Document ID: EPA-HQ-OAR-2022-0985-1423
Agency: epa
Document Type: Proposed Rule
Title: Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles - Phase 3
Posted Date: 2023-04-27T04:00Z

[Federal Register Volume 88, Number 81 (Thursday, April 27, 2023)]
[Proposed Rules]
[Pages 25926-26161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07955]

[[Page 25925]]

Vol. 88

Thursday,

No. 81

April 27, 2023

Part III

Environmental Protection Agency

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40 CFR Parts 1036, 1037, et al.

Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles--Phase 3; 
Proposed Rule

  Federal Register / Vol. 88, No. 81 / Thursday, April 27, 2023 / 
Proposed Rules  

[[Page 25926]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 1036, 1037, 1054, 1065, and 1074

[EPA-HQ-OAR-2022-0985; FRL-8952-01-OAR]
RIN 2060-AV50

Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles--Phase 
3

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
promulgate new GHG standards for heavy-duty highway vehicles starting 
in model year (MY) 2028 through MY 2032 and to revise certain GHG 
standards for MY 2027 that were established previously under EPA's 
Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and 
Heavy-Duty Engines and Vehicles--Phase 2 rule (``HD GHG Phase 2''). 
This document proposes updates to discrete elements of the Averaging 
Banking and Trading program, including a proposal to eliminate the last 
MY year of the HD GHG Phase 2 advanced technology incentive program for 
certain types of electric highway heavy-duty vehicles. EPA is proposing 
to add warranty requirements for batteries and other components of 
zero-emission vehicles and to require customer-facing battery state-of-
health monitors for plug-in hybrid and battery electric vehicles. In 
this document, we are also proposing additional revisions and 
clarifying and editorial amendments to certain highway heavy-duty 
vehicle provisions and certain test procedures for heavy-duty engines. 
Finally, as part of this action, EPA is proposing to revise its 
regulations addressing preemption of state regulation of new 
locomotives and new engines used in locomotives.

DATES: Comments must be received on or before June 16, 2023. Comments 
on the information collection provisions submitted to the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act (PRA) are 
best assured of consideration by OMB if OMB receives a copy of your 
comments on or before May 30, 2023. Public hearing: EPA will announce 
information regarding the public hearing for this proposal in a 
supplemental Federal Register document. Please refer to the 
SUPPLEMENTARY INFORMATION section for additional information on the 
public hearing.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2022-0985, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov/ 
(our preferred method). Follow the online instructions for submitting 
comments.
     Email: [email protected]. Include Docket ID No. EPA-
HQ-OAR-2022-0985 in the subject line of the message.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center, OAR Docket, Mail Code 28221T, 1200 Pennsylvania Avenue NW, 
Washington, DC 20460.
     Hand Delivery or 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.

FOR FURTHER INFORMATION CONTACT: Brian Nelson, Assessment and Standards 
Division, Office of Transportation and Air Quality, Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; 
telephone number: (734) 214-4278; email address: [email protected].

SUPPLEMENTARY INFORMATION: 

Public Participation

Written Comments

    Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2022-
0985, 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), Proprietary 
Business Information (PBI), or other information whose disclosure is 
restricted by statute. If you choose to submit CBI or PBI as a comment 
to EPA's docket, please send those materials to the person listed in 
the FOR FURTHER INFORMATION CONTACT section. 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). 
Commenters who would like EPA to further consider in this rulemaking 
any relevant comments that they provided on the HD2027 NPRM regarding 
proposed HD vehicle GHG standards for the MYs at issue in this proposal 
must resubmit those comments to EPA during this proposal's comment 
period. Please visit https://www.epa.gov/dockets/commenting-epa-dockets 
for additional submission methods; the full EPA public comment policy; 
information about CBI, PBI, or multimedia submissions; and general 
guidance on making effective comments.

Participation in Virtual Public Hearing

    EPA will announce information regarding the public hearing for this 
proposal in a supplemental Federal Register document. The hearing 
notice, registration information, and any updates to the hearing 
schedule will also be available at https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-greenhouse-gas-emissions-standards-heavy. Please refer to this website for any updates regarding 
the hearings. EPA does not intend to publish additional documents in 
the Federal Register announcing updates to the hearing schedule.
    Docket: All documents in the docket are listed on the 
www.regulations.gov website. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the internet and will be 
publicly available only in hard copy form through the EPA Docket Center 
at the location listed in the ADDRESSES section of this document.

General Information

Does this action apply to me?

    This action relates to companies that manufacture, sell, or import 
into the United States new heavy-duty highway vehicles and engines. 
This action also relates to state and local governments. Potentially 
affected categories and entities include the following:

[[Page 25927]]

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             Category               NAICS codes \a\      NAICS title
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Industry.........................            336110  Automobile and
                                                      Light Duty Motor
                                                      Vehicle
                                                      Manufacturing.
Industry.........................            336120  Heavy Duty Truck
                                                      Manufacturing.
Industry.........................            336211  Motor Vehicle Body
                                                      Manufacturing.
Industry.........................            336213  Motor Home
                                                      Manufacturing.
Industry.........................            333618  Other Engine
                                                      Equipment
                                                      Manufacturing.
Industry.........................            811198  All Other
                                                      Automotive Repair
                                                      and Maintenance.
Government.......................  ................  State and local
                                                      governments.\b\
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\a\ NAICS Association. NAICS & SIC Identification Tools. Available
  online: https://www.naics.com/search.
\b\ It should be noted that the proposed revisions do not impose any
  requirements that state and local governments must meet, but rather
  implement the Clean Air Act preemption provisions for locomotives.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities potentially affected by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be affected by this action. Other types of entities 
not listed in the table could also be affected. To determine whether 
your entity is regulated by this action, you should carefully examine 
the applicability criteria found in 40 CFR parts 1036, 1037, 1054, 
1065, and 1074.\1\ If you have questions regarding the applicability of 
this action to a particular entity, consult the person listed in the 
FOR FURTHER INFORMATION CONTACT section.
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    \1\ See 40 CFR 1036.1 through 1036.15 and 40 CFR 1037.1 through 
1037.15.
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What action is the Agency taking?

    The Environmental Protection Agency (EPA) is proposing to 
promulgate new GHG standards for heavy-duty highway vehicles starting 
in model year (MY) 2028 through MY 2032 and to revise certain GHG 
standards for MY 2027 that were established previously under EPA's 
Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and 
Heavy-Duty Engines and Vehicles--Phase 2 rule (``HD GHG Phase 2'') that 
we believe are appropriate and feasible considering lead time, costs, 
and other factors. EPA also proposes that it is appropriate to 
eliminate the last model year (MY 2027) of advanced technology 
incentives for certain electric highway heavy-duty vehicles, initially 
established under the HD GHG Phase 2 rule. EPA is proposing to add 
warranty requirements for batteries and other components of zero-
emission vehicles and to require customer-facing battery state-of-
health monitors for plug-in hybrid and battery electric vehicles. We 
are also proposing revisions and clarifying and editorial amendments to 
certain highway heavy-duty vehicle provisions of 40 CFR part 1037 and 
certain test procedures for heavy-duty engines in 40 CFR parts 1036 and 
1065. In addition, in this action EPA is proposing to revise its 
regulations addressing preemption of state regulation of new 
locomotives and new engines used in locomotives, to more closely align 
with language in the Clean Air Act.

What is the Agency's authority for taking this action?

    Clean Air Act section 202(a), 42 U.S.C. 7521(a), requires that EPA 
establish emission standards for air pollutants from new motor vehicles 
or new motor vehicle engines, which, in the Administrator's judgment, 
cause or contribute to air pollution that may reasonably be anticipated 
to endanger public health or welfare. The Administrator has found that 
GHG emissions from highway heavy-duty vehicles and engines cause or 
contribute to air pollution that may endanger public health or welfare. 
Therefore, the Administrator is exercising his authority under CAA 
section 202(a)(1)-(2) to establish standards for GHG emissions from 
highway heavy-duty vehicles. In addition, section 209(e)(2)(B) of the 
CAA, 42 U.S.C. 7543(e)(2)(B), requires EPA to promulgate regulations 
implementing subsection 209(e) of the Act, which addresses the 
prohibition of state standards regarding certain classes of new nonroad 
engines or new nonroad vehicles including new locomotives and new 
engines used in locomotives, as well as EPA's authorization criteria 
for certain California standards for other nonroad engines or nonroad 
vehicles. See Section I.D of this preamble for more information on the 
agency's authority for this action.

Did EPA conduct a peer review before issuing this action?

    This proposed regulatory action is supported by influential 
scientific information. EPA, therefore, is conducting peer review in 
accordance with OMB's Final Information Quality Bulletin for Peer 
Review. Specifically, we conducted the peer review process on two 
analyses: (1) Emission Adjustments for Onroad Vehicles in MOVES3.R1, 
and (2) Greenhouse Gas and Energy Consumption Rates for Onroad Vehicles 
in MOVES3.R1. In addition, we plan to conduct a peer review of inputs 
to the Heavy-Duty Technology Resource Use Case Scenario (HD TRUCS) tool 
used to analyze HD vehicle energy usage and associated component costs. 
All peer review were or will be in the form of letter reviews conducted 
by a contractor. The peer review reports for each analysis will be 
posted in the docket for this action and will be posted at EPA's 
Science Inventory (https://cfpub.epa.gov/si/).

Table of Contents

Executive Summary
    A. Need for Regulatory Action
    B. The Opportunity for Clean Air Provided by Zero-Emission 
Vehicle Technologies
    C. Summary of the Major Provisions in the Regulatory Action
    D. Impacts of the Proposed Standards
I. Introduction
    A. Brief Overview of the Heavy-Duty Industry
    B. History of Greenhouse Gas Emission Standards for Heavy-Duty 
Engines and Vehicles
    C. What has changed since we finalized the HD GHG Phase 2 rule?
    D. EPA Statutory Authority for the Proposal
    E. Coordination With Federal and State Partners
    F. Stakeholder Engagement
II. Proposed CO2 Emission Standards
    A. Public Health and Welfare Need for GHG Emission Reductions
    B. Summary of Comments Received From HD2027 NPRM
    C. Background on the CO2 Emission Standards in the HD 
GHG Phase 2 Program
    D. Vehicle Technologies
    E. Technology, Charging Infrastructure, and Operating Costs
    F. Proposed Standards
    G. EPA's Basis That the Proposed Standards Are Feasible and 
Appropriate Under the Clean Air Act
    H. Potential Alternatives
    I. Small Businesses
III. Compliance Provisions, Flexibilities, and Test Procedures
    A. Proposed Revisions to the ABT Program
    B. Battery Durability Monitoring and Warranty Requirements
    C. Additional Proposed Revisions to the Regulations
IV. Proposed Program Costs
    A. IRA Tax Credits

[[Page 25928]]

    B. Technology Package Costs
    C. Manufacturer Costs
    D. Purchaser Costs
    E. Social Costs
V. Estimated Emission Impacts From the Proposed Program
    A. Model Inputs
    B. Estimated Emission Impacts From the Proposed Standards
VI. Climate, Health, Air Quality, Environmental Justice, and 
Economic Impacts
    A. Climate Change Impacts
    B. Health and Environmental Effects Associated With Exposure to 
Non-GHG Pollutants
    C. Air Quality Impacts of Non-GHG Pollutants
    D. Environmental Justice
    E. Economic Impacts
    F. Oil Imports and Electricity and Hydrogen Consumption
VII. Benefits of the Proposed Program
    A. Social Cost of GHGs
    B. Criteria Pollutant Health Benefits
    C. Energy Security
VIII. Comparison of Benefits and Costs
    A. Methods
    B. Results
IX. Analysis of Alternative CO2 Emission Standards
    A. Comparison of Proposal and Alternative
    B. Emission Inventory Comparison of Proposal and Slower Phase-In 
Alternative
    C. Program Costs Comparison of Proposal and Alternative
    D. Benefits
    E. How do the proposal and alternative compare in overall 
benefits and costs?
X. Preemption of State Standards and Requirements for New 
Locomotives or New Engines Used in Locomotives
    A. Overview
    B. Background
    C. Evaluation of Impact of Regulatory Preemption
    D. What is EPA proposing?
XI. 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 (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    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 and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act (NTTAA) and 
1 CFR Part 51
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations.
XII. Statutory Authority and Legal Provisions
List of Subjects

Executive Summary

A. Need for Regulatory Action

    The Environmental Protection Agency (EPA) is proposing this action 
to further reduce GHG air pollution from highway heavy-duty (hereafter 
referred to as ``heavy-duty'' or HD) engines and vehicles across the 
United States. Despite the significant emissions reductions achieved by 
previous rulemakings, GHG emissions from HD vehicles continue to impact 
public health, welfare, and the environment. The transportation sector 
is the largest U.S. source of GHG emissions, representing 27 percent of 
total GHG emissions.\2\ Within the transportation sector, heavy-duty 
vehicles are the second largest contributor to GHG emissions and are 
responsible for 25 percent of GHG emissions in the sector.\3\ GHG 
emissions have significant impacts on public health and welfare as 
evidenced by the well-documented scientific record and as set forth in 
EPA's Endangerment and Cause or Contribute Findings under Section 
202(a) of the CAA.\4\ 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 II.A.
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    \2\ Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-
2020 (EPA-430-R-22-003, published April 2022).
    \3\ Ibid.
    \4\ 74 FR 66496, December 15, 2009; see also 81 FR 54422, August 
15, 2016 (making a similar endangerment and cause or contribute 
findings for GHGs from aircraft under section 231(a)(2)(A)). 
Recently, in April 2022, EPA denied administrative petitions 
relating to the 2009 finding, determining that ``[t]he science 
supporting the Administrator's [2009] finding that elevated 
concentrations of greenhouse gases in the atmosphere may reasonably 
be anticipated to endanger the public health and welfare of current 
and future U.S. generations is robust, voluminous, and compelling, 
and has been strongly affirmed by recent scientific assessments. . . 
.'' EPA's Denial of Petitions Relating to the Endangerment and Cause 
or Contribute Findings for Greenhouse Gases Under Section 202(a) of 
the Clean Air Act 1, available at https://www.epa.gov/system/files/documents/2022-04/decision_document.pdf.
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    The potential for the application of zero-emission vehicle (ZEV) 
technologies in the heavy-duty sector presents an opportunity for 
significant reductions in heavy-duty GHG emissions over the long 
term.\5\ Major trucking fleets, HD vehicle and engine manufacturers, 
and U.S. states have announced plans to increase the use of heavy-duty 
zero-emissions technologies in the coming years. The 2021 
Infrastructure Investment and Jobs Act (commonly referred to as the 
``Bipartisan Infrastructure Law'' or BIL) and the Inflation Reduction 
Act of 2022 (``Inflation Reduction Act'' or IRA) together include many 
incentives for the development, production, and sale of ZEVs, electric 
charging infrastructure, and hydrogen, which are expected to spur 
significant innovation in the heavy-duty sector.\6\ In addition, 
supporting assessments provided by some commenters during the comment 
period for the EPA's March 2022 Notice of Proposed Rulemaking ``Control 
of Air Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle 
Standards'' (hereafter referred to as ``HD2027 NPRM''), which proposed 
strengthening existing MY 2027 GHG standards for heavy-duty vehicles, 
suggested that significant ZEV adoption rates can be achieved over the 
next decade.7 8 We discuss these developments in more detail 
in Section I. EPA also projects that improvements in internal 
combustion engines, powertrains, and vehicle technologies such as those 
EPA projected would be used to achieve the HD GHG Phase 2 standards 
will also be needed to continue to reduce GHG emissions from the HD 
sector, and as described in Section II.D.1, these technology 
improvements continue to be feasible. With respect to the need for GHG 
reductions and these heavy-duty sector developments, EPA is proposing 
in this document more stringent MY 2027 HD vehicle CO2 
emission standards (i.e., beyond what was finalized in HD GHG Phase 2) 
and new HD vehicle CO2 emission standards starting in MYs 2028 through 
2032 that we believe are appropriate and feasible considering cost, 
lead time, and other factors, as described throughout this preamble and 
supporting materials in the docket for this proposed rulemaking.
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    \5\ Throughout the preamble, we use the term ZEV technologies to 
refer to technologies that result in zero tailpipe emissions. 
Example ZEV technologies include battery electric vehicles and fuel 
cell vehicles.
    \6\ Infrastructure Investment and Jobs Act, Public Law 117-58, 
135 Stat. 429 (2021) (``Bipartisan Infrastructure Law'' or ``BIL''), 
available at https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf; Inflation Reduction Act of 2022, Public Law 117-169, 
136 Stat. 1818 (2022) (``Inflation Reduction Act'' or ``IRA''), 
available at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
    \7\ Notice of Proposed Rulemaking for Control of Air Pollution 
from New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards. 87 
FR 17414 (March 28, 2022).
    \8\ U.S. EPA, ``Control of Air Pollution from New Motor 
Vehicles: Heavy-Duty Engine and Vehicle Standards--Response to 
Comments.'' Section 28. Docket EPA-HQ-OAR-2019-0055.
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    EPA sets highway heavy-duty vehicle and engine standards for GHG 
emissions

[[Page 25929]]

under its authority in CAA section 202(a). Section 202(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 or new motor 
vehicle engines, . . . which in his judgment cause, or contribute to, 
air pollution which may reasonably be anticipated to endanger public 
health or welfare.'' Section 202(a)(2) provides that standards under 
section 202(a) apply to such vehicles and engines ``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.'' Pursuant 
to section 202(a)(1), such standards apply to vehicles and engines 
``for their useful life.'' EPA also may consider other factors such as 
the impacts of potential GHG standards on the industry, fuel savings, 
oil conservation, energy security, and other relevant considerations. 
Congress authorized the Administrator to determine the levels of 
emission reductions achievable for such air pollutants through the 
application of technologies taking into account cost, lead time, and 
other factors.
    Pursuant to our 202(a) authority, EPA first established standards 
for the heavy-duty sector in the 1970s. Since then, the Agency has 
revised the standards multiple times based upon updated data and 
information, the continued need to mitigate air pollution, and 
Congressional enactments directing EPA to regulate emissions from the 
heavy-duty sector more stringently. Since 1985, HD engine and vehicle 
manufacturers could comply with criteria-pollutant standards using 
averaging,\9\ EPA also introduced banking and trading compliance 
flexibilities in the HD program in 1990,\10\ and EPA's HD GHG standards 
and regulations have consistently included an averaging, banking, and 
trading (ABT) program from the start.\11\ Since the first standards, 
subsequent standards have extended to additional pollutants (including 
GHGs), increased in stringency, and spurred the development and 
deployment of numerous new vehicle and engine technologies. For 
example, the most recent GHG standards for HD vehicles will reduce 
CO2 emissions by approximately 1.1 billion metric tons over 
the lifetime of the new vehicles sold under the program (HD GHG Phase 
2, 81 FR 73478, October 25, 2016) and the most recent criteria-
pollutant standards are projected to reduce NOX emissions 
from the in-use HD fleet by almost 50 percent in 2045 (``Control of Air 
Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle 
Standards'' (hereafter referred to as ``HD2027 FRM''), 88 FR 4296, 
January 24, 2023). This proposal builds upon this multi-decadal 
tradition of regulating heavy-duty vehicles and engines, by applying 
the Agency's clear and longstanding statutory authority considering new 
real-world data and information, including recent Congressional action 
in the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act 
(IRA).
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    \9\ 50 FR 10606, Mar. 15, 1985; see also NRDC v. Thomas, 805 
F.2d 410, 425 (D.C. Cir. 1986) (upholding emissions averaging in the 
1985 HD final rule).
    \10\ 55 FR 30584, July 26, 1990.
    \11\ 76 FR 57128, September 15, 2011 (explaining ABT is a 
flexibility that provides an opportunity for manufacturers to make 
necessary technological improvements while reducing the overall cost 
of the program); 81 FR 73495, October 25, 2016 (explaining that ABT 
plays an important role in providing manufacturers flexibilities, 
including helping reduce costs).
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    This Notice of Proposed Rulemaking is consistent with Executive 
Order 14037 on Strengthening American Leadership in Clean Cars and 
Trucks, which directs the Administrator to ``consider updating the 
existing greenhouse gas emissions standards for heavy-duty engines and 
vehicles beginning with model year 2027 and extending through and 
including at least model year 2029'' and directs EPA to ``consider 
beginning work on a rulemaking under the Clean Air Act to establish new 
greenhouse gas emissions standards for heavy-duty engines and vehicles 
to begin as soon as model year 2030.'' \12\ Consistent with this 
direction, in the HD2027 NPRM, we proposed building on and improving 
the existing emission control program for highway heavy-duty vehicles 
by further strengthening certain MY 2027 GHG standards finalized under 
the HD GHG Phase 2 rule. However, we did not take final action on the 
GHG portion of the HD2027 proposal in the final rule (HD2027 FRM). 
Since that time, EPA has continued its analysis of the heavy-duty 
vehicle sector including the recent passage of the IRA, which as we 
discuss further in this preamble provides significant incentives for 
GHG reductions in the heavy-duty vehicle sector. Based on this updated 
information and analysis, and consistent with EPA's authority under the 
Clean Air Act section 202(a), we are issuing this Notice of Proposed 
Rulemaking (``HD GHG Phase 3 NPRM'') to propose certain revised HD 
vehicle carbon dioxide (CO2) standards for MY 2027 and 
certain new HD vehicle CO2 standards for MYs 2028, 2029, 
2030, 2031, and 2032 that would achieve significant GHG reductions for 
these and later model years (note the MY 2032 standards would remain in 
place for MY 2033 and later). We are requesting comment on an 
alternative set of CO2 standards that would more gradually 
increase in stringency than the proposed standards for the same MYs. 
EPA also requests comment on setting GHG standards starting in MYs 2027 
through 2032 that would reflect: values less stringent than the lower 
stringency alternative for certain market segments, values in between 
the proposed standards and the alternative standards, values in between 
the proposed standards and those that would reflect ZEV adoption levels 
(i.e., percent of ZEVs in production volumes) used in California's ACT, 
values that would reflect the level of ZEV adoption in the ACT program, 
and values beyond those that would reflect ZEV adoption levels in ACT 
such as the 50- to 60-percent ZEV adoption range represented by the 
publicly stated goals of several major original equipment manufacturers 
(OEMs) for 2030.13 14 15 16 17 We also request comment on 
promulgating additional new standards with increasing stringency in MYs 
2033 through 2035. EPA anticipates that the appropriate choice of final 
standards within this range will reflect the Administrator's judgments 
about the uncertainties in EPA's analyses as well as consideration of 
public comment and updated information where available.
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    \12\ 86 FR 43583, August 5, 2021. Executive Order 14037. 
Strengthening American Leadership in Clean Cars and Trucks.
    \13\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \14\ Scania, `Scania's Electrification Roadmap,' Scania Group, 
November 24, 2021, https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html.
    \15\ AB Volvo, `Volvo Trucks Launches Electric Truck with Longer 
Range,' Volvo Group, January 14, 2022, https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html.
    \16\ Deborah Lockridge, `What Does Daimler Truck Spin-off Mean 
for North America?,' Trucking Info (November 11, 2021). https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america.
    \17\ Navistar presentation at the Advanced Clean Transportation 
(ACT) Expo, Long Beach, CA (May 9-11, 2022).
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    CAA section 202(a) directs EPA to regulate emissions of air 
pollutants from new motor vehicles and engines, which in the 
Administrator's judgment, cause or contribute to air pollution that may 
reasonably be anticipated to endanger

[[Page 25930]]

public health or welfare. While standards promulgated pursuant to CAA 
section 202(a) are based on application of technology, the statute does 
not specify a particular technology or technologies that must be used 
to set such standards; rather, Congress has authorized and directed EPA 
to adapt its standards to emerging technologies. In 2009, the 
Administrator issued an Endangerment Finding under CAA section 202(a), 
concluding that GHG emissions from new motor vehicles and engines, 
including heavy-duty vehicles and engines, cause or contribute to air 
pollution that may endanger public health or welfare.\18\ Pursuant to 
the 2009 Endangerment and Cause or Contribute Finding, EPA promulgated 
GHG regulations for heavy-duty vehicles and engines in 2011 and 2016, 
referred to as the HD GHG Phase 1 and HD GHG Phase 2 programs, 
respectively.\19\ In the HD GHG Phase 1 and Phase 2 programs, EPA set 
emission standards that the Agency found appropriate and feasible, 
considering cost, lead time, and other factors.
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    \18\ 74 FR 66496 (Dec. 15, 2009).
    \19\ 76 FR 57106 (Sept. 15, 2011); 81 FR 73478 (Oct. 25, 2016).
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    Over time, manufacturers have not only continued to find ways to 
further reduce emissions from motor vehicles, including HD vehicles, 
they have found ways to eliminate tailpipe emissions entirely through 
the use of zero-emission vehicle technologies. Since the 2009 
Endangerment and Cause or Contribute Finding and issuance of the HD GHG 
Phase 1 and Phase 2 program regulations, there has continued to be 
significant technological advancement in the vehicle and engine 
manufacturing sectors, including for such zero-emission vehicle 
technologies. The HD Phase 3 regulations that we are proposing take 
into account the ongoing technological innovation in the HD vehicle 
space and reflect CO2 emission standards that we consider 
appropriate and feasible considering cost, lead time, and other 
factors.

B. The Opportunity for Clean Air Provided by Zero-Emission Vehicle 
Technologies

    When the HD GHG Phase 2 rule was promulgated in 2016, we 
established CO2 standards on the premise that ZEV 
technologies, such as battery electric vehicles (BEVs) and fuel cell 
electric vehicles (FCEVs), would become more widely available in the 
heavy-duty market over time, but not in significant volume in the 
timeframe of the Phase 2 program. We finalized BEV, plug-in hybrid 
electric vehicle (PHEV), and FCEV advanced technology credit 
multipliers to encourage the development and sales of these advanced 
technologies.
    Several significant developments have occurred since 2016 that 
point to ZEV technologies becoming more readily available much sooner 
than we had previously projected for the HD sector. These developments 
support the feasibility of ZEV technologies and render adoption of ZEV 
technologies to reduce GHG emissions more cost-competitive than ever 
before. First, the HD market has evolved such that early ZEV models are 
in use today for some applications and are expected to expand to many 
more applications; costs of ZEV technologies have gone down and are 
projected to continue to fall; and manufacturers have announced plans 
to rapidly increase their investments in ZEV technologies over the next 
decade. In 2022, there were a number of manufacturers producing fully 
electric HD vehicles for use in a number of applications, and these 
small volumes are expected to rise (see Section I.C and Draft 
Regulatory Impact Analysis (DRIA) Chapter 1). The cost to manufacture 
lithium-ion batteries (the single most expensive component of a BEV) 
has dropped significantly in the past eight years, and that cost is 
projected to continue to fall during this decade, all while the 
performance of the batteries (in terms of energy density) 
improves.20 21 Many of the manufacturers that produce HD 
vehicles and major firms that purchase HD vehicles have announced 
billions of dollars' worth of investments in ZEV technologies and 
significant plans to transition to a zero-carbon fleet over the next 
ten to fifteen years.\22\
---------------------------------------------------------------------------

    \20\ Mulholland, Eamonn. ``Cost of electric commercial vans and 
pickup trucks in the United States through 2040.'' Page 7. January 
2022. Available at https://theicct.org/wp-content/uploads/2022/01/cost-ev-vans-pickups-us-2040-jan22.pdf.
    \21\ Sharpe, Ben and Hussein Basma. ``A meta-study of purchase 
costs for zero-emission trucks''. The International Council on Clean 
Transportation, Working Paper 2022-09 (February 2022). Available 
online: https://theicct.org/publication/purchase-cost-ze-trucks-feb22/.
    \22\ Environmental Defense Fund (2022) September 2022 Electric 
Vehicle Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and Worldwide, 
available online at: https://blogs.edf.org/climate411/files/2022/09/ERM-EDF-Electric-Vehicle-Market-Report_September2022.pdf.
---------------------------------------------------------------------------

    Second, the 2021 BIL and the 2022 IRA laws provide significant and 
unprecedented monetary incentives for the production and purchase of 
qualified ZEVs in the HD market. They also provide incentives for 
qualifying electric charging infrastructure and hydrogen, which will 
further support a rapid increase in market penetration of HD ZEVs. As a 
few examples, over the next five years, BIL provisions include $5 
billion to fund the replacement of school buses with zero- or low-
emission buses and $5.6 billion to support the purchase of zero- or 
low-emission transit buses and associated infrastructure, with up to 
$7.5 billion to help build out a national network of EV charging and 
hydrogen refueling infrastructure, some of which may be used for 
refueling of heavy duty vehicles. The IRA creates a tax credit of up to 
$40,000 per vehicle for vehicles over 14,000 pounds (and up to $7,500 
per vehicle for vehicles under 14,000 pounds) for the purchase of 
qualified commercial clean vehicles and provides tax credits for the 
production and sale of battery cells and modules of up to $45 per 
kilowatt-hour (kWh). The wide array of incentives in both laws will 
help to reduce the costs to manufacture, purchase, and operate ZEVs, 
thereby bolstering their adoption in the market.
    Third, there have been multiple actions by states to accelerate the 
adoption of HD ZEVs. The State of California and other states have 
adopted the ACT program that includes a manufacturer requirement for 
zero-emission truck sales.23 24 The ACT program would 
require that ``manufacturers who certify Class 2b-8 chassis or complete 
vehicles with combustion engines would be required to sell zero-
emission trucks as an
---------------------------------------------------------------------------

    \23\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \24\ See, e.g., Final Advanced Clean Truck Amendments, 1461 
Mass. Reg. 29 (Jan. 21, 2022) (Massachusetts). Medium- and Heavy-
Duty (MHD) Zero Emission Truck Annual Sales Requirements and Large 
Entity Reporting, 44 N.Y. Reg. 8 (Jan. 19, 2022) (New York), 
available at https://dos.ny.gov/system/files/documents/2022/01/011922.pdf. Advanced Clean Trucks Program and Fleet Reporting 
Requirements, 53 N.J.R. 2148(a) (Dec. 20, 2021) (New Jersey), 
available at https://www.nj.gov/dep/rules/adoptions/adopt_20211220a.pdf (pre-publication version). Clean Trucks Rule 
2021, DEQ-17-2021 (Nov. 17, 2021), available at http://records.sos.state.or.us/ORSOSWebDrawer/Recordhtml/8581405 (Oregon). 
Low emission vehicles, Wash. Admin. Code. Sec.  173-423-070 (2021), 
available at https://app.leg.wa.gov/wac/default.aspx?cite=173-423-070; 2021 Wash. Reg. 587356 (Dec. 15, 2021); Wash. Reg. 21-24-059 
(Nov. 29, 2021) (amending Wash. Admin. Code. Sec. Sec.  173-423 and 
173-400), available at https://lawfilesext.leg.wa.gov/law/wsrpdf/2021/24/21-24-059.pdf (Washington).

---------------------------------------------------------------------------

[[Page 25931]]

increasing percentage of their annual [state] sales from 2024 to 
2035.'' 25 26 In addition, 17 states and the District of 
Columbia have signed a Memorandum of Understanding establishing goals 
to support widespread electrification of the HD vehicle market.\27\ We 
discuss these factors further in Section I.
---------------------------------------------------------------------------

    \25\ California Air Resources Board, Advanced Clean Trucks Fact 
Sheet (August 20, 2021), available at https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-trucks-fact-sheet. See also 
California Air Resources Board, Final Regulation Order--Advanced 
Clean Trucks Regulation. Filed March 15, 2021. Available at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \26\ EPA granted the ACT rule waiver requested by California 
under CAA section 209(b) on March 30, 2023. 88 FR 20688, April 6, 
2023 (signed by the Administrator on March 30, 2023).
    \27\ Multi-State MOU, available at https://www.nescaum.org/documents/mhdv-zev-mou-20220329.pdf/.
---------------------------------------------------------------------------

    Recognizing the need for additional GHG reductions from HD vehicles 
and the growth of ZEV technologies in the HD market, last year we 
proposed strengthening certain existing MY 2027 HD vehicle 
CO2 standards as part of the HD2027 NPRM. We received many 
comments on the proposed updates to those HD vehicle CO2 
emission standards.28 Many commenters suggested that EPA 
should further strengthen HD vehicle CO2 emission standards 
in MYs 2027 through 2029 beyond the HD2027 NPRM proposed levels because 
of the accelerating adoption of HD ZEV technologies, and some 
commenters provided a number of reports that evaluate the potential of 
electrification of the HD sector in terms of adoption rates, costs, and 
other factors. Some commenters raised concerns with the HD2027 NPRM 
proposed changes to certain HD GHG Phase 2 CO2 emission 
standards, asserting the significant investment and lead time required 
for development and verification of the durability of ZEV technologies, 
especially given the diverse range of applications in the HD market.
---------------------------------------------------------------------------

    \28\ U.S. EPA, ``Control of Air Pollution from New Motor 
Vehicles: Heavy-Duty Engine and Vehicle Standards--Response to 
Comments.'' Section 28. Docket EPA-HQ-OAR-2019-0055.
---------------------------------------------------------------------------

    In the HD2027 NPRM, EPA also requested comment on several 
approaches to modify the existing Advanced Technology Credit 
Multipliers (``credit multipliers'') under the HD GHG Phase 2 program. 
Many commenters supported limiting the credits in some fashion, such as 
eliminating credit multipliers for ZEVs produced due to state 
requirements or phasing out the credit multipliers earlier than MY 
2027, which was the last model year that multipliers could be applied 
under HD GHG Phase 2. Some of the commenters opposed any changes to the 
existing credit multipliers, indicating that the multipliers are 
necessary for the development of these new and higher-cost technologies 
into existing and new markets. We considered the concerns and 
information provided in these comments when developing this proposal, 
as discussed in Sections II and III. Commenters who would like EPA to 
further consider in this rulemaking any relevant comments that they 
provided on the HD2027 NPRM regarding proposed HD vehicle GHG standards 
for the MYs at issue in this proposal must resubmit those comments to 
EPA during this proposal's comment period.\29\
---------------------------------------------------------------------------

    \29\ Note, comments regarding aspects of the HD program besides 
those GHG standards and compliance requirements in this proposal are 
outside the scope of this rulemaking.
---------------------------------------------------------------------------

    EPA believes the increased application of ZEV technologies in the 
HD sector presents an opportunity to strengthen GHG standards, which 
can result in significant reductions in heavy-duty vehicle emissions. 
Based on an in-depth analysis of the potential for the development and 
application of ZEV technologies in the HD sector, we are proposing in 
this Phase 3 NPRM more stringent GHG standards for MYs 2027 through 
2032 and later HD vehicles heavy-duty vehicles that are appropriate and 
feasible considering lead time, costs, and other factors. These 
proposed Phase 3 standards include (1) revised GHG standards for many 
MY 2027 HD vehicles, with a subset of standards that would not change, 
and (2) new GHG standards starting in MYs 2028 through 2032, of which 
the MY 2032 standards would remain in place for MY 2033 and later. For 
the purposes of this preamble, we refer to the Phase 3 NPRM standards 
generally as applying to MYs 2027 through 2032 and later HD vehicles. 
In this NPRM, we are also requesting comment on setting additional new, 
progressively more stringent GHG standards beyond the MYs proposed and 
starting in MYs 2033 through 2035. In consideration of concerns from 
manufacturers about lead time needed for technology development and 
market investments, we request comment in this NPRM on an alternative 
set of GHG standards starting in MYs 2027 through 2032 that are lower 
than those proposed yet still more stringent than the Phase 2 
standards. We also request comment, including supporting data and 
analysis, if there are certain market segments, such as heavy-haul 
vocational trucks or long-haul tractors which may require significant 
energy content for their intended use, for which it may be appropriate 
to set standards less stringent than the alternative for the specific 
corresponding regulatory subcategories in order to provide additional 
lead time to develop and introduce ZEV or other low emissions 
technology for those specific vehicle applications. In consideration of 
the environmental impacts of HD vehicles and the need for significant 
emission reductions, as well as the views expressed by stakeholders 
such as environmental justice communities, environmental nonprofit 
organizations, and state and local organizations for rapid and 
aggressive reductions in GHG emissions, we are also requesting comment 
on a more stringent set of GHG standards starting in MYs 2027 through 
2032 whose values would go beyond the proposed standards, such as 
values that would reflect the level of ZEV adoption (i.e., percent of 
ZEVs in production volumes) used in California's ACT program, values in 
between these proposed standards and those that would reflect ZEV 
adoption levels in ACT, and values beyond those that would reflect ZEV 
adoption levels in ACT, such as the 50-60 percent ZEV adoption range 
represented by the publicly stated goals of several major OEMs for 
2030.30 31 32 33 34
---------------------------------------------------------------------------

    \30\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \31\ Scania, `Scania's Electrification Roadmap,' Scania Group, 
November 24, 2021, https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html.
    \32\ AB Volvo, `Volvo Trucks Launches Electric Truck with Longer 
Range,' Volvo Group, January 14, 2022, https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html.
    \33\ Deborah Lockridge, `What Does Daimler Truck Spin-off Mean 
for North America?,' Trucking Info (November 11, 2021). https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america.
    \34\ Navistar presentation at the Advanced Clean Transportation 
(ACT) Expo, Long Beach, CA (May 9-11, 2022).
---------------------------------------------------------------------------

    After considering the state of electrification of the HD market, 
new incentives, and comments received on the HD2027 NPRM regarding 
credit multipliers, EPA believes that the HD GHG Phase 2 levels of 
incentives for electrification are no longer appropriate for certain 
segments of the HD vehicle market. We are proposing in this document to 
end credit multipliers for BEVs and PHEVs one year earlier than 
provided in the existing HD GHG Phase 2 program (i.e., no credit 
multipliers for BEVs and PHEVs in MYs 2027 and later).

[[Page 25932]]

C. Summary of the Major Provisions in the Regulatory Action

    Our proposed program features several key provisions that include, 
based on consideration of updated data and information, updating the 
existing MY 2027 GHG emission standards and promulgating new GHG 
emission standards starting in MYs 2028 through 2032 for HD vehicles. 
Specifically, we are proposing to set progressively more stringent GHG 
emission standards that would apply to MYs 2027, 2028, 2029, 2030, 
2031, and 2032 and later for numerous vocational vehicle and tractor 
subcategories. The proposed standards for MY 2032 and later are shown 
in Table ES-1 and Table ES-2 and are described in detail in Section II, 
while the proposed standards for MYs 2027 through 2031 are shown in 
Section II.F.\35\ As described in Section II of this preamble, our 
analysis shows that the proposed revisions to HD GHG Phase 2 
CO2 standards for MY 2027 and the proposed new, 
progressively lower numeric values of the CO2 standards 
starting in MYs 2028 through 2032 are appropriate considering 
feasibility, lead time, costs, and other factors. We seek comment on 
these proposed Phase 3 standards starting in MYs 2027 through 2032.
---------------------------------------------------------------------------

    \35\ See proposed regulations 40 CFR 1037.105 and 1037.106.

 Table ES-1--Proposed MY 2032 and Later Vocational Vehicle CO2 Emission Standards (Grams/Ton-Mile) by Regulatory
                                                   Subcategory
----------------------------------------------------------------------------------------------------------------
                                                     CI medium                                       SI medium
                                  CI light heavy       heavy      CI heavy heavy  SI light heavy       heavy
----------------------------------------------------------------------------------------------------------------
Urban Vehicles..................             179             176             177             225             215
Multi-Purpose Vehicles..........             142             153             138             184             186
Regional Vehicles...............             103             136              97             131             165
----------------------------------------------------------------------------------------------------------------
Note: Please see Section II.F.4 for the full set of proposed standards, including for optional custom chassis
  vehicles.

Table ES-2--Proposed MY 2032 and Later Tractor CO2 Emission Standards (Grams/Ton-Mile) by Regulatory Subcategory
----------------------------------------------------------------------------------------------------------------
                                                                    Class 7 all     Class 8 day       Class 8
                                                                    cab styles          cab         sleeper cab
----------------------------------------------------------------------------------------------------------------
Low Roof Tractor................................................            63.5            48.4            48.1
Mid Roof Tractor................................................            68.2            51.5            52.2
High Roof Tractor...............................................            66.0            50.0            48.2
----------------------------------------------------------------------------------------------------------------
Note: Please see Section II.F.4 for the full set of proposed standards, including for heavy-haul tractors.

    The proposed standards do not mandate the use of a specific 
technology, and EPA anticipates that a compliant fleet under the 
proposed standards would include a diverse range of technologies (e.g., 
transmission technologies, aerodynamic improvements, engine 
technologies, battery electric powertrains, hydrogen fuel cell 
powertrains, etc.). The technologies that have played a fundamental 
role in meeting the Phase 2 GHG standards will continue to play an 
important role going forward as they remain key to reducing the GHG 
emissions of HD vehicles powered by internal combustion engines 
(referred to in this proposal as ICE vehicles). In developing the 
proposed standards, EPA has also considered the key issues associated 
with growth in penetration of zero-emission vehicles, including 
charging infrastructure and hydrogen production. In our assessment that 
supports the appropriateness and feasibility of these proposed 
standards, we developed a technology pathway that could be used to meet 
each of the standards. The technology package includes a mix of ICE 
vehicles with CO2-reducing technologies and ZEVs. EPA 
developed an analysis tool to evaluate the design features needed to 
meet the energy and power demands of various HD vehicle types when 
using ZEV technologies. The overarching analysis is premised on 
ensuring each of the ZEVs could perform the same work as its ICE 
counterpart while oversizing the battery to account for its usable 
range and that batteries deteriorate over time. The fraction of ZEVs in 
the technology packages are shown in Table ES-3 and described further 
in Section II of this preamble.

                               Table ES-3--Projected ZEV Adoption Rates in Technology Packages for the Proposed Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
             Regulatory subcategory grouping                MY 2027 (%)     MY 2028 (%)     MY 2029 (%)     MY 2030 (%)     MY 2031 (%)     MY 2032 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Light-Heavy Duty Vocational.............................              22              28              34              39              45              57
Medium Heavy-Duty Vocational............................              19              21              24              27              30              35
Heavy-Heavy-Duty Vocational.............................              16              18              19              30              33              40
Day Cab Tractors........................................              10              12              15              20              30              34
Sleeper Cab Tractors....................................               0               0               0              10              20              25
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Please see Section II.F.1 for the full set of technology packages, including for optional custom chassis vehicles.

    We are requesting comment on an alternative set of CO2 
standards that would more gradually increase in stringency than the 
proposed standards starting in MY 2027 through 2032, further described 
in Section II.H. We developed a technology pathway that could be used 
to meet the alternatives standards, which projects the aggregated

[[Page 25933]]

ZEV adoption rates shown in Table ES-4 and described further in Section 
II of this preamble. As described in more detail in Section II, we also 
are seeking comment on setting GHG standards starting in MYs 2027 
through 2032 that would reflect values less stringent than the lower 
stringency alternative for certain market segments as well as comment 
on values in between the proposed standards and the alternative 
standards. Also described in Section II, we are seeking comment on 
setting GHG standards starting in MYs 2027 through 2032 that would 
reflect values above the level of the proposed standards. Some of the 
HD2027 NPRM commenters provided specific recommendations for ZEV 
adoption rates to include in our analysis, and these adoption rates are 
on the order of 40 percent or more electrification by MY 
2029.36 37 38 39 The California Air Resources Board's 
(CARB's) ACT regulation sets ZEV sales requirements for vocational 
vehicles at 40 percent and for tractors at 25 percent in MY 2029 (Table 
ES-4). Announcements by major manufacturers project their HD ZEV sales 
to be in the 50 percent range for 2030 globally, with one manufacturer 
projecting sales as high as 60 percent for North America in that 
year.40 41 42 43 We request comment and data that would 
support more stringent GHG standards than we are proposing for MYs 2027 
through 2032, including comment and data on different technologies' 
penetration rates than we included in the technology packages described 
in Section II of the preamble. Specifically, EPA requests comment on 
values that would reflect the level of ZEV adoption used in 
California's ACT program, values in between these proposed standards 
and those that would reflect ZEV adoption levels in ACT, and values 
beyond those that would reflect ZEV adoption levels in ACT such as the 
50-60 percent ZEV adoption range represented by the publicly stated 
goals of several major OEMs for 2030.44 45 46 47 48 We 
further request comment on promulgating progressively more stringent 
standards out through MY 2035.
---------------------------------------------------------------------------

    \36\ ACEEE Comments to the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-2852-A1. Referencing Catherine Ledna et al., 
`Decarbonizing Medium-& Heavy-Duty On-Road Vehicles: Zero-Emission 
Vehicles Cost Analysis' (NREL, March 2022), https://www.nrel.gov/docs/fy22osti/82081.pdf.
    \37\ EDF Comments to the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1265-A1, pp. 16-17.
    \38\ ICCT Comments to the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1211-A1, p. 6.
    \39\ Moving Forward Network Comments to the HD2027 NPRM. See 
Docket Entry EPA-HQ-OAR-2019-0055-1277-A1, pp. 19-20.
    \40\ Scania, `Scania's Electrification Roadmap,' Scania Group, 
November 24, 2021, https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html; AB Volvo, `Volvo 
Trucks Launches Electric Truck with Longer Range,' Volvo Group, 
January 14, 2022, https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html.
    \41\ David Cullen, `Daimler to Offer Carbon Neutral Trucks by 
2039,' (October 25, 2019). https://www.truckinginfo.com/343243/daimler-aims-to-offer-only-co2-neutral-trucks-by-2039-in-key-markets.
    \42\ Deborah Lockridge, `What Does Daimler Truck Spin-off Mean 
for North America?,' Trucking Info (November 11, 2021). https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america.
    \43\ Navistar presentation at the Advanced Clean Transportation 
(ACT) Expo, Long Beach, CA (May 9-11, 2022).
    \44\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \45\ Scania, `Scania's Electrification Roadmap,' Scania Group, 
November 24, 2021, https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html.
    \46\ AB Volvo, `Volvo Trucks Launches Electric Truck with Longer 
Range,' Volvo Group, January 14, 2022, https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html.
    \47\ Deborah Lockridge, `What Does Daimler Truck Spin-off Mean 
for North America?,' Trucking Info (November 11, 2021). https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america.
    \48\ Navistar presentation at the Advanced Clean Transportation 
(ACT) Expo, Long Beach, CA (May 9-11, 2022).

    Table ES-4--Aggregated Projected ZEV Adoption Rates in Technology Packages for the Proposed Standards, Aggregated Projected ZEV Adoption Rates in
                              Technology Packages for the Alternative Standards, and California ACT ZEV Sales Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           MY 2032  and
                                                            MY 2027 (%)     MY 2028 (%)     MY 2029 (%)     MY 2030 (%)     MY 2031 (%)      later (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed:
    Vocational..........................................              20              25              30              35              40              50
    Short-Haul Tractors.................................              10              12              15              20              30              35
    Long-Haul Tractors..................................               0               0               0              10              20              25
Alternative:
    Vocational..........................................              14              20              25              30              35              40
    Short Haul Tractors.................................               5               8              10              15              20              25
    Long Haul Tractors..................................               0               0               0              10              15              20
CARB ACT:
    Vocational..........................................              20              30              40              50              55              60
    Tractors............................................              15              20              25              30              35              40
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As discussed in Section II and DRIA Chapters 1 and 2, EPA 
recognizes that charging and refueling infrastructure for BEVs and 
FCEVs is critically important for the success in the increasing 
development and adoption of these vehicle technologies. There are 
significant efforts already underway to develop and expand heavy-duty 
electric charging and hydrogen refueling infrastructure. The U.S. 
government is making large investments through the BIL and the IRA, as 
discussed in more detail in DRIA Chapter 1.3.2. (e.g., this includes a 
tax credit for charging or hydrogen refueling infrastructure) as well 
as billions of additional dollars for programs that could help fund 
charging infrastructure if purchased alongside an electric 
vehicle).49 50 However, private investments will also play a 
critical role in meeting future infrastructure needs. We expect many 
BEV or fleet owners to invest in charging infrastructure for depot 
charging. (See DRIA Chapter 2.6 for information on our analysis of 
depot charging needs and costs associated with this proposal.) 
Manufacturers, charging network providers, energy companies and others 
are also investing

[[Page 25934]]

in high-power public or other stations that could support en-route 
charging. This includes over a billion dollars for recently announced 
projects to support electric truck or other commercial vehicle charging 
in the United States and Europe.\51\ For example, Daimler Truck North 
America is partnering with electric power generation company NextEra 
Energy Resources and BlackRock Renewable Power to collectively invest 
$650 million to create a nationwide U.S. charging network for 
commercial vehicles with a later phase of the project also supporting 
hydrogen fueling stations.\52\ Volvo Group and Pilot recently announced 
their intent to offer public charging for medium- and heavy-duty BEVs 
at over 750 Pilot and Flying J North American truck stops and travel 
plazas.\53\ (See DRIA Chapter 1.6.2 for a more detailed discussion of 
private investments in heavy-duty infrastructure.)
---------------------------------------------------------------------------

    \49\ Inflation Reduction Act, Public Law 117-169 (2022).
    \50\ Bipartisan Infrastructure Law, Public Law 117-58, 135 Stat. 
429 (2021).
    \51\ BloombergNEF. ``Zero-Emission Vehicles Factbook A 
BloombergNEF special report prepared for COP27.'' November 2022. 
Available online: https://www.bloomberg.com/professional/download/2022-zero-emissions-vehicle-factbook/.
    \52\ NextEra Energy. News Release: ``Daimler Truck North 
America, NextEra Energy Resources and BlackRock Renewable Power 
Announce Plans to Accelerate Public Charging Infrastructure for 
Commercial Vehicles Across The U.S.'' January 31, 2022. Available 
online: https://newsroom.nexteraenergy.com/news-releases?item=123840.
    \53\ Adler, Alan. ``Pilot and Volvo Group add to public electric 
charging projects''. FreightWaves. November 16, 2022. Available 
online: https://www.freightwaves.com/news/pilot-and-volvo-group-add-to-public-electric-charging-projects.
---------------------------------------------------------------------------

    These recent heavy-duty charging announcements come during a period 
of rapid growth in the broader market for charging infrastructure 
serving cars or other electric vehicles. BloombergNEF estimates that 
annual global investment was $62 billion in 2022, nearly twice that of 
the prior year.\54\ Private charging companies have already attracted 
billions globally in venture capital and mergers and acquisitions.\55\ 
In the United States, there was $200 million or more in mergers and 
acquisition activity in 2022 according to the capital market data 
provider Pitchbook,\56\ indicating strong interest in the future of the 
charging industry. Domestic manufacturing capacity is also increasing 
with over $600 million in announced investments to support the 
production of charging equipment and components at existing or new U.S. 
facilities.57 58
---------------------------------------------------------------------------

    \54\ BloombergNEF. ``Next $100 Billion EV-Charger Spend to Be 
Super Fast.'' January 20, 2023. Available online: https://about.bnef.com/blog/next-100-billion-ev-charger-spend-to-be-super-fast/.
    \55\ Hampleton.''Autotech & Mobility M&A market report 1H2023.'' 
2023. Available online: https://www.hampletonpartners.com/fileadmin/user_upload/Report_PDFs/Hampleton-Partners-Autotech-Mobility-Report-1H2023-FINAL.pdf.
    \56\ St. John, Alexa, and Nora Naughton.'' Automakers need way 
more plug-in stations to make their EV plans work. That has sparked 
a buyer frenzy as big charging players gobble up smaller ones.'' 
Insider, November 24, 2022. Available online: https://www.businessinsider.com/ev-charging-industry-merger-acquisition-meet-electric-vehicle-demand-2022-11.
    \57\ Joint Office of Energy and Transportation. ``Private Sector 
Continues to Play Key Part in Accelerating Buildout of EV Charging 
Networks.'' February 15, 2023. Available online: https://driveelectric.gov/news/#private-investment.
    \58\ North Carolina Office of the Governor. ``Manufacturer of 
Electric Vehicle Charging Stations Selects Durham County for New 
Production Facility''. February 7, 2023. Available online: https://governor.nc.gov/news/press-releases/2023/02/07/manufacturer-electric-vehicle-charging-stations-selects-durham-county-new-production-facility.
---------------------------------------------------------------------------

    These important early actions and market indicators suggest strong 
growth in charging and refueling ZEV infrastructure in the coming 
years. Furthermore, as described in Section II of this document, our 
analysis of charging infrastructure needs and costs supports the 
feasibility of the future growth of ZEV technology of the magnitude EPA 
is projecting in this proposal's technology package. EPA has heard from 
some representatives from the heavy-duty vehicle manufacturing industry 
both optimism regarding the heavy-duty industry's ability to produce 
ZEV technologies in future years at high volume, but also concern that 
a slow growth in ZEV charging and refueling infrastructure can slow the 
growth of heavy-duty ZEV adoption, and that this may present challenges 
for vehicle manufacturers ability to comply with future EPA GHG 
standards. Several heavy-duty vehicle manufacturers have encouraged EPA 
to consider ways to address this concern both in the development of the 
Phase 3 program, and in the structure of the Phase 3 program itself. 
\59\ EPA requests comment on this concern, both in the Phase 3 
rulemaking process, and in consideration of whether EPA should consider 
undertaking any future actions related to the Phase 3 standards, if 
finalized, with respect to the future growth of the charging and 
refueling infrastructure for ZEVs. EPA has a vested interest in 
monitoring industry's performance in complying with mobile source 
emission standards, including the highway heavy-duty industry. EPA 
monitors industry's performance through a range of approaches, 
including regular meetings with individual companies and regulatory 
requirements for data submission as part of the annual certification 
process. EPA also provides transparency to the public through actions 
such as publishing industry compliance reports (such as has been done 
during the heavy-duty GHG Phase 1 program).\60\ EPA requests comment on 
what, if any, additional information and data EPA should consider 
collecting and monitoring during the implementation of the Phase 3 
standards; we also request comment on whether there are additional 
stakeholders EPA should work with during implementation of the Phase 3 
standards, if finalized, and what measures EPA should consider to help 
ensure success of the Phase 3 program, including with respect to the 
important issues of refueling and charging infrastructure for ZEVs.
---------------------------------------------------------------------------

    \59\ Truck and Engine Manufacturers Association. ``EPA GHG Phase 
3 Rulemaking: H-D Vehicle Manufacturers' Perspective'' presentation 
to the Society of Automotive Engineers Government and Industry 
Meeting. January 18, 2023.
    \60\ See EPA Reports EPA-420-R-21-001B covering Model Years 
2014-2018, and EPA report EPA-420-R-22-028B covering Model Years 
2014--2020, available online at https://www.epa.gov/compliance-and-fuel-economy-data/epa-heavy-duty-vehicle-and-engine-greenhouse-gas-emissions.
---------------------------------------------------------------------------

    As described in Section III.B of this preamble, we are also 
proposing updates to the advanced technology incentives in the ABT 
program for HD GHG Phase 2 for electric vehicles. Given the ZEV-related 
factors outlined in this section and further described in Sections I 
and II that have arisen since the adoption of HD GHG Phase 2, EPA 
believes it is appropriate to limit the availability of credit 
multipliers, but we also recognize the role these credits play in 
developing new markets. We are proposing in this action to eliminate 
the advanced technology vehicle credit multipliers for BEVs and PHEVs 
for MY 2027, one year before these credit multipliers were set to end 
under the existing HD GHG Phase 2 program. We propose retaining the 
existing FCEV credit multipliers, because the HD market for this 
technology continues to be in the early stage of development. We 
request comment on this approach. In addition to this preamble, we have 
also prepared a Draft Regulatory Impact Analysis (DRIA) which is 
available on our website and in the public docket for this rulemaking. 
The DRIA provides additional data, analysis, and discussion. We request 
comment on the analysis and data in the DRIA.

D. Impacts of the Proposed Standards

    Our estimated emission reductions, average per-vehicle costs, 
program costs, and monetized benefits of the proposed program are 
summarized in this section and detailed in Sections IV through VIII of 
the preamble and Chapters 3 through 8 of the DRIA. EPA notes that, 
consistent with CAA section 202, in

[[Page 25935]]

evaluating potential GHG standards, we carefully weigh the statutory 
factors, including GHG emissions impacts of the GHG standards, and the 
feasibility of the standards (including cost of compliance in light of 
available lead time). We monetize benefits of the proposed GHG 
standards and evaluate other costs in part to better enable a 
comparison of costs and benefits pursuant to E.O. 12866, but we 
recognize that there are benefits that we are currently unable to fully 
quantify. EPA's consistent practice has been to set standards to 
achieve improved air quality consistent with CAA section 202, and not 
to rely on cost-benefit calculations, with their uncertainties and 
limitations, in identifying the appropriate standards. Nonetheless, our 
conclusion that the estimated benefits considerably exceed the 
estimated costs of the proposed program reinforces our view that the 
proposed GHG standards represent an appropriate weighing of the 
statutory factors and other relevant considerations.
    Our analysis of emissions impacts accounts for downstream 
emissions, i.e., from emission processes such as engine combustion, 
engine crankcase exhaust, vehicle evaporative emissions, and vehicle 
refueling emissions. Vehicle technologies would also affect emissions 
from upstream sources that occur during, for example, electricity 
generation and the refining and distribution of fuel. This proposal's 
analyses include emissions impacts from electrical generating units 
(EGUs).\61\ We also account for refinery emission impacts on non-GHG 
pollutants in these analyses.
---------------------------------------------------------------------------

    \61\ We are continuing and are not reopening the existing 
approach taken in both HD GHG Phase 1 and Phase 2, that compliance 
with the vehicle exhaust CO2 emission standards is based 
on CO2 emissions from the vehicle.
---------------------------------------------------------------------------

    The proposed GHG standards would achieve significant reductions in 
GHG emissions. As seen in Table ES-5, through 2055 the program would 
result in significant downstream GHG emission reductions. In addition, 
considering both downstream and EGU cumulative emissions from calendar 
years 2027 through 2055, the proposed standards would achieve 
approximately 1.8 billion metric tons in CO2 emission 
reductions (see Section V of the preamble and Chapter 4 of the DRIA for 
more detail).\62\ As discussed in Section VI of this preamble, these 
GHG emission reductions would make an important contribution to efforts 
to limit climate change and its anticipated impacts. These GHG 
reductions would benefit all U.S. residents, including populations such 
as people of color, low-income populations, indigenous peoples, and/or 
children that may be especially vulnerable to various forms of damages 
associated with climate change. We project a cumulative increase from 
calendar years 2027 through 2055 of approximately 0.4 billion metric 
tons of CO2 emissions from EGUs as a result of the increased 
demand for electricity associated with the proposal, although those 
projected impacts decrease over time because of projected changes in 
the future power generation mix, including cleaner combustion 
technologies and increases in renewables.\63\
---------------------------------------------------------------------------

    \62\ As discussed in Section V, in this proposal we estimated 
refinery emissions impacts only for non-GHG emissions. Were we to 
estimate impacts on refinery GHG emissions, we expect that the 
decrease in liquid fuel consumption associated with this rule would 
lead to a reduction in those emissions, and that the total GHG 
emissions reductions from this proposal (including downstream, EGU, 
and refinery) would exceed 1.8 billion metric tons.
    \63\ We expect IRA incentives, particularly sections 45X, 45Y, 
and 48E of the Internal Revenue Code (i.e., Title 26) added by 
sections 13502 (Advanced Manufacturing Production Credit), 13701 
(Clean Electricity Production Credit), and 13702 (Clean Electricity 
Investment Credit), respectively, to contribute significantly to 
increases in renewables in the future power generation mix.

   Table ES-5--Cumulative Downstream GHG Impacts of the Proposal From
    Calendar Years 2027 Through 2055 in Billion Metric Tons (BMT) \a\
------------------------------------------------------------------------
                                           Reduction in   Percent impact
                Pollutant                       BMT             (%)
------------------------------------------------------------------------
Carbon Dioxide (CO2)....................             2.2             -18
Methane (CH4)...........................         0.00035             -17
Nitrous Oxide (N2O).....................         0.00028             -17
CO2 Equivalent (CO2e)...................             2.3             -18
------------------------------------------------------------------------
\a\ Downstream emissions processes are those that come directly from a
  vehicle, such as tailpipe exhaust, crankcase exhaust, evaporative
  emissions, and refueling emissions.

    We expect the proposed GHG emission standards would lead to an 
increase in HD ZEVs relative to our reference case without the proposed 
rule, which would also result in reductions of vehicle emissions of 
non-GHG pollutants that contribute to ambient concentrations of ozone, 
particulate matter (PM2.5), NO2, CO, and air 
toxics. Exposure to these non-GHG pollutants is linked to adverse human 
health impacts such as premature death as well as other adverse public 
health and environmental effects (see Section VI). As shown in Table 
ES-6, by 2055, when considering downstream, EGU, and refinery 
emissions, we estimate a net decrease in emissions from all pollutants 
modeled (i.e., NOX, PM2.5, VOC, and 
SO2). In this year alone, the proposed standards would 
reduce downstream PM2.5 by approximately 970 U.S. tons 
(about 39 percent of heavy-duty sector downstream PM2.5 
emissions) and downstream oxides of nitrogen (NOX) by over 
70,000 U.S. tons (about 28 percent of heavy-duty sector downstream 
NOX emissions) (see Section V of the preamble and Chapter 4 
of the DRIA for more detail). These reductions in non-GHG emissions 
from vehicles would reduce air pollution near roads. As described in 
Section VI of this preamble, there is substantial evidence that people 
who live or attend school near major roadways are more likely to be of 
a non-White race, Hispanic ethnicity, and/or low socioeconomic status. 
In addition, emissions from HD vehicles and engines can significantly 
affect individuals living near truck freight routes. Based on a study 
EPA conducted of people living near truck routes, an estimated 72 
million people live within 200 meters of a truck freight route.\64\ 
Relative to the rest of the population, people of color and those with 
lower incomes are more likely to live near truck routes.\65\ In 
addition, children who attend school near major roads are 
disproportionately

[[Page 25936]]

represented by children of color and children from low-income 
households.\66\
---------------------------------------------------------------------------

    \64\ U.S. EPA (2021). Estimation of Population Size and 
Demographic Characteristics among People Living Near Truck Routes in 
the Conterminous United States. Memorandum to the Docket EPA-HQ-OAR-
2019-0055.
    \65\ See Section VI.D for additional discussion on our analysis 
of environmental justice impacts of this NPRM.
    \66\ Kingsley, S., Eliot, M., Carlson, L. et al. Proximity of 
U.S. schools to major roadways: a nationwide assessment. J Expo Sci 
Environ Epidemiol 24, 253-259 (2014). https://doi.org/10.1038/jes.2014.5.
---------------------------------------------------------------------------

    Similar to GHG emissions, we project that non-GHG emissions from 
EGUs would increase as a result of the increased demand for electricity 
associated with the proposal, and we expect those projected impacts to 
decrease over time due to EGU regulations and changes in the future 
power generation mix, including impacts of the IRA. We also project 
that non-GHG emissions from refineries would decrease as a result of 
the lower demand for liquid fuel associated with the proposed GHG 
standards (Section V and DRIA Chapter 4).

     Table ES-6--Projected Non-GHG Heavy-Duty Emission Impacts \a\ in Calendar Year 2055 Due to the Proposal
----------------------------------------------------------------------------------------------------------------
                                                    Downstream                                      Net impact
                    Pollutant                       (U.S short       EGU (U.S.    Refinery (U.S.    (U.S. short
                                                       tons)        short tons)     short tons)        tons)
----------------------------------------------------------------------------------------------------------------
Nitrogen Oxides (NOX)...........................         -71,000             790          -1,800         -72,000
Primary Exhaust PM2.5...........................            -970             750            -440            -650
Volatile Organic Compounds (VOC)................         -21,000             750           -1200         -21,000
Sulfur Dioxide (SO2)............................            -520             910            -640            -250
----------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

    We estimate that the present value, at 3 percent, of costs to 
manufacturers would be $9 billion dollars before considering the IRA 
battery tax credits. With those battery tax credits, which we estimate 
to be $3.3 billion, the cost to manufacturers of compliance with the 
program would be $5.7 billion. The manufacturer cost of compliance with 
the proposed rule on a per-vehicle basis are shown in Table ES-7. We 
estimate that the MY 2032 fleet average per-vehicle cost to 
manufacturers by regulatory group would range between a cost savings 
for LHD vocational vehicles to $2,300 for HHD vocational vehicles and 
between $8,000 and $11,400 per tractor. EPA notes the projected costs 
per vehicle for this proposal are similar to the fleet average per-
vehicle costs projected for the HD GHG Phase 2 rule, where the tractor 
standards were projected to cost between $10,200 and $13,700 per 
vehicle (81 FR 73621 (October 25, 2016)) and the MY 2027 vocational 
vehicle standards were projected to cost between $1,486 and $5,670 per 
vehicle (81 FR 73718 (October 25, 2016)). For this proposal, EPA finds 
that the expected the additional vehicle costs are reasonable in light 
of the GHG emissions reductions.\67\
---------------------------------------------------------------------------

    \67\ For illustrative purposes, these average costs would 
represent an approximate two percent increase for vocational 
vehicles and 11 percent increase of tractors if we assume an 
approximate minimum vehicle price of $100,000 for vocational 
vehicles and $100,000 for tractors (81 FR 73482). We also note that 
these average upfront costs are taken across the HD vehicle fleet 
and are not meant as an indicator of average price increase.

      Table ES-7--Manufacturer Costs To Meet the Proposed MY 2032 Standards Relative to the Reference Case
                                                     [2021$]
----------------------------------------------------------------------------------------------------------------
                                                                    Incremental
                                                                   ZEV adoption       Per-ZEV      Fleet-average
                        Regulatory group                             rate  in      manufacturer     per-vehicle
                                                                    technology        RPE on       manufacturer
                                                                   package  (%)       average           RPE
----------------------------------------------------------------------------------------------------------------
Light Heavy-Duty Vocational.....................................              45         -$9,515         -$4,326
Medium Heavy-Duty Vocational....................................              24           1,358             326
Heavy Heavy-Duty Vocational.....................................              28           8,146           2,300
Day Cab Tractors................................................              30          26,364           8,013
Sleeper Cab Tractors............................................              21          54,712          11,445
----------------------------------------------------------------------------------------------------------------

    The proposed GHG standards would reduce adverse impacts associated 
with climate change and exposure to non-GHG pollutants and thus would 
yield significant benefits, including those we can monetize and those 
we are unable to quantify. Table ES-8 summarizes EPA's estimates of 
total monetized discounted costs, operational savings, and benefits. 
The results presented here project the monetized environmental and 
economic impacts associated with the proposed program during each 
calendar year through 2055. EPA estimates that the present value of 
monetized net benefits to society would be approximately $320 billion 
through the year 2055 (annualized net benefits of $17 billion through 
2055), more than 5 times the cost in vehicle technology and associated 
electric vehicle supply equipment (EVSE) combined. Regarding social 
costs, EPA estimates that the cost of vehicle technology (not including 
the vehicle or battery tax credits) and EVSE would be approximately $9 
billion and $47 billion respectively, and that the HD industry would 
save approximately $250 billion in operating costs (e.g., savings that 
come from less liquid fuel used, lower maintenance and repair costs for 
ZEV technologies as compared to ICE technologies, etc.). The program 
would result in significant social benefits including $87 billion in 
climate benefits (with the average SC-GHGs at a 3 percent discount 
rate). Between $15 and $29 billion of the estimated total benefits 
through 2055 are attributable to reduced emissions of non-GHG 
pollutants, primarily those that contribute to ambient concentrations 
of

[[Page 25937]]

PM2.5. Finally, the benefits due to reductions in energy 
security externalities caused by U.S. petroleum consumption and imports 
would be approximately $12 billion under the proposed program. A more 
detailed description and breakdown of these benefits can be found in 
Section VIII of the preamble and Chapter 7 of the DRIA.

  Table ES-8--Monetized Discounted Costs, Benefits, and Net Benefits of the Proposed Program for Calendar Years
                                                2027 Through 2055
                                 [Billions of 2021 dollars] \a\ \b\ \c\ \d\ \e\
----------------------------------------------------------------------------------------------------------------
                                                           Present value                 Annualized value
                                                 ---------------------------------------------------------------
                                                    3% Discount     7% Discount     3% Discount     7% Discount
                                                       rate            rate            rate            rate
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Costs........................              $9             $10           $0.47           $0.82
EVSE Costs......................................              47              29             2.5             2.3
Operational Savings.............................             250             120              13              10
Energy Security Benefits........................              12             6.0            0.62            0.49
GHG Benefits....................................              87              87             4.6             4.6
Non-GHG Benefits................................        15 to 29       5.8 to 11     0.78 to 1.5    0.47 to 0.91
Net Benefits....................................             320             180              17              12
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values 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 (2027-2055) and
  discounted back to year 2027.
\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 GHG (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 7 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. We note that in this proposal we are
  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). For further discussion of SC-
  GHG and how EPA accounted for these estimates, please refer to Section VII of this preamble.
\c\ The same discount rate used to discount the value of damages from future GHG emissions in this table (SC-
  GHGs at 3% discount rate) 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\ Non-GHG health benefits are presented based on two different long-term exposure studies of mortality risk: a
  Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019). 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\ Net benefits reflect the operational savings plus benefits minus costs. For presentational clarity, the
  present and equivalent annualized value of net benefits for a 3 percent discount rate reflect benefits based
  on the Pope III et al. study while the present and equivalent annualized value of net benefits for a 7 percent
  discount rate reflect benefits based on the Wu et al. study.

    Regarding the costs to purchasers as shown in Table ES-9, for the 
proposed program we estimated the average upfront incremental cost to 
purchase a new MY 2032 HD BEV or FCEV relative to an ICE vehicle for a 
vocational BEV and EVSE, a short-haul tractor BEV and EVSE, a short-
haul tractor FCEV, and a long-haul tractor FCEV. These incremental 
costs account for the IRA tax credits, specifically battery and vehicle 
tax credits, as discussed in Section II.E.4 and Section IV.C and IV.D. 
We also estimated the operational savings each year (i.e., savings that 
come from the lower costs to operate, maintain, and repair BEV 
technologies) and payback period (i.e., the year the initial cost 
increase would pay back). Table ES-9 shows that for the vocational 
vehicle ZEVs, short-haul tractor ZEVs, and long-haul tractor FCEVs the 
incremental upfront costs (after the tax credits) are recovered through 
operational savings such that pay back occurs after between one and 
three years on average for vocational vehicles, after three years for 
short-haul tractors and after seven years on average for long-haul 
tractors. We discuss this in more detail in Sections II and IV of this 
preamble and DRIA Chapters 2 and 3.

 Table ES-9--MY 2032 Estimated Average Per-Vehicle Purchaser Upfront Cost and Annual Savings Difference Between
                             BEV/FCEV and ICE Technologies for the Proposed Program
                                               [2021 dollars] \a\
----------------------------------------------------------------------------------------------------------------
                                      Upfront                                         Annual
                                   vehicle cost    Upfront EVSE    Total upfront    incremental   Payback period
        Regulatory group            difference       costs on        costs on        operating       (year) on
                                  (including tax      average         average        costs on         average
                                     credits)                                         average
----------------------------------------------------------------------------------------------------------------
LHD Vocational..................         -$9,608         $10,552            $944         -$4,043               1
MHD Vocational..................          -2,907          14,312          11,405          -5,397               3
HHD Vocational..................          -8,528          17,233           8,705          -7,436               2
Short Haul (Day Cab) Tractors...             582          16,753          17,335          -6,791               3
Long Haul (Sleeper Cab) Tractors          14,712               0          14,712          -2,290               7
----------------------------------------------------------------------------------------------------------------
\a\ Undiscounted dollars.

[[Page 25938]]

I. Introduction

A. Brief Overview of the Heavy-Duty Industry

    Heavy-duty highway vehicles range from commercial pickup trucks to 
vocational vehicles that support local and regional transportation, 
construction, refuse collection, and delivery work, to line-haul 
tractors (semi trucks) that move freight cross-country. This diverse 
array of vehicles is categorized into weight classes based on gross 
vehicle weight ratings (GVWR). These weight classes span Class 2b 
pickup trucks and vans from 8,500 to 10,000 pounds GVWR through Class 8 
line-haul tractors and other commercial vehicles that exceed 33,000 
pounds GVWR. While Class 2b and 3 complete pickups and vans are not 
included in this proposed rulemaking, Class 2b and 3 vocational 
vehicles are included in this rulemaking (as discussed further in 
Section III.E.3).\68\
---------------------------------------------------------------------------

    \68\ Class 2b and 3 vehicles with GVWR between 8,500 and 14,000 
pounds are primarily commercial pickup trucks and vans and are 
sometimes referred to as ``medium-duty vehicles''. The vast majority 
of Class 2b and 3 vehicles are chassis-certified vehicles, and we 
intend to include those vehicles in a combined light-duty and 
medium-duty rulemaking action, consistent with E.O. 14037, Section 
2a. Heavy-duty engines and vehicles are also used in nonroad 
applications, such as construction equipment; nonroad heavy-duty 
engines, equipment, and vehicles are not within the scope of this 
NPRM.
---------------------------------------------------------------------------

    Heavy-duty highway vehicles are powered through an array of 
different means. Currently, the HD vehicle fleet is primarily powered 
by diesel-fueled, compression-ignition (CI) engines. However, gasoline-
fueled, spark-ignition (SI) engines are common in the lighter weight 
classes, and smaller numbers of alternative fuel engines (e.g., 
liquified petroleum gas, compressed natural gas) are found in the 
heavy-duty fleet. We refer to the vehicles powered by internal 
combustion engines (ICE, including SI and CI engines) as ICE vehicles 
throughout this preamble. An increasing number of HD vehicles are 
powered by zero emission vehicle (ZEV) technologies such as battery 
electric vehicle (BEV) technology, e.g., EPA certified 380 HD BEVs in 
MY 2020 but that number jumped to 1,163 HD BEVs in MY 2021. We use the 
term ZEV technologies throughout the preamble to refer to technologies 
that result in zero tailpipe emissions, which in this preamble we refer 
to collectively as ZEVs. Example ZEV technologies include BEVs and fuel 
cell vehicles (FCEVs). While hybrid vehicles (including plug-in hybrid 
electric vehicles) include energy storage features such as batteries, 
they also include an ICE, which do not result in zero tailpipe 
emissions.
    The industry that designs and manufactures HD vehicles is composed 
of three primary segments: vehicle manufacturers, engine manufacturers 
and other major component manufacturers, and secondary manufacturers 
(i.e., body builders). Some vehicle manufacturers are vertically 
integrated--designing, developing, and testing their engines in-house 
for use in their vehicles; others purchase some or all of their engines 
from independent engine suppliers. At the time of this proposal, only 
one major independent engine manufacturer supports the HD industry, 
though some vehicle manufacturers sell their engines or ``incomplete 
vehicles'' (i.e., chassis that include their engines, the frame, and a 
transmission) to body builders who design and assemble the final 
vehicle. Each of these subindustries is often supported by common 
suppliers for subsystems such as transmissions, axles, engine controls, 
and emission controls.
    In addition to the manufacturers and suppliers responsible for 
producing HD vehicles, an extended network of dealerships, repair and 
service facilities, and rebuilding facilities contribute to the sale, 
maintenance, and extended life of these vehicles and engines. HD 
vehicle dealerships offer customers a place to order such vehicles from 
a specific manufacturer and often include service facilities for those 
vehicles and their engines. Dealership service technicians are 
generally trained to perform regular maintenance and make repairs, 
which generally include repairs under warranty and in response to 
manufacturer recalls. Some trucking fleets, businesses, and large 
municipalities hire their own technicians to service their vehicles in 
their own facilities. Many refueling centers along major trucking 
routes have also expanded their facilities to include roadside 
assistance and service stations to diagnose and repair common problems.
    The end-users for HD vehicles are as diverse as the applications 
for which these vehicles are purchased. Smaller weight class HD 
vehicles are commonly purchased by delivery services, contractors, and 
municipalities. The middle weight class vehicles tend to be used as 
commercial vehicles for business purposes and municipal work that 
transport people and goods locally and regionally or provide services 
such as utilities. Vehicles in the heaviest weight classes are 
generally purchased by businesses with high load demands, such as 
construction, towing or refuse collection, or freight delivery fleets 
and owner-operators for regional and long-haul goods movement. The 
competitive nature of the businesses and owner-operators that purchase 
and operate HD vehicles means that any time at which the vehicle is 
unable to operate due to maintenance or repair (i.e., downtime) can 
lead to a loss in income. The customers' need for reliability drives 
much of the vehicle manufacturers innovation and research efforts.

B. History of Greenhouse Gas Emission Standards for Heavy-Duty Engines 
and Vehicles

    EPA has a longstanding practice of regulating GHG emissions from 
the HD sector. In 2009, EPA and the U.S. Department of Transportation's 
(DOT's) National Highway Traffic Safety Administration (NHTSA) began 
working on a joint regulatory program to reduce GHG emissions and fuel 
consumption from HD vehicles and engines.\69\ The first phase of the HD 
GHG and fuel efficiency program was finalized in 2011 (76 FR 57106, 
September 15, 2011) (``HD GHG Phase 1'').\70\ The HD GHG Phase 1 
program largely adopted approaches consistent with recommendations from 
the National Academy of Sciences. The HD GHG Phase 1 program, which 
began in MY 2014 and phased in through MY 2018, included separate 
standards for HD vehicles and HD engines. The program offered 
flexibility allowing manufacturers to attain these standards through a 
mix of technologies and the option to participate in an emissions 
credit ABT program.
---------------------------------------------------------------------------

    \69\ Greenhouse gas emissions from heavy-duty vehicles are 
primarily carbon dioxide (CO2), but also include methane 
(CH4), nitrous oxide (N2O), and 
hydrofluorocarbons (HFC).
    \70\ National Research Council; Transportation Research Board. 
The National Academies' Committee to Assess Fuel Economy 
Technologies for Medium- and Heavy-Duty Vehicles; ``Technologies and 
Approaches to Reducing the Fuel Consumption of Medium- and Heavy-
Duty Vehicles.'' 2010. Available online: https://www.nap.edu/catalog/12845/technologies-and-approaches-to-reducing-the-fuel-consumption-of-medium-and-heavy-duty-vehicles.
---------------------------------------------------------------------------

    In 2016, EPA and NHTSA finalized the HD GHG Phase 2 program.\71\ 
The HD GHG Phase 2 program included technology-advancing, performance-
based emission standards for HD vehicles and HD engines that phase in 
over the long term, with initial standards for most vehicles and 
engines commencing in MY 2021, increasing in stringency in MY 2024, and 
culminating in even more stringent MY 2027 standards. HD GHG Phase 2 
built upon the Phase 1 program and set standards

[[Page 25939]]

based not only on then-currently available technologies, but also on 
technologies that were either still under development or not yet widely 
deployed at the time of the HD GHG Phase 2 final rule. To ensure 
adequate time for technology development, HD GHG Phase 2 provided up to 
10 years lead time to allow for the development and phase-in of these 
control technologies. EPA recently finalized technical amendments to 
the HD GHG Phase 2 rulemaking (``HD Technical Amendments'') that 
included changes to the test procedures for heavy-duty engines and 
vehicles to improve accuracy and reduce testing burden.\72\
---------------------------------------------------------------------------

    \71\ 81 FR 73478, October 25, 2016.
    \72\ 86 FR 34308, June 29, 2021.
---------------------------------------------------------------------------

    As with the previous HD GHG Phase 1 and Phase 2 rules and light-
duty GHG rules, EPA has coordinated with the DOT and NHTSA during the 
development of this proposed rule. This included coordination prior to 
and during the interagency review conducted under E.O. 12866. EPA has 
also consulted with CARB during the development of this proposal, as 
EPA also did during the development of the HD GHG Phase 1 and 2 and 
light-duty rules. See Section I.E for additional detail on EPA's 
coordination with DOT/NHTSA, CARB, and additional Federal Agencies.

C. What has changed since we finalized the HD GHG Phase 2 rule?

    In 2016, we established the HD GHG Phase 2 CO2 standards 
on the premise that zero-emission technologies would not be available 
and cost-competitive in significant volumes in the timeframe of the HD 
GHG Phase 2 program but would become more widely available in the HD 
market over time. To encourage that availability at faster pace, we 
finalized BEV, PHEV, and FCEV advanced technology credit multipliers 
for HD vehicles. As described in the Executive Summary and Section II 
of this preamble, we have considered new data and recent policy changes 
and we are now projecting that ZEV technologies will be readily 
available and technologically feasible much sooner than we had 
projected. We list the developments pointing to this increased 
application of ZEV technologies again in the following paragraphs (and 
we discuss their impacts on the HD market in more detail in the 
Sections I.C.1 through I.C.3):
    First, the HD market has evolved such that early ZEV models are in 
use today for some applications and are expected to expand to many more 
applications, ZEV technologies costs have gone down and are projected 
to continue to fall, and manufacturers have announced plans to rapidly 
increase their investments in ZEV technologies over the next decade. 
For example, in 2022, several manufacturers are producing fully 
electric HD vehicles in several applications, and these applications 
are expected to expand (see Section I.C.1 and DRIA Chapter 1). 
Furthermore, several HD manufacturers have announced their ZEV 
projections that signify a rapid increase in BEVs over the next decade. 
This increase in HD ZEVs is in part due to the significant decrease in 
cost to manufacture lithium-ion batteries, the single most expensive 
component of a BEV, in the past decade; those costs are projected to 
continue to fall during this decade, all while the performance of these 
batteries in terms of energy density has improved and is projected to 
continue to improve.73 74 Many of the manufacturers who 
produce HD vehicles and firms that purchase HD vehicles have announced 
billions of dollars' worth of investments in ZEV technologies and 
significant plans to transition to a zero-carbon fleet over the next 
ten to fifteen years.\75\
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    \73\ Mulholland, Eamonn. ``Cost of electric commercial vans and 
pickup trucks in the United States through 2040.'' Page 7. January 
2022. Available at https://theicct.org/wp-content/uploads/2022/01/cost-ev-vans-pickups-us-2040-jan22.pdf.
    \74\ Environmental Defense Fund. ``Technical Review of Medium- 
and Heavy-Duty Electrification Costs for 2027-2030.'' February 2, 
2022. Available online at: https://blogs.edf.org/climate411/files/2022/02/EDF-MDHD-Electrification-v1.6_20220209.pdf.
    \75\ Environmental Defense Fund (2022) Electric Vehicle Market 
Update: Manufacturer Commitments and Public Policy Initiatives 
Supporting Electric Mobility in the U.S. and Worldwide, September 
2022, available online at: https://blogs.edf.org/climate411/files/2022/09/ERM-EDF-Electric-Vehicle-Market-Report_September2022.pdf.
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    Second, the 2021 BIL and the 2022 IRA laws have been enacted, and 
together these two laws provide significant and unprecedented monetary 
incentives for the production and purchase of ZEVs in the HD market, as 
well as incentives for electric vehicle charging and hydrogen, which 
will further support a rapid increase in market penetration of ZEVs.
    Third, there have been multiple actions by states to accelerate the 
adoption of HD ZEVs. The State of California and other states have 
adopted the ACT program that includes a manufacturer requirement for 
zero-emission truck sales.76 77 The ACT program provides 
that ``manufacturers who certify Class 2b-8 chassis or complete 
vehicles with combustion engines would be required to sell zero-
emission trucks as an increasing percentage of their annual [state] 
sales from 2024 to 2035.'' 78 79 In addition, 17 states and 
the District of Columbia have signed a Memorandum of Understanding 
establishing goals to support widespread electrification of the HD 
vehicle market.\80\
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    \76\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \77\ Oregon adopted ACT on 11/17/2021: https://www.oregon.gov/deq/rulemaking/Pages/ctr2021.aspx. Washington adopted ACT on 11/29/
2021: https://ecology.wa.gov/Regulations-Permits/Laws-rules-rulemaking/Rulemaking/WAC-173-423-400. New York adopted ACT on 12/
29/2021: https://www.dec.ny.gov/regulations/26402.html. New Jersey 
adopted ACT on 12/20/2021: https://www.nj.gov/dep/rules/adoptions.html. Massachusetts adopted ACT on 12/30/2021: https://www.mass.gov/regulations/310-CMR-700-air-pollution-control#proposed-amendments-public-comment.
    \78\ California Air Resources Board, Advanced Clean Trucks Fact 
Sheet (August 20, 2021), available at https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-trucks-fact-sheet. See also 
California Air Resources Board, Final Regulation Order--Advanced 
Clean Trucks Regulation. Filed March 15, 2021. Available at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \79\ EPA granted the ACT rule waiver requested by California 
under CAA section 209(b) on March 30, 2023.
    \80\ Multi-State MOU, available at https://www.nescaum.org/documents/mhdv-zev-mou-20220329.pdf/.
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    We note that the improvements in internal combustion engine 
technologies that began under the HD GHG Phase 1 program and are being 
advanced under the HD GHG Phase 2 standards are still necessary for 
reducing GHG emissions from the HD sector. As we discuss in Section 
II.D.1, these technology improvements exist today and we believe they 
will continue to be feasible during the timeframe at issue in this 
proposed rulemaking.
1. The HD Zero-Emission Vehicle Market
    Since 2012, manufacturers have developed a number of prototype and 
demonstration HD BEV projects, particularly in the State of California, 
establishing technological feasibility and durability of BEV technology 
for specific applications used for specific services, as well as 
building out necessary infrastructure.\81\ In 2019, approximately 60 
makes and models of HD BEVs were available for purchase, with 
additional product lines in prototype or other early development 
stages.82 83 84 According to the Global

[[Page 25940]]

Commercial Vehicle Drive to Zero Zero-Emission Technology Inventory 
(ZETI), 160 BEV models were commercially available on the market in the 
United States and Canada region in 2021, and around 200 BEV models are 
projected to be available by 2024.\85\ DRIA Chapter 1 provides a 
snapshot of BEV models in the HD vehicle market.
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    \81\ NACFE (2019) ``Guidance Report: Viable Class \7/8\ 
Electric, Hybrid and Alternative Fuel Tractors'', available online 
at: https://nacfe.org/downloads/viable-class-7-8-alternative-vehicles/.
    \82\ Nadel, S. and Junga, E. (2020). ``Electrifying Trucks: From 
Delivery Vans to Buses to 18-Wheelers.'' American Council for an 
Energy-Efficient Economy White Paper, available at: https://aceee.org/white-paper/electrifying-trucks-delivery-vans-buses-18.
    \83\ The composition of all-electric truck models was: 36 buses, 
10 vocational trucks, 9 step vans, 3 tractors, 2 street sweepers, 
and 1 refuse truck (Nadel and Junga (2020) citing AFDC (Alternative 
Fuels Data Center). 2018. ``Average Annual Vehicle Miles Traveled by 
Major Vehicle Categories.'' www.afdc.energy.gov/data/widgets/10309.
    \84\ Note that there are varying estimates of BEV and FCEV 
models in the market; NACFE (2019) ``Guidance Report: Viable Class 
\7/8\ Electric, Hybrid and Alternative Fuel Tractors'', available 
at: https://nacfe.org/downloads/viable-class-7-8-alternative-vehicles/. (NACFE 2019) provided slightly lower estimates than those 
included here from Nadel and Junga 2020. A recent NREL study 
suggests that there may be more models available, but it is unclear 
how many are no longer on the market since the inventory includes 
vehicles introduced and used in commerce starting in 2012 (Smith et 
al. 2019).
    \85\ Global Commercial Vehicle Drive to Zero. ``ZETI Data 
Explorer''. CALSTART. Version 1.1, accessed February 2023. Available 
online: https://globaldrivetozero.org/tools/zeti-data-explorer/.
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    Current production volumes of HD BEVs originally started increasing 
in the transit bus market, where electric bus sales grew from 300 to 
650 in the United States between 2018 to 2019.86 87 In 2020, 
the market continued to expand beyond transit, with approximately 900 
HD BEVs sold in the United States and Canada combined, consisting of 
transit buses (54 percent), school buses (33 percent), and straight 
trucks (13 percent).\88\ By 2021, M.J. Bradley's analysis of the HD BEV 
market found that 30 manufacturers had at least one BEV model for sale 
and an additional nine companies had made announcements to begin BEV 
production by 2025.\89\ In April 2022, the Environmental Defense Fund 
(EDF) projected deployments and major orders of electric trucks and 
buses in the United States to rise to 54,000 by 2025 based on an 
analysis of formal statements and announcements by auto manufacturers, 
as well as analysis of the automotive press and data from financial and 
market analysis firms that regularly cover the auto industry.\90\ Given 
the dynamic nature of the BEV market, the number and types of vehicles 
available are increasing fairly rapidly.\91\
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    \86\ Tigue, K. (2019) ``U.S. Electric Bus Demand Outpaces 
Production as Cities Add to Their Fleets'' Inside Climate News, 
November 14. https://insideclimatenews.org/news/14112019/electric-bus-cost-savings-health-fuel-charging.
    \87\ Note that ICCT (2020) estimates 440 electric buses were 
sold in the U.S. and Canada in 2019, with 10 of those products being 
FCEV pilots. The difference in estimates of number of electric buses 
available in the U.S. may lie in different sources looking at 
production vs. sales of units.
    \88\ International Council on Clean Transportation. ``Fact 
Sheet: Zero-Emission Bus and Truck Market in the United States and 
Canada: A 2020 Update.'' Pages 3-4. May 2021.
    \89\ M.J. Bradley and Associates (2021) ``Medium- and Heavy-Duty 
Vehicles: Market Structure, Environmental Impact, and EV 
Readiness.'' Page 21. July 2021.
    \90\ Environmental Defense Fund. ``Electric Vehicle Market 
Update: Manufacturer Commitments and Public Policy Initiatives 
Supporting Electric Mobility in the U.S. and Worldwide''. April 
2022. Available online: https://blogs.edf.org/climate411/files/2022/04/electric_vehicle_market_report_v6_april2022.pdf.
    \91\ Union of Concerned Scientists (2019) ``Ready for Work: Now 
Is the Time for Heavy-Duty Electric Vehicles,'' available at 
www.ucsusa.org/resources/ready-work.
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    The current market for HD FCEVs is not as developed as the market 
for HD BEVs, but models are being designed, tested, and readied for 
purchase in the coming years. According to ZETI,\92\ at least 16 HD 
FCEV models are expected to become commercially available for 
production in the United States and Canada region by 2024, as listed in 
DRIA Chapter 1. The Hydrogen Fuel Cell Partnership reports that fuel 
cell electric buses have been in commercial development for 20 years 
and, as of May 2020, over 100 buses are in operation or in planning in 
the United States.\93\ Foothill Transit in Los Angeles County ordered 
33 transit buses that they expect to be operating in early 2023.\94\ 
Ten Toyota-Kenworth Class 8 fuel cell tractors were successfully tested 
in the Port of Los Angeles and surrounding area through 2022.\95\ 
Hyundai is scheduled to test 30 Class 8 tractors in the Port of Oakland 
in 2023.\96\ Nikola has agreements with fleets to purchase or lease 
over 200 Class 8 trucks upon satisfactory completion of demonstrations 
97 98 99 and is building a manufacturing facility in 
Coolidge, Arizona, with an expected production capacity of up to 20,000 
BEV and FCEV trucks by the end of 2023.\100\
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    \92\ Global Commercial Vehicle Drive to Zero. ``ZETI (Zero-
Emission Technology Inventory)''. CALSTART. Version 8.0, accessed 
November 2022. Available online: https://globaldrivetozero.org/tools/zeti/.
    \93\ Hydrogen Fuel Cell Partnership. ``Buses & Trucks''. 
Available online: https://h2fcp.org/buses_trucks.
    \94\ Scauzillo, Steve. ``First hydrogen-powered transit bus in 
LA County hits streets in December, starting new trend''. San 
Gabriel Valley Tribune. November 22, 2022. Available online: https://ourcommunitynow.com/post/first-hydrogen-powered-transit-bus-in-la-county-hits-streets-in-december-starting-new-trend.
    \95\ Heavy Duty Trucking. ``FCEV Drayage Trucks Prove Themselves 
in LA Port Demonstration Project.'' HDT Truckinginfo. September 22, 
2022. Available online: https://www.truckinginfo.com/10181655/fcev-drayage-trucks-prove-themselves-in-la-port-demonstration-project.
    \96\ Hyundai. ``Hyundai Motors Details Plans to Expand into U.S. 
Market with Hydrogen-powered XCIENT Fuel Cells at ACT Expo.'' May 
10, 2022. Available online: https://www.hyundai.com/worldwide/en/company/newsroom/hyundai-motor-details-plans-to-expand-into-u.s.-market-with-hydrogen-powered-xcient-fuel-cells-at-act-expo-0000016825.
    \97\ Heavy Duty Trucking. ``Pennsylvania Flatbed Carrier to 
Lease 100 Nikola Tre FCEVs.'' HDT Truckinginfo. October 14, 2021. 
Available online: https://www.truckinginfo.com/10153974/pennsylvania-flatbed-carrier-to-lease-100-nikola-tre-evs.
    \98\ Green Car Congress. ``Covenant Logistics Group signs letter 
of intent for 10 Nikola Tre BEVs and 40 Tre FCEVs.'' January 12, 
2022. Available online: https://www.greencarcongress.com/2022/01/20220112-covenant.html.
    \99\ Adler, Alan. ``Plug Power will buy up to 75 Nikola fuel 
cell trucks.'' Freightwaves. December 15, 2022. Available online; 
https://www.freightwaves.com/news/plug-power-will-buy-up-to-75-nikola-fuel-cell-trucks.
    \100\ Nikola. ``Nikola Corportation Celebrates the Customer 
Launch of Serial Production in Coolidge, Arizona.'' April 27, 2022. 
Available online: https://nikolamotor.com/press_releases/nikola-
corporation-celebrates-the-customer-launch-of-serial-production-in-
coolidge-arizona-
163#:~:text=Phase%201%20of%20the%20Coolidge,per%20year%20on%20two%20s
hifts.
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    For this proposed rulemaking, EPA conducted an analysis of 
manufacturer-supplied end-of-year production reports provided to us as 
a requirement of the process to certify HD vehicles to our GHG emission 
standards.\101\ Based on the end-of-year production reports for MY 
2019, manufacturers produced approximately 350 certified HD BEVs. This 
is out of nearly 615,000 HD diesel ICE vehicles produced in MY 2019 and 
represents approximately 0.06 percent of the HD vehicles market. In MY 
2020, 380 HD BEVs were certified, an increase of 30 BEVs from 2019. The 
BEVs were certified in a variety of the Phase 1 vehicle subcategories, 
including light, medium, and heavy heavy-duty vocational vehicles and 
vocational tractors. Out of the 380 HD BEVs certified in MY 2020, a 
total of 177 unique makes and models were available for purchase by 52 
manufacturers in Classes 3-8. In MY 2021, EPA certified 1,163 heavy-
duty BEVs, representing 0.2 percent of the HD vehicles. There were no 
HD FCEVs certified through MY 2021. We note that these HD BEV 
certifications preceded implementation of incentives in the 2022 IRA, 
which we expect to increase adoption (and certification) of BEV and 
FCEV technology in the heavy-duty sector.
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    \101\ Memo to Docket. Heavy-Duty Greenhouse Gas Emissions 
Certification Data. March 2023. Docket EPA-HQ-OAR-2022-0985.
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    Based on current trends, manufacturer announcements, the 2021 BIL 
and 2022 IRA, and state-level actions, electrification of the HD market 
is

[[Page 25941]]

expected to substantially increase over the next decade from current 
levels. The projected rate of growth in electrification of the HD 
vehicle sector currently varies widely. After passage of the IRA, EDF's 
September 2022 report update projected deployments and major orders of 
electric trucks and buses to rise to 166,000 by the end of 2022.\102\ 
ERM updated an analysis for EDF that projected five scenarios that span 
a range of between 13 and 48 percent Class 4-8 ZEV sales in 2029, with 
an average of 29 percent.\103\ The International Council for Clean 
Transportation (ICCT) and Energy Innovation conducted an analysis of 
the impact of the IRA on electric vehicle uptake, projecting between 39 
and 48 percent Class 4-8 ZEV sales in 2030 across three scenarios and 
between 47 and 56 percent in 2035.\104\
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    \102\ Environmental Defense Fund. ``Electric Vehicle Market 
Update: Manufacturer Commitments and Public Policy Initiatives 
Supporting Electric Mobility in the U.S. and Worldwide''. September 
2022. Available online: https://blogs.edf.org/climate411/files/2022/09/ERM-EDF-Electric-Vehicle-Market-Report_September2022.pdf.
    \103\ Robo, Ellen and Dave Seamonds. Technical Memo to 
Environmental Defense Fund: Investment Reduction Act Supplemental 
Assessment: Analysis of Alternative Medium- and Heavy-Duty Zero-
Emission Vehicle Business-As-Usual Scenarios. ERM. August 19, 2022. 
Available online: https://www.erm.com/contentassets/154d08e0d0674752925cd82c66b3e2b1/edf-zev-baseline-technical-memo-addendum.pdf.
    \104\ ICCT and Energy Innovation. ``Analyzing the Impact of the 
Inflation Reduction Act on Electric Vehicle Uptake in the United 
States''. January 2023. Available online: https://theicct.org/wp-content/uploads/2023/01/ira-impact-evs-us-jan23-2.pdf.
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    One of the most important factors influencing the extent to which 
BEVs are available for purchase and able to enter the market is the 
cost of lithium-ion batteries, the single most expensive component of a 
BEV. According to Bloomberg New Energy Finance, average lithium-ion 
battery costs have decreased by more than 85 percent since 2010, 
primarily due to global investments in battery production and ongoing 
improvements in battery technology.\105\ A number of studies, including 
the Sharpe and Basma meta-study of direct manufacturing costs from a 
variety of papers, show that battery pack costs are projected to 
continue to fall during this decade.106 107 108 Cost 
reductions in battery packs for electric trucks are anticipated due to 
continued improvement of cell and battery pack performance and 
advancements in technology associated with energy density, materials 
for cells, and battery packaging and integration.\109\
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    \105\ Bloomberg. ``Battery Pack Prices Cited Below $100/kWh for 
the First Time in 2020, While Market Average Sits at $137/kWh''. 
Available online: https://about.bnef.com/blog/battery-pack-prices-cited-below-100-kwh-for-the-first-time-in-2020-while-market-average-sits-at-137-kwh/.
    \106\ Mulholland, Eamonn. ``Cost of electric commercial vans and 
pickup trucks in the United States through 2040.'' Page 7. January 
2022. Available at https://theicct.org/wp-content/uploads/2022/01/cost-ev-vans-pickups-us-2040-jan22.pdf.
    \107\ Environmental Defense Fund. ``Technical Review of Medium- 
and Heavy-Duty Electrification Costs for 2027-2030.'' February 2, 
2022. Available online: https://blogs.edf.org/climate411/files/2022/02/EDF-MDHD-Electrification-v1.6_20220209.pdf.
    \108\ Sharpe, Ben and Hussein Basma. ``A meta-study of purchase 
costs for zero-emission trucks''. The International Council on Clean 
Transportation, Working Paper 2022-09 (February 2022). Available 
online: https://theicct.org/wp-content/uploads/2022/02/purchase-cost-ze-trucks-feb22-1.pdf.
    \109\ Sharpe, Ben and Hussein Basma. ``A meta-study of purchase 
costs for zero-emission trucks''. The International Council on Clean 
Transportation. https://theicct.org/wp-content/uploads/2022/02/purchase-cost-ze-trucks-feb22-1.pdf.
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    Currently, the fuel cell stack is the most expensive component of a 
HD FCEV, due primarily to the technological requirements of 
manufacturing rather than raw material costs.\110\ Projected costs are 
expected to decrease as manufacturing matures and materials 
improve.\111\ Larger production volumes are anticipated as global 
demand increases for fuel cell systems for HD vehicles, which would 
improve economies of scale.\112\ Costs of the onboard hydrogen storage 
tank, another component unique to a FCEV, are also projected to drop 
due to lighter weight and lower cost carbon fiber-reinforced materials, 
technology improvements, and economies of scale.\113\
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    \110\ Deloitte China. ``Fueling the Future of Mobility: Hydrogen 
and fuel cell solutions for transportation, Volume 1''. 2020. 
Available online: https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/finance/deloitte-cn-fueling-the-future-of-mobility-en-200101.pdf.
    \111\ Sharpe, Ben and Hussein Basma. ``A Meta-Study of Purchase 
Costs for Zero-Emission Trucks''. The International Council on Clean 
Transportation. February 2022. Available online: https://theicct.org/wp-content/uploads/2022/02/purchase-cost-ze-trucks-feb22-1.pdf.
    \112\ Deloitte China. ``Fueling the Future of Mobility: Hydrogen 
and fuel cell solutions for transportation, Volume 1''. 2020. 
Available online: https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/finance/deloitte-cn-fueling-the-future-of-mobility-en-200101.pdf.
    \113\ Ibid.
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    As the cost of components has come down, manufacturers have 
increasingly announced their projections for zero-emission HD vehicles, 
and these projections signify a rapid increase in BEVs and FCEVs over 
the next decade. For example, Volvo Trucks and Scania announced a 
global electrification target of 50 percent of trucks sold being 
electric by 2030.\114\ Daimler Trucks North America has committed to 
offering only what they refer to as ``carbon-neutral'' trucks in the 
United States. by 2039 and expects that by 2030 as much as 60 percent 
of its sales will be ZEVs.115 116 Navistar has a goal of 
having 50 percent of its sales volume be ZEVs by 2030, and it has 
committed to achieve 100 percent zero emissions by 2040.\117\ Cummins 
targets net-zero carbon emissions by 2050.118 119
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    \114\ Scania, `Scania's Electrification Roadmap,' Scania Group, 
November 24, 2021, https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html; AB Volvo, `Volvo 
Trucks Launches Electric Truck with Longer Range,' Volvo Group, 
January 14, 2022, https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html.
    \115\ David Cullen, `Daimler to Offer Carbon Neutral Trucks by 
2039,' (October 25, 2019). https://www.truckinginfo.com/343243/daimler-aims-to-offer-only-co2-neutral-trucks-by-2039-in-key-markets.
    \116\ Deborah Lockridge, `What Does Daimler Truck Spin-off Mean 
for North America?,' Trucking Info (November 11, 2021). https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america.
    \117\ Navistar presentation at the Advanced Clean Transportation 
(ACT) Expo, Long Beach, CA (May 9-11, 2022).
    \118\ Cummins, Inc. ``Cummins Unveils New Environmental 
Sustainability Strategy to Address Climate Change, Conserve Natural 
Resources.'' November 14, 2019. Last accessed on September 10, 2021 
at https://www.cummins.com/news/releases/2019/11/14/cummins-unveils-new-environmental-sustainability-strategy-address-climate.
    \119\ Environmental Defense Fund (2022) September 2022 Electric 
Vehicle Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and Worldwide, 
available online at: https://blogs.edf.org/climate411/files/2022/09/ERM-EDF-Electric-Vehicle-Market-Report_September2022.pdf.
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    On a parallel path, large private HD fleet owners are also 
increasingly committing to expanding their electric fleets.\120\ A 
report by the International Energy Agency (IEA) provides a 
comprehensive accounting of recent announcements made by UPS, FedEx, 
DHL, Walmart, Anheuser-Busch, Amazon, and PepsiCo for fleet 
electrification.\121\ Amazon and UPS, for example, placed orders in 
2020 for 10,000 BEV delivery vans from EV start-ups Rivian and Arrival, 
respectively, and Amazon has plans to scale up to 100,000 BEV vans by 
2030.122 123

[[Page 25942]]

Likewise, in December 2022, PepsiCo added the first of 100 planned 
Tesla Semis to its fleet.\124\ These announcements include not only 
orders for electric delivery vans and semi-trucks, but more specific 
targets and dates to full electrification or net-zero emissions. 
Amazon, FedEx, DHL, and Walmart have set a commitment to fleet 
electrification and/or achieving net-zero emissions by 
2040.125 126 127 128 We recognize that certain delivery vans 
will likely fall into the Class 2b and 3 regulatory category, the vast 
majority of which are not covered in this rule's proposed updates; we 
intend to address this category in a separate light and medium-duty 
vehicle rulemaking.\129\
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    \120\ Environmental Defense Fund (2021) EDF analysis finds 
American fleets are embracing electric trucks. July 28, 2021. 
Available online at: https://blogs.edf.org/energyexchange/2021/07/28/edf-analysis-finds-american-fleets-are-embracing-electric-trucks/
.
    \121\ International Energy Association. Global EV Outlook 2021. 
April 2021. Available online at: https://iea.blob.core.windows.net/assets/ed5f4484-f556-4110-8c5c-4ede8bcba637/GlobalEVOutlook2021.pdf.
    \122\ Amazon, Inc. ``Introducing Amazon's first custom electric 
delivery vehicle.'' October 8, 2020. Last accessed on October 18, 
2022 at https://www.aboutamazon.com/news/transportation/introducing-amazons-first-custom-electric-delivery-vehicle.
    \123\ Arrival Ltd. ``UPS invests in Arrival and orders 10,000 
Generation 2 Electric Vehicles.'' April 24, 2020. Last accessed on 
October 18, 2022 at https://arrival.com/us/en/news/ups-invests-in-arrival-and-orders-10000-generation-2-electric-vehicles.
    \124\ Akash Sriram. ``Musk delivers first Tesla truck, but no 
update on output, pricing.'' Reuters. December 2, 2022. Last 
accessed on January 4, 2023 at https://www.reuters.com/business/autos-transportation/musk-delivers-first-tesla-semi-trucks-2022-12-02/.
    \125\ Robo, Ellen and Dave Seamonds. Technical Memo to 
Environmental Defense Fund: Investment Reduction Act Supplemental 
Assessment: Analysis of Alternative Medium- and Heavy-Duty Zero-
Emission Vehicle Business-As-Usual Scenarios. ERM. August 19, 2022. 
Available online: https://www.erm.com/contentassets/154d08e0d0674752925cd82c66b3e2b1/edf-zev-baseline-technical-memo-addendum.pdf.
    \126\ FedEx Corp. ``FedEx Commits to Carbon-Neutral Operations 
by 2040.'' March 3, 2021. Last accessed on October 18, 2022 at 
https://newsroom.fedex.com/newsroom/asia-english/sustainability2021.
    \127\ Deutsche Post DHL Group. ``Zero emissions by 2050: DHL 
announces ambitious new environmental protection target.'' March 
2017. Last accessed on October 18, 2022 at https://www.dhl.com/global-en/delivered/sustainability/zero-emissions-by-2050.html.
    \128\ Walmart Inc. ``Walmart Sets Goal to Become a Regenerative 
Company.'' September 21, 2020. Last accessed on October 18, 2022 at 
https://corporate.walmart.com/newsroom/2020/09/21/walmart-sets-goal-to-become-a-regenerative-company.
    \129\ Complete heavy-duty vehicles at or below 14,000 pounds. 
GVWR are chassis-certified under 40 CFR part 86, while incomplete 
vehicles at or below 14,000 pounds. GVWR may be certified to either 
40 CFR part 86 (meeting standards under subpart S) or 40 CFR part 
1037 (installed engines would then need to be certified under 40 CFR 
part 1036). Class 2b and 3 vehicles are primarily chassis-certified 
complete commercial pickup trucks and vans. We intend to pursue a 
combined light-duty and medium-duty rulemaking to set more stringent 
standards for complete and incomplete vehicles at or below 14,000 
pounds. GVWR that are certified under 40 CFR part 86, subpart S. The 
standards proposed in this rule would apply for all heavy-duty 
vehicles above 14,000 pounds. GVWR, except as noted in 40 CFR 
1037.150(l). The proposed standards in this rule would also apply 
for incomplete heavy-duty vehicles at or below 14,000 pounds. GVWR 
if vehicle manufacturers opt to certify those vehicles under 40 CFR 
part 1037 instead of certifying under 40 CFR part 86, subpart S.
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    Amazon and Walmart are among fleets owners and operators that are 
also considering hydrogen. Amazon signed an agreement with Plug 
Power,\130\ a company building an end-to-end hydrogen ecosystem, to 
supply hydrogen for up to 800 HD long-haul trucks or 30,000 forklifts 
(which are commonly powered using hydrogen) starting in 2025 through 
2040.\131\ Walmart is purchasing hydrogen from Plug Power \132\ and 
plans to expand pilots of fuel cell forklifts, yard trucks, and 
possibly HD long-haul trucks by 2040.\133\ Plug Power has agreed to 
purchase up to 75 Nikola Class 8 fuel cell trucks over the next three 
years in exchange for supplying the company with hydrogen fuel.\134\
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    \130\ Plug Power. ``Plug and Amazon Sign Green Hydrogen 
Agreement''. Available online: https://www.ir.plugpower.com/press-releases/news-details/2022/Plug-and-Amazon-Sign-Green-Hydrogen-Agreement/default.aspx.
    \131\ Amazon. ``Amazon adopts green hydrogen to help decarbonize 
its operations''. August 25, 2022. Available online: https://www.aboutamazon.com/news/sustainability/amazon-adopts-green-hydrogen-to-help-decarbonize-its-operations.
    \132\ Plug Power. ``Plug Supplies Walmart with Green Hydrogen to 
Fuel Retailer's Fleet of Material Handling Lift Trucks''. April 19, 
2022. Available online: https://www.ir.plugpower.com/press-releases/news-details/2022/Plug-Supplies-Walmart-with-Green-Hydrogen-to-Fuel-Retailers-Fleet-of-Material-Handling-Lift-Trucks/default.aspx.
    \133\ Proactive. ``WalMart eyes benefits of hydrogen delivery 
vehicles in wider trials''. Proactive 13:17. June 8, 2022. Available 
online: https://www.proactiveinvestors.co.uk/companies/news/984360/walmart-eyes-benefits-of-hydrogen-delivery-vehicles-in-wider-trials-984360.html.
    \134\ Adler, Alan. ``Plug Power will buy up to 75 Nikola fuel 
cell trucks''. Freightwaves. December 15, 2022. Available online: 
https://www.freightwaves.com/news/plug-power-will-buy-up-to-75-nikola-fuel-cell-trucks.
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    The lifetime total cost of ownership (TCO), which includes 
maintenance and fuel costs, is likely a primary factor for HD vehicle 
and fleet owners considering BEV and FCEV purchases. In fact, a 2018 
survey of fleet owners showed ``lower cost of ownership'' as the second 
most important motivator for electrifying their fleet.\135\ An ICCT 
analysis from 2019 suggests that TCO for light and medium heavy-duty 
BEVs could reach cost parity with comparable diesel ICE vehicles in the 
early 2020s, while heavy HD BEVs and FCEVs are likely to reach cost 
parity with comparable diesel ICE vehicles closer to the 2030 
timeframe.\136\ Recent findings from Phadke et al. suggest that BEV TCO 
could be 13 percent less than that of a comparable diesel ICE vehicle 
if electricity pricing is optimized.\137\ These studies do not consider 
the IRA. The Rocky Mountain Institute found that because of the IRA, 
the TCO of electric trucks will be lower than the TCO of comparable 
diesel trucks about five years faster than without the IRA. They expect 
cost parity as soon as 2023 for urban and regional duty cycles that 
travel up to 250 miles and 2027 for long-hauls that travel over 250 
miles.\138\
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    \135\ The primary motivator for fleet managers was 
``Sustainability and environmental goals''; the survey was conducted 
by UPS and GreenBiz.
    \136\ ICCT (2019) ``Estimating the infrastructure needs and 
costs for the launch of zero-emissions trucks''; available online 
at: https://theicct.org/publications/zero-emission-truck-infrastructure.
    \137\ Phadke, A., et. al. (2021) ``Why Regional and Long-Haul 
Trucks are Primed for Electrification Now''; available online at: 
https://eta-publications.lbl.gov/sites/default/files/updated_5_final_ehdv_report_033121.pdf.
    \138\ Kahn, Ari, et. al. ``The Inflation Reduction Act Will Help 
Electrify Heavy-Duty Trucking''. Rocky Mountain Institute. August 
25, 2022. Available online: https://rmi.org/inflation-reduction-act-will-help-electrify-heavy-duty-trucking/.
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    As the ICCT and Phadke et al. studies suggest, fuel costs are an 
important part of TCO. While assumptions about vehicle weight and size 
can make direct comparisons between HD ZEVs and ICE vehicles 
challenging, data show greater energy efficiency of battery-electric 
and fuel cell technology relative to ICE 
technologies.139 140 Better energy efficiency leads to lower 
electricity or hydrogen fuel costs for ZEVs relative to ICE fuel 
costs.141 142 Maintenance and service costs are also an 
important component within TCO; although there is limited data 
available on actual maintenance costs for HD ZEVs, early experience 
with BEV medium HD vehicles and transit buses suggests the potential 
for lower maintenance costs after an initial period of learning to 
refine both component durability and maintenance procedures.\143\ We 
expect similar trends for FCEVs, as discussed in Chapter 2 of the DRIA. 
To facilitate HD fleets transitioning to ZEVs, some manufacturers are 
currently including maintenance in leasing agreements with fleets; it 
is unclear the extent to which a full-service leasing model will 
persist or will be transitioned to a more

[[Page 25943]]

traditional purchase model after an initial period of 
learning.144 145
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    \139\ NACFE (2019) ``Guidance Report: Viable Class 7/8 Electric, 
Hybrid and Alternative Fuel Tractors'', available online at: https://nacfe.org/downloads/viable-class-7-8-alternative-vehicles/.
    \140\ Nadel, S. and Junga, E. (2020) ``Electrifying Trucks: From 
Delivery Vans to Buses to 18-Wheelers''. American Council for an 
Energy-Efficient Economy White Paper, available online at: https://aceee.org/white-paper/electrifying-trucks-delivery-vans-buses-18.
    \141\ NACFE (2019) ``Guidance Report: Viable Class 7/8 Electric, 
Hybrid and Alternative Fuel Tractors'', available online at: https://nacfe.org/downloads/viable-class-7-8-alternative-vehicles/.
    \142\ Nadel, S. and Junga, E. (2020) ``Electrifying Trucks: From 
Delivery Vans to Buses to 18-Wheelers''. American Council for an 
Energy-Efficient Economy White Paper, available online at: https://aceee.org/white-paper/electrifying-trucks-delivery-vans-buses-18.
    \143\ U.S. Department of Energy Alternative Fuels Data Center 
(AFDC), ``Developing Infrastructure to Charge Plug-In Electric 
Vehicles'', https://afdc.energy.gov/fuels/electricity_infrastructure.html (accessed 2-27-20).
    \144\ Fisher, J. (2019) ``Volvo's First Electric VNR Ready for 
the Road.'' Fleet Owner, September 17. www.fleetowner.com/blue-fleets/volvo-s-first-electric-vnr-ready-road.
    \145\ Gnaticov, C. (2018). ``Nikola One Hydrogen Electric Semi 
Hits the Road in Official Film.'' Carscoops, Jan. 26. 
www.carscoops.com/2018/01/nikola-one-hydrogen-electric-semi-hits-road-official-film/.
---------------------------------------------------------------------------

    The growth in incentive programs will continue to play an important 
role in the HD ZEV market. For example, as discussed in more detail in 
this section, FHWA-approved plans providing $1.5 billion in funding for 
expanding charging on over 75,000 miles of highway encourages states to 
consider station designs and power levels that could support heavy-duty 
vehicles. In a 2017 survey of fleet managers, upfront purchase price 
was listed as the primary barrier to HD fleet electrification. This 
suggests that federal incentive programs like those in the BIL and IRA 
(discussed in Section I.C.2) to offset ZEV purchase costs, as well as 
state and local incentives and investments, can be influential in the 
near term, with improvements in BEV and FCEV component costs playing an 
increasing role in reducing costs in the longer term.146 147 
For example, BEV incentive programs for transit and school buses have 
experienced growth and are projected to continue to influence BEV 
markets. The Los Angeles Department of Transportation (LADOT) is one of 
the first transit organizations in the country to develop a program 
committed to transitioning its transit fleets to ZEVs by 2030--a target 
that is 10 years sooner than CARB's Innovative Clean Transportation 
(ICT) regulation requiring all public transit to be electric by 
2040.\148\ Since these announcements, LADOT has purchased 27 BEV 
transit and school buses from BYD and Proterra; by 2030, the number of 
BEV buses in the LADOT fleet is expected to grow to 492 buses. Outside 
of California, major metropolitan areas including Chicago, Seattle, New 
York City, and Washington, DC, have zero-emissions transit programs 
with 100 percent ZEV target dates ranging from 2040 to 
2045.149 150 151 152 EV school bus programs, frequently in 
partnership with local utilities, are also being piloted across the 
country and are expanding under EPA's Clean School Bus Program 
(CSB).\153\ These programs initially included school districts in, but 
not limited to, California, Virginia, Massachusetts, Michigan, 
Maryland, Illinois, New York, and 
Pennsylvania.154 155 156 157 158 Going forward, they will 
continue to expand with BIL funding of over $5 billion over the next 
five years (FY 2022-2026) to replace existing school buses with zero-
emission and low-emission models, as discussed more in Section I.C.2.
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    \146\ Other barriers that fleet managers prioritized for fleet 
electrification included: Inadequate charging infrastructure--our 
facilities, inadequate product availability, inadequate charging 
infrastructure--public; for the full list of top barriers see Nadel 
and Junga (2020), citing UPS and GreenBiz 2018.
    \147\ Nadel, S. and Junga, E. (2020) ``Electrifying Trucks: From 
Delivery Vans to Buses to 18-Wheelers''. American Council for an 
Energy-Efficient Economy White Paper, available online at: https://aceee.org/white-paper/electrifying-trucks-delivery-vans-buses-18.
    \148\ LADOT, (2020). ``LADOT Transit Zero-Emission Bus Rollout 
Plan'' https://ww2.arb.ca.gov/sites/default/files/2020-12/LADOT_ROP_Reso_ADA12172020.pdf.
    \149\ Sustainable Bus. ``CTA Chicago tests electric buses and 
pursues 100% e-fleet by 2040''. April 29, 2021. Available online: 
https://www.sustainable-bus.com/electric-bus/cta-chicago-electric-buses/.
    \150\ Pascale, Jordan. ``Metro Approves Plans For Fully Electric 
Bus Fleet By 2045''. DCist. June 10, 2021. Available online: https://dcist.com/story/21/06/10/metro-goal-entirely-electric-bus-fleet-2045/.
    \151\ King County Metro. ``Transitioning to a zero-emissions 
fleet''. Available online: https://kingcounty.gov/depts/transportation/metro/programs-projects/innovation-technology/zero-emission-fleet.aspx.
    \152\ Hallum, Mark. ``MTA's recent purchase of zero emissions 
buses will be 33% bigger than expected''. AMNY. May 25, 2021. 
Available online: https://www.amny.com/transit/mta-says-45-to-60-more-buses-in-recent-procurement-will-be-zero-emissions/.
    \153\ U.S. Environmental Protection Agency. ``Clean School Bus 
Program''. Available online: https://www.epa.gov/cleanschoolbus.
    \154\ Commonwealth of Massachusetts. ``EV Programs & 
Incentives''. Available online: https://www.mass.gov/info-details/ev-programs-incentives.
    \155\ Morris, Charles. ``NYC's new school bus contract includes 
electric bus pilot''. Charged--Electric Vehicles Magazine. July 7, 
2021. Available online: https://chargedevs.com/newswire/nycs-new-school-bus-contract-includes-electric-bus-pilot/.
    \156\ Soneji, Hitesh, et. al. ``Pittsburg USD Electric School 
Bus Final Project Report''. Olivine, Inc. September 23, 2020. 
Available online: https://olivineinc.com/wp-content/uploads/2020/10/Pittsburg-USD-Electric-School-Bus-Final-Project-Report-Final.pdf.
    \157\ Shahan, Cynthia. ``Largest Electric School Bus Program in 
United States Launching in Virginia''. CleanTechnica. January 12, 
2020. Available online: https://cleantechnica.com/2020/01/12/largest-electric-school-bus-program-in-united-states-launching-in-virginia/.
    \158\ St. John, Jeff. ``Highland Electric Raises $235M, Lands 
Biggest Electric School Bus Contract in the US''. gtm. February 25, 
2021. Available online: https://www.greentechmedia.com/articles/read/on-heels-of-253m-raise-highland-electric-lands-biggest-electric-school-bus-contract-in-the-u.s.
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    In summary, the HD ZEV market is growing rapidly, and ZEV 
technologies are expected to expand to many applications across the HD 
sector. As the industry is dynamic and changing rapidly, the examples 
presented here represent only a sampling of the ZEV HD investment 
policies and markets. DRIA Chapter 1 provides a more detailed 
characterization of the HD ZEV technologies in the current and 
projected ZEV market. We request comment on our assessment of the HD 
ZEV market and any additional data sources we should consider.
2. Bipartisan Infrastructure Law and Inflation Reduction Act
i. BIL
    The BIL \159\ was enacted on November 15, 2021, and contains 
provisions to support the deployment of low- and zero-emission transit 
buses, school buses, and trucks that service ports, as well as electric 
vehicle charging infrastructure and hydrogen. These provisions include 
Section 71101 funding for EPA's Clean School Bus Program,\160\ with $5 
billion to fund the replacement of ICE school buses with clean and 
zero-emission buses over the next five years. In its first phase of 
funding for the Clean School Bus Program, EPA is issuing nearly $1 
billion in rebates (up to a maximum of $375,000 per bus, depending on 
the bus fuel type, bus size, and school district prioritization status) 
\161\ for replacement clean and zero-emission buses and associated 
infrastructure costs.162 163 The BIL also includes funding 
for DOT's Federal Transit Administration (FTA) Low- or No-Emission 
Grant Program,\164\ with over $5.6 billion over the next five years to 
support the purchase of zero- or low-emission transit buses and 
associated infrastructure.\165\
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    \159\ United States, Congress. Public Law 117-58. Infrastructure 
Investment and Jobs Act of 2021. Congress.gov, www.congress.gov/bill/117th-congress/house-bill/3684/text. 117th Congress, House 
Resolution 3684, passed 15 Nov. 2021.
    \160\ U.S. Environmental Protection Agency. ``Clean School Bus 
Program''. Available online: https://www.epa.gov/cleanschoolbus.
    \161\ U.S. Environmental Protection Agency. ``2022 Clean School 
Bus (CSB) Rebates Program Guide''. May 2022. Available online: 
https://nepis.epa.gov/Exe/ZyPDF.cgi/P1014WNH.PDF?Dockey=P1014WNH.PDF.
    \162\ Some recipients are able to claim up to $20,000 per bus 
for charging infrastructure.
    \163\ U.S. Environmental Protection Agency, ``EPA Clean School 
Bus Program Second Report to Congress Fiscal Year 2022,'' EPA-420-R-
23-002, February 2023. Available online: https://www.epa.gov/system/files/documents/2023-02/420r23002.pdf (last accessed February 9, 
2023).
    \164\ U.S. Department of Transportation, Federal Transit 
Administration. ``Low or No Emission Vehicle Program--5339(c)''. 
Available online: https://www.transit.dot.gov/lowno (last accessed 
February 10, 2023).
    \165\ U.S. Department of Transportation, Federal Transit 
Administration. ``Bipartisan Infrastructure Law Fact Sheet: Grants 
for Buses and Bus Facilities''. Available online: https://www.transit.dot.gov/funding/grants/fact-sheet-buses-and-bus-facilities-program (last accessed February 10, 2023).
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    The BIL includes up to $7.5 billion to help build out a national 
network of EV

[[Page 25944]]

charging and hydrogen fueling through DOT's Federal Highway 
Administration (FHWA). This includes $2.5 billion in discretionary 
grant programs for charging and fueling infrastructure \166\ along 
designated alternative fuel corridors and in communities (Section 
11401) \167\ and $5 billion for the National Electric Vehicle 
Infrastructure (NEVI) Formula Program (under Division J, Title 
VIII).\168\ In September 2022, the FHWA approved the first set of plans 
for the NEVI program covering all 50 states, Washington, DC, and Puerto 
Rico. The approved plans provide $1.5 billion in funding for fiscal 
years (FY) 2022 and 2023 to expand charging on over 75,000 miles of 
highway.\169\ While jurisdictions are not required to build stations 
specifically for heavy-duty vehicles, FHWA's guidance encourages states 
to consider station designs and power levels that could support heavy-
duty vehicles.\170\
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    \166\ Fueling infrastructure includes hydrogen, propane, and 
natural gas.
    \167\ U.S. Department of Transportation, Federal Highway 
Administration, ``The National Electric Vehicle Infrastructure 
(NEVI) Formula Program Guidance,'' February 10, 2022. Available 
online: https://www.fhwa.dot.gov/environment/alternative_fuel_corridors/nominations/90d_nevi_formula_program_guidance.pdf (last accessed February 10, 
2023).
    \168\ U.S. Department of Transportation, Federal Highway 
Administration. ``Bipartisan Infrastructure Law, Fact Sheets: 
National Electric Vehicle Infrastructure Formula Program''. February 
10, 2022. Available online: https://www.fhwa.dot.gov/bipartisan-infrastructure-law/nevi_formula_program.cfm.
    \169\ U.S. Department of Transportation. ``Historic Step: All 
Fifty States Plus DC and Puerto Rico Grenlit to Move EV Charging 
Networks Forward, Covering 75,000 miles of Highway''. Available 
online: https://www.transportation.gov/briefing-room/historic-step-all-fifty-states-plus-dc-and-puerto-rico-greenlit-move-ev-charging.
    \170\ U.S. Department of Transportation, Federal Highway 
Administration. ``National Electric Vehicle Infrastructure Formula 
Program: Bipartisan Infrastructure Law--Program Guidance''. February 
10, 2022. Available online: https://www.fhwa.dot.gov/environment/alternative_fuel_corridors/nominations/90d_nevi_formula_program_guidance.pdf.
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    The BIL funds other programs that could support HD vehicle 
electrification. For example, there is continued funding of the 
Congestion Mitigation and Air Quality (CMAQ) Improvement Program, with 
more than $2.5 billion authorized for FY 2022 through FY 2026. The BIL 
(Section 11115) amended the CMAQ Improvement Program to add, among 
other things, ``the purchase of medium- or heavy-duty zero emission 
vehicles and related charging equipment'' to the list of activities 
eligible for funding. The BIL establishes a program under Section 11402 
``Reduction of Truck Emissions at Port Facilities'' that includes 
grants to be administered through FHWA aimed at reducing port 
emissions, including through electrification. In addition, the BIL 
includes funding for DOT's Maritime Administration (MARAD) Port 
Infrastructure Development Program; \171\ and DOT's Federal Highway 
Administration (FHWA) Carbon Reduction Program.\172\
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    \171\ U.S. Department of Transportation, Maritime 
Administration. ``Bipartisan Infrastructure Law: Maritime 
Administration''. Available online: https://www.maritime.dot.gov/about-us/bipartisan-infrastructure-law-maritime-administration.
    \172\ U.S. Department of Transportation, Federal Highway 
Administration. ``Bipartisan Infrastructure Law, Fact Sheets: Carbon 
Reduction Program (CRP)''. April 20, 2022. Available online: https://www.fhwa.dot.gov/bipartisan-infrastructure-law/crp_fact_sheet.cfm.
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    The BIL also targets batteries used for electric vehicles. It funds 
DOE's Battery Materials Processing and Battery Manufacturing 
program,\173\ which grants funds to promote U.S. processing and 
manufacturing of batteries for automotive and electric grid use through 
demonstration projects, the construction of new facilities, and the 
retooling, retrofitting, and expansion of existing facilities. This 
includes a total of $3 billion for battery material processing and $3 
billion for battery manufacturing and recycling, with additional 
funding for a lithium-ion battery recycling prize competition, research 
and development activities in battery recycling, state and local 
programs, and the development of a collection system for used 
batteries. In addition, the BIL includes $200 million for the Electric 
Drive Vehicle Battery Recycling and Second-Life Application Program for 
research, development, and demonstration of battery recycling and 
second-life applications.
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    \173\ U.S. Department of Energy. ``Biden Administration 
Announces $3.16 Billion From Bipartisan Infrastructure Law to Boost 
Domestic Battery Manufacturing and Supply Chains. May 2, 2022. 
Available online: https://www.energy.gov/articles/biden-administration-announces-316-billion-bipartisan-infrastructure-law-boost-domestic.
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    Hydrogen provisions of the BIL include funding for several programs 
to accelerate progress towards the Hydrogen Shot goal, launched on June 
7, 2021, to reduce the cost of clean hydrogen \174\ production by 80 
percent to $1 for 1 kg in 1 decade \175\ and jumpstart the hydrogen 
market in the United States. This includes $8 billion for the 
Department of Energy's Regional Clean Hydrogen Hubs Program to 
establish networks of clean hydrogen producers, potential consumers, 
and connective infrastructure in close proximity; $1 billion for a 
Clean Hydrogen Electrolysis Program; and $500 million for Clean 
Hydrogen Manufacturing and Recycling Initiatives.\176\ The BIL also 
called for development of a Clean Hydrogen Production Standard to guide 
DOE hub and Research, Development, Deployment, and Diffusion (RDD&D) 
actions; and a National Clean Hydrogen Strategy and Roadmap to 
facilitate widescale production, processing, delivery, storage, and use 
of clean hydrogen. These BIL programs are currently under development, 
and further details are expected over the course of calendar year (CY) 
2023.
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    \174\ The BIL defines ``clean hydrogen'' as hydrogen produced in 
compliance with the GHG emissions standard established under 42 U.S. 
Code section 16166(a), including production from any fuel source, 
where the standard developed shall define the term to mean hydrogen 
produced with a carbon intensity equal to or less than 2 kilograms 
of carbon dioxide-equivalent produced at the site of production per 
kilogram of hydrogen produced.
    \175\ Satyapal, Sunita. ``2022 AMR Plenary Session''. U.S. 
Department of Energy, Hydrogen and Fuel Cell Technologies Office. 
June 6, 2022. Available online: https://www.energy.gov/sites/default/files/2022-06/hfto-amr-plenary-satyapal-2022-1.pdf.
    \176\ U.S. Department of Energy. ``DOE Establishes Bipartisan 
Infrastructure Law's $9.5 Billion Clean Hydrogen Initiatives''. 
February 15, 2022. Available online: https://www.energy.gov/articles/doe-establishes-bipartisan-infrastructure-laws-95-billion-clean-hydrogen-initiatives.
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ii. IRA Sections 13502 and 13403
    The IRA,\177\ which was enacted on August 16, 2022, contains 
several provisions relevant to vehicle electrification and the 
associated infrastructure via tax credits, grants, rebates, and loans 
through CY 2032, including two key provisions that provide a tax credit 
to reduce the cost of producing qualified batteries (battery tax 
credit) and to reduce the cost of purchasing qualified ZEVs (vehicle 
tax credit). The battery tax credit in ``Advanced Manufacturing 
Production Credit'' in IRA section 13502 and the ``Qualified Commercial 
Clean Vehicles'' vehicle tax credit in IRA section 13403 are included 
quantitatively in our analysis.
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    \177\ Inflation Reduction Act of 2022, Public Law 117-169, 136 
Stat. 1818 (2022) (``Inflation Reduction Act'' or ``IRA''), 
available at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
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    IRA section 13502, ``Advanced Manufacturing Production Credit,'' 
provides tax credits for the production and sale of battery cells and 
modules of up to $45 per kilowatt-hour (kWh), and for 10 percent of the 
cost of producing applicable critical minerals (including those found 
in batteries and fuel cells, provided that the minerals meet certain 
specifications), when such components or minerals are produced in the 
United States. These credits begin in CY 2023 and phase down starting 
in CY 2030, ending after CY 2032. With projected direct manufacturing 
costs for heavy-

[[Page 25945]]

duty vehicle batteries on the order of $65 to $275/kWh in the 2025-2030 
timeframe,\178\ this tax credit has the potential to noticeably reduce 
the cost of qualifying batteries and, by extension, the cost of BEVs 
and FCEVs with qualifying batteries. We did not include a detailed cost 
breakdown of fuel cells quantitatively in our analysis, but the 
potential impact on fuel cells may also be significant because platinum 
(an applicable critical mineral commonly used in fuel cells) is a major 
contributor to the cost of fuel cells.\179\
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    \178\ Sharpe, B., Basma, H. ``A meta-study of purchase costs for 
zero-emission trucks''. International Council on Clean 
Transportation. February 17, 2022. Available online: https://theicct.org/wp-content/uploads/2022/02/purchase-cost-ze-trucks-feb22-1.pdf.
    \179\ Leader, Alexandra & Gaustad, Gabrielle & Babbitt, Callie. 
(2019). The effect of critical material prices on the 
competitiveness of clean energy technologies. Materials for 
Renewable and Sustainable Energy. 8. 10.1007/s40243-019-0146-z.
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    We limited our assessment of this tax credit in our DRIA Chapter 2 
analysis to the tax credits for battery cells and modules. Pursuant to 
the IRA, qualifying battery cells must have an energy density of not 
less than 100 watt-hours per liter, and we expect that batteries for 
heavy-duty BEVs and FCEVs will exceed this requirement as described in 
DRIA Chapter 2.4.2.2. Qualifying battery cells must be capable of 
storing at least 12 watt-hours of energy and qualifying battery modules 
must have an aggregate capacity of not less than 7 kWh (or, for FCEVs, 
not less than 1 kWh); typical battery cells and modules for motor 
vehicles also exceed these requirements.\180\ Additionally, the ratio 
of the capacity of qualifying cells and modules to their maximum 
discharge amount shall not exceed 100:1. We expect that battery cells 
and modules in heavy-duty BEVs and FCEVs will also meet this 
requirement because the high costs and weight of the batteries and the 
competitiveness of the heavy-duty industry will pressure manufacturers 
to allow as much of their batteries to be useable as possible. We did 
not consider the tax credits for critical minerals quantitatively in 
our analysis. However, we note that any applicability of the critical 
mineral tax credit may further reduce the costs of batteries.
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    \180\ Islam, Ehsan Sabri, Ram Vijayagopal, Aymeric Rousseau. ``A 
Comprehensive Simulation Study to Evaluate Future Vehicle Energy and 
Cost Reduction Potential'', Report to the U.S. Department of Energy, 
Contract ANL/ESD-22/6, October 2022. See Medium- and heavy-duty 
vehicles (techno-economic analysis with BEAN). Available online: 
https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.
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    We included this battery tax credit by reducing the direct 
manufacturing costs of batteries in BEVs and FCEVs, but not the 
associated indirect costs. At present, there are few manufacturing 
plants for HD vehicle batteries in the United States, which means that 
few batteries would qualify for the tax credit now. We expect that the 
industry will respond to this tax credit incentive by building more 
domestic battery manufacturing capacity in the coming years, but this 
will take several years to come to fruition. Thus, we have chosen to 
model this tax credit by assuming that HD BEV and FCEV manufacturers 
fully utilize the module tax credit (which provides $10 per kWh) and 
gradually increase their utilization of the cell tax credit (which 
provides $35 per kWh) for MY 2027-2029 until MY 2030 and beyond, when 
they earn 100 percent of the available cell and module tax credits. 
Further discussion of this battery tax credit and our battery costs can 
be found in DRIA Chapter 2.4.3.1.
    IRA section 13403, ``Qualified Commercial Clean Vehicles,'' creates 
a tax credit of up to $40,000 per Class 4 through 8 HD vehicle (up to 
$7,500 per Class 2b or 3 vehicle) for the purchase or lease of a 
qualified commercial clean vehicle. This tax credit is available from 
CY 2023 through CY 2032 and is based on the lesser of the incremental 
cost of the clean vehicle over a comparable ICE vehicle or the 
specified percentage of the basis of the clean vehicle, up to the 
maximum applicable limitation. By effectively reducing the price a 
vehicle owner must pay for a HD ZEV and the incremental difference in 
cost between it and a comparable ICE vehicle--by $40,000 in many 
cases--more vehicle purchasers will be poised to take advantage of the 
cost savings anticipated from total cost of ownership, including 
operational cost savings from fuel and maintenance and repair compared 
with ICE vehicles. Among other specifications, these vehicles must be 
on-road vehicles (or mobile machinery) that are propelled to a 
significant extent by a battery-powered electric motor or are qualified 
fuel cell motor vehicles (also known as fuel cell electric vehicles, 
FCEVs). For the former, the battery must have a capacity of at least 15 
kWh (or 7 kWh if it has a gross vehicle weight rating of less than 
14,000 pounds (Class 3 or below)) and must be rechargeable from an 
external source of electricity. This limits the qualified vehicles to 
BEVs and plug-in hybrid electric vehicles (PHEVs), in addition to 
FCEVs. Since this tax credit overlaps with the model years for which we 
are proposing standards (MYs 2027 through 2032), we included it in our 
calculations for each of those years in our feasibility analysis for 
our proposed standards (see DRIA Chapter 2).
    For BEVs and FCEVs, the per-vehicle tax credit is equal to the 
lesser of the following, up to the cap limitation: (A) 30 percent of 
the BEV or FCEV cost, or (B) the incremental cost of the BEV or FCEV 
when compared to a comparable (in size and use) ICE vehicle. The 
limitation on this tax credit is $40,000 for vehicles with a gross 
vehicle weight rating of equal to or greater than 14,000 pounds (Class 
4-8 commercial vehicles) and $7,500 for vehicles with a gross vehicle 
weight rating of less than 14,000 pounds (commercial vehicles Class 3 
and below). For example, if a BEV with a gross vehicle weight rating of 
equal to or greater than 14,000 pounds costs $350,000 and a comparable 
ICE vehicle costs $150,000,\181\ the tax credit would be the lesser of 
the following, subject to the limitation: (A) 30 percent x $350,000 = 
$105,000 or (B) $350,000-$150,000 = $200,000. (A) is less than (B), but 
(A) exceeds the limit of $40,000, so the tax credit would be $40,000. 
For PHEVs, the per-vehicle tax credit follows the same calculation and 
cap limitation as for BEVs and FCEVs except that (A) is 15 percent of 
the PHEV cost.
---------------------------------------------------------------------------

    \181\ Sharpe, B., Basma, H. ``A meta-study of purchase costs for 
zero-emission trucks''. International Council on Clean 
Transportation. February 17, 2022. Available online: https://theicct.org/wp-content/uploads/2022/02/purchase-cost-ze-trucks-feb22-1.pdf.
---------------------------------------------------------------------------

    In order to estimate the impact of this tax credit in our 
feasibility analysis for BEVs and FCEVs, we first applied a retail 
price equivalent to our direct manufacturing costs for BEVs, FCEVs, and 
ICE vehicles. Note that the direct manufacturing costs of BEVs and 
FCEVs were reduced by the amount of the battery tax credit in IRA 
section 13502, as described in DRIA Chapter 2.4.3.1. We calculated the 
purchaser's incremental cost of BEVs and FCEVs compared to ICE vehicles 
and not the full cost of vehicles in our analysis. We based our 
calculation of the tax credit on this incremental cost. When the 
incremental cost exceeded the tax credit limitation (determined by 
gross vehicle weight rating as described in the previous paragraph), we 
decreased the incremental cost by the tax credit limitation. When the 
incremental cost was between $0 and the tax credit limitation, we 
reduced the incremental cost to $0 (i.e., the tax credit received by 
the purchaser was equal to the incremental cost). When the incremental 
cost was negative (i.e., the BEV or FCEV was cheaper to purchase than 
the ICE vehicle), no tax credit was given. In order for this 
calculation to be appropriate, we determined that all

[[Page 25946]]

Class 4-8 BEVs and FCEVs must cost more than $133,333 such that 30 
percent of the cost is at least $40,000 (or $25,000 and $7,500, 
respectively, for BEVs and FCEVs Class 3 and below), which is 
reasonable based on our review of the literature on the costs of BEVs 
and FCEVs.\182\ The tax credit amounts for each vehicle type included 
in our analysis in MYs 2027 and 2032 are shown in DRIA Chapter 2.8.2.
---------------------------------------------------------------------------

    \182\ Burnham, A., Gohlke, D., Rush, L., Stephens, T., Zhou, Y., 
Delucchi, M. A., Birky, A., Hunter, C., Lin, Z., Ou, S., Xie, F., 
Proctor, C., Wiryadinata, S., Liu, N., Boloor, M. ``Comprehensive 
Total Cost of Ownership Quantification for Vehicles with Different 
Size Classes and Powertrains''. Argonne National Laboratory. April 
1, 2021. Available at https://publications.anl.gov/anlpubs/2021/05/167399.pdf.
---------------------------------------------------------------------------

    We project that the impact of the IRA vehicle tax credit will be 
significant, as shown in DRIA Chapter 2.8.2. In many cases, the 
incremental cost (with the tax credit) of a BEV compared to an ICE 
vehicle is eliminated, leaving only the cost of the electric vehicle 
supply equipment (EVSE) as an added upfront cost to the BEV owner. 
Similarly, in some cases, the tax credit eliminates the upfront cost of 
a FCEV compared to an ICE vehicle.
iii. Other IRA Provisions
    There are many other provisions of the IRA that we expect will 
support electrification of the heavy-duty fleet. Importantly, these 
other provisions do not serve to reduce ZEV adoption rates from our 
current projections. Due to the complexity of analyzing the combined 
potential impact of these provisions, we did not quantify their 
potential impact in our assessment of costs and feasibility, but we 
note that they may help to reduce many obstacles to electrification of 
HDVs and may further support or even increase ZEV adoption rates beyond 
the levels we currently project. Our assessment of the impacts of these 
provisions of the IRA on ZEV adoption rates are, therefore, somewhat 
conservative.
    Section 13404, ``Alternative Fuel Refueling Property Credit,'' 
modifies an existing tax credit that applies to alternative fuel 
refueling property (e.g., electric vehicle chargers and hydrogen 
fueling stations) and extends the tax credit through CY 2032. The 
credit also applies to refueling property that stores or dispenses 
specified clean-burning fuels, including at least 85 percent hydrogen, 
into the fuel tank of a motor vehicle. Starting in CY 2023, this 
provision provides a tax credit of up to 30 percent of the cost of the 
qualified alternative fuel refueling property (e.g., HD BEV charger), 
and up to $100,000 when located in low-income or non-urban area census 
tracts and certain other requirements are met. We expect that many HD 
BEV owners will need chargers installed in their depots for overnight 
charging, and this tax credit will effectively reduce the costs of 
installing charging infrastructure and, in turn, further effectively 
reduce the total costs associated with owning a BEV for many HD vehicle 
owners. Additionally, this tax credit may offset some of the costs of 
installing very high-powered public and private chargers that are 
necessary to recharge HD BEVs with minimal downtime during the day. 
Similarly, we expect that this tax credit will reduce the costs 
associated with refueling heavy-duty FCEVs, whose owners may rely on 
public hydrogen refueling stations or those installed in their depots. 
We expect that this tax credit will help incentivize the build out of 
the charging and hydrogen refueling infrastructure necessary for high 
BEV and FCEV adoption, which may further support increased BEV and FCEV 
uptake.
    Section 60101, ``Clean Heavy-duty Vehicles,'' amends the CAA to add 
new section 132 (42 U.S.C. 7432) and appropriates $1 billion to the 
Administrator, including $600 million generally for carrying out CAA 
section 132 (3 percent of which must be reserved for administrative 
costs necessary to carry out the section's provisions) and $400 million 
to make awards under CAA section 132 to eligible recipients/contractors 
that propose to replace eligible vehicles to serve one or more 
communities located in an air quality area designated pursuant to CAA 
section 107 as nonattainment for any air pollutant, in FY 2022 and 
available through FY 2031. CAA section 132 requires the Administrator 
to implement a program to make awards of grants and rebates to eligible 
recipients (defined as States, municipalities, Indian tribes, and 
nonprofit school transportation associations), and to make awards of 
contracts to eligible contractors for providing rebates, for up to 100 
percent of costs for: (1) the incremental costs of replacing a Class 6 
or Class 7 heavy-duty vehicle that is not a zero-emission vehicle with 
a zero-emission vehicle (as determined by the Administrator based on 
the market value of the vehicles); (2) purchasing, installing, 
operating, and maintaining infrastructure needed to charge, fuel, or 
maintain zero-emission vehicles; (3) workforce development and training 
to support the maintenance, charging, fueling, and operation of zero-
emission vehicles; and (4) planning and technical activities to support 
the adoption and deployment of zero-emission vehicles.
    Section 60102, ``Grants to Reduce Air Pollution at Ports,'' amends 
the CAA to add a new section 133 (42 U.S.C. 7433) and appropriates $3 
billion (2 percent of which must be reserved for administrative costs 
necessary to carry out the section's provisions), $750 million of which 
is for projects located in areas of nonattainment for any air 
pollutant, in FY 2022 and available through FY 2027, to reduce air 
pollution at ports. Competitive rebates or grants are to be awarded for 
the purchase or installation of zero-emission port equipment or 
technology for use at, or to directly serve, one or more ports; to 
conduct any relevant planning or permitting in connection with the 
purchase or permitting of zero-emission port equipment or technology; 
and to develop qualified climate action plans. The zero-emission 
equipment or technology either (1) produces zero emissions of GHGs, 
listed criteria pollutants, and hazardous air pollutants or (2) it 
captures 100 percent of the emissions produced by an ocean-going vessel 
at berth.
    Section 60103, ``Greenhouse Gas Reduction Fund,'' amends the CAA to 
add a new section 134 (42 U.S.C. 7434) and appropriates $27 billion, 
$15 billion of which is for low-income and disadvantaged communities, 
in FY 2022 and available through FY 2024, for a GHG reduction grant 
program. The program supports direct investments in qualified projects 
at the national, regional, State, and local levels, and indirect 
investments to establish new or support existing public, quasi-public, 
not-for-profit, or nonprofit entities that provide financial assistance 
to qualified projects. The program focuses on the rapid deployment of 
low- and zero-emission products, technologies, and services to reduce 
or avoid GHG emissions and other forms of air pollution.
    Section 60104, ``Diesel Emissions Reductions,'' appropriates $60 
million (2 percent of which must be reserved for administrative costs 
necessary to carry out the section's provisions), in FY 2022 and 
available through FY 2031, for grants, rebates, and loans under section 
792 of the Energy Policy Act of 2005 (42 U.S.C. 16132) to identify and 
reduce diesel emissions resulting from goods movement facilities and 
vehicles servicing goods movement facilities in low-income and 
disadvantaged communities to address the health impacts of such 
emissions on such communities.

[[Page 25947]]

    Section 70002 appropriates $3 billion in FY 2022 and available 
through FY 2031 for the U.S. Postal Service to purchase ZEVs ($1.29 
billion) and to purchase, design, and install infrastructure to support 
zero-emission delivery vehicles at facilities that the U.S. Postal 
Service owns or leases from non-Federal entities ($1.71 billion).
    Section 13501, ``Extension of the Advanced Energy Project Credit,'' 
allocates $10 billion in tax credits for facilities to domestically 
manufacture advanced energy technologies, subject to certain 
application and other requirements and limitations. Qualifying 
properties now include light-, medium-, or heavy-duty electric or fuel 
cell vehicles along with the technologies, components, or materials for 
such vehicles and the associated charging or refueling infrastructure. 
They also include hybrid vehicles with a gross vehicle weight rating of 
not less than 14,000 pounds along with the technologies, components, or 
materials for them.
    Sections 50142, 50143, 50144, 50145, 50151, 50152, and 50153 
collectively appropriate nearly $13 billion to support low- and zero-
emission vehicle manufacturing and energy infrastructure. These 
provisions are intended to help accelerate the ability for industry to 
meet the demands spurred by the previously mentioned IRA sections, both 
for manufacturing vehicles, including BEVs and FCEVs, and for energy 
infrastructure.
    Section 13204, ``Clean Hydrogen,'' amends section 45V of the 
Internal Revenue Code (i.e., Title 26) to offer a tax credit to produce 
hydrogen for qualified clean production facilities that use a process 
that results in a lifecycle GHG emissions rate of not greater than 4 kg 
of CO2e per kg of hydrogen. This credit is eligible for 
qualified clean hydrogen production facilities whose construction 
begins before January 1, 2033, and is available during the 10-year 
period beginning on the date such facility was originally placed in 
service. The credit increases to a maximum of $3 per kilogram produced 
as the lifecycle GHG emissions rate is reduced to less than 0.45 kg of 
CO2e per kg of hydrogen. Facilities that received credit for 
the construction of carbon capture and direct air capture equipment or 
facilities (i.e., under 45Q) do not qualify, and prevailing wage and 
apprenticeship requirements apply. Section 60113, ``Methane Emissions 
Reduction Program,'' amends the CAA by adding Section 136 and 
appropriates $850 million to EPA to support methane mitigation and 
monitoring, plus authorizes a new fee of $900 per ton on ``waste'' 
methane emissions that escalates after two years to $1,500 per ton. 
These combined incentives promote the production of hydrogen in a 
manner that minimizes its potential greenhouse gas impact.
    While there are challenges facing greater adoption of heavy-duty 
ZEV technologies, the IRA provides many financial incentives to 
overcome these challenges and thus would also support our proposed 
rulemaking. We expect IRA sections 13502 and 13403 to support the 
adoption of HD ZEV technologies in the market, as detailed in our 
assessment of the appropriate GHG standards we are proposing. 
Additionally, we expect IRA sections 13404, 60101-60104, 70002, 13501, 
50142-50145, 50151-50153, and 13204 to further accelerate ZEV adoption, 
but we are not including them quantitatively in our analyses.
    As described in Section II of the proposed rule, EPA has considered 
the potential impacts of the BIL and the IRA in our assessment of the 
appropriate proposed GHG standards both quantitatively and 
qualitatively, and we request comment on our approach.

3. States' Efforts To Increase Adoption of HD ZEVs

    HD vehicle sales and on-road vehicle populations are significant in 
the state of California. Approximately ten percent of U.S. HD ICE 
vehicles in 2016 were registered in California.\183\ California adopted 
the ACT program in 2020, which will also influence the market 
trajectory for BEV and FCEV technologies.184 185 186 The ACT 
program requires manufacturers who certify HD vehicles for sale in 
California to sell a certain percentage of zero-emission HD vehicles 
(BEVs or FCEVs) in California for each model year, beginning with MY 
2024.\187\ As shown in Table I-1, the sales requirements vary by 
vehicle class, starting at 5 to 9 percent of total MY 2024 HD vehicle 
sales in California and increasing to 40 to 75 percent of a total MY's 
HD vehicle sales in California in MYs 2035 and later.\188\
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    \183\ FHWA. U.S. Highway Statistics. Available online at: 
https://www.fhwa.dot.gov/policyinformation/statistics.cfm.
    \184\ CAA section 209(a) generally preempts states from adopting 
emission control standards for new motor vehicles. But Congress 
created an important exception from preemption. Under CAA section 
209(b), the State of California may seek a waiver of preemption, and 
EPA must grant it unless the Agency makes one of three statutory 
findings. California's waiver of preemption for its motor vehicle 
emissions standards allows other States to adopt and enforce 
identical standards pursuant to CAA section 177. Since the CAA was 
enacted, EPA has granted California dozens of waivers of preemption, 
permitting California to enforce its own motor vehicle emission 
standards.
    \185\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \186\ EPA granted the ACT rule waiver requested by California 
under CAA section 209(b) on March 30, 2023.
    \187\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf at Sec.  1963.1, tbl. A-1, ``ZEV Sales Percentage 
Schedule''.
    \188\ Ibid.

  Table I-1--CARB's ACT ZEV Sales Requirements for Class 4-8 Heavy-Duty
                       Vehicles by Model Year \1\
------------------------------------------------------------------------
                                                             Class 7-8
             Model year (MY)               Class 4-8 (%)   tractors (%)
------------------------------------------------------------------------
2024....................................               9               5
2025....................................              11               7
2026....................................              13              10
2027 \2\................................              20              15
2028 \2\................................              30              20
2029 \2\................................              40              25
2030 \2\................................              50              30
2031 \2\................................              55              35
2032 \2\................................              60              40
2033....................................              65              40
2034....................................              70              40
2035+...................................              75              40
------------------------------------------------------------------------
Notes:
\1\ The CARB ACT program also includes ZEV sales requirements for Class
  2b and 3 vehicles with GVWR between 8,500 and 14,000 pounds. These
  vehicles are primarily commercial pickup trucks and vans and are
  sometimes referred to as ``medium-duty vehicles.'' The majority of
  Class 2b and 3 vehicles are chassis-certified vehicles and EPA is
  addressing these vehicles in a separate regulatory action, along with
  light-duty vehicles, consistent with E.O. 14037, Section 2a.
\2\ We are proposing GHG emission standards for these MYs in this
  action.

    Outside of California, a number of states have signaled interest in 
greater adoption of HD ZEV technologies and/or establishing specific 
goals to increase the HD electric vehicle market. As one example, the 
Memorandum of Understanding (MOU), ``Multi-State Medium- and Heavy-Duty 
Zero Emission Vehicle,'' (Multi-State MOU) organized by Northeast 
States for Coordinated Air Use Management (NESCAUM), sets targets ``to 
make all sales of new medium- and heavy-duty vehicles [in the 
jurisdictions of the signatory states and the District of Columbia] 
zero emission vehicles by no later than 2050'' with an interim goal of 
30 percent of all sales of new medium- and heavy-duty vehicles being 
zero emission vehicles no later than 2030.\189\

[[Page 25948]]

The Multi-State MOU was signed by the governors of 17 states including 
California, Colorado, Connecticut, Hawaii, Maine, Maryland, 
Massachusetts, New Jersey, New York, North Carolina, Nevada, Oregon, 
Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, as well 
as the mayor of the District of Columbia. The Multi-State MOU outlines 
these jurisdictions' more specific commitments to move toward ZEVs 
through the Multi-State ZEV Task Force and provides an action plan for 
zero-emission medium- and heavy-duty vehicles with measurable sales 
targets and a focus on overburdened and underserved communities. 
Several states that signed the Multi-State MOU have since adopted 
California's ACT program, pursuant to CAA section 177, and we 
anticipate more jurisdictions will follow with similar proposals.\190\
---------------------------------------------------------------------------

    \189\ Northeast States for Coordinated Air Use Management 
(NESCAUM), Multi-state Medium- and Heavy-duty Zero Emission Vehicle 
Memorandum of Understanding, available at https://www.nescaum.org/documents/mhdv-zev-mou-20220329.pdf/ (hereinafter ``Multi-State 
MOU'').
    \190\ See, e.g., Final Advanced Clean Truck Amendments, 1461 
Mass. Reg. 29 (Jan. 21, 2022) (Massachusetts). Medium- and Heavy-
Duty (MHD) Zero Emission Truck Annual Sales Requirements and Large 
Entity Reporting, 44 N.Y. Reg. 8 (Jan. 19, 2022) (New York), 
available at https://dos.ny.gov/system/files/documents/2022/01/011922.pdf. Advanced Clean Trucks Program and Fleet Reporting 
Requirements, 53 N.J.R. 2148(a) (Dec. 20, 2021) (New Jersey), 
available at https://www.nj.gov/dep/rules/adoptions/adopt_20211220a.pdf (pre-publication version). Clean Trucks Rule 
2021, DEQ-17-2021 (Nov. 17, 2021), available at http://records.sos.state.or.us/ORSOSWebDrawer/Recordhtml/8581405 (Oregon). 
Low emission vehicles, Wash. Admin. Code. Sec.  173-423-070 (2021), 
available at https://app.leg.wa.gov/wac/default.aspx?cite=173-423-070; 2021 Wash. Reg. 587356 (Dec. 15, 2021); Wash. Reg. 21-24-059 
(Nov. 29, 2021) (amending Wash. Admin. Code. Sec. Sec.  173-423 and 
173-400), available at https://lawfilesext.leg.wa.gov/law/wsrpdf/2021/24/21-24-059.pdf. (Washington).
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D. EPA Statutory Authority for the Proposal

    This section briefly summarizes the statutory authority for the 
proposed rule. Statutory authority for the GHG standards EPA is 
proposing is found in CAA section 202(a)(1) (2), 42 U.S.C. 7521(a)(1)-
(2), which requires EPA to establish standards applicable to emissions 
of air pollutants from new motor vehicles and engines which cause or 
contribute to air pollution which may reasonably be anticipated to 
endanger public health or welfare. Additional statutory authority for 
the proposed action is found in CAA sections 202-209, 216, and 301, 42 
U.S.C. 7521-7543, 7550, and 7601. We discuss some key aspects of these 
sections in relation to this proposed action immediately below.
    Title II of the Clean Air Act provides for comprehensive regulation 
of mobile sources, authorizing EPA to regulate emissions of air 
pollutants from all mobile source categories, including motor vehicles 
under CAA section 202(a). In turn, CAA section 216(2) defines ``motor 
vehicle'' as ``any self-propelled vehicle designed for transporting 
persons or property on a street or highway.'' Congress has 
intentionally and consistently used the broad term ``any self-propelled 
vehicle'' since the Motor Vehicle Air Pollution Control Act of 1965 so 
as not to limit standards adopted under CAA section 202 to vehicles 
running on a particular fuel, power source, or system of propulsion. 
Congress's focus was on emissions from classes of motor vehicles and 
the ``requisite technologies'' that could feasibly reduce those 
emissions giving appropriate consideration to cost of compliance and 
lead time, as opposed to being limited to any particular type of 
vehicle.
    Section 202(a)(1) of the CAA 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.'' CAA section 202(a)(1) also 
requires that any standards promulgated thereunder ``shall be 
applicable to such vehicles and engines for their useful life (as 
determined under [CAA section 202(d)], relating to useful life of 
vehicles for purposes of certification), whether such vehicle and 
engines are designed as complete systems or incorporate devices to 
prevent or control such pollution.'' CAA section 202(d) directs EPA to 
prescribe regulations under which the ``useful life'' of vehicles and 
engines shall be determined for the purpose of setting standards under 
CAA section 202(a)(1). For HD highway vehicles and engines, CAA section 
202(d) establishes ``useful life'' minimum values of 10 years or 
100,000 miles, whichever occurs first, unless EPA determines that 
greater values are appropriate.\191\
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    \191\ In 1983, EPA adopted useful life periods to apply for HD 
engines criteria pollutant standards (48 FR 52170, November 16, 
1983). The useful life mileage for heavy HD engines criteria 
pollutant standards was subsequently increased for 2004 and later 
model years (62 FR 54694, October 21, 1997). In the GHG Phase 2 rule 
(81 FR 73496, October 25, 2016), EPA set the same useful life 
periods to apply for HD engines and vehicles greenhouse gas emission 
standards, except that the spark-ignition HD engine standards and 
the standards for model year 2021 and later light HD engines apply 
over a useful life of 15 years or 150,000 miles, whichever comes 
first. In the HD2027 rule (88 FR 4359, January 24, 2023), EPA 
lengthened useful life periods for all 2027 and later model year HD 
engines criteria pollutant standards. See also 40 CFR 1036.104(e), 
1036.108(d), 1037.105(e), and 1037.106(e).
---------------------------------------------------------------------------

    While emission standards set by the EPA under CAA section 202(a)(1) 
generally do not mandate use of particular technologies, they are 
technology-based, 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 motor-vehicle 
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.'' Coalition for Responsible 
Regulation v. EPA, 684 F.3d 120, 128 (D.C. Cir. 2012). 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); see also Growth 
Energy v. EPA, 5 F.4th 1, 15 (D.C. Cir. 2021) (``The court is 
`particularly deferential' to agencies' predictive judgments, requiring 
only that `the agency acknowledge factual uncertainties and identify 
the considerations it found persuasive.' EPA cleared that modest 
bar.'') (internal citations omitted). Moreover, ``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

[[Page 25949]]

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.\192\
---------------------------------------------------------------------------

    \192\ Additionally, with respect to regulation of vehicular GHG 
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. 
Pursuant to the broad grant of authority in section 202, when setting 
GHG emission standards for HD vehicles, EPA must consider certain 
factors and may also consider other factors and has done so previously 
when setting such standards. For instance, in HD GHG Phase 1 and Phase 
2, EPA explained that when acting under this authority EPA has 
considered such issues as technology effectiveness, its cost (including 
per vehicle, per manufacturer, and per purchaser), the lead time 
necessary to implement the technology, and based on this the 
feasibility and practicability of potential standards; the impacts of 
potential standards on emissions reductions; the impacts of standards 
on oil conservation and energy security; the impacts of standards on 
fuel savings by vehicle operators; the impacts of standards on the 
heavy-duty vehicle industry; as well as other relevant factors such as 
impacts on safety.193 194
---------------------------------------------------------------------------

    \193\ 76 FR 57129, September 15, 2011.
    \194\ 81 FR 73478, 73512, October 25, 2016.
---------------------------------------------------------------------------

    In addition, EPA has clear authority to set standards under CAA 
section 202(a)(1)-(2) that are technology forcing when EPA considers 
that to be appropriate, but is not required to do so (as compared to 
standards under provisions such as section 202(a)(3), which require the 
greatest degree of emissions reduction achievable, giving appropriate 
consideration to cost, energy and safety factors). CAA section 202(a) 
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'''); National Petrochemical and Refiners Ass'n 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.'').\195\
---------------------------------------------------------------------------

    \195\ See also; 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. Federal 
Energy Regulatory Comm'n, 297 F. 3d 1071, 1084 (D.C. Cir. 2002) 
(same).
---------------------------------------------------------------------------

    As noted previously in this section, there are also other 
provisions of the CAA that provide authority for EPA's proposed action, 
including CAA sections 203, 206, and 207. Under section 203 of the CAA, 
sales of vehicles are prohibited unless the vehicle is covered by a 
certificate of conformity, and EPA issues certificates of conformity 
pursuant to section 206 of the CAA. Certificates of conformity are 
based on (necessarily) pre-sale testing conducted either by EPA or by 
the manufacturer. Compliance with standards is required not only at 
certification but throughout a vehicle's useful life, so that testing 
requirements may continue post-certification. To assure each engine and 
vehicle complies during its useful life, EPA 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 emissions standards is 
measured. EPA's testing authority under the CAA is broad and flexible.
    Under CAA section 207, manufacturers are required to provide 
emission-related warranties. The emission-related warranty period for 
HD engines and vehicles under CAA section 207(i) is ``the period 
established by the Administrator by regulation (promulgated prior to 
November 15, 1990) for such purposes unless the Administrator 
subsequently modifies such regulation.'' For HD vehicles, part 1037 
currently specifies that the emission-related warranty for Light HD 
vehicles is 5 years or 50,000 miles and for Medium HD and Heavy HD 
vehicles is 5 years or 100,000 miles, and specifies the components 
covered for such vehicles.\196\ Section 207 of the CAA also grants EPA 
broad authority to require manufacturers to remedy nonconformity if EPA 
determines there are a substantial number of noncomplying vehicles. 
Additional aspects of EPA's legal authority are more fully discussed in 
the HD GHG Phase 1 final rule.\197\ Further discussion of EPA's 
authority under CAA section 202(a)(1)-(2) may also be found in the HD 
GHG Phase 1 final rule.
---------------------------------------------------------------------------

    \196\ See 40 CFR 1037.120.
    \197\ 76 FR 57129-57130, September 15, 2011.
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    With regard to the specific technologies that could be used to meet 
the emission standards promulgated under the statutory authorities 
discussed in this Section I.D, EPA's rules have historically not 
required the use of any particular technology, but rather have allowed 
manufacturers to use any technology that demonstrates the engine or 
vehicle meets the standards over the applicable test procedures. 
Similarly, in determining the standards, EPA appropriately considers 
updated data and analysis on pollution control technologies, without a 
priori limiting its consideration to a particular set of technologies. 
Given the continuous development of pollution control technologies 
since the early days of the CAA, this approach means that EPA routinely 
considers novel and projected technologies developed or refined since 
the time of the CAA's enactment, including for instance, electric 
vehicle technologies. In requiring EPA to consider lead time that takes 
into consideration development and application of technology when 
setting standards before such standards may take effect, Congress 
directed EPA to consider future technological advancements and 
innovation rather than limiting the Agency to setting standards that 
reflect only technologies in place at the time the standards are 
developed. This forward-looking regulatory approach keeps pace with 
real-world technological developments that have the potential to reduce 
emissions and comports with Congressional intent.
    Section 202 does not specify or expect any particular type of motor 
vehicle propulsion system to remain prevalent, and it was clear as 
early as the 1960s that ICE vehicles might be inadequate to achieve the 
country's air quality goals.

[[Page 25950]]

In 1967, the Senate Committees on Commerce and Public Works held five 
days of hearings on ``electric vehicles and other alternatives to the 
internal combustion engine,'' which Chairman Magnuson opened by saying 
``The electric will help alleviate air pollution. . . . The electric 
car does not mean a new way of life, but rather it is a new technology 
to help solve the new problems of our age.'' \198\ In a 1970 message to 
Congress seeking a stronger CAA, President Nixon stated he was 
initiating a program to develop ``an unconventionally powered, 
virtually pollution free automobile'' because of the possibility that 
``the sheer number of cars in densely populated areas will begin 
outrunning the technological limits of our capacity to reduce pollution 
from the internal combustion engine.'' \199\
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    \198\ Electric Vehicles and Other Alternatives to the Internal 
Combustion Engine: Joint Hearings before the Comm. On Commerce and 
the Subcomm. On Air and Water Pollution of the Comm. On Pub. Works, 
90th Cong. (1967).
    \199\ Richard Nixon, Special Message to the Congress on 
Environmental Quality (Feb. 10, 1970), https://www.presidency.ucsb.edu/documents/special-message-the-congress-environmental-quality.
---------------------------------------------------------------------------

    Since the earliest days of the CAA, Congress has emphasized that 
the goal of section 202 is to address air quality hazards from motor 
vehicles, not to simply reduce emissions from internal combustion 
engines to the extent feasible. In the Senate Report accompanying the 
1970 CAA Amendments, Congress made clear the EPA ``is expected to press 
for the development and application of improved technology rather than 
be limited by that which exists'' and identified several 
``unconventional'' technologies that could successfully meet air 
quality-based emissions targets for motor vehicles.\200\ In the 1970 
amendments Congress further demonstrated its recognition that 
developing new technology to ensure that pollution control keeps pace 
with economic development is not merely a matter of refining the ICE, 
but requires considering new types of motor vehicle propulsion. 
Congress provided EPA with authority to fund the development of ``low 
emission alternatives to the present internal combustion engine'' as 
well as a program to encourage Federal purchases of ``low-emission 
vehicles.'' See CAA section 104(a)(2) (previously codified as CAA 
section 212). Congress also adopted section 202(e) expressly to grant 
the Administrator discretion regarding the certification of vehicles 
and engines based on ``new power sources or propulsion system[s],'' 
that is to say, power sources and propulsion systems beyond the 
existing internal combustion engine and fuels available at the time of 
the statute's enactment, if those vehicles emitted pollutants which the 
Administrator judged contributed to dangerous air pollution but had not 
yet established standards for under section 202(a). As the D.C. Circuit 
stated in 1975, ``We may also note that it is the belief of many 
experts--both in and out of the automobile industry--that air pollution 
cannot be effectively checked until the industry finds a substitute for 
the conventional automotive power plant-the reciprocating internal 
combustion (i.e., ``piston'') engine. . . . It is clear from the 
legislative history that Congress expected the Clean Air Amendments to 
force the industry to broaden the scope of its research--to study new 
types of engines and new control systems.'' International Harvester Co. 
v. Ruckelshaus, 478 F.2d 615, 634-35 (D.C. Cir. 1975).
---------------------------------------------------------------------------

    \200\ S. Rep. No. 91-1196, at 24-27 (1970).
---------------------------------------------------------------------------

    Since that time, Congress has continued to emphasize the importance 
of technology development to achieving the goals of the CAA. In the 
1990 amendments, Congress instituted a clean fuel vehicles program to 
promote further progress in emissions reductions, which also applied to 
motor vehicles as defined under section 216, see CAA section 241(1), 
and explicitly defined motor vehicles qualifying under the program as 
including vehicles running on an alternative fuel or ``power source 
(including electricity),'' CAA section 241(2). Congress also directed 
EPA to phase-in certain section 202(a) standards, see CAA section 
202(g)-(j),\201\ which confirms EPA's authority to promulgate 
standards, such as fleet averages, phase-ins, and averaging, banking, 
and trading programs, that are fulfilled through compliance over an 
entire fleet, or a portion thereof, rather than through compliance by 
individual vehicles. As previously noted in the Executive Summary of 
this preamble, EPA has long included averaging provisions for complying 
with emission standards in the HD program and in upholding the first HD 
final rule that included such a provision the D.C. Circuit rejected 
petitioner's challenge in the absence of any clear evidence that 
Congress meant to prohibit averaging. NRDC v. Thomas, 805 F.2d 410, 425 
(D.C. Cir. 1986). In the subsequent 1990 amendments, Congress, noting 
NRDC v. Thomas, opted to let the existing law ``remain in effect,'' 
reflecting that ``[t]he intention was to retain the status quo,'' i.e., 
EPA's existing authority to allow averaging.\202\ Averaging, banking, 
and trading is discussed further in Sections II and III of this 
preamble; additional history of ABT is discussed in EPA's Answering 
Brief in Texas v. EPA (D.C. Cir., 22-1031, at Sec.  IV.A-B).
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    \201\ See, e.g., CAA section 202(h), which requires that the 
regulations EPA promulgates under CAA section 202(a) for light-duty 
trucks over 6,000 pounds. GVWR must contain standards that provide 
that the specified numeric emission standards will be met by 
specified percentages of each manufacturer's sales volume of such 
trucks, depending on the MY (e.g., 50% for MY 1996).
    \202\ 136 Cong. Rec. 36,713, 1990 WL 1222468 at *1136 Cong. Rec. 
35,367, 1990 WL 1222469 at *1.
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    The recently-enacted IRA \203\ ``reinforces the longstanding 
authority and responsibility of [EPA] to regulate GHGs as air 
pollutants under the Clean Air Act,'' \204\ and ``the IRA clearly and 
deliberately instructs EPA to use'' this authority by ``combin[ing] 
economic incentives to reduce climate pollution with regulatory drivers 
to spur greater reductions under EPA's CAA authorities.'' \205\ To 
assist with this, as described in Section I.C.2, the IRA provided a 
number of economic incentives for HD ZEVs and the infrastructure 
necessary to support them, and specifically affirms Congress's 
previously articulated statements that non-ICE technologies will be a 
key component of achieving emissions reductions from the mobile source 
sector, including the HD industry sector.\206\ The Congressional Record 
reflects that ``Congress recognizes EPA's longstanding authority under 
CAA Section 202 to adopt standards that rely on zero emission 
technologies, and Congress expects that future EPA regulations will 
increasingly rely on and incentivize zero-emission vehicles as 
appropriate.'' \207\
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    \203\ Inflation Reduction Act, Public Law 117-169, 136 Stat. 
1818, (2022), available at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
    \204\ 168 Cong. Rec. E868-02 (daily ed. Aug. 12, 2022) 
(statement of Rep. Pallone).
    \205\ 168 Cong. Rec. E879-02, at 880 (daily ed. Aug. 26, 2022) 
(statement of Rep. Pallone).
    \206\ See Inflation Reduction Act, Public Law 117-169, at 
Sec. Sec.  13204, 13403, 13404, 13501, 13502, 50142-50145, 50151-
50153, 60101-60104, 70002 136 Stat. 1818, (2022), available at 
https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
    \207\ 168 Cong. Rec. E879-02, at 880 (daily ed. Aug. 26, 2022) 
(statement of Rep. Pallone).
---------------------------------------------------------------------------

    Consistent with Congress's intent, EPA's CAA Title II emission 
standards have been based on and stimulated the development of a broad 
set of advanced technologies, such as electronic fuel injection 
systems, gasoline catalytic convertors, diesel particulate filters, 
diesel NOX reduction catalysts, gasoline direct injection 
fuel systems, active aerodynamic grill shutters, and advanced 
transmission technologies, which have been the building blocks of

[[Page 25951]]

heavy-duty vehicle designs and have yielded not only lower pollutant 
emissions, but improved vehicle performance, reliability, and 
durability. As previously discussed, beginning in 2011, EPA has set HD 
vehicle and engine standards under section 202(a)(1)-(2) for GHGs.\208\ 
Manufacturers have responded to standards over the past decade by 
continuing to develop and deploy a wide range of technologies, 
including more efficient engine designs, transmissions, aerodynamics, 
and tires, air conditioning systems that contribute to lower GHG 
emissions, as well as vehicles based on methods of propulsion beyond 
diesel- and gasoline-fueled ICE vehicles, including ICE running on 
alternative fuels (such as natural gas, biodiesel, renewable diesel, 
methanol, and other fuels), as well as various levels of electrified 
vehicle technologies from mild hybrids, to strong hybrids, and up 
through battery electric vehicles and fuel cell electric vehicles. In 
addition, the continued application of performance-based standards take 
into consideration averaging provisions that provide an opportunity for 
all technology improvements and innovation to be reflected in a vehicle 
manufacturers' compliance results.
---------------------------------------------------------------------------

    \208\ 76 FR 57106, September 15, 2011.
---------------------------------------------------------------------------

    With regard to EPA's proposed revised preemption regulations 
regarding locomotives described in Section X of the preamble, statutory 
authority is found in CAA section 209. CAA section 209(e)(1)(B), 42 
U.S.C. 7543(e)(1)(B), prohibits states and political subdivisions 
thereof from adopting or attempting to enforce any standard or other 
requirement relating to the control of emissions from new locomotives 
or new engines used in locomotives. However, CAA section 209(e)(2)(A)-
(B), 42 U.S.C. 7543(e)(2)(A)-(B), requires EPA to authorize, after 
notice and an opportunity for public hearing, California to adopt and 
enforce standards and other requirements relating to control of 
emissions from other nonroad vehicles or engines provided certain 
criteria are met, and allows states other than California to adopt and 
enforce, after notice to EPA, such standards provided they are 
equivalent to California's authorized standards. CAA section 
209(e)(2)(B) then requires EPA to issue regulations to implement 
subsection 209(e).

E. Coordination With Federal and State Partners

    Executive Order 14037 directs EPA and DOT to coordinate, as 
appropriate and consistent with applicable law, during consideration of 
this rulemaking. EPA has coordinated and consulted with DOT/NHTSA, both 
on a bilateral level during the development of the proposed program as 
well as through the interagency review of the EPA proposal led by the 
Office of Management and Budget. EPA has set some previous heavy-duty 
vehicle GHG emission standards in joint rulemakings where NHTSA also 
established heavy-duty fuel efficiency standards. In the light-duty GHG 
emission rulemaking establishing standards for model years 2023 through 
2026, EPA and NHTSA concluded that it was appropriate to coordinate and 
consult but not to engage in joint rulemaking. EPA has similarly 
concluded that it is not necessary for this EPA proposal to be issued 
in a joint action with NHTSA. In reaching this conclusion, EPA notes 
there is no statutory requirement for joint rulemaking and 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.'' \209\ Although there is no 
statutory requirement for EPA to consult with NHTSA, EPA has consulted 
with NHTSA in the development of this proposal. For example, staff of 
the two agencies met frequently to discuss various technical issues and 
to share technical information.
---------------------------------------------------------------------------

    \209\ Massachusetts v. EPA, 549 U.S. at 532.
---------------------------------------------------------------------------

    EPA also has consulted with other federal agencies in developing 
this proposal, including the Federal Energy Regulatory Commission, the 
Department of Energy and several national labs. EPA collaborates with 
DOE and Argonne National Laboratory on battery cost analyses and 
critical materials forecasting. EPA also coordinates with the Joint 
Office of Energy and Transportation on charging infrastructure. EPA and 
the Oak Ridge National Laboratory collaborate on energy security 
issues. EPA also participates in the Federal Consortium for Advanced 
Batteries led by DOE and the Joint Office of Energy and Transportation. 
EPA and DOE also have entered into a Joint Memorandum of Understanding 
to provide a framework for interagency cooperation and consultation on 
electric sector resource adequacy and operational reliability.\210\
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    \210\ Joint Memorandum on Interagency Communication and 
Consultation on Electric Reliability, U.S. Department of Energy and 
U.S. Environmental Protection Agency, March 8, 2023.
---------------------------------------------------------------------------

    E.O. 14037 also directs EPA to coordinate with California and other 
states that are leading the way in reducing vehicle emissions, as 
appropriate and consistent with applicable law, during consideration of 
this rulemaking. EPA has engaged with the California Air Resources 
Board on technical issues in developing this proposal. EPA has 
considered certain aspects of the CARB Advanced Clean Trucks Rule, as 
discussed elsewhere in this document. We also have engaged with other 
states, including members of the National Association of Clean Air 
Agencies, the Association of Air Pollution Control Agencies, the 
Northeast States for Coordinated Air Use Management, and the Ozone 
Transport Commission.

F. Stakeholder Engagement

    EPA has conducted extensive engagement with a diverse range of 
interested stakeholders in developing this proposal. We have engaged 
with those groups with whom E.O. 14037 specifically directs EPA to 
engage, including labor unions, states, industry, environmental justice 
organizations and public health experts. In addition, we have engaged 
with environmental NGOs, vehicle manufacturers, technology suppliers, 
dealers, utilities, charging providers, Tribal governments, and other 
organizations. For example, in April-May 2022, EPA held a series of 
engagement sessions with organizations representing all of these 
stakeholder groups so that EPA could hear early input in developing its 
proposal. EPA has continued engagement with many of these stakeholders 
throughout the development of this proposal. EPA looks forward to 
hearing from all stakeholders through comments on this proposal and 
during the public hearing.

II. Proposed CO2 Emission Standards

    Under our CAA section 202(a)(1)-(2) authority, and consistent with 
E.O. 14037, we are proposing new GHG standards for MYs 2027 through 
2032 and later HD vehicles. We are retaining and not reopening the 
nitrous oxide (N2O), methane (CH4), and 
CO2 emission standards that apply to heavy-duty engines, the 
HFC emission standards that apply to heavy-duty vehicles, and the 
general compliance structure of existing 40 CFR part 1037 except for 
some proposed revisions described in

[[Page 25952]]

Section III.\211\ In this Section II, we describe our assessment that 
these stringent standards are appropriate and feasible considering lead 
time, costs, and other factors. These proposed Phase 3 standards 
include (1) revised GHG standards for many MY 2027 HD vehicles, and (2) 
new GHG standards starting in MYs 2028 through 2032. The proposed 
standards do not mandate the use of a specific technology, and EPA 
anticipates that a compliant fleet under the proposed standards would 
include a diverse range of technologies, including ZEV and ICE vehicle 
technologies. In developing the proposed standards, EPA has considered 
the key issues associated with growth in penetration of zero-emission 
vehicles, including charging infrastructure and hydrogen production. In 
this section, we describe our assessment of the appropriateness and 
feasibility of these proposed standards and present a technology 
pathway for achieving each of those standards through increased ZEV 
adoption. In this section, we also present and request comment on an 
alternative that would provide a more gradual phase-in of the 
standards. As described in Section II.H., EPA also requests comment on 
setting GHG standards starting in MYs 2027 through 2032 that would 
reflect: values less stringent than the lower stringency alternative 
for certain market segments, values in between the proposed standards 
and the alternative standards, values in between the proposed standards 
and those that would reflect ZEV adoption levels (i.e., percent of ZEVs 
in production volumes) used in California's ACT, values that would 
reflect the level of ZEV adoption in the ACT program, and values beyond 
those that would reflect ZEV adoption levels in ACT such as the 50- to 
60-percent ZEV adoption range.
---------------------------------------------------------------------------

    \211\ See the HD GHG Phase 2 rule (81 FR 73478, October 25, 
2016), the Heavy-Duty Engine and Vehicle Technical Amendment rule 
(86 FR 34308, June 29, 2021), and the HD2027 rule (88 FR 4296, 
January 24, 2023). In this rulemaking, EPA is not reopening any 
portion of our heavy-duty compliance provisions, flexibilities, and 
testing procedures, including those in 40 CFR parts 1037, 1036, and 
1065, other than those specifically identified in this document as 
the subject of our proposal or a solicitation for comment. For 
example, while EPA is proposing to revise discrete elements of the 
HD ABT program, EPA is not reopening the general availability of 
ABT.
---------------------------------------------------------------------------

    In the beginning of this section, we first describe the public 
health and welfare need for GHG emission reductions (Section II.A). In 
Section II.B, we provide an overview of the comments the Agency 
received in response to the GHG standards previously proposed as part 
of the HD2027 NPRM. In Section II.C, we provide a brief overview of the 
existing CO2 emission standards that we promulgated in HD 
GHG Phase 2. Section II.D contains our technology assessment and 
Section II.E includes our assessment of technology costs, EVSE costs, 
operating costs, and payback. Section II.F includes the proposed 
standards and the analysis demonstrating the feasibility and Section 
II.G discusses the feasibility and appropriateness of the proposed 
emission standards under the Clean Air Act. Section II.H presents 
potential alternatives to the proposed standards, including requests 
for comment on standards other than those proposed. Finally, Section 
II.I summarizes our consideration of small businesses.

A. Public Health and Welfare Need for GHG Emission Reductions

    The transportation sector is the largest U.S. source of GHG 
emissions, representing 27 percent of total GHG emissions.\212\ Within 
the transportation sector, heavy-duty vehicles are the second largest 
contributor, at 25 percent.\213\ GHG emissions have significant impacts 
on public health and welfare as set forth in EPA's 2009 Endangerment 
and Cause or Contribute Findings under CAA section 202(a) and as 
evidenced by the well-documented scientific record.\214\
---------------------------------------------------------------------------

    \212\ Inventory of U.S. Greenhouse Gas Emissions and Sinks: 
1990-2020 (EPA-430-R-22-003), published April 2022.
    \213\ Ibid.
    \214\ See 74 FR 66496, December 15, 2009; see also EPA's Denial 
of Petitions Relating to the Endangerment and Cause or Contribute 
Findings for Greenhouse Gases Under Section 202(a) of the Clean Air 
Act, available at https://www.epa.gov/system/files/documents/2022-04/decision_document.pdf.
---------------------------------------------------------------------------

    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 altering 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 rule, 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), hydrofluorocarbons (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).

[[Page 25953]]

    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 \215\ 
in the United States., 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 a lesser 
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 U.S. (74 FR 66530).
---------------------------------------------------------------------------

    \215\ The 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).
---------------------------------------------------------------------------

    The most recent information demonstrates that the climate is 
continuing to change in response to the human-induced buildup of GHGs 
in the atmosphere. Recent scientific assessments show that atmospheric 
concentrations of GHGs have risen to a level that has no precedent in 
human history and that they continue to climb, primarily because of 
both historic and current anthropogenic emissions, and that these 
elevated concentrations endanger our health by affecting our food and 
water sources, the air we breathe, the weather we experience, and our 
interactions with the natural and built environments.
    Global average temperature has increased by about 1.1 degrees 
Celsius ([deg]C) (2.0 degrees Fahrenheit ([deg]F)) in the 2011-2020 
decade relative to 1850-1900. The IPCC determined with medium 
confidence that this past decade was warmer than any multi-century 
period in at least the past 100,000 years. Global average sea level has 
risen by about 8 inches (about 21 centimeters (cm)) from 1901 to 2018, 
with the rate from 2006 to 2018 (0.15 inches/year or 3.7 millimeters 
(mm)/year) almost twice the rate over the 1971 to 2006 period, and 
three times the rate of the 1901 to 2018 period. The rate of sea level 
rise during the 20th Century was higher than in any other century in at 
least the last 2,800 years. The CO2 being absorbed by the 
ocean has resulted in changes in ocean chemistry due to acidification 
of a magnitude not seen in 65 million years \216\ putting many marine 
species--particularly calcifying species--at risk. Human-induced 
climate change has led to heatwaves and heavy precipitation becoming 
more frequent and more intense, along with increases in agricultural 
and ecological droughts \217\ in many regions.\218\ The NCA4 found that 
it is very likely (greater than 90 percent likelihood) that by mid-
century, the Arctic Ocean will be almost entirely free of sea ice by 
late summer for the first time in about 2 million years.\219\ Coral 
reefs will be at risk for almost complete (99 percent) losses with 1 
[deg]C (1.8 [deg]F) of additional warming from today (2 [deg]C or 3.6 
[deg]F since preindustrial). At this temperature, between 8 and 18 
percent of animal, plant, and insect species could lose over half of 
the geographic area with suitable climate for their survival, and 7 to 
10 percent of rangeland livestock would be projected to be lost. The 
IPCC similarly found that climate change has caused substantial damages 
and increasingly irreversible losses in terrestrial, freshwater, and 
coastal and open ocean marine ecosystems.\220\
---------------------------------------------------------------------------

    \216\ IPCC (2018): Global Warming of 1.5 [deg]C. An IPCC Special 
Report on the impacts of global warming of 1.5 [deg]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. Portner, D. 
Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. 
Pe[acute]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.)].
    \217\ These are drought measures based on soil moisture.
    \218\ IPCC (2021): Summary for Policymakers. In: Climate Change 
2021: The Physical Science Basis. Contribution of Working Group I to 
the Sixth Assessment Report of the Intergovernmental Panel on 
Climate Change [Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. 
Connors, C. Pe[acute]an, S. Berger, N. Caud, Y. Chen, L. Goldfarb, 
M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. 
Maycock, T. Waterfield, O. Yelek[ccedil]i, R. Yu and B. Zhou 
(eds.)]. Cambridge University Press.
    \219\ USGCRP (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.
    \220\ IPCC (2022): Summary for Policymakers [H.-O. P[ouml]rtner, 
D.C. Roberts, E.S. Poloczanska, K. Mintenbeck, M. Tignor, A. 
Alegr[iacute]a, M. Craig, S. Langsdorf, S. L[ouml]schke, V. 
M[ouml]ller, A. Okem (eds.)]. In: Climate Change 2022: Impacts, 
Adaptation and Vulnerability. Contribution of Working Group II to 
the Sixth Assessment Report of the Intergovernmental Panel on 
Climate Change [H.-O. P[ouml]rtner, D.C. Roberts, M. Tignor, E.S. 
Poloczanska, K. Mintenbeck, A. Alegr[iacute]a, M. Craig, S. 
Langsdorf, S. L[ouml]schke, V. M[ouml]ller, A. Okem, B. Rama 
(eds.)]. Cambridge University Press, Cambridge, UK and New York, NY, 
USA, pp. 3-33, doi:10.1017/9781009325844.001.
---------------------------------------------------------------------------

    In 2016, the Administrator issued a similar finding for GHG 
emissions from aircraft under section 231(a)(2)(A) of the CAA.\221\ 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). Pursuant to the 2009 Endangerment 
and Cause or Contribute Findings, CAA section 202(a) requires EPA to 
issue standards applicable to emissions of those pollutants from new 
motor vehicles. See Coalition for Responsible Regulation, 684 F.3d at 
116-125, 126-27; Massachusetts, 549 U.S. at 533. See also Coalition for 
Responsible Regulation, 684 F.3d at 127-29 (upholding EPA's light-duty 
GHG emission standards for MYs 2012-2016 in their entirety).\222\ 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.223 224 225 226
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    \221\ ``Finding that Greenhouse Gas Emissions from Aircraft 
Cause or Contribute to Air Pollution That May Reasonably Be 
Anticipated To Endanger Public Health and Welfare.'' 81 FR 54422, 
August 15, 2016. (``2016 Endangerment Finding'').
    \222\ See also EPA's Denial of Petitions Relating to the 
Endangerment and Cause or Contribute Findings for Greenhouse Gases 
Under Section 202(a) of the Clean Air Act (Apr. 2022), available at 
https://www.epa.gov/system/files/documents/2022-04/decision_document.pdf.
    \223\ USGCRP, 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.
    \224\ Roy, 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 [deg]C. An IPCC Special 
Report on the impacts of global warming of 1.5 [deg]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. P[ouml]rtner, 
D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. 
P[eacute]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.
    \225\ National Academies of Sciences, Engineering, and Medicine. 
2019. Climate Change and Ecosystems. Washington, DC: The National 
Academies Press. https://doi.org/10.17226/25504.
    \226\ NOAA 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.

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[[Page 25954]]

B. Summary of Comments Received From HD2027 NPRM

    We received a significant number of comments to the proposed 
updates to the HD GHG emission standards proposed as part of the HD2027 
NPRM.\227\ A number of commenters provided support and reasoning for 
revising the HD CO2 standards while a number of other 
commenters expressed concerns about reopening the HD GHG Phase 2 
program. This Section II.B includes a summary of the comments received. 
Commenters who would like EPA to further consider in this rulemaking 
any relevant comments that they provided on the HD2027 NPRM regarding 
proposed HD vehicle GHG standards for the MYs at issue in this proposal 
must resubmit those comments to EPA during this proposal's comment 
period. EPA considered the comments received in response to the HD2027 
NPRM when developing this Phase 3 proposal. The proposed standards were 
developed based on a more in-depth analysis of the potential for 
electrification of the heavy-duty sector and attendant emissions 
reductions than was used in the HD2027 NPRM analysis and is described 
in Sections II.D through II.F. This analysis addresses many of the 
concerns raised in comments summarized in the following subsections, 
such as the need to consider a wide range of HD applications, 
technology and operating costs of BEVs, the impact of heating and 
cooling on the energy demands of electric vehicles, infrastructure 
concerns, and the potential impact of weight and space for packaging of 
batteries. This analysis also includes consideration of the IRA 
provisions that provide significant financial incentives for the heavy-
duty ZEV market and reduce or eliminate the cost difference between ICE 
vehicles and ZEVs. In consideration of some commenters' concerns about 
the time needed for research plans, product development, manufacturing 
investment, and charging infrastructure, we discuss these topics in our 
technical analysis supporting this NPRM. As described in Section II.H., 
EPA also requests comment on setting GHG standards starting in MYs 2027 
through 2032 that would reflect: values less stringent than the lower 
stringency alternative for certain market segments, values in between 
the proposed standards and the alternative standards, values in between 
the proposed standards and those that would reflect ZEV adoption levels 
(i.e., percent of ZEVs in production volumes) used in California's ACT, 
values that would reflect the level of ZEV adoption in the ACT program, 
and values beyond those that would reflect ZEV adoption levels in ACT 
such as the 50- to 60-percent ZEV adoption range.
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    \227\ For the complete set of comments, please see U.S. EPA, 
``Control of Air Pollution from New Motor Vehicles: Heavy-Duty 
Engine and Vehicle Standards--Response to Comments.'' (RTC) Section 
28. Docket EPA-HQ-OAR-201 9-0055.
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1. Summary of Comments in Support of Revising the Phase 2 GHG Emission 
Standards for MY 2027
    Many commenters, including non-governmental organizations, states, 
and mass comment campaigns, provided support for revising the targeted 
HD vehicle MY 2027 CO2 emission standards to reflect the 
increase in electrification of the HD market and attendant potential 
for additional emission reductions. Additionally, many commenters 
suggested that EPA should further reduce the emission standards in MYs 
2027 through 2029 beyond the levels proposed because of the 
accelerating adoption of HD ZEVs. Many commenters also highlighted that 
five additional states besides California adopted the California ACT 
program in late 2021 and noted that this would also drive additional 
electrification in the HD segment of the transportation sector.\228\ 
Finally, some commenters pointed to the ``Multi-State Medium and Heavy-
Duty Zero Emission Vehicle Memorandum of Understanding'' (Multi-State 
MOU) signed by 17 states and the District of Columbia establishing 
goals to increase HD electric vehicle sales in those jurisdictions to 
30 percent by 2030 and 100 percent by 2050. Commenters also provided a 
number of reports that evaluate the potential of electrification of the 
HD sector in terms of adoption rates, costs, and other factors.
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    \228\ Ibid. Many commenters in HD2027 RTC Section 28.1.1 pointed 
to ACT.
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    Some of the commenters provided specific recommendations for HD ZEV 
adoption rates in the MYs 2027 through 2029 timeframe. For example, the 
American Council for an Energy-Efficient Economy (ACEEE) suggested 
that, based on a recent NREL study, EPA could set standards that 
reflect 20 percent electrification in MY 2027 and up to 40 percent in 
MY 2029.\229\ The Environmental Defense Fund (EDF) suggested standards 
to achieve 80 percent sales of ZEVs for new school and transit buses 
and 40 percent of new Class 4-7 vehicles and Class 8 short-haul 
vehicles by MY 2029.\230\ EDF also referenced an analysis from 
Environmental Resources Management (ERM) that included a range of 
scenarios, with midpoint scenarios projecting HD ZEV deployment in 
excess of 20 percent in MY 2029 and more optimistic scenarios 
projecting HD ZEV sales of over 33 percent of all Class 4-8 single unit 
trucks, short-haul tractors, and school and transit buses in MY 
2029.\231\ The ICCT suggested HD ZEV ranges of 15 to 40 percent 
depending on the vehicle segment in MY 2027, increasing up to 40 to 80 
percent in MY 2029.\232\ Moving Forward Network suggested that ZEVs 
could comprise 20 percent of new sales in MY 2027 and increase 10 
percent each year, with a goal of 100 percent by MY 2035.\233\ Tesla 
referenced a NREL study, a forecast from Americas Commercial 
Transportation Research Co. (ACT Research) that projected a 26 percent 
sales share of HD ZEVs nationwide in 2030, and another study that 
projected 25 percent of the global HD fleet will be electric by 
2030.\234\ Other commenters,

[[Page 25955]]

such as AMPLY Power (rebranded to bp plus), suggest that the federal 
CO2 emission standards should achieve ZEV deployments on par 
with California's ACT program.\235\
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    \229\ ACEEE comments on the HD2027 NPRM. See Docket Entry EPA-
HQ-OAR-2019-0055-2852-A1. Referencing Catherine Ledna et al., 
`Decarbonizing Medium-& Heavy-Duty On-Road Vehicles: Zero-Emission 
Vehicles Cost Analysis' (NREL, March 2022), available at https://www.nrel.gov/docs/fy22osti/82081.pdf.
    \230\ EDF comments on the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1265-A1, pp.16-17.
    \231\ EDF comments on the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1265-A1 (citing Rachel MacIntosh, Sophie Tolomiczenko, 
Grace Van Horn. April 2022. Electric Vehicle Market Update: 
Manufacturer Commitments and Public Policy Initiatives Supporting 
Electric Mobility in the U.S. and Worldwide, ERM for EDF, Version 6 
(April 2022), available at http://blogs.edf.org/climate411/files/2022/04/electric_vehicle_market_report_v6_april2022.pdf.
    \232\ ICCT Comments on the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1211-A1, p. 6.
    \233\ Moving Forward Network Comments on the HD2027 NPRM. See 
Docket Entry EPA-HQ-OAR-2019-0055-1277-A1, pp. 19-20.
    \234\ Tesla Comments on the HD2027 NPRM. See Docket Entry EPA-
HQ-OAR-2019-0055-1219-A1, p.9 (citing HDT Truckinginfo, ACT: Third 
of Class 4-8 Vehicles to be Battery-Electric in 10 Year (June 4, 
2021); Fleet Owner, Disruption in trucking technology (Jan. 13, 
2020); and MJ Bradley, Medium- & Heavy-Duty Vehicles: Market 
Structure, Environmental Impact, and EV Readiness (Aug. 11, 2022)).
    \235\ AMPLY Comments on the HD2027 NPRM. See Docket Entry EPA-
HQ-OAR-2019-0055-1236-A1, p. 1.
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    Some commenters also referred to manufacturer statements regarding 
such manufacturers' projections for HD electrification. For example, 
ACEEE pointed to Volvo's and Scania's announcements for global 
electrification targets of 50 percent by 2030.\236\ EDF pointed to 
several manufacturer's statements.\237\ First, EDF noted Daimler Trucks 
North America has committed to offering only carbon-neutral trucks in 
the United States by 2039 and expects that by 2030, as much as 60 
percent of its sales will be ZEVs.\238\ Second, EDF noted Navistar has 
a goal of having 50 percent of its sales volume be ZEVs by 2030, and 
its commitment to achieve 100 percent zero emissions by 2040 across all 
operations and carbon-neutrality by 2050.\239\
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    \236\ ACEEE Comments on the HD2027 NPRM. See Docket Entry EPA-
HQ-OAR-2019-0055-0055-2852-A1. Citing Scania, `Scania's 
Electrification Roadmap,' Scania Group, November 24, 2021, https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html; AB Volvo, `Volvo Trucks Launches 
Electric Truck with Longer Range,' Volvo Group, January 14, 2022, 
https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html.
    \237\ EDF comments on the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1265-A1.
    \238\ EDF comments on the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1265-A1 (citing David Cullen, ``Daimler to Offer 
Carbon Neutral Trucks by 2039,'' (October 25, 2019), https://www.truckinginfo.com/343243/daimler-aims-to-offer-only-co2-neutral-trucks-by-2039-in-key-markets (last accessed October 2022) and 
Deborah Lockridge, ``What Does Daimler Truck Spin-off Mean for North 
America?,'' Trucking Info (November 11, 2021), https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america (last accessed October 2022)).
    \239\ EDF comments on the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1265-A1 (citing Navistar presentation at the Advanced 
Clean Transportation Expo, Long Beach, CA (May 9-11, 2022)).
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    Finally, some commenters discussed hydrogen-powered ICEs and 
asserted that there are benefits associated with that technology as a 
potential CO2-reducing technology for the HD segment of the 
transportation sector.\240\
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    \240\ BorgWarner comments on the HD2027 NPRM. See Docket Entry 
EPA-HQ-OAR-2019-0055-1234-A1, p. 3; Westport Fuel Systems comments 
on the HD2027 NPRM. See Docket Entry EPA-HQ-OAR-2019-0055-1278-A1, 
p. 5.
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2. Summary of Comments Expressing Concern With Revising the Phase 2 GHG 
Emission Standards for MY 2027
    Some commenters raised concerns with the HD2027 NPRM proposed 
changes to certain HD GHG Phase 2 CO2 emission standards. 
Some highlighted the significant investment and lead time required for 
development and verification of durability of ZEVs and stated EPA 
should not adopt standards that project broad adoption of heavy-duty 
ZEVs.
    Some commenters stated that EPA should not reopen the HD GHG Phase 
2 emission standards.\241\ Several manufacturers and suppliers pointed 
to the need for regulatory certainty and stability, stating that 
reopening the Phase 2 standards would threaten their long-term 
investments and production planning. Some commenters went further and 
stated that certain technologies that EPA projected for use to meet the 
existing Phase 2 emission standards are seeing lower-than-expected 
penetration rates in MY 2021; these commenters suggested that EPA relax 
the Phase 2 standards.\242\ The technologies highlighted by the 
commenters suggesting that EPA relax Phase 2 standards include tamper-
resistant automatic shutdown systems, neutral idle, low rolling 
resistance tires, stop-start, and advanced transmission shift 
strategies.
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    \241\ Daimler Trucks comments on the HD2027 NPRM. See Docket 
Entry EPA-HQ-OAR-2019-0055-1168-A1, p.112; Navistar Comments on the 
HD2027 NPRM. See Docket Entry EPA-HQ-OAR-2019-0055-1318-A1, p. 6; 
PACCAR Comments on the HD2027 NPRM. See Docket Entry EPA-HQ-OAR-
2019-0055-1346-A1, p. 3; Truck and Engine Manufacturer's Association 
Comments on the HD2027 NPRM. See Docket Entry EPA-HQ-OAR-2019-0055-
1203-A1, pp. 7-8; Volvo Group Comments on the HD2027 NPRM. See 
Docket Entry EPA-HQ-OAR-2019-0055-1324-A1, p. 7.
    \242\ Truck and Engine Manufacturer's Association Comments on 
the HD2027 NPRM. See Docket Entry EPA-HQ-OAR-2019-0055-1203-A1, p. 
108.
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    Commenters also stated that it takes time to develop ZEV 
technologies for the wide range of HD applications. They also raised 
concerns regarding asserted high costs and long lead times associated 
with the necessary charging infrastructure, the weight impact of 
batteries, the impact of battery degradation and ambient temperatures 
on the range of electric vehicles, and the impact on operations due to 
the time required to charge. Commenters also raised issues regarding 
the upstream and lifecycle emissions impact of ZEVs, including minerals 
and battery manufacturing, battery disposal and recycling, potential 
higher tire and brake wear from electric vehicles, and the availability 
of minerals and other supply chain issues.
    Some commenters raised concerns about the approach used in the 
HD2027 NPRM to project ZEV sales in MY 2027. Concerns raised by 
commenters include the uncertainty of the actual production levels 
needed to meet California ACT program requirements; that EPA has not 
approved a waiver for the California ACT program and, therefore, should 
not consider full implementation of that program; and that the current 
HD ZEVs are expensive.
    One commenter raised concerns related to small businesses. The 
commenter stated that its less diverse product mix and low sales volume 
present challenges in meeting the proposed GHG standards in the HD2027 
NPRM.

C. Background on the CO2 Emission Standards in the HD GHG Phase 2 
Program

    In the Phase 2 Heavy-Duty GHG rule, we finalized GHG emission 
standards tailored to three regulatory categories of HD vehicles--
heavy-duty pickups and vans, vocational vehicles, and combination 
tractors.\243\ In addition, we set separate standards for the engines 
that power combination tractors and for the engines that power 
vocational vehicles. The heavy-duty vehicle CO2 emission 
standards are in grams per ton-mile, which represents the grams of 
CO2 emitted to move one ton of payload a distance of one 
mile. In promulgating the Phase 2 standards, we explained that the 
stringency of the Phase 2 standards were derived on a fleet average 
technology mix basis and that the emission averaging provisions of ABT 
meant that the regulations did not require all vehicles to meet the 
standards (contrasted with the banking and trading provisions of the HD 
GHG Phase 2 ABT program which were not relied upon in selecting the 
stringency the HD GHG Phase 2 standards). For example, we projected 
that diversified manufacturers would continue to use the averaging 
provisions in the ABT program to meet the standards on average for each 
of their vehicle families. In addition, the Phase 2 program established 
subcategories of vehicles (i.e., custom chassis vocational

[[Page 25956]]

vehicles and heavy-haul tractors) that were specifically designed to 
recognize the limitations of certain vehicle applications to adopt some 
technologies due to specialized operating characteristics or generally 
low sales volumes with prohibitively long payback periods. The vehicles 
certified to the custom chassis vocational vehicle standards are not 
permitted to bank or trade credits and some have limited averaging 
provisions under the HD GHG Phase 2 ABT program.\244\
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    \243\ We also set standards for certain types of trailers used 
in combination with tractors (see 81 FR 73639, October 25, 2016). As 
described in Section III of this preamble, we are proposing to 
remove the regulatory provisions related to trailers in 40 CFR part 
1037 to carry out a decision by the U.S. Court of Appeals for the 
D.C. Circuit, which vacated the portions of the HD GHG Phase 2 final 
rule that apply to trailers. Truck Trailer Manufacturers Association 
v. EPA, 17 F.4th 1198 (D.C. Cir. 2021).
    \244\ See 40 CFR 1037.105(h)(2).
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    In this proposal, we continue to expect averaging would play an 
important role in manufacturer strategies to meet the proposed 
standards. In Section II.F, we are proposing new standards for 
vocational vehicles and combination tractors, which we project are 
feasible to meet through a technology pathway where vehicle 
manufacturers would adopt ZEV technologies for a portion of their 
product lines. This Section II.C includes additional background 
information on these two vehicle categories. At this time, we are not 
proposing to update engine standards in 40 CFR 1036.108. Additionally, 
we intend to separately pursue a combined light-duty and medium-duty 
rulemaking to propose more stringent standards for complete and 
incomplete vehicles at or below 14,000 pounds. GVWR that are certified 
under 40 CFR part 86, subpart S. Manufacturers of incomplete vehicles 
at or below 14,000 pounds GVWR would continue to have the option of 
either meeting the greenhouse gas standards under 40 CFR parts 1036 and 
1037, or instead meeting the greenhouse gas standards with chassis-
based measurement procedures under 40 CFR part 86, subpart S.
    We are continuing and are not reopening the existing approach taken 
in both HD GHG Phase 1 and Phase 2, that compliance with the vehicle 
exhaust CO2 emission standards is based on CO2 
emissions from the vehicle. See 76 FR 57123 (September 15, 2011); see 
also 77 FR 51705 (August 24, 2012), 77 FR 51500 (August 27, 2012), and 
81 FR 75300 (October 25, 2016). EPA's heavy-duty standards have been in 
place as engine- and vehicle-based standards for decades, for all 
engine and vehicle technologies. We estimated the upstream emission 
impact of the proposed standards for heavy-duty vehicles on both the 
refinery and electricity generation sectors, as shown in Section V, and 
those analyses also support the proposed CO2 emission 
standards.
1. Vocational Vehicles
    Vocational vehicles include a wide variety of vehicle types, 
spanning Class 2b-8, and serve a wide range of functions. We define 
vocational vehicles as all heavy-duty vehicles greater than 8,500 lb 
GVWR that are not certified under 40 CFR part 86, subpart S, or a 
combination tractor under 40 CFR 1037.106.\245\ Some examples of 
vocational vehicles include urban delivery trucks, refuse haulers, 
utility service trucks, dump trucks, concrete mixers, transit buses, 
shuttle buses, school buses, emergency vehicles, motor homes, and tow 
trucks. The HD GHG Phase 2 vocational vehicle program also includes a 
special regulatory subcategory called vocational tractors, which covers 
vehicles that are technically tractors but generally operate more like 
vocational vehicles than line-haul tractors. These vocational tractors 
include those designed to operate off-road and in certain intra-city 
delivery routes.
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    \245\ See 40 CFR 1037.105(a).
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    The existing HD GHG Phase 2 CO2 standards for vocational 
vehicles are based on the performance of a wide array of control 
technologies. In particular, the HD GHG Phase 2 vocational vehicle 
standards recognize detailed characteristics of vehicle powertrains and 
drivelines. Driveline improvements present a significant opportunity 
for reducing fuel consumption and CO2 emissions from 
vocational vehicles. However, there is no single package of driveline 
technologies that will be equally suitable for all vocational vehicles, 
because there is an extremely broad range of driveline configurations 
available in the market. This is due in part to the variety of final 
vehicle build configurations, ranging from a purpose-built custom 
chassis to a commercial chassis that may be intended as a multi-purpose 
stock vehicle. Furthermore, the wide range of applications and driving 
patterns of these vocational vehicles leads manufacturers to offer a 
variety of drivelines, as each performs differently in use.
    In the final HD GHG Phase 2 rule, we recognized the diversity of 
vocational vehicle applications by setting unique CO2 
emission standards evaluated over composite drive cycles for 23 
different regulatory subcategories. The program includes vocational 
vehicle standards that allow the technologies that perform best at 
highway speeds and those that perform best in urban driving to each be 
properly recognized over appropriate drive cycles, while avoiding 
potential unintended results of forcing vocational vehicles that are 
designed to serve in different applications to be measured against a 
single drive cycle. The vehicle CO2 emissions are evaluated 
using EPA's Greenhouse Gas Emissions Model (GEM) over three drive 
cycles, where the composite weightings vary by subcategory, with the 
intent of balancing the competing pressures to recognize the varying 
performance of technologies, serve the wide range of customer needs, 
and maintain a workable regulatory program.\246\ The HD GHG Phase 2 
primary vocational standards, therefore, contain subcategories for 
Regional, Multi-purpose, and Urban drive cycles in each of the three 
weight classes (Light Heavy-Duty (Class 2b-5), Medium Heavy-Duty (Class 
6-7) and Heavy Heavy-Duty (Class 8)), for a total of nine unique 
subcategories.\247\ These nine subcategories apply for compression-
ignition (CI) vehicles. We separately, but similarly, established six 
subcategories of spark-ignition (SI) vehicles. In other words, there 
are 15 separate numerical performance-based emission standards for each 
model year.
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    \246\ GEM is an EPA vehicle simulation tool used to certify HD 
vehicles. A detailed description of GEM can be found in the Phase 2 
Regulatory Impacts Analysis or at https://www.epa.gov/regulations-emissions-vehicles-and-engines/greenhouse-gas-emissions-model-gem-medium-and-heavy-duty.
    \247\ See 40 CFR 1037.140(g) and (h).
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    EPA also established optional custom chassis categories in the 
Phase 2 rule in recognition of the unique technical characteristics of 
these applications. These categories also recognize that many 
manufacturers of these custom chassis are not full-line heavy-duty 
vehicle companies and thus do not have the same flexibilities as other 
firms in the use of the Phase 2 program emissions averaging program 
which could lead to challenges in meeting the standards EPA established 
for the overall vocational vehicle and combination tractor program. We 
therefore established optional custom chassis CO2 emission 
standards for Motorhomes, Refuse Haulers, Coach Buses, School Buses, 
Transit Buses, Concrete Mixers, Mixed Use Vehicles, and Emergency 
Vehicles.\248\ In total, EPA set CO2 emission standards for 
15 subcategories of vocational vehicles and eight subcategories of 
specialty vehicle

[[Page 25957]]

types for a total of 23 vocational vehicle subcategories.
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    \248\ The numeric values of the optional custom chassis 
standards are not directly comparable to the primary vocational 
vehicle standards. As explained in the HD GHG Phase 2 rule, there 
are simplifications in GEM that produce higher or lower 
CO2 emissions. 81 FR 73686-73688. October 25, 2016.
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    The HD GHG Phase 2 standards phase in over a period of seven years, 
beginning with MY 2021. The HD GHG Phase 2 program progresses in three-
year stages with an intermediate set of standards in MY 2024 and final 
standards in MY 2027 and later. In the HD GHG Phase 2 final rule, we 
identified a potential technology path for complying with each of the 
three increasingly stringent stages of the HD GHG Phase 2 program 
standards. These standards are based on the performance of more 
efficient engines, workday idle reduction technologies, improved 
transmissions including mild hybrid powertrains, axle technologies, 
weight reduction, electrified accessories, tire pressure systems, and 
tire rolling resistance improvements. We developed the Phase 2 
vocational vehicle standards using the methodology where we applied 
fleet average technology mixes to fleet average baseline vehicle 
configurations, and each average baseline and technology mix was unique 
for each vehicle subcategory.\249\ When the HD GHG Phase 2 final rule 
was promulgated in 2016, we established CO2 standards on the 
premise that electrification of the heavy-duty market would occur in 
the future but was unlikely to occur at significant sales volumes in 
the timeframe of the program. As a result, the Phase 2 vocational 
vehicle CO2 standards were not in any way premised on the 
application of ZEV technologies. Instead, we finalized BEV, PHEV, and 
FCEV advanced technology credit multipliers within the HD GHG ABT 
program to incentivize a transition to these technologies (see Section 
III of this preamble for further discussion on this program and 
proposed changes). Details regarding the HD GHG Phase 2 standards can 
be found in the HD GHG Phase 2 final rule preamble, and the HD GHG 
Phase 2 vocational vehicle standards are codified at 40 CFR part 
1037.\250\
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    \249\ 81 FR 73715, October 25, 2016.
    \250\ 81 FR 73677-73725, October 25, 2016.
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2. Combination Tractors
    The tractor regulatory structure is attribute-based in terms of 
dividing the tractor category into ten subcategories based on the 
tractor's weight rating, cab configuration, and roof height. The 
tractors are subdivided into three weight ratings--Class 7 with a gross 
vehicle weight rating (GVWR) of 26,001 to 35,000 pounds; Class 8 with a 
GVWR over 33,000 pounds; and Heavy-haul with a gross combined weight 
rating of greater than or equal to 120,000 pounds.\251\ The Class 7 and 
8 tractor cab configurations are either day cab or sleeper cab. Day cab 
tractors are typically used for shorter haul operations, whereas 
sleeper cabs are often used in long haul operations. EPA set 
CO2 emission standards for 10 tractor subcategories.
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    \251\ See 40 CFR 1037.801.
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    Similar to the vocational program, implementation of the HD GHG 
Phase 2 tractor standards began in MY 2021 and will be fully phased in 
for MY 2027. In the HD GHG Phase 2 final rule, EPA analyzed the 
feasibility of achieving the CO2 standards and identified 
technology pathways for achieving the standards. The existing HD GHG 
Phase 2 CO2 emission standards for combination tractors 
reflect reductions that can be achieved through improvements in the 
tractor's powertrain, aerodynamics, tires, idle reduction, and other 
vehicle systems as demonstrated using GEM. As we did for vocational 
vehicles, we developed a potential technology package for each of the 
tractor subcategories that represented a fleet average application of a 
mix of technologies to demonstrate the feasibility of the standard for 
each MY.\252\ EPA did not premise the HD GHG Phase 2 CO2 
tractor emission standards on application of hybrid powertrains or ZEV 
technologies. However, we predicted some limited use of these 
technologies in MY 2021 and beyond and we finalized BEV, PHEV, and FCEV 
advanced technology credit multipliers within the HD GHG ABT program to 
incentivize a transition to these technologies (see Section III of this 
preamble for further discussion on this program and proposed changes). 
More details can be found in the HD GHG Phase 2 final rule preamble, 
and the HD GHG Phase 2 tractor standards are codified at 40 CFR part 
1037.\253\
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    \252\ 81 FR 73602-73611, October 25, 2016.
    \253\ 81 FR 73571, October 25, 2016.
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3. Heavy-Duty Engines
    In HD GHG Phase 1, we developed a regulatory structure for 
CO2, nitrous oxide (N2O), and methane (CH4) emission 
standards that apply to the engine, separate from the HD vocational 
vehicle and tractor. The regulatory structure includes separate 
standards for spark-ignition engines (such as gasoline engines) and 
compression-ignition engines (such as diesel engines), and for heavy 
heavy-duty (HHD), medium heavy-duty (MHD) and light heavy-duty (LHD) 
engines, that also apply to alternative fuel engines. We also used this 
regulatory structure for HD engines in HD GHG Phase 2. More details can 
be found in the HD GHG Phase 2 final rule preamble, and the HD GHG 
Phase 2 engine standards are codified at 40 CFR part 1036.\254\
---------------------------------------------------------------------------

    \254\ 81 FR 73553-73571, October 25, 2016.
---------------------------------------------------------------------------

4. Heavy-Duty Vehicle Average, Banking, and Trading Program
    Beginning in HD GHG Phase 1, EPA adopted an averaging, banking, and 
trading (ABT) program for CO2 emission credits that allows 
ABT within a vehicle weight class.\255\ For the HD GHG Phase 2 ABT 
program, the three credit averaging sets for HD vehicles are Light 
Heavy-Duty Vehicles, Medium Heavy-Duty Vehicles, and Heavy Heavy-Duty 
Vehicles. This approach allows ABT between CI-powered vehicles, SI-
powered vehicles, BEVs, FCEVs, and hybrid vehicles in the same weight 
class, which have the same regulatory useful life. Although the 
vocational vehicle emission standards are subdivided by Urban, Multi-
purpose, and Regional regulatory subcategories, credit exchanges are 
currently allowed between them within the same weight class. However, 
these averaging sets currently exclude vehicles certified to the 
separate optional custom chassis standards. Finally, the ABT program 
currently allows credits to exchange between vocational vehicles and 
tractors within a weight class.
---------------------------------------------------------------------------

    \255\ 40 CFR 1037.701 through 1037.750.
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    ABT is commonly used by vehicle manufacturers for the HD GHG Phase 
2 program. In MY 2022, 93 percent of the vehicle families (256 out of 
276 families) certified used ABT.\256\ Similarly, 29 out of 40 
manufacturers in MY 2022 used ABT to certify some or all of their 
vehicle families. Most of the manufacturers that did not use ABT 
produced vehicles that were certified to the optional custom chassis 
standards where the banking and trading components of ABT are not 
allowed, and averaging is limited.\257\
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    \256\ U.S. EPA Heavy-Duty Vehicle Certification Data. Last 
accessed on January 25, 2023 at https://www.epa.gov/compliance-and-fuel-economy-data/annual-certification-data-vehicles-engines-and-equipment.
    \257\ See 40 CFR 1037.105(h)(2) for details.

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[[Page 25958]]

D. Vehicle Technologies

    As explained in Section ES.B, EPA is both proposing to revise the 
MY 2027 HD vehicle CO2 emission standards and proposing new 
CO2 emission standards that phase in annually from MY 2028 
through 2032 for HD vocational vehicles and tractors. We are proposing 
that these Phase 3 vehicle standards are appropriate and feasible, 
including consideration of cost of compliance and other factors, for 
their respective MYs and vehicle subcategories through technology 
improvements in several areas. To support the feasibility and 
appropriateness of the proposed standards, we evaluated each technology 
and estimated a potential technology adoption rate in each vehicle 
subcategory per MY (our technology packages) that EPA projects is 
achievable based on nationwide production volumes, considering lead 
time, technical feasibility, cost, and other factors. At the same time, 
the proposed standards are performance-based and do not mandate any 
specific technology for any manufacturer or any vehicle subcategory. 
The following subsections describe the GHG emission-reducing 
technologies for HD vehicles considered in the proposal, including 
those for HD vehicles with ICE (Section II.D.1), BEVs (Section II.D.2), 
and FCEVs (Section II.D.3), as well as a summary of the technology 
assessment that supports the feasibility of the proposed Phase 3 
standards (Section II.D.4) and the primary inputs we used in our new 
technology assessment tool, Heavy-Duty Technology Resource Use Case 
Scenario (HD TRUCS), that we developed to evaluate the design features 
needed to meet the power and energy demands of various HD vehicles when 
using ZEV technologies, as well as costs related to manufacturing, 
purchasing and operating ICE and ZEV technologies (Section II.D.5).
    We are not proposing changes to the existing Phase 2 GHG emission 
standards for HD engines and are not reopening those standards in this 
rulemaking. As noted in the following section and DRIA Chapter 1.4, 
there are technologies available that can reduce GHG emissions from HD 
engines, and we anticipate that many of them will be used to meet the 
MY 2024 and MY 2027 CO2 emission standards, while 
development is underway to meet the new low NOX standards 
for MY 2027.\258\ At this time, we believe that additional GHG 
reductions would be best driven through more stringent vehicle-level 
CO2 emission standards as we are proposing in this 
rulemaking, which also account for the engine's CO2 
emissions, instead of also proposing new CO2 emission 
standards that apply to heavy-duty engines.
---------------------------------------------------------------------------

    \258\ 40 CFR 1036.104.
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1. Technologies To Reduce GHG Emissions From HD Vehicles With ICEs
    The CO2 emissions of HD vehicles vary depending on the 
configuration of the vehicle. Many aspects of the vehicle impact its 
emissions performance, including the engine, transmission, drive axle, 
aerodynamics, and rolling resistance. For this proposed rule, as we did 
for HD Phase 1 and Phase 2, we are proposing more stringent 
CO2 emissions standards for each of the regulatory 
subcategories based on the performance of a package of technologies 
that reduce CO2 emissions. And in this rule, we developed 
technology packages that include both ICE vehicle and ZEV technologies.
    For each regulatory subcategory, we selected a theoretical ICE 
vehicle with CO2-reducing technologies to represent the 
average MY 2027 vehicle that meets the existing MY 2027 Phase 2 
standards. These vehicles are used as baselines from which to evaluate 
costs and effectiveness of additional technologies and more stringent 
standards on a per-vehicle basis. The MY 2027 technology package for 
tractors include technologies such as improved aerodynamics; low 
rolling resistance tires; tire inflation systems; efficient engines, 
transmissions, and drivetrains, and accessories; and extended idle 
reduction for sleeper cabs, The GEM inputs for the individual 
technologies that make up the fleet average technology package that 
meets the existing MY 2027 CO2 tractor emission standards 
are shown in Table II-1.\259\ The comparable table for vocational 
vehicles is shown in Table II-2.\260\ The technology package for 
vocational vehicles include technologies such as low rolling resistance 
tires; tire inflation systems; efficient engines, transmissions, and 
drivetrains; weight reduction; and idle reduction technologies. Note 
that the HD GHG Phase 2 standards are performance-based; EPA does not 
require this specific technology mix, rather the technologies shown in 
Table II-1 and II-2 are potential pathways for compliance.
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    \259\ 81 FR 73616, October 25, 2016.
    \260\ 81 FR 73714, October 25, 2016.

[[Page 25959]]

                         Table II-1--GEM Inputs for MY 2027 Vehicles Meeting the Existing MY 2027 Tractor CO2 Emission Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               Class 7                                                                      Class 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                               Day cab                                                 Day cab                                 Sleeper cab
--------------------------------------------------------------------------------------------------------------------------------------------------------
                Low roof                    Mid roof      High roof     Low roof      Mid roof      High roof     Low roof      Mid roof      High roof
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Engine Fuel Map
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027MY 11L Engine 350 HP                   2027MY 11L    2027MY 11L    2027MY 15L    2027MY 15L    2027MY 15L    2027MY 15L    2027MY 15L    2027MY 15L
                                           Engine 350    Engine 350    Engine 455    Engine 455    Engine 455    Engine 455    Engine 455    Engine 455
                                                   HP            HP            HP            HP            HP            HP            HP            HP
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Aerodynamics (CA in m\2\)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5.12....................................         6.21          5.67          5.12          6.21          5.67          5.08          6.21          5.26
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Steer Tire Rolling Resistance (CRR in kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
5.8.....................................          5.8           5.6           5.8           5.8           5.6           5.8           5.8           5.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Drive Tire Rolling Resistance (CRR in kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6.2.....................................          6.2           5.8           6.2           6.2           5.8           6.2           6.2           5.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Extended Idle Reduction Weighted Effectiveness
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A.....................................          N/A           N/A           N/A           N/A           N/A            3%            3%            3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Transmission = 10 speed Manual Transmission
                                        Gear Ratios = 12.8, 9.25, 6.76, 4.90, 3.58, 2.61, 1.89, 1.38, 1.00, 0.73
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Drive Axle Ratio = 3.21 for day cabs, 3.16 for sleeper cabs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            6 x 2 Axle Weighted Effectiveness
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A.....................................          N/A           N/A          0.6%          0.6%          0.6%          0.6%          0.6%          0.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Transmission Type Weighted Effectiveness = 1.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Neutral Idle Weighted Effectiveness
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.2%....................................         0.2%          0.2%          0.2%          0.2%          0.2%         0.03%         0.03%         0.03%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Direct Drive Weighted Effectiveness = 1.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Transmission Efficiency Weighted Effectiveness = 0.7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Axle Efficiency Improvement = 1.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Air Conditioner Efficiency Improvements = 0.3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Accessory Improvements = 0.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Predictive Cruise Control = 0.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Automatic Tire Inflation Systems = 0.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
 Tire Pressure Monitoring System = 0.7%
--------------------------------------------------------------------------------------------------------------------------------------------------------

                   Table II-2--GEM Inputs for MY 2027 Vehicles Meeting the Existing MY 2027 Vocational Vehicle CO2 Emission Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          LHD (Class 2b-5)                                         MHD (Class 6-7)                            HHD (Class 8)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Multi-                                    Multi-                                    Multi-
                  Urban                      purpose      Regional        Urban        purpose      Regional        Urban        purpose      Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                              SI Engine Fuel Map
-----------------------------------------
                                          2018 MY 6.8L, 300 hp engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   CI Engine Fuel Map
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027 MY 7L, 200 hp Engine                         2027 MY 7L, 270 hp Engine         2027 MY 11L,
                                                                                         350 hp
                                                                                         Engine   2027 MY 11L, 350 hp Engine
                                                                                                     and 2027 MY 15L 455hp
                                                                                                            Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Torque Converter Lockup in 1st Gear (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
50%.....................................          50%           50%           50%           50%           50%           30%           30%            0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           6x2 Disconnect Axle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0%......................................           0%            0%            0%            0%            0%            0%           25%           30%
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 25960]]

              Table II-2--GEM Inputs for MY 2027 Vehicles Meeting the Existing MY 2027 Vocational Vehicle CO2 Emission Standards--Continued
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          LHD (Class 2b-5)                                         MHD (Class 6-7)                            HHD (Class 8)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Multi-                                    Multi-                                    Multi-
                  Urban                      purpose      Regional        Urban        purpose      Regional        Urban        purpose      Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Automatic Engine Shutdown (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
70%.....................................          70%           90%           70%           70%           90%           70%           70%           90%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Stop-Start (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
30%.....................................          30%            0%           30%           30%            0%           20%           20%            0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Neutral Idle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
60%.....................................          60%            0%           60%           60%            0%           70%           70%            0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Steer Tire Rolling Resistance (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6.8.....................................          6.2           6.2           6.7           6.2           6.2           6.2           6.2           6.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Drive Tire Rolling Resistance (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6.9.....................................          6.9           6.9           7.5           6.9           6.9           7.5           6.9           6.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Weight Reduction (lb)
--------------------------------------------------------------------------------------------------------------------------------------------------------
75......................................           75            75            75            75            75           125           125           125
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Technologies exist today and continue to evolve to improve the 
efficiency of the engine, transmission, drivetrain, aerodynamics, and 
tire rolling resistance in HD vehicles and therefore reduce their 
CO2 emissions. As discussed in the preamble to the HD GHG 
Phase 2 program and shown in Table II-1 and Table II-2, there are a 
variety of such technologies. In developing the Phase 2 CO2 
emission standards, we developed technology packages that were premised 
on technology adoption rates of less than 100 percent. There may be an 
opportunity for further improvements and increased adoption through MY 
2032 for many of these technologies included in the HD GHG Phase 2 
technology package used to set the existing MY 2027 standards. For 
example, DRIA Chapter 1.4 provides an update to tractor aerodynamic 
designs developed by several of the manufacturers as part of the DOE 
SuperTruck program that demonstrate aerodynamics that are better than 
those used in the existing MY 2027 standards' HD GHG Phase 2 technology 
package for high roof sleeper cab tractors in MYs beyond 2027.
    The heavy-duty industry has also been developing hybrid 
powertrains, as described in DRIA Chapter 1.4.1.1. Hybrid powertrains 
consist of an ICE as well as an electric drivetrain and some designs 
also incorporate plug-in capability. Hybrid powered vehicles may 
provide CO2 emission reductions through the use of downsized 
engines, recover energy through regenerative braking system that is 
normally lost while braking, and provide additional engine-off 
operation during idling and coasting. Hybrid powertrains are available 
today in a number of heavy-duty vocational vehicles including passenger 
van/shuttle bus, transit bus, street sweeper, refuse hauler, and 
delivery truck applications. Heavy-duty hybrid vehicles may include a 
power takeoff (PTO) system that is used to operate auxiliary equipment, 
such as the boom/bucket on a utility truck or the water pump on a fire 
truck.
    Furthermore, manufacturers may develop new ICE vehicle technologies 
through the MY 2032 timeframe. An example of a new technology under 
development that would reduce GHG emissions from HD vehicles with ICEs 
is hydrogen-fueled internal combustion engines (H2-ICE). These engines 
are currently in the prototype stage of innovation \261\ for HD 
vehicles, but have also been demonstrated as technically feasible in 
the past in the LD fleet. H2-ICE is a technology that produces zero 
hydrocarbon (HC), carbon monoxide (CO), and CO2 engine-out 
emissions.
---------------------------------------------------------------------------

    \261\ Comment submitted by DTNA to EPA Docket, EPA-HQ-OAR-2017-
0055-1168. See Control of Air Pollution from New Motor Vehicles: 
Heavy-Duty Engine and Vehicle Standards Response to Comments, EPA-
420-R-22-036 December 2022.
---------------------------------------------------------------------------

    H2-ICE are similar to existing internal combustion engines and 
could leverage the technical expertise manufacturers have developed 
with existing products. H2-ICEs use many of the same components as 
existing internal combustion engines for many key systems. Similarly, 
H2-ICE vehicles could be built on the same assembly lines as existing 
ICE vehicles, by the same workers and with many of the same suppliers.
    Though many engine components would be similar between H2-ICE and, 
for example, a comparable existing diesel-fueled ICE, components such 
as the cylinder head, piston and piston rings would be unique to H2-ICE 
as well as intake and exhaust valves and seats to control H2 leakage 
during combustion. Fuel systems would require changes to fuel injectors 
and the fuel delivery system. The H2-ICE aftertreatment systems may be 
simpler than today's comparable diesel-fueled ICEs. They likely would 
not require the use of a diesel oxidation catalyst (DOC) or a diesel 
particulate filter (DPF) system. NOX emissions are still 
present in the H2-ICE exhaust and therefore a selective catalyst 
reduction (SCR) system would likely still be required, though smaller 
in size than an existing comparable diesel-fueled ICE aftertreatment 
system. The use of lean air-fuel ratios, not exhaust gas recirculation 
(EGR), would be the most effective way to control NOX in H2 
combustion engines. EGR is less effective with H2 due to the absence of 
CO2 in the exhaust gas. Additional information regarding H2-
ICE can be found in the DRIA Chapter 1.4.2.
    One key significant difference between an existing comparable 
diesel-fueled ICE and a H2-ICE is the fuel storage tanks. The hydrogen 
storage tanks that would replace existing ICE fuel tanks are 
significantly more expensive. The fuel tanks used by H2-ICE would be 
the same as those used by

[[Page 25961]]

a FCEV and may be either compressed storage (350 or 700 Bar) or 
cryogenic (storage temperatures reaching -253 degrees Celsius). Please 
refer to Section II.D.3 for the discussion regarding H2 fuel storage 
tanks. Furthermore, like FCEVs, H2 refueling infrastructure would be 
required for H2-ICE vehicles.
    We request comment on whether we should include additional GHG-
reducing technologies and/or higher levels of adoption rates of 
existing technologies for ICE vehicles in our technology assessment for 
the final rule.
2. HD Battery Electric Vehicle Technology
    The HD BEV market has been growing significantly since MY 2018. 
DRIA Chapter 1.5 includes BEV vehicle information on over 170 models 
produced by over 60 manufacturers that cover a broad range of 
applications, including school buses, transit buses, straight trucks, 
refuse haulers, vans, tractors, utility trucks, and others, available 
to the public through MY 2024.
    The battery electric propulsion system includes a battery pack that 
provides the energy to the motor that moves the vehicle. In this 
section, and in DRIA Chapter 1.5.1 and 2.4, we discuss battery 
technology that can be found in both BEVs and FCEVs. We request comment 
on our assessment of heavy-duty battery designs, critical materials, 
and battery manufacturing.
i. Batteries Design Parameters
    Battery design involves considerations related to cost \262\ and 
performance including specific energy \263\ and power, energy 
density,\264\ temperature impact, durability, and safety. These 
parameters typically vary based on the cathode and anode materials, and 
the conductive electrolyte medium at the cell level. Different battery 
chemistries have different intrinsic values. Here we provide a brief 
overview of the different energy and power parameters of batteries and 
battery chemistries.
---------------------------------------------------------------------------

    \262\ Cost, here, is associated with cost of the battery design 
produced at scale instead of decrease in cost of batteries from high 
volume production. This cost may be associated with using more 
expensive minerals (e.g. nickel and cobalt instead of iron 
phosphate). Alternatively, some battery cell components may be more 
expensive for the same chemistry. For example, power battery cells 
are more expensive to manufacture than energy battery cells because 
these cells require thinner electrodes which are more complex to 
produce.
    \263\ Battery specific energy (also referred to as gravimetric 
energy density) is a measure of battery energy per unit of mass.
    \264\ Gravimetric energy density (specific energy) is a measure 
of battery energy per unit of mass. Volumetric energy density (also 
called energy density) is a measure of battery energy per unit of 
volume.
---------------------------------------------------------------------------

a. Battery Energy and Power Parameters
    Specific energy and power and energy density are a function of how 
much energy or power can be stored per unit mass (in Watt-hour per 
kilogram (Wh/kg) or watt per kilogram (W/kg)) or volume (in Watt-hour 
per liter (Wh/L)). Therefore, for a given battery weight or mass, the 
energy (in kilowatt-hour or kWh) can be calculated. For example, a 
battery with high specific energy and a lower weight may yield the same 
amount of energy as a chemistry with a lower specific energy and more 
weight.
    Battery packs have a ``nested'' design where a group of cells are 
combined to make a battery module and a group of modules are combined 
to make a battery pack. Therefore, the battery systems can be described 
on the pack, module, and cell levels. Design choices about the 
different energy and power capacities to prioritize in a battery can 
depend on its battery chemistry. Common battery chemistries today 
include nickel-manganese-cobalt (NMC), nickel-cobalt-aluminum (NCA), 
and iron-phosphate (LFP) based-chemistries. Nickel-based chemistries 
typically have higher gravimetric and volumetric energy densities than 
iron phosphate-based chemistries. Since energy or power is only housed 
at the chemistry level, any additional mass such as the cell, module, 
and pack casings will only add to the weight of the battery without 
increasing the energy of the overall system. Therefore, some pack 
producers have eliminated the module in favor of a ``cell-to-pack'' 
design in recent years.\265\
---------------------------------------------------------------------------

    \265\ BYD ``blade'' cells are an example of cell-to-pack 
technology.
---------------------------------------------------------------------------

    External factors, especially temperature, can have a strong 
influence on the performance of the battery. Heavy-duty BEVs today 
include thermal management systems to keep the battery operating within 
a desired temperature range, which is commonly referred to as 
conditioning of the battery. Therefore, while operating a vehicle in 
cold temperatures, some of the battery energy is used to heat both the 
battery packs and the vehicle interior.\266\ Cold temperatures, in 
particular, can result in reduced mobility of the lithium ions in the 
liquid electrolyte inside the battery; for the driver, this may mean 
lower range. Battery thermal management is also used during hot ambient 
temperatures to keep the battery from overheating. We consider and 
account for the energy required for battery thermal management in our 
analysis, as discussed in Section II.D.5.ii.b.
---------------------------------------------------------------------------

    \266\ https://www.aaa.com/AAA/common/AAR/files/AAA-Electric-Vehicle-Range-Testing-Report.pdf.
---------------------------------------------------------------------------

b. Battery Durability
    Another important battery design consideration is the durability of 
the battery. Durability is frequently associated with cycle life, where 
cycle life is the number of times a battery can fully charge and 
discharge before the battery is no longer used for its original 
purpose. In 2015 the United Nations Economic Commission for Europe (UN 
ECE) began studying the need for a Global Technical Regulation (GTR) 
governing battery durability in light-duty vehicles. In 2021 it 
finalized United Nations Global Technical Regulation No. 22, ``In-
Vehicle Battery Durability for Electrified Vehicles,'' \267\ or GTR No. 
22, which provides a regulatory structure for contracting parties to 
set standards for battery durability in light-duty BEVs and PHEVs. 
Likewise, although not finalized, the UN ECE GTR working group began 
drafting language for HD BEVs and hybrid electric vehicles. Loss of 
electric range could lead to a loss of utility, meaning electric 
vehicles could be driven less and therefore displace less distance 
travelled than might otherwise be driven in conventional vehicles. 
Furthermore, a loss in utility could also dampen purchaser sentiment.
---------------------------------------------------------------------------

    \267\ United Nations Economic Commission for Europe, Addendum 
22: United Nations Global Technical Regulation No. 22, United 
Nations Global Technical Regulation on In-vehicle Battery Durability 
for Electrified Vehicles, April 14, 2022. Available at: https://unece.org/sites/default/files/2022-04/ECE_TRANS_180a22e.pdf.
---------------------------------------------------------------------------

    For batteries that are used in HD BEVs, the state-of-health (SOH) 
is an important design factor. The environmental performance of 
electrified vehicles may be affected by excess degradation of the 
battery system over time. However, the durability of a battery is not 
limited to the cycling of a battery, there are many phenomena that can 
impact the duration of usability of a battery. As a battery goes 
through charge and discharge cycles, the SOH of the battery decreases. 
Capacity fade, increase in internal resistance, and voltage loss, for 
example, are other common metrics to measure the SOH of a battery. 
These parameters together help better understand and define the 
longevity or durability of the battery. The SOH and, in turn, the cycle 
life of the battery is determined by both the chemistry of the battery 
as well as external factors including temperature. The rate at which 
the battery is discharged as well as the rate at which it is charged 
will also impact the SOH

[[Page 25962]]

of the battery. Lastly, calendar aging, or degradation of the battery 
while not in use, can also contribute to the deterioration of the 
battery.
    There are a number of ways to improve and prolong the battery life 
in a vehicle. We took considerations on maintaining the battery 
temperature while driving by applying additional energy required for 
conditioning the battery. Furthermore, battery size is increased by 20 
percent to accommodate additional energy that may be required resulting 
from loss of capacity over time.
c. HD BEV Safety Assessment
    HD BEV systems must be designed to always maintain safe operation. 
As with any onroad vehicle, BEVs must be robust while operating in 
temperature extremes as well as rain and snow. The BEV systems must be 
designed for reasonable levels of immersion, including immersion in 
salt water or brackish water. BEV systems must also be designed to be 
crashworthy and limit damage that compromises safety. If the structure 
is compromised by a severe impact, the systems must provide first 
responders with a way to safely conduct their work at an accident 
scene. The HD BEV systems must be designed to ensure the safety of 
users, occupants, and the general public in their vicinity.
    In DRIA Chapter 1.5.4, we discuss the industry codes and standards 
used by manufacturers that guide safe design and development of heavy-
duty BEVs, including those for developing battery systems and charging 
systems that protect people and the equipment. These standards have 
already been developed by the industry and are in place for 
manufacturers to use today to develop current and future products. The 
standards guide the design of BEV batteries to allow them to safely 
accept and deliver power for the life of the vehicle. The standards 
provide guidance to design batteries that also handle vibration, 
temperature extremes, temperature cycling, water, and mechanical impact 
from items such as road debris. For HD BEVs to uphold battery/
electrical safety during and after a crash, they are designed to 
maintain high voltage isolation, prevent leakage of electrolyte and 
volatile gases, maintain internal battery integrity, and withstand 
external fire that could come from the BEV or other vehicle(s) involved 
in a crash. NHTSA continues work on battery safety requirements and 
extend the applicability of FMVSS No. 305 to HD vehicles and would 
align with the existing Global Technical Regulation (GTR) No. 20 to 
include safety requirements during normal operation, charging, and 
post-crash. We request comment on our assessment that HD BEVs can be 
designed to maintain safety.
ii. Assessment of Battery Materials and Production
    Although the market share of light-duty and heavy-duty ZEVs in the 
United States is already growing, EPA recognizes that the proposed 
standards may accelerate this trend. Assessing the feasibility of 
incremental penetrations of ZEVs that may result from the proposed 
standards includes consideration of the readiness of the supply chain 
to provide the required quantities of critical minerals, components, 
and battery manufacturing capacity. This section provides a general 
review of how we considered supply chain and manufacturing in this 
analysis, the sources we considered, and how we used this information 
in the analysis. It also provides a high-level discussion of the 
security implications of increased demand for minerals and other 
commodities used to manufacture ZEVs.
    In developing these standards, we considered the ability for global 
and domestic manufacturing and critical mineral capacity to respond to 
the projected demand for ZEVs that manufacturers may choose to produce 
to comply with the proposed standards. As described in this section, we 
consulted with industry and government agency sources (including DOE, 
U.S. Geological Survey (USGS), and several analysis firms) to collect 
information on production capacity, price forecasts, global mineral 
markets, and related topics, and have considered this information to 
inform our assumptions about future manufacturing capabilities and 
costs. We have included consideration of the influence of critical 
minerals and materials availability as well as vehicle and battery 
manufacturing capacities on the production of ZEVs.
    We believe that the proposed rate of stringency is appropriate in 
light of this assessment. It is also our assessment that increased 
vehicle electrification in the United States will not lead to a 
critical long term dependence on foreign imports of minerals or 
components, nor that increased demand for these products will become a 
vulnerability to national security. First, in many cases the reason 
that these products are often sourced from outside of the United States 
is not because the products cannot be produced in the U.S., but because 
other countries have already invested in developing a supply chain for 
their production. Moreover, the United States will likely develop a 
domestic supply chain for these products because U.S. manufacturers 
will need to remain competitive in a global market where 
electrification is already proceeding rapidly. Second, many vehicle 
manufacturers, suppliers, startups, and related industries have already 
recognized the need for increased domestic production capacity as a 
business opportunity, and are basing business models on building out 
various aspects of the supply chain. Third, Congress and the 
Administration have taken significant steps to accelerate this activity 
by funding, facilitating, and otherwise promoting the rapid growth of 
U.S. supply chains for these products through the Inflation Reduction 
Act, the Bipartisan Infrastructure Law, and numerous Executive Branch 
initiatives. EPA has confidence that these efforts are effectively 
addressing supply chain concerns. Finally, utilization of critical 
minerals is different from the utilization of foreign oil, in that oil 
is consumed as a fuel while minerals become a constituent of 
manufactured vehicles. Minerals that are imported for vehicle 
production remain in the vehicle, and can be reclaimed through 
recycling. Each of these points will be expanded in more detail in the 
sections below.
    We request comment on our assessment and data to support our 
assessment of battery critical raw materials and battery production for 
the final rule.
a. Battery Critical Raw Materials
    Critical minerals are generally considered to include a large 
diversity of products, ranging from relatively plentiful materials that 
are constrained primarily by production capacity and refining, such as 
aluminum, to those that are both relatively rare and costly to process, 
such as the rare-earth metals that are used in magnets for permanent-
magnet synchronous motors (PMSMs) that are used as the electric motors 
to power heavy-duty ZEVs and some semiconductor products. Extraction, 
processing, and recycling of certain critical minerals (such as 
lithium, cobalt, nickel, magnesium, graphite and rare earth metals) are 
also an important part of the supply chain supporting the production of 
battery components.
    These minerals are also experiencing increasing demand across many 
other sectors of the global economy, not just the transportation 
industry, as the world seeks to reduce carbon emissions. As with any 
emerging technology, a transition period must take place in which a 
robust supply chain develops to support production of these products. 
At the present time, they are commonly sourced from global suppliers 
and do

[[Page 25963]]

not yet benefit from a fully developed domestic supply chain.\268\ As 
demand for these materials increases due to increasing production of 
ZEVs, current mining and processing capacity will expand.
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    \268\ As mentioned in Preamble I.C.2.i and in DRIA 1.3.2.2, 
there are tax credit incentives in the IRA for the production and 
sale of battery cells and modules of up to $45 per kWh, which 
includes up to 10 percent of the cost of producing applicable 
critical materials that meet certain specifications when such 
components or minerals are produced in the United States.
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    The U.S. Geological Survey lists 50 minerals as ``critical to the 
U.S. economy and national security.'' 269 270 The Energy Act 
of 2020 defines a ``critical mineral'' as a non-fuel mineral or mineral 
material essential to the economic or national security of the United 
States and which has a supply chain vulnerable to disruption.\271\ 
Critical minerals are not necessarily short in supply, but are seen as 
essential to the manufacture of products that are important to the 
economy or national security. The risk to their availability may stem 
from geological scarcity, geopolitics, trade policy, or similar 
factors.\272\
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    \269\ U.S. Geological Survey, ``U.S. Geological Survey Releases 
2022 List of Critical Minerals,'' February 22, 2022. Available at: 
https://www.usgs.gov/news/national-news-release/us-geological-survey-releases-2022-list-critical-minerals.
    \270\ The full list includes: Aluminum, antimony, arsenic, 
barite, beryllium, bismuth, cerium, cesium, chromium, cobalt, 
dysprosium, erbium, europium, fluorspar, gadolinium, gallium, 
germanium, graphite, hafnium, holmium, indium, iridium, lanthanum, 
lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium, 
palladium, platinum, praseodymium, rhodium, rubidium, ruthenium, 
samarium, scandium, tantalum, tellurium, terbium, thulium, tin, 
titanium, tungsten, vanadium, ytterbium, yttrium, zinc, and 
zirconium.
    \271\ See 2021 Draft List of Critical Minerals (86 FR 62199-
62203).
    \272\ International Energy Agency, ``The Role of Critical 
Minerals in Clean Energy Transitions,'' World Energy Outlook Special 
Report, Revised version. March 2022.
---------------------------------------------------------------------------

    Emission control catalysts for ICE vehicles utilize critical 
minerals including cerium, palladium, platinum, and rhodium. These are 
also required for hybrid vehicles due to the presence of the ICE. 
Critical minerals most relevant to lithium-ion battery production 
include cobalt, graphite, lithium, manganese, and nickel, which are 
important constituents of electrode active materials, their presence 
and relative amounts depending on the chemistry formulation. Aluminum 
is also used for cathode foils and in some cell chemistries. Rare-earth 
metals are used in permanent-magnet electric machines, and include 
several elements such as dysprosium, neodymium, and samarium.
    Some of the electrification technologies that use critical minerals 
have alternatives that use other minerals or eliminate them entirely. 
For these, vehicle manufacturers in some cases have some flexibility to 
modify their designs to reduce or avoid use of minerals that are 
difficult or expensive to procure. For example, in some ZEV battery 
applications it is feasible and increasingly common to employ an iron 
phosphate cathode which has lower energy density but does not require 
cobalt, nickel, or manganese. Similarly, rare earths used in permanent-
magnet electric machines have potential alternatives in the form of 
ferrite or other advanced magnets, or the use of induction machines or 
advanced externally excited motors, which do not use permanent magnets.
    This discussion therefore focuses on minerals that are most 
critical for battery production, including nickel, cobalt, graphite, 
and lithium.
    Availability of critical minerals for use in battery production 
depends on two primary considerations: production of raw minerals from 
mining (or recycling) operations and refining operations that produce 
purified and processed substances (precursors, electrolyte solutions, 
and finished electrode powders) made from the raw minerals, that can 
then be made into battery cells.
    As shown in Figure II-1, in 2019 about 50 percent of global nickel 
production occurred in Indonesia, Philippines, and Russia, with the 
rest distributed around the world. Nearly 70 percent of cobalt 
originated from the Democratic Republic of Congo, with some significant 
production in Russia and Australia, and about 20 percent in the rest of 
the world. More than 60 percent of graphite production occurred in 
China, with significant contribution from Mozambique and Brazil for 
another 20 percent. About half of lithium was mined in Australia, with 
Chile accounting for another 20 percent and China about 10 percent.
BILLING CODE 6560-50-P
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[[Page 25964]]

    According to the 100-day review under E.O. on America's Supply 
Chains (E.O. 14017), of the major actors in mineral refining, 60 
percent of lithium refining occurred in China, with 30 percent in Chile 
and 10 percent in Argentina. 72 percent of cobalt refining occurred in 
China, with another 17 percent distributed among Finland, Canada, and 
Norway. 21 percent of Class 1 nickel refining occurred in Russia, with 
16 percent in China, 15 percent in Japan and 13 percent in Canada.\273\ 
Similar conclusions were reached in an analysis by the International 
Energy Agency, shown in Figure II-2.
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    \273\ The White House, ``Building Resilient Supply Chains, 
Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth,'' 100-Day Reviews under Executive Order 14017, June 2021.
[GRAPHIC] [TIFF OMITTED] TP27AP23.029

    Currently, the United States is lagging behind much of the rest of 
the world in critical mineral production. Although the United States 
has nickel reserves, and opportunity also exists to recover significant 
nickel from mine waste remediation and similar activities, it is more 
convenient for U.S. nickel to be imported from other countries, with 68 
percent coming from Canada, Norway, Australia, and Finland, countries 
with which the United States has good trade relations.\274\ According 
to the USGS, ample reserves of nickel exist in the United States and 
globally, potentially constrained only by processing capacity.\275\ The 
United States has numerous cobalt deposits but few are developed while 
some have produced cobalt only in the past; about 72 percent of U.S. 
consumption is imported.\276\ Similar observations may be made about 
graphite and lithium. Significant lithium deposits do exist in the 
United States in Nevada and California as well as several other 
locations,277 278 and are currently the target of 
development by suppliers and vehicle manufacturers. U.S. deposits of 
natural graphite deposits also exist but graphite has not been produced 
in the United States since the 1950s and significant known resources 
are largely undeveloped.\279\
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    \274\ The White House, ``Building Resilient Supply Chains, 
Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth,'' 100-Day Reviews under Executive Order 14017, June 2021.
    \275\ The White House, ``Building Resilient Supply Chains, 
Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth,'' 100-Day Reviews under Executive Order 14017, June 2021.
    \276\ U.S. Geological Survey, ``Cobalt Deposits in the United 
States,'' June 1, 2020. Available at https://www.usgs.gov/data/cobalt-deposits-united-states.
    \277\ U.S. Geological Survey, ``Mineral Commodity Summaries 
2022--Lithium'', January 2022. Available at https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-lithium.pdf.
    \278\ U.S. Geological Survey, ``Lithium Deposits in the United 
States,'' June 1, 2020. Available at https://www.usgs.gov/data/lithium-deposits-united-states.
    \279\ U.S. Geological Survey, ``USGS Updates Mineral Database 
with Graphite Deposits in the United States,'' February 28, 2022.
---------------------------------------------------------------------------

    Although predicting mineral supply and demand into the future is 
challenging, it is possible to identify general trends likely to occur 
in the future. As seen in Figure II-3 and Figure II-4, preliminary 
projections prepared by Li-Bridge for DOE,\280\ and presented to the 
Federal Consortium for Advanced Batteries (FCAB) \281\ in November 
2022, indicate that global supplies of cathode active material (CAM) 
used as a part of the cathode manufacturing process and lithium 
chemical product are expected to be sufficient through 2035.
---------------------------------------------------------------------------

    \280\ Slides 6 and 7 of presentation by Li-Bridge to Federal 
Consortium for Advanced Batteries (FCAB), November 17, 2022.
    \281\ U.S. Department of Energy, Vehicle Technologies Office. 
``Federal Consortium for Advanced Batteries (FCAB)''. Available 
online: https://www.energy.gov/eere/vehicles/federal-consortium-advanced-batteries-fcab.

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[[Page 25965]]

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[GRAPHIC] [TIFF OMITTED] TP27AP23.031

BILLING CODE 6560-50-C
    The most recent information indicates that the market is responding 
robustly to demand\282\ and lithium supplies are expanding as new 
resources are characterized, projects continue through engineering 
economic assessments, and others begin permitting or construction. For 
example, in October 2022, the IEA projected that global Lithium 
Carbonate Equivalent (LCE) production from operating mines and those 
under construction may sufficiently meet primary demand until 2028 
under the Stated Policies Scenario.\283\ In December 2022, BNEF 
projected lithium mine production can meet end-use demand

[[Page 25966]]

until 2028.284 285 Notably, the BNEF data is not exhaustive 
and includes only three U.S. projects: Silver Peak (phase I and II), 
Rhyolite Ridge (phase I), and Carolina Lithium (phase I). Additionally, 
in March 2023 DOE communicated to EPA that DOE and ANL have identified 
21 additional lithium production projects in the United States in 
addition to the three identified in the December 2022 BNEF data. Were 
they to achieve commercial operations, the 24 U.S. projects would 
produce an additional 1,000 kilotons per year LCE not accounted for in 
the December BNEF analysis,\286\ and suggests that lithium supplies 
would meet the BNEF Net-Zero demand projection.
---------------------------------------------------------------------------

    \282\ Bloomberg New Energy Finance, ``Lithium-ion Battery Pack 
Prices Rise for First Time to an Average of $151/kWh,'' December 6, 
2022. Accessed on December 6, 2022 at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-rise-for-first-time-to-an-average-of-151-kwh/.
    \283\ International Energy Agency, ``Committed mine production 
and primary demand for lithium, 2020-2030,'' October 26, 2022. 
Accessed on March 9, 2023 at https://www.iea.org/data-and-statistics/charts/committed-mine-production-and-primary-demand-for-lithium-2020-2030.
    \284\ Sui, Lang. Memorandum to docket EPA-HQ-OAR-2022-0985. 
Based on subscription data available to BNEF subscribers at https://www.bnef.com/interactive-datasets/2d5d59acd9000031?tab=DashboardDemand&view=8472b6c7-e8cc-467f-b4a4-fe85468fba3a.
    \285\ Sui, Lang. Memorandum to docket EPA-HQ-OAR-2022-0985. 
Based on subscription data available to BNEF subscribers at https://www.bnef.com/interactive-datasets/2d5d7ea4a2000001.
    \286\ Sui, Lang. Memorandum to docket EPA-HQ-OAR-2022-0985. 
Department of Energy, communication to EPA titled ``Lithium 
Supplies--additional datapoints and research,'' March 8, 2023.
---------------------------------------------------------------------------

    In addition, the European Union is seeking to promote rapid 
development of Europe's battery supply chains by considering targeted 
measures such as accelerating permitting processes and encouraging 
private investment. To these ends the European Parliament proposed a 
Critical Raw Materials Act on March 16, 2023, which includes these and 
other measures to encourage the development of new supplies of critical 
minerals not currently anticipated in market 
projections.287 288 289 In DRIA 1.5.1.3 we detail these and 
many other examples that demonstrate how momentum has picked up in the 
lithium market since IEA's May 2022 report. For more discussion, please 
see DRIA 1.5.1.3.
---------------------------------------------------------------------------

    \287\ European Union, ``7th High-Level Meeting of the European 
Battery Alliance: main takeaways by the Chair Maro[scaron] 
[Scaron]ef[ccaron]ovi[ccaron] and the Council Presidency,'' March 1, 
2023. Accessed on March 9, 2023 at https://single-market-economy.ec.europa.eu/system/files/2023-03/Main%20takeaways_7th%20High-Level%20Meeting%20of%20EBA.pdf.
    \288\ New York Times, ``U.S. Eyes Trade Deals With Allies to 
Ease Clash Over Electric Car Subsidies,'' February 24, 2023.
    \289\ European Parliament, ``Proposal for a regulation of the 
European Parliament and of the Council establishing a framework for 
ensuring a secure and sustainable supply of critical raw 
materials,'' March 16, 2023. https://single-market-economy.ec.europa.eu/publications/european-critical-raw-materials-act_en.
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    Despite recent short-term fluctuations in price, the price of 
lithium is expected to stabilize at or near its historical levels by 
the mid- to late-2020s.290 291 This perspective is also 
supported by proprietary battery price forecasts by Wood Mackenzie that 
include the predicted effect of temporarily elevated mineral 
prices.\292\ This is consistent with the BNEF battery price outlook 
2022 which expects battery prices to start dropping again in 2024, and 
BNEF's 2022 Battery Price Survey which predicts that average pack 
prices should fall below $100/kWh by 2026.\293\ Taken together these 
outlooks support the perspective that lithium is not likely to 
encounter a critical shortage as supply responds to meet growing 
demand.
---------------------------------------------------------------------------

    \290\ Sun et al., ``Surging lithium price will not impede the 
electric vehicle boom,'' Joule, doi:10.1016/j.joule. 2022.06.028 
(https://dx.doi.org/10.1016/j.joule.2022.06.028).
    \291\ Green Car Congress, ``Tsinghua researchers conclude 
surging lithium price will not impede EV boom,'' July 29, 2022.
    \292\ Sui, Lang. Memorandum to docket EPA-HQ-OAR-2022-0985. Wood 
Mackenzie, ``Battery & raw materials--Investment horizon outlook to 
2032,'' accompanying data set, September 2022 (filename: brms-data-
q3-2022.xlsx).
    \293\ Bloomberg New Energy Finance, ``Lithium-ion Battery Pack 
Prices Rise for First Time to an Average of $151/kWh,'' December 6, 
2022. Accessed on December 6, 2022 at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-rise-for-first-time-to-an-average-of-151-kwh/.
---------------------------------------------------------------------------

    As described in the following section, the development of mining 
and processing capacity in the United States is a primary focus of 
efforts on the part of both industry and the Administration toward 
building a robust domestic supply chain for electrified vehicle 
production, and will be greatly facilitated by the provisions of the 
BIL and the IRA as well as large private business investments that are 
already underway and continuing.
b. Battery Market and Manufacturing Capacity
    Battery systems can be described on the pack, module, and cell 
levels. A pack typically consists of a group of modules, a module 
consists of a group of cells, and cells consist of the half-cell 
electrodes. Cells can be directly supplied to the manufacturer to be 
assembled into modules and packs; alternatively, cell producers may 
assemble cells into modules before sending the modules to another 
supplier to be assembled into a pack, before then sending it to the OEM 
for final assembly. While there are hundreds of reported automotive 
battery cell producers, major LD automakers use batteries produced by a 
handful of battery cell manufacturers. These suppliers include LG Chem, 
Samsung SDI, SK Innovation, Panasonic/Tesla, Contemporary Amperex 
Technology Co., Limited (CATL) and BYD. A 2021 report developed by 
DOE's Argonne National Lab (ANL) found significant growth in the annual 
battery supply between 2010 and 2020.\294\
---------------------------------------------------------------------------

    \294\ Argonne National Laboratory. ``Lithium-Ion Battery Supply 
Chain for E-Drive Vehicles in the United States: 2010-2020.'' 2021.
---------------------------------------------------------------------------

    In both the LD and HD industry sectors, there is a meaningful 
distinction between 1) battery cell suppliers, and 2) battery pack 
assemblers who refer to themselves as battery producers while using 
cells produced by a different cell supplier, in understanding how 
impacts from the increased production volumes of cells and costs of 
cells in both industries flow to these different types of suppliers. 
The cost of cells occupies a significant percent of the final pack 
cost, and cell costs are inversely proportional to cell production 
volume.295 296 In other words, increased cell production 
volume lowers the cost of battery cells, which in turn lowers the 
overall pack cost. Thus, though the LD sector demand for automotive 
batteries is significantly outpacing the demand for vehicle batteries 
in the HD sector, the battery cell industry for both sectors will 
likely be significantly influenced by the demand in the LD industry.
---------------------------------------------------------------------------

    \295\ Argonne National Laboratory. ``BatPaC Model Software''. 
Available online: https://www.anl.gov/cse/batpac-model-software.
    \296\ BloombergNEF. ``Battery Pack Prices Fall to an Average of 
$132/kWh, But Rising Commodity Prices Start to Bite''. November 30, 
2021. Available online: https://about.bnef.com/blog/battery-pack-prices-fall-to-an-average-of-132-kwh-but-rising-commodity-prices-start-to-bite.
---------------------------------------------------------------------------

    Although most global battery manufacturing capacity is currently 
located outside the U.S., most of the batteries and cells present today 
in the domestic EV fleet were manufactured in the United States \297\ 
We expect domestic manufacturing of batteries and cells to increase 
considerably over the coming decade. According to the Department of 
Energy, at least 13 new battery plants are expected to become 
operational in the United States within the next four years.\298\ Among 
these 13 new battery plants include the following activities by battery 
suppliers and vehicle manufacturers. In partnership with SK Innovation, 
Ford is building three large new battery plants in Kentucky and 
Tennessee.\299\ General

[[Page 25967]]

Motors is partnering with LG Energy Solutions to build another three 
battery cell manufacturing plants in Tennessee, Michigan, and Ohio, and 
there are discussions about another plant in Indiana.\300\ LG Chem has 
also announced plans for a cathode material production facility in 
Tennessee, said to be sufficient to supply 1.2 million high-performance 
electric vehicles per year by 2027.\301\ CATL is considering 
construction of plants in Arizona, Kentucky, and South Carolina.\302\ 
In addition, CATL is partnering with Daimler Truck to expand their 
global partnership to producm ion batteries for their all electric long 
haul heavy duty trucks starting 2024 to 2030.\303\ Panasonic, already 
partnering with Tesla for its factories in Texas and Nevada, is 
planning two new factories in Oklahoma and Kansas.\304\ Furthermore, 
Tesla is also planning a $3.6 billion expansion to their Nevada 
Gigafactory to mass produce all electric semi trucks.\305\ Toyota plans 
to be operational with a plant in Greensboro, North Carolina in 2025, 
and Volkswagen in Chattanooga, Tennessee at about the same 
time.306 307 According to S&P Global, announcements such as 
these could result in a U.S. manufacturing capacity of 382 GWh by 
2025,\308\ and 580 GWh by 2027,\309\ up from roughly 60 GWh 
310 311 today. More recently, the Department of Energy 
estimates that recent plant announcements for North America to date 
could enable an estimated 838 GWh of capacity by 2025, 896 GWh by 2027, 
and 998 GWh by 2030, the vast majority of which is cell manufacturing 
capacity.\312\
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    \297\ Argonne National Laboratory, ``Lithium-Ion Battery Supply 
Chain for E-Drive Vehicles in the United States: 2010-2020,'' ANL/
ESD-21/3, March 2021.
    \298\ Department of Energy, Fact of the Week #1217, ``Thirteen 
New Electric Vehicle Battery Plants Are Planned in the U.S. Within 
the Next Five Years,'' December 20, 2021.
    \299\ Dunn, Jason. ``Ford to build battery and assembly plants 
in Kentucky and Tennessee for massive acceleration of EV output''. 
Autonomive Logistics. September 28, 2021. Available online: https://www.automotivelogistics.media/battery-supply-chain/ford-to-build-battery-and-assembly-plants-in-kentucky-and-tennessee-for-massive-acceleration-of-ev-output/42325.article#.
    \300\ Shepardson, David. ``GM, LG Energy drop plan for fourth 
U.S. JV battery plant''. Reuters. January 20, 2023. Available 
online: https://www.reuters.com/technology/gm-lg-energy-drop-plan-fourth-us-jv-battery-plant-2023-01-20/.
    \301\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in 
US for EV Batteries,'' Press Release, November 22, 2022.
    \302\ Randall, Chris. ``CATL likely to build US battery plant in 
Kentucky or South Carolina''. Electrive. May 6, 2022. Available 
online: https://www.electrive.com/2022/05/06/catl-likely-to-build-us-battery-plant-in-kentucky-or-south-carolina/.
    \303\ Kane, Mark. ``Daimler and CATL Expand Global Battery 
Partnership''. InsideEVs. May 23, 2022. Available online: https://insideevs.com/news/509050/daimler-catl-global-battery-partnership/.
    \304\ Alvarez, Simon. ``Tesla partner Panasonic looking at 
potential EV battery plant in Oklahoma: report''. TeslaRati. August 
26, 2022. Available online: https://www.teslarati.com/tesla-panasonic-plans-new-ev-battery-factory-usa/.
    \305\ CNBC, ``Tesla plans to spend $3.6 billion more on battery 
and truck manufacturing in Nevada,'' January 24, 2023. Accessed on 
March 21, 2023 at https://www.cnbc.com/2023/01/24/tesla-plans-to-spend-3point6-billion-more-on-manufacturing-in-nevada.html.
    \306\ Toyota. ``Toyota Announces $2.5 Billion Expansion of North 
Carolina Plant with 350 Additional Jobs and BEV Battery Capacity''. 
August 31, 2022. Available online: https://pressroom.toyota.com/toyota-announces-2-5-billion-expansion-of-north-carolina-plant-with-350-additional-jobs-and-bev-battery-capacity/.
    \307\ Doll, Scooter. ``Volkswagen reportedly considering a 
second US production site plus new battery cell plant''. Available 
online: https://electrek.co/2022/04/29/volkswagen-reportedly-considering-a-second-us-production-site-plus-new-battery-cell-plant/
.
    \308\ S&P Global Market Intelligence, ``US ready for a battery 
factory boom, but now it needs to hold the charge,'' October 3, 
2022. Accessed on November 22, 2022 at https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-ready-for-a-battery-factory-boom-but-now-it-needs-to-hold-the-charge-72262329.
    \309\ S&P Global Mobility, ``Growth of Li-ion battery 
manufacturing capacity in key EV markets,'' May 20, 2022. Accessed 
on November 22, 2022 at https://www.spglobal.com/mobility/en/research-analysis/growth-of-liion-battery-manufacturing-capacity.html.
    \310\ Federal Consortium for Advanced Batteries, ``National 
Blueprint for Lithium Batteries 2021-2030,'' June 2021. Available at 
https://www.energy.gov/sites/default/files/2021-06/FCAB%20National%20Blueprint%20Lithium%20Batteries%200621_0.pdf.
    \311\ S&P Global Mobility, ``Growth of Li-ion battery 
manufacturing capacity in key EV markets,'' May 20, 2022. Accessed 
on November 22, 2022 at https://www.spglobal.com/mobility/en/research-analysis/growth-of-liion-battery-manufacturing-capacity.html.
    \312\ Argonne National Laboratory, ``Assessment of Light-Duty 
Plug-in Electric Vehicles in the United States, 2010-2021,'' ANL-22/
71, November 2022.
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    The expected HD battery capacity demand based on this proposed rule 
would be 17 GWh in MY 2027 and grow to 36 GWh by MY 2032 (as described 
in DRIA 2.8.3.1), which is well below the expected manufacturing 
capacity for this time frame. It should be noted that the projected 
U.S. HD battery demand would be only a fraction of total U.S. battery 
demand. In comparison, we project in the Light- and Medium-Duty 
Multipollutant Emissions Standards Proposed Rule that the annual 
battery production required for the light-duty fleet would be slightly 
less than 900 GWh in MY 2030, and stabilize at around 1,000 GWh per 
year for MY 2031 and beyond.\313\ Therefore, between the two proposed 
highway motor vehicle rules, the U.S. market could require 940 GWh of 
battery capacity by 2030 and 1050 GWh of battery capacity by 2032. DOE 
estimates plant announcements of ~1,000 GWh by 2030; furthermore, the 
battery market is an international market where IEA projects 3.7 
terrawatt hours (TWh) of battery globally by 2030 in their 
``Sustainable Development Scenario'' \314\
---------------------------------------------------------------------------

    \313\ The Light- and Medium-Duty Multipollutant Emissions 
Standards proposed rule, titled ``Multi-Pollutant Emissions 
Standards for Model Years 2027 and Later Light-Duty and Medium-Duty 
Vehicles,'' was signed by the Administrator on the same day as this 
proposal. Available at https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model.
    \314\ IEA, ``Annual EV battery demand projections by region and 
scenario, 2020-2030'', October 26, 2022. Available at https://www.iea.org/data-and-statistics/charts/annual-ev-battery-demand-projections-by-region-and-scenario-2020-2030.
---------------------------------------------------------------------------

    In addition, the IRA and the BIL are providing significant support 
to accelerate these efforts to build out a U.S. supply chain for 
mineral, cell, and battery production. The IRA offers sizeable 
incentives and other support for further development of domestic and 
North American manufacture of these components. According to the 
Congressional Budget Office, an estimated $30.6 billion will be 
realized by manufacturers through the Advanced Manufacturing Production 
Credit, which includes a tax credit to manufacturers for battery 
production in the United States. According to one third-party estimate 
based on information from Benchmark Mineral Intelligence, the recent 
increase in U.S. battery manufacturing plant announcements could 
increase this figure to $136 billion or more.\315\ Another $6.2 billion 
or more may be realized through expansion of the Advanced Energy 
Project Credit, a 30 percent tax credit for investments in projects 
that reequip, expand, or establish certain energy manufacturing 
facilities.\316\ Together, these provisions create a strong motivation 
for manufacturers to support the continued development of a North 
American supply chain and already appear to be proving influential on 
the plans of manufacturers to procure domestic or North American 
mineral and component sources and to construct domestic manufacturing 
facilities to claim the benefits of the act.317 318
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    \315\ Axois.com, ``Axios What's Next,'' February 1, 2023. 
Accessed on March 1, 2023 at https://www.axios.com/newsletters/axios-whats-next-1185bdcc-1b58-4a12-9f15-8ffc8e63b11e.html?chunk=0&utm_term=emshare#story0.
    \316\ Congressional Research Service, ``Tax Provisions in the 
Inflation Reduction Act of 2022 (H.R. 5376),'' August 10, 2022.
    \317\ Subramanian, P., ``Why Honda's EV battery plant likely 
wouldn't happen without new climate credits,'' Yahoo Finance, August 
29, 2022.
    \318\ LG Chem, ``LG Chem to Establish Largest Cathode Plant in 
US for EV Batteries,'' Press Release, November 22, 2022.
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    In addition, the BIL provides $7.9 billion to support development 
of the domestic supply chain for battery manufacturing, recycling, and 
critical minerals.\319\ Notably, it supports the

[[Page 25968]]

development and implementation of a $675 million Critical Materials 
Research, Development, Demonstration, and Commercialization Program 
administered by the Department of Energy (DOE),\320\ and has created 
numerous other programs in related areas, such as for example, critical 
minerals data collection by the USGS.\321\ Provisions extend across 
several areas including critical minerals mining and recycling 
research, USGS energy and minerals research, rare earth elements 
extraction and separation research and demonstration, and expansion of 
DOE loan programs in critical minerals and zero-carbon 
technologies.322 323 The Department of Energy is working to 
facilitate and support further development of the supply chain, by 
identifying weaknesses for prioritization and rapidly funding those 
areas through numerous programs and funding 
opportunities.324 325 326 According to a final report from 
the Department of Energy's Li-Bridge alliance,\327\ ``the U.S. industry 
can double its value-added share by 2030 (capturing an additional $17 
billion in direct value-add annually and 40,000 jobs in 2030 from 
mining to cell manufacturing), dramatically increase U.S. national and 
economic security, and position itself on the path to a near-circular 
economy by 2050.'' \328\ The $7.9 billion provided by the BIL for U.S. 
battery supply chain projects \329\ represents a total of about $14 
billion when industry cost matching is considered.330 331 
Other recently announced projects will utilize another $40 billion in 
private funding.\332\ According to DOE's Li-Bridge alliance, the total 
of these commitments already represents more than half of the capital 
investment that Li-Bridge considers necessary for supply chain 
investment to 2030.\333\
---------------------------------------------------------------------------

    \319\ Congressional Research Service, ``Energy and Minerals 
Provisions in the Infrastructure Investment and Jobs Act (Pub. L. 
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
    \320\ Department of Energy, ``DOE Seeks Public Input on Critical 
Materials Research Program to Strengthen Clean Energy Technology 
Manufacturing in America,'' August 9, 2022. Available at https://www.energy.gov/articles/biden-harris-administration-launches-675-million-bipartisan-infrastructure-law-program.
    \321\ U.S. Geological Survey, ``Bipartisan Infrastructure Law 
supports critical-minerals research in central Great Plains,'' 
October 26, 2022. Available at https://www.usgs.gov/news/state-news-release/bipartisan-infrastructure-law-supports-critical-minerals-research-central.
    \322\ Congressional Research Service, ``Energy and Minerals 
Provisions in the Infrastructure Investment and Jobs Act (Pub. L. 
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
    \323\ International Energy Agency, ``Infrastructure and Jobs 
act: Critical Minerals,'' October 26, 2022. https://www.iea.org/policies/14995-infrastructure-and-jobs-act-critical-minerals.
    \324\ Department of Energy, Li-Bridge, ``Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
    \325\ The White House, ``Building Resilient Supply Chains, 
Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth,'' 100-Day Reviews under Executive Order 14017, June 2021.
    \326\ Federal Consortium for Advanced Batteries, ``National 
Blueprint for Lithium Batteries 2021-2030,'' June 2021. Available at 
https://www.energy.gov/sites/default/files/2021-06/FCAB%20National%20Blueprint%20Lithium%20Batteries%200621_0.pdf.
    \327\ Argonne National Laboratory. ``Li-Bridge''. Available 
online: https://www.anl.gov/li-bridge.
    \328\ Department of Energy, Li-Bridge, '' Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
    \329\ Congressional Research Service, ``Energy and Minerals 
Provisions in the Infrastructure Investment and Jobs Act (Pub. L. 
117-58)'', February 16, 2022. https://crsreports.congress.gov/product/pdf/R/R47034.
    \330\ Department of Energy, Li-Bridge, ``Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023 (p. 9).
    \331\ Department of Energy, EERE Funding Opportunity Exchange, 
EERE Funding Opportunity Announcements. Accessed March 4, 2023 at 
https://eere-exchange.energy.gov/Default.aspx#FoaId0596def9-c1cc-478d-aa4f-14b472864eba.
    \332\ Federal Reserve Bank of Dallas, ``Automakers' bold plans 
for electric vehicles spur U.S. battery boom,'' October 11, 2022. 
Accessed on March 4, 2023 at https://www.dallasfed.org/research/economics/2022/1011.
    \333\ Department of Energy, Li-Bridge, ``Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023 (p. 9).
---------------------------------------------------------------------------

    Further, the DOE Loan Programs Office is administering a major 
loans program focusing on extraction, processing and recycling of 
lithium and other critical minerals that will support continued market 
growth,\334\ through the Advanced Technology Vehicles Manufacturing 
(ATVM) Loan Program and Title 17 Innovative Energy Loan Guarantee 
Program. This program includes over $20 billion of available loans and 
loan guarantees to finance critical materials projects.
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    \334\ Department of Energy Loan Programs Office, ``Critical 
Materials Loans & Loan Guarantees,'' https://www.energy.gov/sites/default/files/2021-06/DOE-LPO_Program_Handout_Critical_Materials_June2021_0.pdf.
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c. Mineral Security
    As stated at the beginning of this Section II.D, it is our 
assessment that increased electrification in the U.S. transportation 
sector does not constitute a vulnerability to national security, for 
several reasons supported by the discussion in this preamble and in 
DRIA 1.5.1.2.
    A domestic supply chain for battery and cell manufacturing is 
rapidly forming by the actions of stakeholders including vehicle 
manufacturers and suppliers who wish to take advantage of the business 
opportunities that this need presents, and by vehicle manufacturers who 
recognize the need to remain competitive in a global market that is 
shifting to electrification. It is therefore already a goal of the U.S. 
manufacturing industry to create a robust supply chain for these 
products, in order to supply not only the domestic vehicle market, but 
also all of the other applications for these products in global markets 
as the world decarbonizes.
    Further, the IRA and BIL are proving to be a highly effective means 
by which Congress and the Administration have provided support for the 
building of a robust supply chain, and to accelerate this activity to 
ensure that it forms as rapidly as possible. An example is the work of 
Li Bridge, a public-private alliance committed to accelerating the 
development of a robust and secure domestic supply chain for lithium-
based batteries. It has set forth a goal that by 2030 the United States 
should capture 60 percent of the economic value associated with the 
U.S. domestic demand for lithium batteries. Achieving this target would 
double the economic value expected in the United States under 
``business as usual'' growth.\335\ More evidence of recent growth in 
the supply chain is found in a February 2023 report by Pacific 
Northwest National Laboratory (PNNL), which documents robust growth in 
the North American lithium battery industry.\336\
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    \335\ Department of Energy, Li-Bridge, ``Building a Robust and 
Resilient U.S. Lithium Battery Supply Chain,'' February 2023.
    \336\ Pacific Northwest National Laboratory, ``North American 
Lithium Battery Materials V 1.2,'' February 2023. Available at 
https://www.pnnl.gov/projects/north-american-lithium-battery-materials-industry-report.
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    Finally, it is important to note that utilization of critical 
minerals is different from the utilization of foreign oil, in that oil 
is consumed as a fuel while minerals become a constituent of 
manufactured vehicles. That is, mineral security is not a perfect 
analogy to energy security. Supply disruptions and fluctuating prices 
are relevant to critical minerals as well, but the impacts of such 
disruptions are felt differently and by different parties. Disruptions 
in oil supply or gasoline price has an immediate impact on consumers 
through higher fuel prices, and thus constrains the ability to travel. 
In contrast, supply disruptions or price fluctuations of minerals 
affect only the production and price of new vehicles. In practice, 
short-term price fluctuations do not always translate to higher 
production cost as most manufacturers purchase minerals via long-term 
contracts that insulate them to a degree from changes in spot prices. 
Moreover, critical minerals are not a single

[[Page 25969]]

commodity but a number of distinct commodities, each having its own 
supply and demand dynamics, and some being capable of substitution by 
other minerals.\337\ Importantly, while oil is consumed as a fuel and 
thus requires continuous supply, minerals become part of the vehicle 
and have the potential to be recovered and recycled. Thus even when 
minerals are imported from other countries, their acquisition adds to 
the domestic mineral stock that is available for domestic recycling in 
the future.
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    \337\ For example, manganese can be subsituted by aluminum in 
the case of nickel-manganese-cobalt (NMC) and nickel-cobalt-aluminum 
(NCA) batteries. Likewise, a LFP battery uses iron phophaste 
chemistry without nickel, manganese, cobalt or aluminum. Research 
has also been conducted to study the replacement of lithium with 
sodium ions.
---------------------------------------------------------------------------

    Over the long term, battery recycling will be a critical component 
of the BEV supply chain and will contribute to mineral security and 
sustainability, effectively acting as a domestically produced mineral 
source that reduces overall reliance on foreign-sourced products. While 
the number of end-of-life BEV batteries available for recycling will 
lag the market penetration of BEVs, it is important to consider the 
projected growth in development of a battery recycling supply chain 
during the time frame of the rule and beyond.
    By 2050, battery recycling could be capable of meeting 25 to 50 
percent of total lithium demand for battery 
production.338 339 To this end, battery recycling is avery 
active area of research. The Department of Energy coordinates much 
research in this area through the ReCell Center, described as ``a 
national collaboration of industry, academia and national laboratories 
working together to advance recycling technologies along the entire 
battery life-cycle for current and future battery chemistries.'' \340\ 
Funding is also being disbursed as directed by the BIL, as discussed in 
Chapter 1.3.2 of the DRIA.\341\ A growing number of private companies 
are entering the battery recycling market as the rate of recyclable 
material becoming available from battery production facilities and 
salvaged vehicles has grown, and manufacturers are already reaching 
agreements to use these recycled materials for domestic battery 
manufacturing. For example, Panasonic has contracted with Redwood 
Materials Inc. to supply domestically processed cathode material, much 
of which will be sourced from recycled batteries.\342\
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    \338\ Sun et al., ``Surging lithium price will not impede the 
electric vehicle boom,'' Joule, doi:10.1016/j.joule. 2022.06.028 
(https://dx.doi.org/10.1016/j.joule.2022.06.028).
    \339\ Ziemann et al., ``Modeling the potential impact of lithium 
recycling from EV batteries on lithium demand: a dynamic MFA 
approach,'' Resour. Conserv. Recycl. 133, pp. 76-85. https://doi.org/10.1016/j.resconrec.2018.01.031.
    \340\ ReCell Advanced Battery Remanufacturing. https://recellcenter.org/about/.
    \341\ Department of Energy, ``Biden-Harris Administration 
Announces Nearly $74 Million To Advance Domestic Battery Recycling 
And Reuse, Strengthen Nation's Battery Supply Chain,'' Press 
Release, November 16, 2022.
    \342\ Randall, T., ``The Battery Supply Chain Is Finally Coming 
to America,'' Bloomberg, November 15, 2022.
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    Recycling infrastructure is one of the targets of several 
provisions of the BIL. It includes a Battery Processing and 
Manufacturing program, which grants significant funds to promote U.S. 
processing and manufacturing of batteries for automotive and electric 
grid use, by awarding grants for demonstration projects, new 
construction, retooling and retrofitting, and facility expansion. It 
will provide a total of $3 billion for battery material processing, $3 
billion for battery manufacturing and recycling, $10 million for a 
lithium-ion battery recycling prize competition, $60 million for 
research and development activities in battery recycling, an additional 
$50 million for state and local programs, and $15 million to develop a 
collection system for used batteries. In addition, the Electric Drive 
Vehicle Battery Recycling and Second-Life Application Program will 
provide $200 million in funds for research, development, and 
demonstration of battery recycling and second-life applications.\343\
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    \343\ Environmental Defense Fund and ERM, ``Electric Vehicle 
Market Update: Manufacturer Commitments and Public Policy 
Initiatives Supporting Electric Mobility in the U.S. and 
Worldwide,'' September 2022.
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    The efforts to fund and build a mid-chain processing supply chain 
for active materials and related products will also be important to 
reclaiming minerals through domestic recycling. While domestic 
recycling can recover minerals and other materials needed for battery 
cell production, they commonly are recovered in elemental forms that 
require further midstream processing into precursor substances and 
active material powders that can be used in cell production. The DOE 
ReCell Center coordinates extensive research on development of a 
domestic lithium-ion recycling supply chain, including direct 
recycling, in which materials can be recycled for direct use in cell 
production without destroying their chemical structure, and advanced 
resource recovery which uses chemical conversion to recover raw 
minerals for processing into new constituents.\344\
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    \344\ Department of Energy, ``The ReCell Center for Advanced 
Battery Recycling FY22 Q4 Report,'' October 20, 2022. Available at: 
https://recellcenter.org/2022/12/15/recell-advanced-battery-recycling-center-fourth-quarter-progress-report-2022/.
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    Currently, pilot-scale battery recycling research projects and 
private recycling startups have access to only limited amounts of 
recycling stock that originate from sources such as manufacturer waste, 
crashed vehicles, and occasional manufacturer recall/repair events. As 
ZEVs are currently only a small portion of the U.S. vehicle stock, some 
time will pass before vehicle scrappage can provide a steady supply of 
end-of-life batteries to support large-scale battery recycling. During 
this time, we expect that the midchain processing portion of the supply 
chain will continue to develop and will be able to capture much of the 
resources made available by the recycling of used batteries coming in 
from the fleet.\345\
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    \345\ Department of Energy, ``Biden-Harris Administration 
Announces Nearly $74 Million To Advance Domestic Battery Recycling 
and Reuse, Strengthen Nation's Battery Supply Chain,'' Press 
Release, November 16, 2022.
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3. HD Fuel Cell Electric Vehicle Technology
    Fuel cell technologies that run on hydrogen have been in existence 
for decades, though they are just starting to enter the heavy-duty 
transportation market. Hydrogen FCEVs are similar to BEVs in that they 
have batteries and use an electric motor instead of an internal 
combustion engine to power the wheels. Unlike BEVs that need to be 
plugged in to recharge, FCEVs have fuel cell stacks that use a chemical 
reaction involving hydrogen to generate electricity. Fuel cells with 
electric motors are two-to-three times more efficient than ICEs that 
run on gasoline or diesel, requiring less energy to fuel.\346\
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    \346\ U.S. Department of Energy, Vehicle Technologies Office. 
``Hydrogen Basics''. Alternative Fuels Data Center. Available 
online: https://afdc.energy.gov/fuels/hydrogen_basics.html.
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    Hydrogen FCEVs do not emit air pollution at the tailpipe--only heat 
and pure water.\347\ With current and near-future technologies, energy 
can be stored more densely onboard a vehicle as gaseous or liquid 
hydrogen than it can as electrons in a battery. This allows FCEVs to 
perform periods of service between fueling events that batteries 
currently cannot achieve without affecting vehicle weight and limiting 
payload capacity. Thus, fuel cells are of interest for their potential 
use in heavy-duty sectors that are difficult to electrify

[[Page 25970]]

using batteries due to range or weight limitations.
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    \347\ U.S. Department of Energy, Fuel Cell Technologies Office. 
``Fuel Cells''. November 2015. Available online: https://www.energy.gov/sites/prod/files/2015/11/f27/fcto_fuel_cells_fact_sheet.pdf.
---------------------------------------------------------------------------

    In the following sections, and in DRIA Chapter 1.7, we discuss key 
technology components unique to HD FCEVs. We request comment on our 
assessment and data to support our assessment of FCEV technology for 
the final rule.
i. Fuel Cell Stack
    A fuel cell system is composed of a fuel cell stack and ``balance 
of plant'' (BOP) components that support the fuel cell stack (e.g., 
pumps, sensors, compressors, humidifiers). A fuel cell stack is a 
module that may contain hundreds of fuel cell units, typically combined 
in series.\348\ A heavy-duty FCEV may have several fuel cell stacks to 
meet the power needs of a comparable ICE vehicle.
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    \348\ U.S. Department of Energy, Hydrogen and Fuel Cell 
Technologies Office. ``Fuel Cell Systems''. Available online: 
https://www.energy.gov/eere/fuelcells/fuel-cell-systems.
---------------------------------------------------------------------------

    Though there are many types of fuel cell technologies, polymer 
electrolyte membrane (PEM) fuel cells are typically used in 
transportation applications because they offer high power density, 
therefore have low weight and volume, and can operate at relatively low 
temperatures.\349\ PEM fuel cells are built using membrane electrode 
assemblies (MEA) and supportive hardware. The MEA includes the PEM 
electrolyte material, catalyst layers (anode and cathode), and gas 
diffusion layers.\350\ Hydrogen fuel and oxygen enter the MEA and 
chemically react to generate electricity, which is either used to 
propel the vehicle or is stored in a battery to meet future power 
needs. The process creates excess water vapor and heat.
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    \349\ U.S. Department of Energy, Hydrogen and Fuel Cell 
Technologies Office. ``Types of Fuel Cells''. Available online: 
https://www.energy.gov/eere/fuelcells/types-fuel-cells.
    \350\ U.S. Department of Energy, Hydrogen and Fuel Cell 
Technologies Office. ``Parts of a Fuel Cell''. Available online: 
https://www.energy.gov/eere/fuelcells/parts-fuel-cell.
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    Key BOP components include the air supply system that provides 
oxygen, the hydrogen supply system, and the thermal management system. 
With the help of compressors and sensors, these components monitor and 
regulate the pressure and flow of the gases supplied to the fuel cell 
along with relative humidity and temperature. Similar to ICEs and 
batteries, PEM fuel cells require thermal management systems to control 
the operating temperatures. It is necessary to control operating 
temperatures to maintain stack voltage and the efficiency and 
performance of the system. There are different strategies to mitigate 
excess heat that comes from operating a fuel cell. For example, a HD 
vehicle may include a cooling system the circulates cooling fluid 
through the stack.\351\ Waste heat recovery solutions are also 
emerging.\352\ The excess heat also can be in turn used to heat the 
cabin, similar to ICE vehicles. Power consumed to operate BOP 
components can also impact the stack's 
efficiency.353 354 355
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    \351\ Hyfindr. ``Fuel Cell Stack''. Available online: https://hyfindr.com/fuel-cell-stack/.
    \352\ Baroutaji, Ahmad, et al. ``Advancements and prospects of 
thermal management and waste heat recovery of PEMFC''. Interational 
Journal of Thermofluids: 9. February 2021. Available online: https://www.sciencedirect.com/science/article/pii/S2666202721000021.
    \353\ Hoeflinger, Johannes and Peter Hofmann. ``Air mass flow 
and pressure optimization of a PEM fuel cell range extender 
system''. International Journal of Hydrogen Energy. Volume 45:53. 
October 02020. Available online: https://www.sciencedirect.com/science/article/pii/S0360319920327841.
    \354\ Pardhi, Shantanu, et al. ``A Review of Fuel Cell 
Powertrains for Long-Haul Heavy-Duty Vehicles: Technology, Hydrogen, 
Energy and Thermal Management Systems''. Energies. December 2022. 
Available online: https://www.mdpi.com/1996-1073/15/24/9557.
    \355\ Hyfindr. ``Fuel Cell Stack''. Available online: https://hyfindr.com/fuel-cell-stack/.
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    To improve fuel cell performance, the air and hydrogen fuel that 
enter the system may be compressed, humidified, and/or filtered.\356\ A 
fuel cell operates best when the air and the hydrogen are free of 
contaminants, since contaminants can poison and damage the catalyst. 
PEM fuel cells require hydrogen that is over 99 percent pure, which can 
add to the fuel production cost.\357\ Hydrogen produced from natural 
gas tends to initially have more impurities (e.g., carbon monoxide and 
ammonia, associated with the reforming of hydrocarbons) than hydrogen 
produced from water through electrolysis.\358\ There are standards such 
as ISO 14687 that include hydrogen fuel quality specifications for use 
in vehicles to minimize impurities.\359\
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    \356\ U.S .Environmental Protection Agency. ``Assessment of Fuel 
Cell Technologies at Ports''. Prepared for EPA by Eastern Research 
Group, Inc. July 2022. Available online: https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1015AQX.pdf.
    \357\ US Drive. ``Hydrogen Production Tech Team Roadmap''. 
November 2017. Available online: https://www.energy.gov/eere/vehicles/articles/us-drive-hydrogen-production-technical-team-roadmap.
    \358\ Nhuyen, Huu Linh, et al. ``Review of the Durability of 
Polymer Electrolyte Membrane Fuel Cell in Long-Term Operation: Main 
Influencing Parameters and Testing Protocols''. Energies. July 2021. 
Available online: https://www.mdpi.com/1996-1073/14/13/4048.
    \359\ International Organization for Standardization. ``ISO 
14687: 2019, Hydrogen fuel quality--Product specification''. 
November 2019. Available online: https://www.iso.org/standard/69539.html.
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    Fuel cell durability is important in heavy-duty applications, given 
that vehicle owners and operators often have high expectations for 
drivetrain lifetimes in terms of years, hours, and miles. Fuel cells 
can be designed to meet durability needs, or the ability of the stack 
to maintain its performance over time. Considerations must be included 
in the design to accommodate operations in less-than-optimized 
conditions. For example, prolonged operation at high voltage (low 
power) or when there are multiple transitions between high and low 
voltage can stress the system. As a fuel cell system ages, a fuel 
cell's MEA materials can degrade, and performance and maximum power 
output can decline. The fuel cell can become less efficient, which can 
cause it to generate more excess heat and consume more fuel.\360\ DOE's 
ultimate long-term technology target for Class 8 HD trucks is a fuel 
cell lifetime of 30,000 hours, corresponding to an expected vehicle 
lifetime of 1.2 million miles.\361\ A voltage degradation of 10 percent 
at rated power (i.e., the power level the cell is designed for) by end-
of-life is considered by DOE when evaluating targets.\362\
---------------------------------------------------------------------------

    \360\ Nhuyen, Huu Linh, et al. ``Review of the Durability of 
Polymer Electrolyte Membrane Fuel Cell in Long-Term Operation: Main 
Influencing Parameters and Testing Protocols''. Energies. July 2021. 
Available online: https://www.mdpi.com/1996-1073/14/13/4048.
    \361\ Marcinkoski, Jason et al. ``DOE Advanced Truck 
Technologies: Subsection of the Electrified Powertrain Roadmap--
Technical Targets for Hydrogen-Fueled Long-Haul Tractor-Trailer 
Trucks. October 31, 2019. Available online: https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf.
    \362\ Marcinkoski, Jason et al. ``DOE Advanced Truck 
Technologies: Subsection of the Electrified Powertrain Roadmap--
Technical Targets for Hydrogen-Fueled Long-Haul Tractor-Trailer 
Trucks. October 31, 2019. Available online: https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf.
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    Currently, the fuel cell stack is the most expensive component of a 
heavy-duty FCEV, primarily due to the technological requirements of 
manufacturing rather than raw material costs.\363\ Larger production 
volumes are anticipated as global demand increases for fuel cell 
systems for HD vehicles, which could improve economies of scale.\364\ 
Costs are also anticipated to decline as durability improves, which 
could extend the life of fuel cells and reduce the need for parts 
replacement.\365\ Fuel cells contain PEM catalysts that typically are 
made using precious metals from the platinum

[[Page 25971]]

group, which are expensive but efficient and can withstand conditions 
in a cell. With today's technology, roughly 50 grams of platinum may be 
required for a 160-kW fuel cell in a vehicle.\366\ Platinum group 
metals are classified as critical minerals in the DOE Critical Minerals 
and Materials Strategy.\367\ Efforts are underway to minimize or 
eliminate the use of platinum in catalysts.\368\
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    \363\ Deloitte China. ``Fueling the Future of Mobility: Hydrogen 
and fuel cell solutions for transportation, Volume 1''. 2020. 
Available online: https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/finance/deloitte-cn-fueling-the-future-of-mobility-en-200101.pdf.
    \364\ Ibid.
    \365\ Ibid.
    \366\ James, Brian D., et al. ``Fuel Cell Truck System Cost 
Analysis''. Strategic Analysis Inc. July 2018. Available online: 
https://www.energy.gov/sites/prod/files/2018/08/f54/fcto-truck-workshop-2018-10-james.pdf.
    \367\ U.S. Department of Energy, Advanced Manufacturing & 
Industrial Decarbonization Office. ``Critical Minerals & 
Materials''. Available online: https://www.energy.gov/eere/amo/critical-minerals-materials.
    \368\ Berkeley Lab. ``Strategies for Reducing Platinum Waste in 
Fuel Cells. November 2021. Available online: https://als.lbl.gov/strategies-for-reducing-platinum-waste-in-fuel-cells/.
---------------------------------------------------------------------------

ii. Fuel Cell and Battery Interaction
    The instantaneous power required to move a FCEV can come from 
either the fuel cell stack, the battery, or a combination of both. 
Interactions between the fuel cell stacks and batteries of a FCEV can 
be complex and may vary based on application. Each manufacturer likely 
would employ a unique strategy to optimize the durability of these 
components and manage costs. The strategy selected would impact the 
size of the fuel cell stack and the size of the battery.
    The fuel cell stack can be used to charge the battery that in turn 
powers the wheels (i.e., series hybrid or range-extending), or it can 
work with the battery to provide power (i.e., parallel hybrid or 
primary power) to the wheels. In the emerging HD FCEV market, when used 
to extend range, the fuel cell tends to have a lower peak power 
potential and may be sized to match the average power needed during a 
typical use cycle, including steady highway driving. At idle, the fuel 
cell may run at minimal power or turn off based on state of charge of 
the battery. The battery is used during prolonged high-power operations 
such as grade climbing and is typically in charge-sustaining mode, 
which means the average state of charge is maintained above a certain 
level while driving. When providing primary power, the fuel cell tends 
to have a larger peak power potential, sized to match all power needs 
of a typical duty cycle and to meet instantaneous power needs. The 
battery is mainly used to capture energy from regenerative braking and 
to help with acceleration and other transient power demands.\369\
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    \369\ Islam, Ehsan Sabri, Ram Vijayagopal, Aymeric Rousseau. ``A 
Comprehensive Simulation Study to Evaluate Future Vehicle Energy and 
Cost Reduction Potential'', Report to the U.S. Department of Energy, 
Contract ANL/ESD-22/6. October 2022. See Full report. Available 
online: https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.
---------------------------------------------------------------------------

    Based on how the fuel cell stacks and batteries are managed, 
manufacturers may use different types of batteries in HD FCEVs. Energy 
battery cells are typically used to store energy for applications with 
distance needs, so may be used more with range-extending fuel cells in 
vehicles with a relatively large battery. Power battery cells are 
typically used to provide additional high power for applications with 
high power needs in primary power fuel cell-dominant vehicles.\370\
---------------------------------------------------------------------------

    \370\ Sharpe, Ben and Hussein Basma. ``A Meta-Study of Purchase 
Costs for Zero-Emission Trucks''. The International Council on Clean 
Transportation. February 2022. Available online: https://theicct.org/publication/purchase-cost-ze-trucks-feb22/.
---------------------------------------------------------------------------

iii. Onboard Hydrogen Storage Tanks
    Fuel cell vehicles carry hydrogen fuel onboard using large tanks. 
Hydrogen has extremely low density, so it must be compressed or 
liquified for use. There are various techniques for storing hydrogen 
onboard a vehicle, depending on how much fuel is needed to meet range 
requirements. Most transportation applications today use Type IV 
tanks,\371\ which typically include a plastic liner wrapped with a 
composite material such as carbon fiber that can withstand high 
pressures with minimal weight.372 373 High-strength carbon 
fiber is expensive, accounting for over 50 percent of the cost of 
onboard storage at production volumes of over 100,000 tanks per 
year.\374\
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    \371\ Type I-III tanks are not typically used in transportation 
for reasons related to low hydrogen density, metal embrittlement, 
weight, or cost.
    \372\ Langmi, Henrietta et. al. ``Hydrogen storage''. 
Electrochemical Power Sources: Fundamentals, Systems, and 
Applications. 2022. Portion available online: https://www.sciencedirect.com/topics/engineering/compressed-hydrogen-storage.
    \373\ U.S. Department of Energy, Fuel Cell Technologies Office. 
``Hydrogen Storage''. March 2017. Available online: https://www.energy.gov/sites/prod/files/2017/03/f34/fcto-h2-storage-fact-sheet.pdf.
    \374\ Houchins, Cassidy and Brian D. James. ``2019 DOE Hydrogen 
and Fuel Cell Program Review: Hydrogen Storage Cost Analysis''. 
Strategic Analysis. May 2019. Available online: https://www.hydrogen.energy.gov/pdfs/review19/st100_james_2019_o.pdf.
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    Some existing fuel cell buses use compressed hydrogen gas at 350 
bars (~5,000 pounds per square inch, or psi) of pressure, but other 
applications are using tanks with increased compressed hydrogen gas 
pressure at 700 bar (~10,000 psi) for extended driving range.\375\ A 
Heavy-Duty Vehicle Industry Group was formed in 2019 to standardize 700 
bar high-flow fueling hardware components globally that meet fueling 
speed requirements (i.e., so that fill times are similar to comparable 
HD ICE vehicles, as identified in DOE technical targets for Class 8 
long-haul tractor-trailers).\376\ High-flow refueling rates for heavy-
duty vehicles of 60-80 kg hydrogen in under 10 minutes were recently 
demonstrated in a DOE lab setting.377 378 379
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    \375\ Basma, Hussein and Felipe Rodriquez. ``Fuel cell electric 
tractor-trailers: Technology overview and fuel economy''. Working 
Paper 2022-23. The International Council on Clean Transportation. 
July 2022. Available online: https://theicct.org/wp-content/uploads/2022/07/fuel-cell-tractor-trailer-tech-fuel-jul22.pdf.
    \376\ NextEnergy. ``Hydrogen Heavy Duty Vehicle Industry 
Group''. Available online: https://nextenergy.org/hydrogen-heavy-duty-vehicle-industry-group/.
    \377\ DOE suggests that 60 kg of H2 will be required to achieve 
a 750-mile range in a Class 8 tractor-trailer truck, assuming a fuel 
economy of 12.4 miles per kilogram. In the DOE lab, one fill (61.5 
kg) was demonstrated from the fueling station into seven type-IV 
tanks of a HD vehicle simulator, and the second fill (75.9 kg) was 
demonstrated from the station into nine tanks.
    \378\ Marcinkoski, Jason et. al. ``DOE Advanced Truck 
Technologies: Subsection of the Electrified Powertrain Roadmap--
Technical Targets for Hydrogen-Fueled Long-Haul Tractor-Trailer 
Trucks. October 31, 2019. Available online: https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf.
    \379\ Martineau, Rebecca. ``Fast Flow Future for Heavy-Duty 
Hydrogen Trucks: Expanded Capabilities at NREL Demonstration High-
Flow-Rate Hydrogen Fueling for Heavy-Duty Applications''. National 
Renewable Energy Lab. June 2022. Available online: https://www.nrel.gov/news/program/2022/fast-flow-future-heavy-duty-hydrogen-trucks.html.
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    Based on our review of the literature, we believe that most HD 
vehicles likely have sufficient physical space to package hydrogen 
storage tanks onboard.\380\ Geometry and packing challenges may 
constrain the amount of gaseous hydrogen that can be stored onboard 
and, thus, the maximum range of trucks that travel longer distances 
without a stop for fuel.\381\ Liquid hydrogen is emerging as a cost-
effective onboard storage option for long-haul operations; however, the 
technology readiness of liquid storage and refueling technologies is 
relatively low compared to compressed gas technologies.\382\

[[Page 25972]]

Nonetheless, companies like Daimler and Hyzon are pursuing onboard 
liquid hydrogen to minimize potential payload impacts and maintain the 
flexibility to drive up to 1,000 miles between refueling, comparable to 
today's diesel ICE vehicle refueling ranges.383 384 
Therefore given our assessment of technology readiness, liquid storage 
tanks were not included as part of the technology packages that support 
the feasibility and appropriateness of our proposed standards. We 
request comment and data related to packaging space availability 
associated with FCEVs and projections for the development and 
application of liquid hydrogen in the HD transportation sector over the 
next decade.
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    \380\ Kast, James et. al. ``Designing hydrogen fuel cell 
electric trucks in a diverse medium and heavy duty market''. 
Research in Transportation Economics: Volume 70. October 2018. 
Available online: https://www.sciencedirect.com/science/article/pii/S0739885916301639.
    \381\ Basma, Hussein and Felipe Rodriquez. ``Fuel cell electric 
tractor-trailers: Technology overview and fuel economy''. Working 
Paper 2022-23. The International Council on Clean Transportation. 
July 2022. Available online: https://theicct.org/wp-content/uploads/2022/07/fuel-cell-tractor-trailer-tech-fuel-jul22.pdf.
    \382\ Basma, Hussein and Felipe Rodriquez. ``Fuel cell electric 
tractor-trailers: Technology overview and fuel economy''. Working 
Paper 2022-23. The International Council on Clean Transportation. 
July 2022. Available online: https://theicct.org/wp-content/uploads/2022/07/fuel-cell-tractor-trailer-tech-fuel-jul22.pdf.
    \383\ Daimler Truck. ``Development milestone: Daimler Truck 
tests fuel-cell truck with liquid hydrogen''. June 2022. Available 
online: https://media.daimlertruck.com/marsMediaSite/en/instance/ko/Development-milestone-Daimler-Truck-tests-fuel-cell-truck-with-liquid-hydrogen.xhtml?oid=51975637.
    \384\ Hyzon. ``Hyzon Motors, Chart Industries to Develop Liquid 
Hydrogen Fuel Cell-Powered Truck, Targeting 1000-Mile Range''. July 
2021. Available online: https://www.hyzonmotors.com/in-the-news/hyzon-motors-chart-industries-to-develop-liquid-hydrogen-fuel-cell-powered-truck-targeting-1000-mile-range.
---------------------------------------------------------------------------

iv. HD FCEV Safety Assessment
    FCEVs have two potential risk factors that can be mitigated through 
proper design, process, and training: hydrogen and electricity. 
Electricity risks are identical to those of BEVs and, thus, are 
discussed in Section II.D.2 and DRIA Chapter 1.5.2. Hydrogen risks can 
occur throughout the process of fueling a vehicle. FCEVs must be 
designed such that hydrogen can safely be delivered to a vehicle and 
then transferred into a vehicle's onboard storage tanks and fuel cell 
stacks. Hydrogen has been handled, used, stored, and moved in 
industrial settings for more than 50 years, and there are many 
established methods for doing so safely.\385\ There is also federal 
oversight and regulation throughout the hydrogen supply chain 
system.\386\ Safety training and education are key for maintaining 
reasonable risk while handling and using hydrogen. For example, 
hydrogen-related fuel cell vehicle risks can be mitigated by following 
various SAE and OSHA standards, as discussed in DRIA Chapter 1.7.4. We 
request comment on our assessment that HD FCEVs can be designed to 
maintain safety.
---------------------------------------------------------------------------

    \385\ Hydrogen Tools. ``Best Practices Overview''. Pacific 
Northwest National Laboratory. Available online: https://h2tools.org/bestpractices/best-practices-overview.
    \386\ Baird, Austin R. et. al. ``Federal Oversight of Hydrogen 
Systems''. Sandia National Laboratories. March 2021. Available 
online: https://energy.sandia.gov/wp-content/uploads/2021/03/H2-Regulatory-Map-Report_SAND2021-2955.pdf.
---------------------------------------------------------------------------

4. Summary of Technology Assessment
    In prior HD GHG rulemakings, EPA promulgated standards that could 
feasibly be met through technological improvements in many areas of the 
vehicle. For example, the HD GHG Phase 2 CO2 emission 
standards were premised on technologies such as engine waste heat 
recovery, advanced aerodynamics (like those developed for DOE's 
SuperTruck programs), and, in some cases, hybrid powertrains. We 
evaluated each technology's effectiveness as demonstrated over the 
regulatory duty cycles using EPA's GEM and estimated the appropriate 
adoption rate of each technology.\387\ We then developed a technology 
package for each of the regulatory subcategories. We are following a 
similar approach in this Phase 3 NPRM.
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    \387\ GEM is an EPA vehicle simulation tool used to certify HD 
vehicles. A detailed description of GEM can be found in the RIA for 
the HD GHG Phase 2 rulemaking, available at https://nepis.epa.gov/Exe/ZyPDF.cgi/P100P7NS.PDF?Dockey=P100P7NS.PDF.
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    In the HD GHG Phase 2 final rule, we included ZEV technologies in 
our assessment of the suite of technologies for HD vocational vehicles 
and tractors. However, in 2016, when the HD GHG Phase 2 rule was being 
developed, we stated that ``adoption rates for these advanced 
technologies in heavy-duty vehicles are essentially non-existent today 
and seem unlikely to grow significantly within the next decade without 
additional incentives.'' \388\ Thus, at that time, instead of including 
ZEV technologies in the technology packages for setting the Phase 2 
standards, we provided advanced technology credit multipliers to help 
incentivize the development of ZEV technologies.
---------------------------------------------------------------------------

    \388\ 81 FR 73498 (October 25, 2016).
---------------------------------------------------------------------------

    Since the 2016 promulgation of the HD GHG Phase 2 final rule, as 
discussed in Section I.C, a number of important factors have 
contributed to changes in the HD landscape. Therefore, as detailed in 
this Section II and DRIA Chapter 2, we now are proposing that BEV 
technologies and FCEV technologies will be technically feasible for HD 
vehicles and suitable for most applications, as assessed by vehicle 
type and each Phase 3 MY. As further detailed in this Section II and 
DRIA Chapter 2, we are also proposing that BEV and FCEV technologies 
are feasible at the adoption rates included in the technology packages, 
which vary depending on the respective vehicle type and Phase 3 MY, and 
thus that the proposed revised standards for MY 2027 and proposed new 
standards for MYs 2028 through 2032 are feasible and appropriate. 
Similar to Phase 1 and Phase 2, the technology packages used to support 
the standards in this proposal include a mix of technologies applied to 
HD vehicles, and development of those technology packages included an 
assessment of the projected feasibility of the development and 
application of BEV, FCEV, and other technologies that reduce GHG 
emissions from HD vehicles. While our analysis in this Section II.D 
focuses on certain technologies in the technology packages to 
demonstrate the feasibility of the proposed HD vehicle GHG emission 
standards, there are other technologies as described in DRIA Chapter 1 
that can reduce CO2 emissions. Under the proposed rule, manufacturers 
may choose to produce the technologies that work best for their 
business case and the operator's needs in meeting the proposed 
standards, as the proposed standards are performance-based and do not 
mandate any specific technology for any manufacturer or any vehicle 
subcategory.
    EPA developed a bottom-up approach to estimate the operational 
characteristics and costs of ZEV technologies for this proposal. This 
approach takes into consideration concerns received on the HD2027 NPRM 
concerning the proposed revised MY 2027 GHG vehicle standards' analysis 
presented in the HD2027 NPRM. We developed a new technology assessment 
tool, Heavy-Duty Technology Resource Use Case Scenario (HD TRUCS), to 
evaluate the design features needed to meet the power and energy 
demands of various HD vehicles when using ZEV technologies, as well as 
costs related to manufacturing, purchasing and operating ICE and ZEV 
technologies. HD TRUCS is described in more detail in Section II.D.5 
and DRIA Chapter 2 but we briefly summarize the approach here.
    To build technology packages using HD TRUCS, we created 101 
representative HD vehicles that cover the full range of weight classes 
within the scope of this rulemaking (Class 2b through 8 vocational 
vehicles and tractors). The representative vehicles cover many aspects 
of work performed by the industry. This work was translated into energy 
and power demands per vehicle type based on everyday use of HD 
vehicles, ranging from moving goods and people to mixing cement. We 
then identified the technical properties required for a BEV

[[Page 25973]]

or FCEV to meet the operational needs of a comparable ICE HD 
vehicle.\389\
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    \389\ Heavy-duty vehicles are typically powered by a diesel-
fueled compression-ignition (CI) engine, though the heavy-duty 
market includes vehicles powered by gasoline-fueled spark-ignition 
(SI) engines and alternative-fueled ICEs. We selected diesel-powered 
ICE vehicles as the baseline vehicle for the assessment in HD TRUCS 
in our analysis because a diesel-fueled CI engine is broadly 
available for all of the 101 vehicle types.
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    Since batteries can add weight and volume to a vehicle,\390\ we 
evaluated battery mass and physical volume required to package a 
battery pack. If the performance needs of a BEV resulted in a battery 
that was too large or heavy, then we did not consider the BEV for that 
application in our technology package because of, for example, the 
impact on payload and, thus, potential work accomplished relative to a 
comparable ICE vehicle.\391\
---------------------------------------------------------------------------

    \390\ Smith, David et. al. ``Medium- and Heavy-Duty Vehicle 
Electrification: An Assessment of Technology and Knowledge Gaps''. 
U.S. Department of Energy: Oak Ridge National Laboratory and 
National Renewable Energy Laboratory. December 2019. Available 
online: https://info.ornl.gov/sites/publications/Files/Pub136575.pdf.
    \391\ This does not necessarily mean that a BEV with a large 
battery weight and volume would not be technically feasible for a 
given HD vehicle use, but rather this is an acknowledgement that we 
considered impacts of increased battery size on feasibility 
considerations like payload capacity as well as cost and payback 
within the selection of HD vehicle technologies for the technology 
packages.
---------------------------------------------------------------------------

    To evaluate costs, including costs of compliance for manufacturers 
as well as user costs related to purchasing and operating ZEVs, we 
sized vehicle components that are unique to ZEVs to meet the work 
demands of each representative vehicle. We applied cost estimates to 
each vehicle component based on sizing to assess the difference in 
total powertrain costs between the ICE and ZEV powertrains. We 
accounted for the IRA battery tax credit and vehicle tax credit, as 
discussed in Section II.E.4. We also compared operating costs due to 
fuel consumption as well as vehicle maintenance and repair, and we 
included the cost to procure and install depot charging infrastructure 
for BEVs. For FCEVs, similar to ICE vehicles' infrastructure and fuel 
costs, we assumed hydrogen infrastructure costs were embedded in the 
cost of hydrogen fuel.
    We relied on research and findings discussed in DRIA Chapters 1 and 
2 to conduct this analysis. For MYs 2027 through 2029, we focused 
primarily on BEV technology. Consistent with our analysis, research 
shows that BEV technologies can become cost-competitive in terms of 
total cost of ownership for many HD vehicles by the late 2020s, but it 
would take longer for FCEVs.392 393 394 Given that there are 
more BEV models available today compared to FCEV models (see, e.g., 
DRIA Chapters 1.7.5 and 1.7.6), we inferred that BEV adoption is likely 
to happen sooner than the adoption of FCEV technology.
---------------------------------------------------------------------------

    \392\ Ledna et. al. ``Decarbonizing Medium- & Heavy-Duty On-Road 
Vehicles: Zero-Emission Vehicles Cost Analysis''. U.S. Department of 
Energy, National Renewable Energy Laboratory. March 2022. Available 
online: https://www.nrel.gov/docs/fy22osti/82081.pdf.
    \393\ Hall, Dale and Nic Lutsey. ``Estimating the Infrastructure 
Needs and Costs for the Launch of Zero-Emission Trucks''. White 
Paper: The International Council on Clean Transportation. August 
2019. Available online: https://theicct.org/wp-content/uploads/2021/06/ICCT_EV_HDVs_Infrastructure_20190809.pdf.
    \394\ Robo, Ellen and Dave Seamonds. Technical Memo to 
Environmental Defense Fund: Investment Reduction Act Supplemental 
Assessment: Analysis of Alternative Medium- and Heavy-Duty Zero-
Emission Vehicle Business-As-Usual Scenarios. ERM. August 19, 2022. 
Available online: https://www.erm.com/contentassets/154d08e0d0674752925cd82c66b3e2b1/edf-zev-baseline-technical-memo-addendum.pdf.
---------------------------------------------------------------------------

    Starting in MY 2030, we also considered FCEV technology for select 
applications. BEV technology is more energy efficient than FCEV 
technology but may not be suitable for all applications, such as when 
the performance needs result in additional battery mass that affects 
payload. FCEVs are more energy efficient than diesel vehicles and can 
have shorter refueling times than BEVs with large 
batteries.395 396 We considered FCEVs in the technology 
packages for applications that travel longer distances and/or carry 
heavier loads (i.e., for those that may be sensitive to refueling times 
or payload impacts). This included coach buses, heavy-haul tractors, 
sleeper cab tractors, and day cab tractors.
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    \395\ A technology is more energy efficient if it uses less 
energy to do the same amount of work. Energy can be lost as it moves 
through the vehicle's components due to heat and friction.
    \396\ Cunanan, Carlo et. al. ``A Review of Heavy-Duty Vehicle 
Powertrain Technologies: Diesel Engine Vehicles, Battery Electric 
Vehicles, and Hydrogen Fuel Cell Electric Vehicles''. Clean Technol. 
Available online: https://www.mdpi.com/2571-8797/3/2/28.
---------------------------------------------------------------------------

    Though fuel cell technology is still emerging in HD vehicle 
applications, FCEVs are a viable ZEV technology for heavy-duty 
transportation 397 398 399 and will be available in the 2030 
timeframe (see DRIA Chapter 1.7.5).400 401 402 403 Inclusion 
of FCEVs in the technology packages starting in MY 2030 takes into 
consideration additional lead time to allow manufacturers to design, 
develop, and manufacture HD FCEV models. Fuel cell technology in other 
sectors has been in existence for decades \404\ and has been 
demonstrated to be technically feasible in heavy-duty 
transportation.\405\ Interim research and development (R&D) technical 
targets and projects (see DRIA Chapter 1.7.7) are in place to 
facilitate necessary improvements in the performance, durability, and 
costs of hydrogen-fueled long-haul HD tractors in 2030.\406\ With 
substantial federal investment in low-GHG hydrogen production (see DRIA 
Chapter 1.3.2), we project that the price of hydrogen fuel will drop 
enough by 2030 to make HD FCEVs cost-competitive with comparable ICE 
vehicles for some duty cycles. Hydrogen infrastructure is expected to 
need the additional time prior to MY 2030 to further develop, as 
discussed in greater detail in DRIA Chapter 1.8,407 408 but 
we expect the

[[Page 25974]]

refueling needs can be met by MY 2030.\409\ We also recognize that 
regulations, like this proposed rule, can further incentivize 
technology and refueling infrastructure development and deployment. 
Therefore, we included FCEVs in our technology assessment beginning in 
MY 2030, which is our best projection after considering the IRA 
incentives related to hydrogen as a transportation fuel and FCEVs, 
DOE's hydrogen assessments, and other information discussed here in 
Section II and in DRIA Chapter 1.
---------------------------------------------------------------------------

    \397\ Mihelic, Rick et. al. ``Making Sense of Heavy-Duty 
Hydrogen Fuel Cell Tractors''. North American Council for Freight 
Efficiency. December 16, 2020. Available online: https://nacfe.org/research/electric-trucks/making-sense-of-heavy-duty-hydrogen-fuel-cell-tractors/.
    \398\ Cunanan, Carlo et. al. ``A Review of Heavy-Duty Vehicle 
Powertrain Technologies: Diesel Engine Vehicles, Battery Electric 
Vehicles, and Hydrogen Fuel Cell Electric Vehicles''. Clean Technol. 
Available online: https://www.mdpi.com/2571-8797/3/2/28.
    \399\ Cullen et. al. ``New roads and challenges for fuel cells 
in heavy-duty transportation.'' Nature Energy. March 25, 2021. 
Available online: https://www.nature.com/articles/s41560-021-00775-z.
    \400\ For example, California's Advanced Clean Fleets Regulation 
requires that 10 percent of sleeper cab tractors and specialty 
vehicles must be zero-emission by 2030. We note that although our 
technology package consider FCEVs for specific HD applications, a 
diverse range of technologies may be used to comply with the 
proposed performance-based standards.
    \401\ California Air Resources Board. ``Advanced Clean Fleets 
Regulation Summary''. October 27, 2022. Available online: https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-fleets-regulation-summary (ACF 2030 goals).
    \402\ Adler, Alan. ``Hyundai's Xcient positioned for instant US 
fuel cell truck leadership''. FreightWaves. November 29, 2022. 
Available online: https://www.freightwaves.com/news/hyundais-xcient-positioned-for-instant-us-fuel-cell-truck-leadership.
    \403\ GNA. ``State of Sustainable Fleet: 2022 Market Brief--Fuel 
Cell Electric Miniguide''. 2022. Available online: https://www.stateofsustainablefleets.com/.
    \404\ U.S. Energy Information Administration. ``Hydrogen 
explained: Use of hydrogen''. Last updated January 20, 2022. 
Available online: https://www.eia.gov/energyexplained/hydrogen/use-of-hydrogen.php.
    \405\ Toyota. ``Toyota, Kenworth Prove Fuel Cell Electric Truck 
Capabilities with Successful Completion of Truck Operations for 
ZANZEFF Project''. September 22, 2022. Available online: https://pressroom.toyota.com/toyota-kenworth-prove-fuel-cell-electric-truck-capabilities-with-successful-completion-of-truck-operations-for-zanzeff-project/.
    \406\ Marcinkoski, Jason et. al. ``DOE Advanced Truck 
Technologies: Subsection of the Electrified Powertrain Roadmap--
Technical Targets for Hydrogen-Fueled Long-Haul Tractor-Trailer 
Trucks. October 31, 2019. Available online: https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf.
    \407\ U.S. Department of Energy. ``Pathways to Commercial 
Liftoff: Clean Hydrogen''. March 2023. Available online: https://liftoff.energy.gov/wp-content/uploads/2023/03/20230320-Liftoff-Clean-H2-vPUB.pdf.
    \408\ The proposed rule projects that hydrogen consumption from 
FCEVs will be a small proportion of total low-GHG hydrogen 
production expected in 2030: from 1.3% in 2030 to 8.3% in 2032.
    \409\ U.S. Department of Energy. ``DOE National Clean Hydrogen 
Strategy and Roadmap''. Draft September 2022. Available online: 
https://www.hydrogen.energy.gov/pdfs/clean-hydrogen-strategy-roadmap.pdf.
---------------------------------------------------------------------------

    After considering operational characteristics and costs in 2021 
dollars, we determined the payback period, which is the number of years 
it would take to offset any incremental cost increase of a ZEV over a 
comparable ICE vehicle. Lastly, technology adoption rates for BEVs or 
FCEVs for the technology packages were selected based on the payback 
period. We request comment on this approach and any supporting data on 
the potential for these and additional technologies to be available in 
the HD market in the MY 2027 through MY 2032 timeframe.
5. EPA's HD TRUCS Analysis Tool
    For this proposal, EPA developed an analysis tool, HD TRUCS, to 
evaluate the design features needed to meet the energy and power 
demands of various HD vehicle types when using ZEV technologies. The 
overarching design and functionality of HD TRUCS is premised on 
ensuring each of the 101 ZEV types could perform the same work as its 
ICE counterpart. We did this by sizing the BEV and FCEV components such 
that they could meet the driving demands based on the 90th percentile 
daily VMT for each application, while also accounting for the HVAC and 
battery thermal conditioning load requirements in hot and cold weather 
and any PTO demands for the vehicle. Furthermore, we accounted for the 
fact that the usable battery capacity is less than 100 percent and that 
batteries deteriorate over time. We also sized the ZEV powertrains to 
ensure that the vehicles would meet an acceptable level of acceleration 
from a stop and be able to maintain a cruise speed while going up a 
hill at six-percent grade. In this subsection, we discuss the primary 
inputs used in HD TRUCS. Additional details on HD TRUCS can be found in 
DRIA Chapter 2. We welcome comment on all aspects of HD TRUCS.
i. Vehicles Analyzed
    We developed inputs for 101 different vehicle types for our 
assessment in HD TRUCS. This encompasses 22 different applications in 
the HD vehicle market, as shown in Table II-3. These vehicles 
applications are further differentiated by weight class, duty cycle, 
and daily vehicle miles traveled (VMT) for each of these vehicle 
applications into 101 vehicle types. These 101 vehicle types cover all 
33 of the heavy-duty regulatory subcategories, as shown in DRIA Chapter 
2.8.3.1. The initial list of HD TRUCS vehicles contained 87 vehicle 
types and was based on work the Truck and Engine Manufacturers 
Association (EMA) and California Air Resources Board (CARB) conducted 
for CARB's ACT rule.\410\ We consolidated the list; eliminated some of 
the more unique vehicles with small populations like mobile 
laboratories; and assigned operational characteristics that correspond 
to the Urban, Multi-Purpose, and Regional duty cycles used in GEM. We 
also added additional vehicle types to reflect vehicle applications 
that were represented in EPA's certification data. Chapter 2.1 of the 
DRIA summarizes the 101 unique vehicle types represented in HD TRUCS 
and how they are categorized, each with a vehicle identifier, vehicle 
application, vehicle weight class, MOtor Vehicle Emission Simulator 
(MOVES) SourceTypeID and RegClassID,\411\ and GEM duty cycle category. 
We request comment on our approach, including our categorization of 
vehicle types and applications in the data, and whether there are 
additional specific vehicle types we should include in our assessment.
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    \410\ California Air Resources Board, Appendix E: Zero Emission 
Truck Market Assessment (2019), available at https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/appe.pdf (last 
accessed on Sept. 26, 2022).
    \411\ MOVES homepage: https://www.epa.gov/moves (last accessed 
October 2022).

        Table II-3--HD Vehicle Applications Included in HD TRUCS
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Ambulance.
Box Truck.
Cement Mixer.
Coach Bus.
Dump Truck.
Fire Truck.
Flatbed/Stake Truck.
Port Drayage Tracto.
Refuse Truck.
RV.
School Bus.
Shuttle bus.
Snow Plow.
Step Van.
Street Sweeper.
Tanker Truck.
Tow Truck.
Tractor, Day Cab.
Tractor, Sleeper Cab.
Transit Bus.
Utility Truck.
Yard Tractor.
------------------------------------------------------------------------

    Heavy-duty vehicles are typically powered by a diesel-fueled 
compression-ignition (CI) engine, though the heavy-duty market also 
includes vehicles powered by gasoline-fueled spark-ignition (SI) 
engines and alternative-fueled ICE. We selected diesel-powered ICE 
vehicles as the baseline vehicle for the assessment in HD TRUCS in our 
analysis because a diesel-fueled CI engine is broadly available for all 
of the 101 vehicle types and are more efficient than SI engines. 
Chapter 2.2 of the DRIA includes the details we developed for each of 
the baseline vehicles, including the size of the engine and the 
transmission type. This information was used to determine the weight 
and the cost of the ICE powertrains.
    In the analysis, for MYs 2027 through 2029, we focused primarily on 
BEV technology. Starting in MY 2030, we also considered FCEV technology 
for select applications that travel longer distances and/or carry 
heavier loads. This included coach buses, heavy-haul tractors, sleeper 
cab tractors, and day cab tractors that are designed to travel longer 
distances. We request comment on our approach that focuses primarily on 
BEVs, which currently are more prevalent in the HD vehicle market, and 
whether there are additional vehicle types that should be evaluated as 
FCEVs along with BEVs.
ii. Vehicle Energy Demand
    Vehicles require energy to perform the work required of the 
vehicle. This work includes driving, idling, and providing heating and 
cooling; in addition, some vehicles require energy to operate 
equipment. Vehicles with regenerative braking systems have the 
opportunity to recover some of the kinetic energy that would otherwise 
be lost during braking. There are a wide variety of energy demands 
across the heavy-duty sector, depending on the vehicle's application. 
For example, some vehicles, such as long-haul tractors, spend the vast

[[Page 25975]]

majority of the time driving, a fraction of the time idling, and 
require heating and cooling of the cabin, but do not require operation 
of additional equipment. A transit bus typically operates at low 
speeds, so it requires less energy for driving than a long-haul 
tractor, but requires more energy for heating or cooling due to its 
large amount of interior cabin volume. Unlike ICE vehicles where the 
cabin heating is often provided by excess heat from the main ICE, BEVs 
do not have excess heat from an ICE to utilize in this manner and thus 
require more energy than ICE vehicles to heat the cabin and additional 
energy to manage the temperature of the batteries. As another example 
of the wide variety of energy demands for HD vehicles, a utility truck, 
also known as a bucket truck, may only drive a few miles to a worksite 
while idling for the majority of the day and using energy to move the 
bucket up and down. The power to run the separate equipment on ICE 
vehicles is typically provided by a PTO from the main engine. In HD 
TRUCS, we determined the daily energy demand for each of the 101 
vehicle types by estimating both the baseline energy demands that are 
similar regardless of the powertrain configuration and the energy 
demands that vary by powertrain. The baseline energy includes energy at 
the axle to move the vehicle, energy recovered from regenerative 
braking energy, and PTO energy. Powertrain-specific energy includes 
energy required to condition the battery and heat or cool the cabin 
using a heating, ventilation, and air conditioning (HVAC) system. We 
discuss each of these in the following subsections.
a. Baseline Energy
    The amount of energy needed at the axle to move the vehicle down 
the road is determined by a combination of the type of drive cycle 
(such as urban or freeway driving) and the number of miles traveled 
over a period of time. For each HD TRUCS vehicle type, we determined 
the baseline energy consumption requirement that would be needed for 
each of the ZEV applications. To do this, we used the drive cycles and 
cycle weightings adopted for HD GHG Phase 2 for our assessment of the 
energy required per mile for each vehicle type. EPA's GEM model 
simulates road load power requirements for various duty cycles to 
estimate the energy required per mile for HD vehicles. To understand 
the existing heavy-duty industry, we performed an analysis on current 
heavy-duty vehicles in the market in order to determine typical power 
requirements and rates of energy consumption at the axle. These values 
represent the energy required to propel a vehicle of a given weight, 
frontal area, and tire rolling resistance to complete the specified 
duty cycle on a per-mile basis, independent of the powertrain. In DRIA 
Chapter 2.2.2, we describe the GEM inputs and results used to estimate 
the propulsion energy and power requirements at the axle for ICE 
vehicles on a per-mile basis. We also used these inputs, along with 
some simple electric vehicle assumptions, to develop a model for 
electric vehicles to calculate weighted percent of energy recovery due 
to regenerative braking. Additional detail can be found in DRIA Chapter 
2.2.2.1.3. We request comment on our approach, including other data we 
should consider in our assessment of energy consumption.
    Some vocational vehicles have attachments that perform work, 
typically by powering a hydraulic pump, which are powered by PTOs. 
Information on in-use PTO energy demand cycles is limited. NREL 
published two papers describing investigative work into PTO usage and 
fuel consumption.412 413 These studies, however, were 
limited to electric utility vehicles, such as bucket trucks and 
material handlers. To account for PTO usage in HD TRUCS, we chose to 
rely on a table described in California's Diesel Tax Fuel Regulations, 
specifically in Regulation 1432, ``Other Nontaxable Uses of Diesel Fuel 
in a Motor Vehicle,'' \414\ that covers a wider range of vehicles 
beyond the electric utility vehicles in the referenced NREL studies. 
This table contains ``safe-harbor'' percentages that are presumed 
amounts of diesel fuel used for ``auxiliary equipment'' operated from 
the same fuel tank as the motor vehicle. We used this source to 
estimate PTO energy use as a function of total fuel consumed by vehicle 
type, as discussed in DRIA Chapter 2.2.2.1.4. We request additional 
data that could be considered in our assessment of PTO loads in our 
final rulemaking assessment.
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    \412\ NREL, Characterization of PTO and Idle Behavior for 
Utility Vehicles, Sept 2017. Available online: https://www.nrel.gov/docs/fy17osti/66747.pdf.
    \413\ NREL, Fuel and Emissions Reduction in Electric Power Take-
Off Equipped Utility Vehicles, June 2016. Available online: https://www.nrel.gov/docs/fy17osti/66737.pdf.
    \414\ See Cal. Code Regs. tit. 18, Sec.  1432, ``Other 
Nontaxable Uses of Diesel Fuel in a Motor Vehicle,'' available at 
https://www.cdtfa.ca.gov/lawguides/vol3/dftr/dftr-reg1432.html.
---------------------------------------------------------------------------

    Within HD TRUCS, we calculated the total energy needed daily based 
on a daily VMT for each vehicle type. We used multiple sources to 
develop the VMT for each vehicle. Daily VMT for each vehicle came from 
one of five Sources: the NREL FleetDNA database, a University of 
California-Riverside (UCR) database, the 2002 Vehicle Inventory and Use 
Survey (VIUS), the CARB Large Entity Report, or an independent source 
specific to an application, as discussed in DRIA Chapter 2.2.1.2.\415\ 
Each vehicle type was assigned a 50th percentile or average daily VMT 
\416\ that was used to estimate operational costs, such as average 
annual fuel, hydrogen, or electricity costs, and maintenance and repair 
costs (see DRIA Chapters 2.3.4, 2.4.4, and 2.5.3). We also account for 
the change in use of the vehicle over the course of its ownership and 
operation in HD TRUCS by applying a MOVES-based VMT ratio based on 
vehicle age to the 50th percentile VMT to arrive at a 10 year average 
VMT, as described in more detail in DRIA Chapter 2.2.1.2.2. We also 
developed a 90th percentile daily VMT and used it in HD TRUCS to size 
ZEV components, such as batteries, and estimate the size requirements 
for EVSE. We selected the 90th percentile daily VMT data because we 
project that manufacturers will design their BEVs to meet most daily 
VMT needs, but not the most extreme operations. BEVs designed for all 
daily VMT needs would be unnecessarily heavy and expensive for most 
operations, which would limit their appeal in the broad market. Please 
see DRIA Chapter 2.2.1.2 for the complete list of VMT for each of the 
101 vehicle types. We request comment, including comment with data, on 
our VMT assessments.
---------------------------------------------------------------------------

    \415\ NREL and EPA. Heavy-Duty Vehicle Activity for EPA MOVES. 
Available at https://data.nrel.gov/submissions/168, last accessed on 
October 15, 2022, which includes an assessment of both the NREL and 
UC-Riverside databases; U.S. Census Bureau. 2002 Vehicle Inventory 
and Use Survey. https://www.census.gov/library/publications/2002/econ/census/vehicle-inventory-and-use-survey.html, last accessed on 
October 15, 2022. CARB. Large Entity Reporting. Available at https://ww2.arb.ca.gov/our-work/programs/advanced-clean-trucks/large-entity-reporting.
    \416\ We used the 50th percentile as a proxy for average VMT 
from the NREL FleetDNA database and the UC-Riverside database. The 
NREL and UC-Riverside databases each contained a selection of 
vehicles that we used to calculate 50th and 90th percentile daily 
VMT. When each database had a VMT value, the values were averaged to 
get VMT for a specific market segment. See DRIA Chapter 2.2.1.2 for 
further details.
---------------------------------------------------------------------------

b. Powertrain-Specific Energy
    Heating, ventilation, and air conditioning (HVAC) requirements vary 
by vehicle type, location, and duty cycle. The HVAC energy required to 
heat and cool interior cabins is considered separately from the 
baseline energy in HD TRUCS, since these energy loads are not required 
year-round or in

[[Page 25976]]

all regions of the country. Nearly all commercial vehicles are equipped 
with heat and basic ventilation and most vehicles are equipped with air 
conditioning (A/C). In ICE vehicles, traditional cabin heating uses 
excess thermal energy produced by the main ICE. This is the only source 
of cabin heating for many vehicle types. Additionally, on ICE vehicles, 
cabin A/C uses a mechanical refrigerant compressor that is engine belt-
driven.
    For BEVs, the energy required for thermal management is different 
than for ICE vehicles. First, the loads for HVAC are different because 
the vehicle is not able to be heated from excess heat from the engine. 
In this analysis, we project HD BEVs would be equipped with either a 
positive temperature coefficient (PTC) electric resistance heater with 
traditional A/C, or a full heat pump system, as described in DRIA 
Chapter 1. The vehicle's battery is used to power either system, but 
heat pumps are many times more efficient than PTC heaters. Given the 
success and increasing adoption of heat pumps in light-duty EVs, we 
believe that heat pumps will be the more commonly used technology and 
thus assume the use of heat pumps in HD TRUCS.
    To estimate HVAC energy consumption of BEVs in HD TRUCS, we 
performed a literature and market review. Even though there are limited 
real-world studies, we agreed with the HVAC modeling-based approach 
described in Basma et. al.\417\ This physics-based cabin thermal model 
considers four vehicle characteristics: the cabin interior, walls, 
materials, and number of passengers. The authors modeled a Class 8 
electric transit bus with an HVAC system consisting of two 20-kW 
reversible heat pumps, an air circulation system, and a battery thermal 
management system. We used their estimated HVAC power demand values as 
a function of temperature, resembling a parabolic curve, where hotter 
and colder temperatures require more power with the lowest power demand 
between 59 to 77 [deg]F.
---------------------------------------------------------------------------

    \417\ Basma, Hussein, Charbel Mansour, Marc Haddad, Maroun 
Nemer, Pascal Stabat. ``Comprehensive energy modeling methodology 
for battery electric buses''. Energy: Volume 207, 15 September 2020, 
118241. Available online: https://www.sciencedirect.com/science/article/pii/S0360544220313487.
---------------------------------------------------------------------------

    The power required for HVAC in HD TRUCS is based on a Basma et. al 
study that determined the HVAC power demand across a range of ambient 
temperatures.\418\ We created three separate ambient temperature bins: 
one for heating (less than 55 [deg]F), one for cooling (greater than 80 
[deg]F), and one for a temperature range that requires only ventilation 
(55-80 [deg]F). In HD TRUCS, we already accounted for the energy loads 
due to ventilation in the axle loads, so no additional energy 
consumption is applied here for the ventilation-only operation. We then 
weighted the power demands by the percent HD VMT traveled at a specific 
temperature range. The results of the VMT-weighted HVAC power demand 
for a Class 8 Transit Bus are shown in Table II-4. We request comment 
on and data to support other approaches to quantify the HVAC energy 
demand in BEVs, including the ambient temperature ranges where heating 
and cooling are utilized.
---------------------------------------------------------------------------

    \418\ It should be noted that Basma model has discrete values in 
Celsius and MOVES data has discrete values in Fahrenheit. The Basma 
discrete values in the Basma model is fitted to a parabolic curve 
and converted into Fahrenheit to best fit the VMT distribution that 
is available in MOVES.

Table II-4--HD TRUCS VMT-Weighted HVAC Power Demand of a Class 8 Transit
                                   Bus
------------------------------------------------------------------------
                                            Temperature     Consumption
                                             ([deg]F)          (kW)
------------------------------------------------------------------------
Heating.................................             <55            5.06
Ventilation.............................           55-80            0.00
Cooling.................................             >80            3.32
------------------------------------------------------------------------

    Lastly, HVAC load is dependent on cabin size--the larger the size 
of the cabin, the greater the HVAC demand. The values for HVAC power 
demand shown in Table II-4 represent the power demand to heat or cool 
the interior of a Class 8 Transit bus. However, HD vehicles have a 
range of cabin sizes; therefore, we developed scaling ratios relative 
to the cabin size of a Class 8 bus. Each vehicle's scaling factor is 
based on the surface area of the vehicle compared to the surface area 
of the Class 8 bus. For example, a Class 4-5 shuttle bus has a cabin 
size ratio of 0.6, in this case, the heating demand for the vehicle 
will be 3.04 kW and the cooling demand would be 1.99 kW. The adjustment 
ratio for buses and ambulances are between 0.3-0.6, while the cabin 
size for remaining HDVs have a similar cabin to a mid-size light duty 
vehicle and therefore, a single average scaling factor of 0.2 was 
applied to all remaining vehicle types.\419\ We welcome data to support 
these or other cabin size scaling factors.
---------------------------------------------------------------------------

    \419\ The interior cabin where the driver and passengers sit are 
heated while where the cargo is stored is not heated.
---------------------------------------------------------------------------

    Fuel cell stacks produce excess heat during the conversion of 
hydrogen to electricity, similar to an ICE during combustion. This 
excess heat can be used to heat the interior cabin of the vehicle. In 
HD TRUCS, we already accounted for the energy loads due to ventilation 
in the axle loads, so no additional energy consumption is applied to 
FCEV for heating operation. Therefore, for FCEV energy consumption in 
HD TRUCS, we only include additional energy requirements for air 
conditioning (i.e. not for heating).\420\ As described in DRIA Chapter 
2.4.1.1.1, we assigned a power demand of 3.32 kW for powering the air 
conditioner on a Class 8 bus. The A/C loads are then scaled by the 
cabin volume for other vehicle applications in HD TRUCS and applied to 
the VMT fraction that requires cooling, just as we did for BEVs.
---------------------------------------------------------------------------

    \420\ FCEVs use waste heat from the fuel cell for heating, and 
that ventilation operates the same as it does for an ICE vehicle.
---------------------------------------------------------------------------

    BEVs have thermal management systems to maintain battery core 
temperatures within an optimal range of approximately 68 to 95 degrees 
Fahrenheit (F).\421\ In HD TRUCS, we accounted for the battery thermal 
management energy demands as a function of ambient temperature based on 
a Basma et. al study.\422\ As described in DRIA Chapter 2.4.1.1.3, we 
determined the amount of energy consumed to heat the battery with cabin 
air when it is cold outside (less than 55 [deg]F) and energy consumed 
to cool the battery when it is hot outside (greater than 80 [deg]F) 
with refrigerant cooling. For the ambient temperatures between these 
two regimes, we agreed with Basma, et. al that only ambient air cooling 
is required for the batteries, which requires no additional load. We 
first determined a single VMT-weighted power consumption value for 
battery heating and a value for battery cooling based on the MOVES HD 
VMT distribution, based on the same method used for HVAC. Then, we 
determined the energy required for battery conditioning required for 
eight hours of daily operation and expressed it in terms of percent of 
total battery size. Table II-5 shows the energy consumption for battery 
conditioning for both hot and cold ambient temperatures, expressed as a 
percentage of battery capacity, used in HD TRUCS. We request additional 
data on the battery thermal management loads for HD BEVs.
---------------------------------------------------------------------------

    \421\ Basma, Hussein, Charbel Mansour, Marc Haddad, Maroun 
Nemer, Pascal Stabat. ``Comprehensive energy modeling methodology 
for battery electric buses''. Energy: Volume 207, 15 September 2020, 
118241. Available online: https://www.sciencedirect.com/science/article/pii/S0360544220313487.
    \422\ Ibid.

[[Page 25977]]

           Table II-5--Battery Conditioning Energy Consumption
------------------------------------------------------------------------
                                              Ambient         Energy
                                            temperature     consumption
                                             ([deg]F)           (%)
------------------------------------------------------------------------
Battery Heating.........................             <55             1.9
Battery Cooling.........................             >80             4.2
------------------------------------------------------------------------

iii. BEV Component Sizing and Weight
    We used HD TRUCS to determine the size of two of the major 
components in a BEV--the battery and the motor. The size of these 
components is determined by the energy needs of the specific vehicle to 
meet its daily operating requirements. In this subsection, we also 
discuss our method to evaluate the payload and packaging impact of the 
battery.
a. Battery
    First, in HD TRUCS, we based the size of the battery on the daily 
demands on the vehicle to perform a day's work, based on the 90th 
percentile VMT (sizing VMT). As described in the Vehicle Energy Demand 
subsection, this daily energy consumption is a function of miles the 
vehicle is driven and the energy it consumes because of: (1) moving the 
vehicle per unit mile, including the impact of regenerative braking, 
and PTO energy requirements and (2) battery conditioning and HVAC 
energy requirements. Then we also accounted for the battery efficiency, 
depth of discharge, and deterioration in sizing of the batteries for 
BEVs in HD TRUCS.
    The daily energy consumption of each BEV in HD TRUCS is determined 
by applying efficiency losses to energy consumption at the axle, as 
described in DRIA Chapter 2.4.1.1.3. We have accounted for these losses 
in the battery, inverter, and e-motor before the remaining energy 
arrives at the axle, as shown in Table II-6. We request comment, 
including data, on our approach and the results for our assessment of 
system efficiencies for HD BEV components.

                                                 Table II-6--BEV Component Efficiencies Used in HD TRUCS
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Component                           MY 2027 (%)     MY 2028 (%)     MY 2029 (%)     MY 2030 (%)     MY 2031 (%)     MY 2032 (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Battery.................................................              95              95              95              95              95              95
Inverter................................................            97.0            97.0            97.0            97.5            97.5            97.5
E-Motor.................................................            94.5            94.5            94.5            95.0            95.0            95.0
Total System Efficiency.................................              87              87              87              88              88              88
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Next, we oversized the battery to account separately for the 
typical usable amount of battery and for battery deterioration over 
time. We sized the battery limiting the battery to a maximum depth of 
discharge of 80 percent, recognizing that manufacturers and users 
likely would not allow the battery capacity to be depleted beyond 80 
percent of original capacity. We also accounted for deterioration of 
the battery capacity over time by oversizing the battery by 20 percent, 
assuming only 80 percent of the battery storage is available throughout 
its life. Therefore, the battery sizes we used in our assessment are 
conservative because they could meet 100 percent of the daily operating 
requirement using the 90th percentile VMT at the battery end of life. 
This is described in greater detail in DRIA Chapter 2.4.1.1 and 
2.7.5.4. We request comment on approach and results for the useable 
battery range and battery deterioration for HD BEVs that we could 
consider for our final rule analysis.
b. Motor
    We determined the size of the motor for each BEV based on the peak 
power of the transient cycle and highway cruise cycles, the vehicle's 
ability to meet minimum performance targets in terms of acceleration 
rate of the vehicle, and the ability of the vehicle to maintain speed 
going up a hill. As described in DRIA Chapter 2.4.1.2, we estimated a 
BEV motor's peak power needs to size the e-motor, after considering the 
peak power required during the ARB transient cycle \423\ and 
performance targets included in ANL's Autonomie model \424\ and in 
Islam et al.,\425\ as indicated in Table II-7. We assigned the target 
maximum time to accelerate a vehicle from stop to 30 mph and 60 mph 
based on weight class of each vehicle. We also used the criteria that 
the vehicle must be able to maintain a specified cruise speed while 
traveling up a road with a 6 percent grade, as shown in Table II-7. In 
the case of cruising at 6 percent grade, the road load calculation is 
set at a constant speed for each weight class bin on a hill with a 6 
percent incline. We determined the required power rating of the motor 
as the greatest power required to drive the vehicle over the ARB 
transient test cycle, at 55 mph and 65 mph constant cruise speeds, or 
at constant speed at 6 percent grade, and then applied losses from the 
e-motor. We request comment on our approach using these performance 
targets.
---------------------------------------------------------------------------

    \423\ EPA uses three representative duty cycles for calculating 
CO2 emissions in GEM: transient cycle and two highway 
cruise cycles. The transient duty cycle was developed by the 
California Air Resources Board (CARB) and includes no grade--just 
stops and starts. The highway cruise duty cycles represent 55-mph 
and 65-mph vehicle speeds on a representative highway. They use the 
same road load profile but at different vehicle speeds, along with a 
percent grade ranging from -5 percent to 5 percent.
    \424\ Islam, Ehsan Sabri. Ram Vijayagopal, Ayman Moawad, Namdoo 
Kim, Benjamin Dupont, Daniela Nieto Prada, Aymeric Rousseau, ``A 
Detailed Vehicle Modeling & Simulation Study Quantifying Energy 
Consumption and Cost Reduction of Advanced Vehicle Technologies 
Through 2050,'' Report to the U.S. Department of Energy, Contract 
ANL/ESD-21/10, October 2021. See previous reports and analysis: 
2021. Available online: https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.
    \425\ Islam, Ehsan Sabri, Ram Vijayagopal, Aymeric Rousseau. ``A 
Comprehensive Simulation Study to Evaluate Future Vehicle Energy and 
Cost Reduction Potential'', Report to the U.S. Department of Energy, 
Contract ANL/ESD-22/6, October 2022. Available online: https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.

                                                           Table II-7--ANL Performance Targets
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Vocational
                                                                Tractors
--------------------------------------------------------------------------------------------------------------------------------------------------------
Weight Class Bin..................................            2b-3              4-5              6-7                8                7                8
0-30 mph Time (s).................................               7                8               16               20               18               20
0-60 mph Time (s).................................              25               25               50              100               60              100

[[Page 25978]]

 
Cruise Speed (mph) @ 6% grade.....................              65               55               45               25               30               30
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Battery Weight and Volume
    Performance needs of a BEV can result in a battery that is so large 
or heavy that it impacts payload and, thus, potential work accomplished 
relative to a comparable ICE vehicle. We determined the battery weight 
and physical volume for each vehicle application in HD TRUCS using the 
specific energy and energy density of the battery for each battery 
capacity. As described in DRIA Chapter 2.4.2, to determine the weight 
impact, we used battery specific energy, which measures battery energy 
per unit of mass. While battery technologies have made tremendous 
advancements in recent years, it is well known that current automotive 
batteries add mass to the vehicle. Our values for the specific energy 
of battery packs with lithium-ion cell chemistries are based on 
Autonomie.\426\ The values we used in HD TRUCS are shown in Table II-8.
---------------------------------------------------------------------------

    \426\ Islam, Ehsan Sabri. Ram Vijayagopal, Ayman Moawad, Namdoo 
Kim, Benjamin Dupont, Daniela Nieto Prada, Aymeric Rousseau, ``A 
Detailed Vehicle Modeling & Simulation Study Quantifying Energy 
Consumption and Cost Reduction of Advanced Vehicle Technologies 
Through 2050,'' Report to the U.S. Department of Energy, Contract 
ANL/ESD-21/10, October 2021. See previous reports and analysis: 
2021. Available online: https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.

                                           Table II-8--Battery Pack-Level Specific Energy in HD TRUCS (Wh/kg)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Model year                            2027             2028             2029             2030             2031             2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specific Energy (Wh/kg)...........................             199              203              208              213              218              223
--------------------------------------------------------------------------------------------------------------------------------------------------------

    To evaluate battery volume and determine the packaging space 
required for each HD vehicle type, we used battery energy density. We 
also estimated the battery's width using the wheelbase and frame 
depths.
    Battery energy density (also referred to as volumetric energy 
density) measures battery energy per unit of volume. This value was not 
available as a part of the Autonomie; however, the overall trend of 
energy density shows a linear correlation with specific energy. In this 
analysis, we determined the energy density is 2.5 times that of 
specific energy, as shown in Table II-9.

                                            Table II-9--Battery Pack Level Energy Density in HD TRUCS (Wh/L)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Model year                              2027            2028            2029            2030            2031            2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
Specific Energy (Wh/L)..................................             496             508             521             533             545             557
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We request comment on our approach and results as well as comment 
and data on current and projected levels of battery-specific energy and 
battery-specific density values for HD vehicles.
    Heavy-duty vehicles are used to perform work, such as moving cargo 
or carrying passengers. Consequently, heavy-duty vehicles are sensitive 
to increases in vehicle weight and carrying volume. To take this into 
account, we also evaluated BEVs in terms of the overall impact on 
payload-carrying ability and battery packaging space. The results of 
this analysis can be found in DRIA Chapters 2.4.2 and 2.8.1. We found 
that the extra weight of the batteries for applications such as coach 
buses and tractors that travel long distances could have an impact on 
operations of these vehicles as BEVs. Therefore, for applications where 
our analysis showed that BEVs impacted the payload capacity by over 30 
percent, we assessed fuel cell technology. In this proposal we are 
using a single technology package that supports the feasibility of the 
proposed standards, but we recognize the potential of BEVs in the 
applications where we evaluate FCEVs, as demonstrated by the 
development of a long-haul battery electric tractor by Tesla.
iv. Charging Infrastructure for BEVs
    Charging infrastructure represents a key element required for HD 
BEV operation. More charging infrastructure will be needed to support 
the growing fleet of HD BEVs. This will likely consist of a combination 
of (1) depot charging--with infrastructure installed in parking depots, 
warehouses, and other private locations where vehicles are parked off-
shift (when not in use), and (2) en-route charging, which provides 
additional electricity for vehicles during their operating hours.
    In draft RIA Chapters 2.6 and 2.7.7 we describe how we accounted 
for charging infrastructure in our analysis of HD BEV technology 
feasibility and adoption rates for MYs 2027-2032. For this analysis, we 
estimate infrastructure costs associated with depot charging to fulfill 
each BEV's daily charging needs off-shift with the appropriately sized 
electrical vehicle supply equipment.\427\ This approach reflects our 
expectation that many heavy-duty BEV owners will opt to purchase and 
install EVSE at depots; accordingly, we explicitly account for all of 
these upfront costs in our analysis. By contrast, we do not estimate 
upfront hardware and installation costs for public and other en-route 
electric charging infrastructure because the BEV charging needs are met 
with depot charging in our analysis. Discussion of private sector 
infrastructure investments and charging deployment projects is included 
in DRIA Chapter 1.6.2. We request comment on this analytical approach.
---------------------------------------------------------------------------

    \427\ We sized EVSE to meet vehicles' daily electricity 
consumption (kWh/day) based on the 90th percentile VMT.
---------------------------------------------------------------------------

    Vehicle owners with return-to-base operations who choose to install 
depot charging equipment have many options from which to select. This 
includes AC

[[Page 25979]]

or DC charging, power level, as well as the number of ports and 
connectors per charging unit, connector type(s), communications 
protocols, and additional features such as vehicle-to-grid capability 
(which allows the vehicle to supply energy back to the grid). Many of 
these selections will impact EVSE hardware and installation costs, with 
power level as one of the most significant drivers of cost. While 
specific cost estimates vary across the literature, higher-power 
charging equipment is typically more expensive than lower-power units. 
For this reason, we have chosen to evaluate infrastructure costs 
separately for four different, common charging types in our depot 
charging analysis: AC Level 2 (19.2 kW) and 50 kW, 150 kW, and 350 kW 
DC fast charging (DCFC).
    How long a vehicle is off-shift and parked at a depot, warehouse, 
or other home base each day is a key factor for determining which 
charging type(s) could meet its needs. The amount of time available at 
the depot for charging (dwell time) will depend on a vehicle's duty 
cycle. For example, a school bus or refuse truck may be parked at a 
depot in the afternoon and remain there until the following morning 
whereas a transit bus may continue to operate throughout the evening. 
Even for a specific vehicle, off-shift dwell times may vary between 
weekends and weekdays, by season, or due to other factors that impact 
its operation. The 101 vehicle types in our analysis span a wide range 
of vehicle applications and duty cycles, and we expect their off-shift 
dwell times at depots to vary accordingly. As described in DRIA Chapter 
2.6.4.1, in order to better understand what an average depot dwell time 
might look like, we examined a dataset with engine start and off times 
for 564 commercial vehicles. We used the longest time the vehicle 
engine was off each day as a rough proxy for depot dwell time, finding 
the average across all 564 vehicles to be over 14 hours, with proxy 
dwell times for most of the seven vehicle categories examined rounding 
to 12 hours or longer. However, assigning specific dwell times for each 
of the 101 vehicle types in our analysis is challenging due a lack of 
comprehensive datasets on parking times and locations, and, as further 
detailed in DRIA Chapter 2.6.4.1, we acknowledge limitations in the 
approach and dataset we examined. Given these uncertainties, we used an 
off-shift dwell time for all vehicle types of 12 hours for the purpose 
of selecting charging equipment at depots in our analysis.
v. FCEV Component Sizing
    To compare diesel-fueled HD ICE vehicles and HD FCEV technology 
costs and performance in HD TRUCS, this section explains how we define 
HD FCEVs based on the performance and use criteria in DRIA Chapter 2.2 
(that we also used for HD BEVs, as explained in Section D.5.ii). We 
determined the e-motor, fuel cell stack, and battery pack sizes to meet 
the power requirements for each of the eight FCEVs represented in HD 
TRUCS. We also estimated the size of the onboard fuel tank needed to 
store the energy, in the form of hydrogen, required to meet typical 
range and duty cycle needs. See DRIA Chapter 2.5 for further details. 
We request comment, including data, on our approach and results from 
our assessment of HD FCEV component sizing.
a. E-Motor
    As discussed in DRIA Chapter 2.4.1.2, the electric motor (e-motor) 
is part of the electric drive system that converts the electric power 
from the battery or fuel cell into mechanical power to move the wheels 
of the vehicle. In HD TRUCS, the e-motor was sized for a FCEV like it 
was sized for a BEV--to meet peak power needs of a vehicle, which is 
the maximum power to drive the ARB transient cycle, meet the maximum 
time to accelerate from 0 to 30 mph, meet the maximum time to 
accelerate from 0 to 60 mph, and maintain a set speed up a six-percent 
grade. Additional power was added to account for e-motor efficiency 
losses using the same e-motor efficiency losses calculated and applied 
for BEVs, as discussed in DRIA Chapter 2.4.1.1.3.
b. Fuel Cell Stack
    Vehicle power in a FCEV comes from a combination of the fuel cell 
(FC) stack and the battery pack. The FC stack behaves like the internal 
combustion engine of a hybrid vehicle, converting chemical energy 
stored in the hydrogen fuel into useful work. The battery is charged by 
power derived from regenerative braking, as well as excess power from 
the FC stack. Some FCEVs are designed to primarily rely on the fuel 
cell stack to produce the necessary power, with the battery exclusively 
used to capture energy from regenerative braking. Other FCEVs are 
designed to store more energy in a battery to meet demand during 
situations of high-power need.428 429
---------------------------------------------------------------------------

    \428\ Note that ANL's analysis defines a fuel cell hybrid EV as 
a battery-dominant vehicle with a large energy battery pack and a 
small fuel cell, and a fuel cell EV as a fuel cell-dominant vehicle 
with a large fuel cell and a smaller power battery. Ours is a 
slightly different approach because we consider a fuel cell-dominant 
vehicle with a battery with energy cells. We took this approach 
because energy cell batteries are less expensive to manufacture than 
power cell batteries.
    \429\ Islam, Ehsan Sabri, Ram Vijayagopal, Aymeric Rousseau. ``A 
Comprehensive Simulation Study to Evaluate Future Vehicle Energy and 
Cost Reduction Potential'', Report to the U.S. Department of Energy, 
Contract ANL/ESD-22.6. October 2022. See Full report. Available 
online: https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.
---------------------------------------------------------------------------

    While much of FCEV design is dependent on the use case of the 
vehicle, manufacturers also balance the cost of components such as the 
FC stack, the battery, and the hydrogen fuel storage tanks. For the 
purposes of this HD TRUCS analysis, we focused on proton-exchange 
membrane (PEM) fuel cells that use energy battery cells, where the fuel 
cell and the battery were sized based on the demands of the vehicle. In 
HD TRUCS, the fuel cell stack was sized either to reach the 90th 
percentile of power required for driving the ARB transient cycle or to 
maintain a constant highway speed of 75 mph. The 90th percentile power 
requirement was used to size the fuel cells of vocational vehicles. For 
sleeper and day cabs, the fuel cell was sized using the power required 
to drive at 75 mph with 80,000-pound gross combined vehicle weight 
(GCVW).
    To avoid undersizing the fuel cell stack, we applied efficiency 
values to account for losses that take place before the remaining 
energy arrives at the axle. The same battery and inverter efficiencies 
from Table II-10 were used for the FCEV calculations. Fuel cell stack 
efficiency losses are due to the conversion of onboard hydrogen to 
electricity. The DOE technical targets for Class 8 long-haul tractor-
trailers are to reach 68 percent peak efficiency by around 2030 (this 
is the interim target; the ultimate target is to reach 72 percent 
efficiency).430 431 Table II-10 shows the fuel cell 
efficiency values that we used for MYs 2027-2032 in HD TRUCS, which are 
slightly more conservative yet include expected improvements over time. 
We averaged the high-tech peak efficiency estimates with low-tech peak 
efficiency estimates from ANL's 2022 Autonomie \432\ for 2025, 2030, 
and 2035

[[Page 25980]]

for available vehicle types. We then linearly interpolated these 
averaged values to calculate values for each year.
---------------------------------------------------------------------------

    \430\ According to DOE, ultimate targets are ``based on 2050 
simple cost of ownership assumptions and reflects anticipated 
timeframe for market penetration''.
    \431\ Marcinkoski, Jason et. al. ``DOE Advanced Truck 
Technologies: Subsection of the Electrified Powertrain Roadmap--
Technical Targets for Hydrogen-Fueled Long-Haul Tractor-Trailer 
Trucks. October 31, 2019. Available online: https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf.
    \432\ Islam, Ehsan Sabri, Ram Vijayagopal, Aymeric Rousseau. ``A 
Comprehensive Simulation Study to Evaluate Future Vehicle Energy and 
Cost Reduction Potential'', Report to the U.S. Department of Energy, 
Contract ANL/ESD-22.6. October 2022. See Medium- and heavy-duty 
vehicles (assumptions). Available online: https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.

                            Table II-10--FCEV Fuel Cell Efficiencies for MY 2027-2032
----------------------------------------------------------------------------------------------------------------
                   Component                     2027 (%)   2028 (%)   2029 (%)   2030 (%)   2031 (%)   2032 (%)
----------------------------------------------------------------------------------------------------------------
Fuel Cell.....................................      64.5       64.5       64.5       66.0       66.0       66.0
----------------------------------------------------------------------------------------------------------------

c. Battery Pack
    As described in DRIA Chapter 2.5.1.1.3, in HD TRUCS, the battery 
power accounts for the difference between the power demand of the e-
motor at any moment and the maximum power output of the fuel cell 
stack. We sized the battery to meet these power needs in excess of the 
fuel cell stack's capability only when the fuel cell cannot provide 
sufficient power. In our analysis, the remaining power needs are 
sustained for a duration of 10 minutes (e.g., to assist with a climb up 
a steep hill).
d. Onboard Hydrogen Storage Tank
    A FCEV is re-fueled like a gasoline or diesel-fueled vehicle. We 
determined the capacity of the onboard hydrogen energy storage system 
using an approach like the BEV methodology for battery pack sizing in 
DRIA Chapter 2.4.1.1, but we based the amount of hydrogen needed on the 
daily energy consumption needs of a FCEV.
    As described in DRIA Chapter 2.5.1.2, we converted FCEV energy 
consumption (kWh) into hydrogen weight using an energy content of 33.33 
kWh per kg of hydrogen. In our analysis, 95 percent of the hydrogen in 
the tank (``usable H2'') can be accessed. This is based on targets for 
light-duty vehicles, where a 700-bar hydrogen fuel tank with a capacity 
of 5.9 kg has 5.6 kg of usable hydrogen.\433\ Furthermore, we added an 
additional 10 percent to the tank size in HD TRUCS to avoid complete 
depletion of hydrogen from the tank.
---------------------------------------------------------------------------

    \433\ U.S. Department of Energy, US Drive. ``Target Explanation 
Document: Onboard Hydrogen Storage for Light-Duty Fuel Cell 
Vehicles''. 2017. Available online: https://www.energy.gov/sites/prod/files/2017/05/f34/fcto_targets_onboard_hydro_storage_explanation.pdf.
---------------------------------------------------------------------------

E. Technology, Charging Infrastructure, and Operating Costs

    In the following subsections, we first discuss BEV technology 
(Section II.E.1) and associated EVSE technology costs (Section II.E.2) 
and FCEV technology costs (Section II.E.3). DRIA Chapter 2.4.3. (for 
BEVs) and DRIA Chapter 2.5.2 (for FCEVs) includes the cost estimates 
for each of the 101 applications. We then discuss the Inflation 
Reduction Act tax credits we quantified in our analysis in Section 
II.E.4. Our assessment of operating costs including the fuel or 
electricity costs, along with the maintenance and repair costs, are 
presented in Section II.E.5. This subsection concludes with the overall 
payback analysis in Section II.E.6. DRIA Chapter 2.8.2 includes the 
vehicle technology costs, EVSE costs, operating costs, and payback 
results for each of the 101 HD applications. The technology costs 
aggregated into MOVES categories are also described in detail in DRIA 
Chapter 3.1.
1. BEV Technology Costs
    The incremental cost of a BEV powertrain system is calculated as 
the cost difference from the comparable vehicle powertrain with an ICE. 
The ICE vehicle powertrain cost is a sum of the costs of the engine 
(including the projected cost of the HD2027 standards), alternator, 
gearbox (transmission), starter, torque converter, and final drive 
system.
    Heavy-duty BEV powertrain costs consist of the battery, electric 
motor, inverter, converter, onboard charger, power electronics 
controller, transmission or gearbox, final drive, and any electrical 
accessories. DRIA Chapter 2.4.3 contains additional detail on our cost 
projections for each of these components. We request comment, including 
additional data, on our analysis for consideration in the final rule 
regarding current and projected BEV component costs.
    Battery costs are widely discussed in the literature because they 
are a key driver of the cost of a HD electric vehicle. The per unit 
cost of the battery, in terms of $/kWh, is the most common metric in 
determining the cost of the battery as the final size of the battery 
may vary significantly between different applications. The total 
battery pack cost is a function of the per unit kWh cost and the size 
(in terms of kWh) of the pack.
    There are numerous projections for battery costs and battery 
pricing in the literature that cover a range of estimates. Sources do 
not always clearly define what is included in their cost or price 
projections, nor whether the projections reflect direct manufacturing 
costs incurred by the manufacturer or the prices seen by the end-
consumer. Except as noted, the values in the literature we used were 
developed prior to enactment of the Inflation Reduction Act. For 
example, BloombergNEF presents battery prices that would reach $100 per 
kWh in 2026.\434\ In 2021, ANL developed cost projections for heavy-
duty vehicle battery packs in their benefit analysis (BEAN) model, that 
ranged from $225 per kWh to $175 per kWh in 2027 and drop to $150 per 
kWh to $115 per kWh in 2035.\435\ In a recent update to BEAN, released 
after the IRA was passed, ANL now projects heavy-duty battery pack 
costs in the range of $95 per kWh to $128 per kWh in 2025 and a drop to 
between $70 per kWh and $90 per kWh in 2035.\436\ The direct 
manufacturing battery cost for MY 2027 used in HD TRUCS is based on a 
literature review of costs of zero-emission truck components conducted 
by the International Council on Clean Transportation (ICCT).\437\ As 
described in detail in DRIA Chapter 2.4.3.1, we considered this source 
to be a comprehensive review of the literature at the time of the HD 
TRUCS analysis for the cost of battery packs in the

[[Page 25981]]

absence of the IRA, which may mean that it presents higher costs than 
will be realized with the incentives in the IRA, even when accounting 
for the battery tax credit described in Section II.E.4. In 2025, the 
average cost is estimated to be $163.50/kWh (2019$) and, in 2030, the 
average cost is projected to fall to $100 (2019$). We applied a linear 
interpolation of these values that yields an estimated cost of $138/kWh 
(2019$) for MY 2027. We then projected the costs to MY 2032 by using an 
EPA estimate of market learning related to battery production and the 
respective reduction in battery costs over this period of time, as 
shown in Table II-11. We request comment, including data, on our 
approach and projections for battery pack costs for the heavy-duty 
sector, including values that specifically incorporate the potential 
impacts of the IRA.
---------------------------------------------------------------------------

    \434\ Bloomberg NEF. ``Battery Pack Prices Fall to an Average of 
$132/kWh, But Rising Commodity Prices Start to Bite.'' November 30, 
2021. https://about.bnef.com/blog/battery-pack-prices-fall-to-an-average-of-132-kwh-but-rising-commodity-prices-start-to-bite/.
    \435\ Argonne National Lab, Vehicle & Mobility Systems Group, 
BEAN, found at: https://vms.taps.anl.gov/tools/bean/ (accessed 
August 2022).
    \436\ Argonne National Lab, Vehicle & Mobility Systems Group, 
BEAN, found at: https://vms.taps.anl.gov/tools/bean/ (accessed 
December 2022).
    \437\ Sharpe, Ben and Hussein Basma. ``A meta-study of purchase 
costs for zero-emission trucks''. The International Council on Clean 
Transportation, Working Paper 2022-09 (February 2022). Available 
online: https://theicct.org/publication/purchase-cost-ze-trucks-feb22/.

                     Table II-11--Direct Manufacturing Pack-Level Battery Costs in HD TRUCS
                                                     [2021$]
----------------------------------------------------------------------------------------------------------------
                  Model year                       2027       2028       2029       2030       2031       2032
----------------------------------------------------------------------------------------------------------------
Battery Cost ($/kWh)..........................       145        134        126        120        115        111
----------------------------------------------------------------------------------------------------------------

    Batteries are the most significant cost component for BEVs and the 
IRA section 13502, ``Advanced Manufacturing Production Credit,'' has 
the potential to significantly reduce the cost of BEVs whose batteries 
are produced in the United States. As discussed in Section II.E.4, we 
thus then also accounted for the IRA Advanced Manufacturing Production 
Credit, which provides up to $45 per kWh tax credits (with specified 
phase-out in calendar years (CYs) 2030-2033) for the production and 
sale of battery cells and modules, and additional tax credits for 
producing critical minerals such as those found in batteries, when such 
components or minerals are produced in the United States and other 
criteria are met.
    An electric drive (e-drive)--another major component of an electric 
vehicle--includes the electric motor, an inverter, a converter, and 
optionally, a transmission system or gearbox. The electric energy in 
the form of direct current (DC) is provided from the battery; an 
inverter is used to change the DC into alternating current (AC) for use 
by the motor. The motor then converts the electric power into 
mechanical or motive power to move the vehicle. Conversely, the motor 
also receives AC from the regenerative braking, whereby the converter 
changes it to DC to be stored in the battery. The transmission reduces 
the speed of the motor through a set of gears to an appropriate speed 
at the axle. An emerging trend is to replace the transmission and 
driveline with an e-axle, which is an electric motor integrated into 
the axle, e-axles are not explicitly covered in our cost analysis.\438\ 
We request data on e-axle costs that we could consider for the final 
rule.
---------------------------------------------------------------------------

    \438\ E-axles are an emerging technology that have potential to 
realize efficiency gains because they have fewer moving parts.
---------------------------------------------------------------------------

    Similar to the battery cost, there is a range of electric drive 
cost projections available in the literature. One reason for the 
disparity is differences across the literature is what is included in 
each for the ``electric drive''; some cost estimates include only the 
electric motor and others present a more integrated model of e-motor/
inverter/gearbox combination. As described in detail in DRIA Chapter 
2.4.3.2.1, EPA's MY 2027 e-drive cost, shown in Table II-12, comes from 
ANL's 2022 BEAN model and is a linear interpolation of the average of 
the high- and low-tech scenarios for 2025 and 2030, adjusted to 
2021$.\439\ We then calculated MY 2028-2032 values, also shown in Table 
II-12, using an EPA estimate of market learning shown in DRIA Chapter 
3.2.1. We welcome comment, including data, on our assessment of e-drive 
costs.
---------------------------------------------------------------------------

    \439\ Argonne National Lab, Vehicle & Mobility Systems Group, 
BEAN, found at: https://vms.taps.anl.gov/tools/bean/ (accessed 
December 2022).

                           Table II-12--E-Drive Direct Manufacturing Costs in HD TRUCS
                                                 [$/kW] [2021$]
----------------------------------------------------------------------------------------------------------------
                  Model year                       2027       2028       2029       2030       2031       2032
----------------------------------------------------------------------------------------------------------------
E-Drive Cost ($/kW)...........................        20         18         17         16         16         15
----------------------------------------------------------------------------------------------------------------

    Gearbox and final drive units are used to reduce the speed of the 
motor and transmit torque to the axle of the vehicle. In HD TRUCS, the 
final drive unit direct manufacturing cost is $1,500 per unit, based on 
the ``Power Converter'' average cost in ANL's BEAN model.\440\ The cost 
of the gearbox varies depending on the vehicle weight class and duty 
cycle. In our assessment, all light heavy-duty BEVs would be direct 
drive and have no transmission and therefore no cost, consistent with 
ANL's BEAN model. We then mapped BEAN gearbox costs for BEVs to the 
appropriate medium heavy-duty and heavy heavy-duty vehicles in HD 
TRUCS. Gearbox and final drive costs for BEVs are in DRIA Chapter 
2.4.3.2.
---------------------------------------------------------------------------

    \440\ Ibid.
---------------------------------------------------------------------------

    Power electronics are another electrification component (along with 
batteries and motors) where a DC-DC converter transitions high battery 
voltage to a common 12V level for auxiliary uses. EPA's power 
electronics and electric accessories costs of $6,000 per unit came from 
ANL's BEAN model.\441\ See DRIA Chapter 2.4.3.2.2 for further details.
---------------------------------------------------------------------------

    \441\ Argonne National Lab, Vehicle & Mobility Systems Group, 
BEAN, found at: https://vms.taps.anl.gov/tools/bean/ (accessed 
August 2022).
---------------------------------------------------------------------------

    When using a Level 2 charging plug, an on-board charger converts AC 
power from the grid to usable DC power via an AC-DC converter. When 
using a DC fast charger (DCFC), any AC-DC converter is bypassed, and 
the high-voltage battery is charged directly. As further discussed in 
DRIA Chapter 2.4.3.3, EPA's on-board charger costs, as shown in Table 
II-13, come from ANL's BEAN model and we averaged the low-tech and 
high-tech values for 2025 and 2030, and then MY

[[Page 25982]]

2027 was linearly interpolated and adjusted to 2021$.\442\ We then 
calculated the MY 2028-2032 costs using the learning curve shown in 
DRIA Chapter 3.2.1.
---------------------------------------------------------------------------

    \442\ Argonne National Lab, Vehicle & Mobility Systems Group, 
BEAN, found at: https://vms.taps.anl.gov/tools/bean/ (accessed 
August 2022).

                      Table II-13--On-Board Charger Direct Manufacturing Costs in HD TRUCS
                                                     [2021$]
----------------------------------------------------------------------------------------------------------------
                  Model year                       2027       2028       2029       2030       2031       2032
----------------------------------------------------------------------------------------------------------------
On-Board Charger Cost ($/unit)................        38         35         33         31         30         29
----------------------------------------------------------------------------------------------------------------

    The total upfront BEV direct manufacturing cost is the summation of 
the per-unit cost of the battery, motor, power electronics, on-board 
charger, gearbox, final drive, and accessories. The total direct 
manufacturing technology costs for BEVs for each of the 101 vehicle 
types in HD TRUCS can be found in DRIA Chapter 2.4.3.5 for MY 2027 and 
MY 2032.
2. Charging Infrastructure Costs
    In our analysis of depot charging infrastructure costs, we account 
for the cost to purchasers to procure both EVSE (which we refer to as 
the hardware costs) as well as costs to install the equipment. These 
installation costs typically include labor and supplies, permitting, 
taxes, and any upgrades or modifications to the on-site electrical 
service. We developed our EVSE cost estimates from the available 
literature, as discussed in DRIA Chapter 2.6.
    Both hardware and installation costs could vary over time. For 
example, hardware costs could decrease due to manufacturing learning 
and economies of scale. Recent studies by ICCT assumed a 3 percent 
reduction in hardware costs for EVSE per year to 
2030.443 444 By contrast, installation costs could increase 
due to growth in labor or material costs. Installation costs are also 
highly dependent on the specifics of the site including whether 
sufficient electric capacity exists to add charging infrastructure and 
how much trenching or other construction is required. If fleet owners 
choose to install charging stations at easier, and therefore, lower 
cost sites first, then installation costs could rise over time as 
stations are developed at more challenging sites. One of the ICCT 
studies found that these and other countervailing factors could result 
in the average cost of a 150 kW EVSE port in 2030 being similar (~3 
percent lower) to that in 2021.\445\ After considering the uncertainty 
on how costs may change over time, we keep the combined hardware and 
installation costs per EVSE port constant. We request comment on this 
approach.
---------------------------------------------------------------------------

    \443\ Minjares, Ray, Felipe Rodriguez, Arijit Sen, and Caleb 
Braun. ``Infrastructure to support a 100% zero-emission tractor-
trailer fleet in the United States by 2040''. ICCT, September 2021. 
Available online: https://theicct.org/sites/default/files/publications/ze-tractor-trailer-fleet-us-hdvs-sept21.pdf.
    \444\ Bauer, Gordon, Chih-Wei Hsu, Mike Nicholas, and Nic 
Lutsey. ``Charging Up America: Assessing the Growing Need for U.S. 
Charging Infrastructure Through 2030''. The International Council on 
Clean Transportation, July 2021. Available online: https://theicct.org/wp-content/uploads/2021/12/charging-up-america-jul2021.pdf.
    \445\ Ibid.
---------------------------------------------------------------------------

    Our infrastructure analysis centered around four charging types for 
heavy-duty depot charging. As shown in Table II-14, the EVSE costs we 
used in our analysis range from about $10,000 for a Level 2 port to 
over $160,000 for a 350 kW DCFC port. As described in Chapter 2.6, in 
our analysis, we allow up to two vehicles to share one DCFC port if 
there is sufficient depot dwell time for both vehicles to meet their 
daily charging needs.\446\ In those cases, the EVSE costs per vehicle 
are halved. We request comment, including data, on our approach and 
assessment of current and future costs for charging equipment and 
installation.
---------------------------------------------------------------------------

    \446\ We note that for some of the vehicle types we evaluated, 
more than two vehicles could share a DCFC port and still meet their 
daily electricity consumption needs. However, we choose to limit 
sharing to two vehicles pending market developments and more robust 
depot dwell time estimates.

 Table II-14--Combined Hardware and Installation EVSE Costs, per Vehicle
                                 [2021$]
------------------------------------------------------------------------
              Charging type                    Cost            Cost
------------------------------------------------------------------------
                                          (1 Vehicle per    (2 Vehicles
                                               port)         per port)
------------------------------------------------------------------------
Level 2 (19.2 kW).......................         $10,541  Not Applicable
DCFC-50 kW..............................          31,623         $15,811
DCFC-150 kW.............................          99,086          49,543
DCFC-350 kW.............................         162,333          81,166
------------------------------------------------------------------------

    EPA acknowledges that there may be additional infrastructure needs 
and costs beyond those associated with charging equipment itself. While 
planning for additional electricity demand is a standard practice for 
utilities and not specific to BEV charging, the buildout of public and 
private charging stations (particularly those with multiple high-
powered DC fast charging units) could in some cases require upgrades to 
local distribution systems. For example, a recent study found power 
needs as low as 200 kW could trigger a requirement to install a 
distribution transformer.\447\ The use of onsite battery storage and 
renewables may be able to reduce the need for some distribution 
upgrades; station operators may also opt to install these to mitigate 
demand charges associated with peak

[[Page 25983]]

power.\448\ However, there is considerable uncertainty associated with 
future distribution upgrade needs, and in many cases, some costs may be 
borne by utilities rather than directly incurred by BEV or fleet 
owners. Therefore, we do not model them directly as part of our 
infrastructure cost analysis. We welcome comments on this and other 
aspects of our cost analysis.
---------------------------------------------------------------------------

    \447\ Borlaug, B., Muratori, M., Gilleran, M. et al, ``Heavy-
duty truck electrification and the impacts of depot charging on 
electricity distribution systems,'' Nat Energy 6, 673-682 (2021). 
Accessed on January 11, 2023, at https://doi.org/10.1038/s41560-021-00855-0.
    \448\ Matt Alexander, Noel Crisostomo, Wendell Krell, Jeffrey 
Lu, Raja Ramesh,'' Assembly Bill 2127: Electric Vehicle Charging 
Infrastructure Assessment,'' July 2021, California Energy 
Commission. Accessed March 9, 2023, at https://www.energy.ca.gov/programs-and-topics/programs/electric-vehicle-charging-infrastructure-assessment-ab-2127.
---------------------------------------------------------------------------

    As discussed in Section V, we model changes to power generation due 
to the increased electricity demand anticipated in the proposal as part 
of our upstream analysis. We project the additional generation needed 
to meet the demand of the heavy-duty BEVs in the proposal to be 
relatively modest (as shown in DRIA Chapter 6.5). As the proposal is 
estimated to increase electric power end use by heavy-duty electric 
vehicles by 0.1 percent in 2027 and increasing to 2.8 percent in 2055. 
The U.S. electricity end use between the years 1992 and 2021, a similar 
number of years included in our proposal analysis, increased by around 
25 percent \449\ without any adverse effects on electric grid 
reliability or electricity generation capacity shortages. Grid 
reliability is not expected to be adversely affected by the modest 
increase in electricity demand associated with HD BEV charging.
---------------------------------------------------------------------------

    \449\ Annual Energy Outlook 2022, U.S. Energy Information 
Administration, March 3, 2022 (https://www.eia.gov/outlooks/aeo/narrative/introduction/sub-topic-01.php).
---------------------------------------------------------------------------

    A GAO report noted that the private sector and the government share 
responsibility for the reliability of the U.S. electric power grid. The 
report stated, ``Most of the electricity grid--the commercial electric 
power transmission and distribution system comprising power lines and 
other infrastructure--is owned and operated by private industry. 
However, Federal, state, local, Tribal, and territorial governments 
also have significant roles in enhancing the resilience of the 
electricity grid.'' \450\ For instance, at the Federal level, the 
Department of Homeland Security (DHS) coordinates Federal efforts to 
promote the security and reliability of the nation's energy sector; the 
Department of Energy (DOE) leads Federal efforts including research and 
technology development; and the Federal Energy Regulatory Commission 
(FERC) regulates the interstate electricity transmission and is 
responsible for reviewing and approving mandatory electric Reliability 
Standards, which are developed by the North American Electric 
Reliability Corporation (NERC).\451\ NERC is the federally designated 
U.S. electric reliability organization which ``develops and enforces 
Reliability Standards; annually assesses seasonal and long[hyphen]term 
reliability; monitors the bulk power system through system awareness; 
and educates, trains, and certifies industry personnel.'' \452\ These 
efforts help to keep the U.S. electric power grid is reliable. We also 
consulted with FERC and EPRI staff on bulk power system reliability and 
related issues.
---------------------------------------------------------------------------

    \450\ Federal Efforts to Enhance Grid Resilience. General 
Accounting Office, GAO-17-153, 1/25/2017. https://www.gao.gov/assets/gao-17-153.pdf.
    \451\ Electricity Grid Resilience. General Accounting Office, 
GAO-21-105403, 9/20/2021, https://www.gao.gov/assets/gao-21-105403.pdf.
    \452\ North American Electric Reliability Corporation. ``About 
NERC''. Available online: https://www.nerc.com/AboutNERC/Pages/default.aspx.
---------------------------------------------------------------------------

    U.S. electric power utilities routinely upgrade the nation's 
electric power system to improve grid reliability and to meet new 
electric power demands. For example, when confronted with rapid 
adoption of air conditioners in the 1960s and 1970s, U.S. electric 
power utilities successfully met the new demand for electricity by 
planning and building upgrades to the electric power distribution 
system. Likewise, U.S. electric power utilities planned and built 
distribution system upgrades required to service the rapid growth of 
power-intensive data centers and server farms over the past two 
decades. U.S. electric power utilities have already successfully 
designed and built the distribution system infrastructure required for 
1.4 million battery electric vehicles.\453\ Utilities have also 
successfully integrated 46.1 GW of new utility-scale electric 
generating capacity into the grid.\454\
---------------------------------------------------------------------------

    \453\ U.S. DOE Alternative Fuels Data Center, Maps and Data--
Electric Vehicle Registrations by State, https://afdc.energy.gov/data/.
    \454\ EIA, ``Electric Power Annual 2021'', November 2022. 
Available online: https://www.eia.gov/electricity/annual/html/epa_01_01.html.
---------------------------------------------------------------------------

    When taking into consideration ongoing upgrades to the U.S. 
electric power grid, and that the U.S. electric power utilities 
generally have more capacity to produce electricity than is 
consumed,\455\ the expected increase in electric power demand 
attributable to vehicle electrification is not expected to adversely 
affect grid reliability due to the modest increase in electricity 
demand associated with electric vehicle charging. The additional 
electricity demand from HD BEVs will depend on the time of day that 
charging occurs, the type or power level of charging, and the use of 
onsite storage and vehicle-to-grid (V2G) or other vehicle-grid-
integration (VGI) technology, among other considerations, as discussed 
in DRIA Chapter 1.6.4. As noted by Lipman et al.,\456\ a wide variety 
of organizations are engaged in VGI research, including the California 
Energy Commission,\457\ California Public Utilities Commission,\458\ 
California Independent System Operator,\459\ the Electric Power 
Research Institute, as well as charging providers, utilities (e.g., 
SCE, PG&E, SDG&E), and automakers. Electric Island, a truck charging 
station deployed by Daimler Trucks North America and Portland General 
Electric which is planned to eventually include megawatt-level 
charging, will offer an opportunity to test energy management and VGI 
with heavy-duty BEVs. Future plans for Electric Island also include the 
use of onsite solar generation and battery storage.\460\
---------------------------------------------------------------------------

    \455\ EIA, ``Electric Power Annual 2021'', November 2022. 
Available online: https://www.eia.gov/electricity/annual/html/epa_01_01.html.
    \456\ Lipman, Timothy, Alissa Harrington, and Adam Langton. 
2021. ``Total Charge Management of Electric Vehicles.'' California 
Energy Commission.'' Publication Number: CEC-500-2021-055. Available 
online: https://www.energy.ca.gov/sites/default/files/2021-12/CEC-500-2021-055.pdf.
    \457\ Chhaya, S., et al., ``Distribution System Constrained 
Vehicle-to-Grid Services for Improved Grid Stability and 
Reliability,'' Publication Number: CEC-500-2019-027, 2019. Available 
online: https://www.energy.ca.gov/sites/default/files/2021-06/CEC-500-2019-027.pdf.
    \458\ Order Instituting Rulemaking to Continue the Development 
of Rates and Infrastructure for Vehicle Electrification. California 
Public Utilities Commission, Rulemaking 18-12-006, 12/21/2020.
    \459\ California Independent System Operator (CAISO), 
``California Vehicle-Grid Integration (VGI) Roadmap: Enabling 
vehicle-based grid services,'' February 2014.
    \460\ PGE, ``Daimler Trucks North America, Portland General 
Electric open first-of-its-kind heavy-duty electric truck charging 
site,'' April 21, 2021. Available online: https://portlandgeneral.com/news/2021-04-21-daimler-portland-general-electric-open-electric-charging-site.
---------------------------------------------------------------------------

    Finally, we note that DOE is engaged in multiple efforts to 
modernize the grid and improve resilience and reliability. For example, 
in November 2022, DOE announced $13 billion in funding opportunities 
under the BIL to support transmission and distribution infrastructure. 
This includes $3 billion for smart grid grants with a focus on PEV 
integration among other topics.\461\
---------------------------------------------------------------------------

    \461\ DOE, ``Biden-Harris Administration Announces $13 Billion 
to Modernize and Expand America's Power Grid,'' November 18, 2022. 
Available online: https://www.energy.gov/articles/biden-harris-administration-announces-13-billion-modernize-and-expand-americas-power-grid.

---------------------------------------------------------------------------

[[Page 25984]]

3. FCEV Technology Costs
    FCEVs and BEVs include many of the same components such as a 
battery pack, e-motor, power electronics, gearbox unit, final drive, 
and electrical accessories. Therefore we used the same costs for these 
components across vehicles used for the same applications; for detailed 
descriptions of these components, see DRIA Chapter 2.4.3. In this 
subsection and DRIA Chapter 2.5.2, we present the costs for components 
for FCEVs that are different from a BEV. These components include the 
fuel cell stack and hydrogen fuel tank. The same energy cell battery 
costs used for BEVs are used for fuel cell vehicles, but the battery 
size of a comparable FCEV is smaller. We request comment, including 
data, on our approach and cost projections for FCEV components.
i. Fuel Cell Stack Costs
    The fuel cell stack is the most expensive component of a heavy-duty 
FCEV. Fuel cells for the heavy-duty sector are expected to be more 
expensive than fuel cells for the light-duty sector because they 
operate at higher average continuous power over their lifespan, which 
requires a larger fuel cell stack size, and because they have longer 
durability needs (i.e., technology targets are for 25,000 to 30,000 
hours for a truck versus 8,000 hours for cars).\462\
---------------------------------------------------------------------------

    \462\ Marcinkoski, Jason et. al. ``DOE Advanced Truck 
Technologies: Subsection of the Electrified Powertrain Roadmap--
Technical Targets for Hydrogen-Fueled Long-Haul Tractor-Trailer 
Trucks. October 31, 2019. Available online: https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf.
---------------------------------------------------------------------------

    Projected costs vary widely in the literature. They are expected to 
decrease as manufacturing matures. Larger production volumes are 
anticipated as global demand increases for fuel cell systems for HD 
vehicles, which could improve economies of scale.\463\ Costs are also 
anticipated to decline as durability improves, which could extend the 
life of fuel cells and reduce the need for parts replacement.\464\ 
Burke et al. compared estimates from the literature and chose values of 
$240 per kW in 2025 for a high case in their analysis, based on 1,000 
heavy-duty fuel cell units produced per year, and $145 per kW for both 
a low case in 2025 and a high case in 2030, based on 3,000 units 
produced per year.\465\
---------------------------------------------------------------------------

    \463\ Deloitte China. ``Fueling the Future of Mobility: Hydrogen 
and fuel cell solutions for transportation, Volume 1''. 2020. 
Available online: https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/finance/deloitte-cn-fueling-the-future-of-mobility-en-200101.pdf.
    \464\ Deloitte China. ``Fueling the Future of Mobility: Hydrogen 
and fuel cell solutions for transportation, Volume 1''. 2020. 
Available online: https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/finance/deloitte-cn-fueling-the-future-of-mobility-en-200101.pdf.
    \465\ U.S. Department of Energy. ``DOE National Clean Hydrogen 
Strategy and Roadmap''. Draft September 2022. Available online: 
https://www.hydrogen.energy.gov/pdfs/clean-hydrogen-strategy-roadmap.pdf.
---------------------------------------------------------------------------

    The interim DOE cost target for Class 8 tractor-trailer fuel stacks 
is $80 per kW by 2030. Their ultimate target is $60 per kW in 2050, set 
to ensure that costs are comparable to those of advanced diesel engines 
and other factors. These targets are based on 100,000 units per year 
production volume. They pointed to analysis that suggests that 2019 
costs at a manufacturing volume of 1,000 units per year were around 
$190 per kW.\466\ In BEAN model updates, ANL estimated a range based on 
vehicle type of between $156 per kW and $174 per kW in 2025, and from 
$65 per kW to $99 per kW by 2035.\467\
---------------------------------------------------------------------------

    \466\ Marcinkoski, Jason et. al. ``DOE Advanced Truck 
Technologies: Subsection of the Electrified Powertrain Roadmap--
Technical Targets for Hydrogen-Fueled Long-Haul Tractor-Trailer 
Trucks. October 31, 2019. Available online: https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf. https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf.
    \467\ Argonne National Lab, Vehicle & Mobility Systems Group, 
BEAN, found at: https://vms.taps.anl.gov/tools/bean/ (accessed 
December 2022).
---------------------------------------------------------------------------

    A Sharpe and Basma meta-study of other reports found 2025 costs 
ranging from $750 per kW to $50 per kW. The authors stated that they 
expect fuel cell costs to drop by about 30 percent between 2025 and 
2030 due to manufacturer learning, improved materials and performance, 
and economies of scale.\468\ Like the approach we took for BEV battery 
costs, we averaged the 2025 cost values from the Sharpe and Basma meta-
study, averaged the 2030 values, and then linearly interpolated to get 
MY 2027 values and adjusted to 2021$; we then applied the learning 
curve shown in DRIA Chapter 3.2.1 to calculate MY 2028-2032 values. The 
resulting fuel cell stack direct manufacturing costs are shown in Table 
II-15.\469\
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    \468\ Sharpe, Ben and Hussein Basma. ``A meta-study of purchase 
costs for zero-emission trucks''. The International Council on Clean 
Transportation, Working Paper 2022-09 (February 2022). Available 
online: https://theicct.org/publication/purchase-cost-ze-trucks-feb22/.
    \469\ IRA section 13502 provides tax credits for 10 percent of 
the cost of producing applicable critical materials, including those 
found in fuel cells (providing that the minerals meet certain 
specifications), when such components or minerals are produced in 
the U.S. We did not include a detailed cost breakdown of fuel cells 
quantitatively in our analysis, but the potential impact of the tax 
credit on fuel cells may be significant because platinum (an 
applicable critical mineral commonly used in fuel cells) is a major 
contributor to the cost of fuel cells.

                           Table II-15--HD Fuel Cell Stack Direct Manufacturing Costs
                                                     [2021$]
----------------------------------------------------------------------------------------------------------------
                  Model year                       2027       2028       2029       2030       2031       2032
----------------------------------------------------------------------------------------------------------------
$/kW..........................................       242        223        210        200        192        185
----------------------------------------------------------------------------------------------------------------

ii. Hydrogen Fuel Tank Costs
    Hydrogen storage cost projections also vary widely in the 
literature. Sharpe and Basma reported costs ranging from as high as 
$1,289 per kg to $375 per kg of usable hydrogen in 2025. They expect 
hydrogen tank costs to drop by 21 percent between 2025 and 2030 due to 
lighter weight and lower cost carbon fiber-reinforced materials, 
technology improvements, and economies of scale.\470\
---------------------------------------------------------------------------

    \470\ Sharpe, Ben and Hussein Basma. ``A meta-study of purchase 
costs for zero-emission trucks''. The International Council on Clean 
Transportation, Working Paper 2022-09 (February 2022). Available 
online: https://theicct.org/publication/purchase-cost-ze-trucks-feb22/.
---------------------------------------------------------------------------

    The interim DOE target for Class 8 tractor-trailers is $300 per kg 
of hydrogen by 2030. Their ultimate target is $266 per kg (2016$) by 
2050. They include all components necessary to support the tank and are 
based on a production volume of 100,000 tanks per year. They point to 
analysis that suggests that 2019 costs for 700-bar tanks at a 
manufacturing volume of 1,000 tanks per year were roughly $1,200 per 
kg.\471\ For reference, the Kenworth ``beta'' fuel cell truck holds

[[Page 25985]]

six 10-kg hydrogen storage tanks at 700 bar.\472\
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    \471\ Marcinkoski, Jason et al. ``DOE Advanced Truck 
Technologies: Subsection of the Electrified Powertrain Roadmap--
Technical Targets for Hydrogen-Fueled Long-Haul Tractor-Trailer 
Trucks. October 31, 2019. Available online: https://www.hydrogen.energy.gov/pdfs/19006_hydrogen_class8_long_haul_truck_targets.pdf.
    \472\ https://www.kenworth.com/media/voffdzok/ata-fuel-cell-flyer-08-25-2021-v2.pdf and https://www.greencarreports.com/news/1120765_toyota-and-kenworth-to-build-10-fuel-cell-semis-for-la-port-duty.
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    Like the approach we took for battery and fuel cell stack costs, we 
averaged all of the 2025 cost values in the Sharpe and Basma meta-
study, averaged all of the 2030 values, and then linearly interpolated 
to determine the MY 2027 value, adjusted to 2021 dollars. We applied 
the learning curve shown in DRIA Chapter 3.2.1 to calculate MY 2028-
2032 values. The hydrogen fuel tank direct manufacturing costs are 
shown in Table II-16.

                           Table II-16--Hydrogen Fuel Tank Direct Manufacturing Costs
                                                     [2021$]
----------------------------------------------------------------------------------------------------------------
                                            MY 2027     MY 2028     MY 2029     MY 2030     MY 2031     MY 2032
----------------------------------------------------------------------------------------------------------------
$/kg H2.................................        801         738         694         660         634         612
----------------------------------------------------------------------------------------------------------------

4. Inflation Reduction Act Tax Credits
    The IRA,\473\ which was signed into law on August 16, 2022, 
includes a number of provisions relevant to vehicle electrification. 
There are two provisions of the IRA we included within our quantitative 
analysis in HD TRUCS. First, Section 13502, ``Advanced Manufacturing 
Production Credit,'' provides up to $45 per kWh tax credits for the 
production and sale of battery cells and modules when such components 
are produced in the United States and other qualifications are met. 
Second, Section 13403, ``Qualified Commercial Clean Vehicles,'' 
provides for a vehicle tax credit applicable to HD vehicles if certain 
qualifications are met. Beyond these two tax credits described in 
sections 13403 and 13502 of the IRA, there are numerous provisions in 
the IRA and the BIL \474\ that may impact HD vehicles and increase 
adoption of HD ZEV technologies. These range from tax credits across 
the supply chain, to grants which may help direct ZEVs to communities 
most burdened by air pollution, to funding for programs to build out 
electric vehicle charging infrastructure, as described in Section I of 
this preamble and DRIA Chapter 1.3.2. We welcome comment on our 
assessment of how the IRA will impact the heavy-duty industry, and how 
EPA could consider reflecting those impacts in our assessment for 
establishing the HD GHG standards under this proposal, including 
comment on methods to appropriately account for these provisions in our 
assessment.
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    \473\ Inflation Reduction Act of 2022, Public Law 117-169, 136 
Stat. 1818 (2022) (``Inflation Reduction Act'' or ``IRA''), 
available at https://www.congress.gov/117/bills/hr5376/BILLS-117hr5376enr.pdf.
    \474\ United States, Congress. Public Law 117-58. Infrastructure 
Investment and Jobs Act of 2021. Congress.gov, www.congress.gov/bill/117th-congress/house-bill/3684/text. 117th Congress, House 
Resolution 3684, passed 15 Nov. 2021.
---------------------------------------------------------------------------

    Regarding the first of the two provisions, IRA section 13502, 
``Advanced Manufacturing Production Credit,'' provides up to $45 per 
kWh tax credits for the production and sale of battery cells (up to $35 
per kWh) and modules (up to $10 per kWh) and 10 percent of the cost of 
producing critical minerals such as those found in batteries, when such 
components or minerals are produced in the United States and other 
qualifications are met. These credits begin in CY 2023 and phase down 
starting in CY 2030, ending after CY 2032. As further discussed in DRIA 
Chapter 2.4.3.1, we recognize that there are currently few 
manufacturing plants for HD vehicle batteries in the United States. We 
expect that the industry will respond to this tax credit incentive by 
building more domestic battery manufacturing capacity in the coming 
years, in part due to the BIL and IRA. For example, Proterra recently 
announced its first heavy-duty battery manufacturing plant in the 
United States,\475\ Tesla is expanding its facilities in Nevada to 
produce its Semi BEV tractor and battery cells,\476\ and Cummins has 
entered into an agreement with Arizona-based Sion Power to design and 
supply battery cells for commercial electric vehicle applications.\477\ 
In addition, DOE is funding through the BIL battery materials 
processing and manufacturing projects to ``support new and expanded 
commercial-scale domestic facilities to process lithium, graphite and 
other battery materials, manufacture components, and demonstrate new 
approaches, including manufacturing components from recycled 
materials.'' \478\ Thus, we model this tax credit in HD TRUCS such that 
HD BEV and FCEV manufacturers fully utilize the battery module tax 
credit and gradually increase their utilization of the cell tax credit 
for MY 2027-2029 until MY 2030 and beyond, when they earn 100 percent 
of the available cell and module tax credits. The battery pack costs 
and battery tax credits used in our analysis are shown in Table II-17. 
We request comment on our approach to modeling this tax credit, 
including our projection that the full value of the tax credit earned 
by the manufacturer is passed through to the purchaser because market 
competition would drive manufacturers to minimize their prices.
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    \475\ Proterra. ``First Proterra Powered commercial EV battery 
produced at new Powered 1 battery factory''. January 12, 2023. 
Available online: https://www.proterra.com/press-release/first-battery-at-powered1-factory/.
    \476\ Sriram, Akash, Aditya Soni, and Hyunjoo Jin. ``Tesla plans 
$3.6 bln Nevada expansion to make Semi truck, battery cells.'' 
Reuters. January 25, 2023. Last accessed on March 31, 2023 at 
https://www.reuters.com/markets/deals/tesla-invest-over-36-bln-nevada-build-two-new-factories-2023-01-24/.
    \477\ Sion Power. ``Cummins Invests in Sion Power to Develop 
Licerion[supreg] Lithium Metal Battery Technology for Commercial 
Electric Vehicle Applications''. November 30, 2021. Available 
online: https://sionpower.com/2021/cummins-invests-in-sion-power-to-develop-licerion-lithium-metal-battery-technology-for-commercial-electric-vehicle-applications/.
    \478\ U.S. Department of Energy. ``Bipartisan Infrastructure 
Law: Battery Materials Processing and Battery Manufacturing & 
Recycling Funding Opportunity Announcement--Factsheets''. October 
19, 2022. Available online: https://www.energy.gov/sites/default/files/2022-10/DOE%20BIL%20Battery%20FOA-2678%20Selectee%20Fact%20Sheets%20-%201_2.pdf.

           Table II-17--Pack-Level Battery Direct Manufacturing Costs and IRA Tax Credits in HD TRUCS
                                                     [2021$]
----------------------------------------------------------------------------------------------------------------
                  Model year                       2027       2028       2029       2030       2031       2032
----------------------------------------------------------------------------------------------------------------
Battery Pack Cost ($/kWh).....................        145        134        126        120        115        111

[[Page 25986]]

 
IRA Cell Credit ($/kWh).......................       8.75      17.50      26.25      26.25      17.50       8.75
IRA Module Credit ($/kWh).....................      10.00      10.00      10.00       7.50       5.00       2.50
IRA Total Battery Credit ($/kWh)..............      18.75      27.50      36.25      33.75      22.50      11.25
Battery Pack Cost Less IRA Total Battery           126.25     106.50      89.75      86.25      92.50      99.75
 Credit ($/kWh)...............................
----------------------------------------------------------------------------------------------------------------

    Regarding the second of the two provisions, IRA section 13403 
creates a tax credit applicable to each purchase of a qualified 
commercial clean vehicle. These vehicles must be on-road vehicles (or 
mobile machinery) that are propelled to a significant extent by a 
battery-powered electric motor. The battery must have a capacity of at 
least 15 kWh (or 7 kWh if it is Class 3 or below) and must be 
rechargeable from an external source of electricity. This limits the 
qualified vehicles to BEVs and plug-in hybrid electric vehicles 
(PHEVs). Additionally, fuel cell electric vehicles (FCEVs) are 
eligible. The credit is available from calendar year (CY) 2023 through 
2032, which overlaps with the model years for which we are proposing 
standards (MYs 2027 through 2032), so we included the tax credit in our 
calculations for each of those years in HD TRUCS.
    For BEVs and FCEVs, the tax credit is equal to the lesser of: (A) 
30 percent of the BEV or FCEV cost, or (B) the incremental cost of a 
BEV or FCEV when compared to a comparable ICE vehicle. The limit of 
this tax credit is $40,000 for Class 4-8 commercial vehicles and $7,500 
for commercial vehicles Class 3 and below. For example, if a BEV costs 
$350,000 and a comparable ICE vehicle costs $150,000,\479\ the tax 
credit would be the lesser of: (A) 0.30 x $350,000 = $105,000 or (B) 
$350,000 - $150,000 = $200,000. In this example, (A) is less than (B), 
but (A) exceeds the limit of $40,000, so the tax credit would be 
$40,000.
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    \479\ Sharpe, B., Basma, H. ``A meta-study of purchase costs for 
zero-emission trucks''. International Council on Clean 
Transportation. February 17, 2022. Available online: https://theicct.org/wp-content/uploads/2022/02/purchase-cost-ze-trucks-feb22-1.pdf.
---------------------------------------------------------------------------

    We included this tax credit in HD TRUCS by decreasing the 
incremental upfront cost a vehicle purchaser must pay for a ZEV 
compared to a comparable ICE vehicle following the process explained in 
the previous paragraph. The calculation for this tax credit was done 
after applying a retail price equivalent to our direct manufacturing 
costs. We did not calculate the full cost of vehicles in our analysis, 
instead we determined that all Class 4-8 ZEVs could be eligible for the 
full $40,000 (or $7,500 for ZEVs Class 3 and below) if the incremental 
cost calculated compared to a comparable ICE vehicle was greater than 
that amount. In order for this determination to be true, all Class 4-8 
ZEVs must cost more than $133,333 such that 30 percent of the cost is 
at least $40,000 (or $25,000 and $7,500, respectively, for ZEVs Class 3 
and below), which seems reasonable based on our assessment of the 
literature.\480\ As in the calculation described in the previous 
paragraph, both (A) and (B) are greater than the tax credit limit and 
the vehicle purchaser may receive the full tax credit. The incremental 
cost of a ZEV taking into account the tax credits for each vehicle 
segment in MY 2027 and MY 2032 are included in DRIA Chapter 2.8.2. We 
welcome comment on how we included the IRA tax credits for HD vehicles 
in our assessment.
---------------------------------------------------------------------------

    \480\ Burnham, A., Gohlke, D., Rush, L., Stephens, T., Zhou, Y., 
Delucchi, M.A., Birky, A., Hunter, C., Lin, Z., Ou, S., Xie, F., 
Proctor, C., Wiryadinata, S., Liu, N., Boloor, M. ``Comprehensive 
Total Cost of Ownership Quantification for Vehicles with Different 
Size Classes and Powertrains''. Argonne National Laboratory. April 
1, 2021. Available at https://publications.anl.gov/anlpubs/2021/05/167399.pdf.
---------------------------------------------------------------------------

5. Operating Costs
    Operating costs for HD vehicles encompass a variety of costs, such 
as labor, insurance, registration fees, fueling, maintenance and repair 
(M&R), and other costs. For this analysis, we are primarily interested 
in costs that would differ for a comparable diesel-powered ICE vehicle 
and a ZEV.\481\ These operational cost differences are used to 
calculate an estimated payback period in HD TRUCS. We expect fueling 
costs and M&R costs to be different for ZEVs than for comparable 
diesel-fueled ICE vehicles, but we do not anticipate other operating 
costs, such as labor and insurance, to differ significantly, so the 
following subsections focus on M&R and fueling costs. Operating costs 
are averaged over a 10-year time period of the annual M&R cost and 
annual fuel cost.
---------------------------------------------------------------------------

    \481\ For diesel-fueled ICE vehicles, we also estimated the cost 
of the diesel exhaust fluid (DEF) required for the selective 
catalytic reduction aftertreatment system. See DRIA Chapter 2.3.4.1 
for DEF costs.
---------------------------------------------------------------------------

i. Maintenance and Repair Costs
    M&R costs contribute to the overall operating costs for HD 
vehicles. To establish a baseline cost for maintenance and repair of 
diesel-fueled ICE vehicles, we relied on the research compiled by 
Burnham et al. and used equations found in the ANL's BEAN 
model.482 483 Burnham et al. used data from Utilimarc and 
the American Transportation Research Institute (ATRI) to estimate 
maintenance and repair costs per mile for multiple heavy-duty vehicle 
categories over time. We selected the box truck curve to represent 
vocational vehicles and short-haul tractors, and the semi-tractor curve 
to represent long-haul tractors.\484\ Additional details regarding this 
analysis can be found in DRIA Chapter 2.3.4.2. Averaging the M&R costs 
for years 0-9 yields about 67 cents per mile for vocational vehicles 
and short-haul tractors and about 25 cents per mile for long-haul 
tractors, after adjusting to 2021$. We welcome comment, including 
additional data, on our approach and assessment of HD ICE vehicle M&R 
costs.
---------------------------------------------------------------------------

    \482\ Burnham, A., Gohlke, D., Rush, L., Stephens, T., Zhou, Y., 
Delucchi, M.A., Birky, A., Hunter, C., Lin, Z., Ou, S., Xie, F., 
Proctor, C., Wiryadinata, S., Liu, N., Boloor, M. ``Comprehensive 
Total Cost of Ownership Quantification for Vehicles with Different 
Size Classes and Powertrains''. Argonne National Laboratory. Chapter 
3.5.5. April 1, 2021. Available at https://publications.anl.gov/anlpubs/2021/05/167399.pdf.
    \483\ Argonne National Lab, Vehicle & Mobility Systems Group, 
BEAN, found at: https://vms.taps.anl.gov/tools/bean/ (accessed 
August 2022).
    \484\ Short haul tractors and vocational vehicles are 
represented by the same M&R equation because they have duty cycles 
and annual VMT that are similar.
---------------------------------------------------------------------------

    Data on real-world M&R costs for HD ZEVs is limited due to limited 
HD ZEV technology adoption today. We expect the overall maintenance 
costs to be lower for ZEVs compared to a comparable ICE vehicles for 
several reasons. First, an electric powertrain has fewer moving parts 
that accrue wear or need regular adjustments. Second, ZEVs do not 
require fluids such as engine oil or diesel exhaust fluid (DEF), nor do 
they require exhaust filters to reduce

[[Page 25987]]

particulate matter or other pollutants. Third, the per-mile rate of 
brake wear is expected to be lower for ZEVs due to regenerative braking 
systems. Several literature sources propose applying a scaling factor 
to diesel vehicle maintenance costs to estimate ZEV maintenance 
costs.485 486 487 We followed this approach and applied a 
maintenance and repair cost scaling factor of 0.71 for BEVs and 0.75 
for FCEVs to the maintenance and repair costs of diesel-fueled ICE 
vehicles. The scaling factors are based on an analysis from Wang et al. 
that estimates a future BEV heavy-duty truck would have a 29 percent 
reduction, and a future FCEV heavy-duty vehicle would have a 25 percent 
reduction, compared to a diesel-powered heavy-duty 
vehicle.488 489 We welcome comment on our approach and these 
projections.
---------------------------------------------------------------------------

    \485\ Burnham, A., Gohlke, D., Rush, L., Stephens, T., Zhou, Y., 
Delucchi, M.A., Birky, A., Hunter, C., Lin, Z., Ou, S., Xie, F., 
Proctor, C., Wiryadinata, S., Liu, N., Boloor, M. ``Comprehensive 
Total Cost of Ownership Quantification for Vehicles with Different 
Size Classes and Powertrains''. Argonne National Laboratory. April 
1, 2021. Available online: https://publications.anl.gov/anlpubs/2021/05/167399.pdf.
    \486\ Hunter, Chad, Michael Penev, Evan Reznicek, Jason 
Lustbader, Alicia Birkby, and Chen Zhang. ``Spatial and Temporal 
Analysis of the Total Cost of Ownership for Class 8 Tractors and 
Class 4 Parcel Delivery Trucks''. National Renewable Energy Lab. 
September 2021. Available online: https://www.nrel.gov/docs/fy21osti/71796.pdf.
    \487\ Burke, Andrew, Marshall Miller, Anish Sinha, et. al. 
``Evaluation of the Economics of Battery-Electric and Fuel Cell 
Trucks and Buses: Methods, Issues, and Results''. August 1, 2022. 
Available online: https://escholarship.org/uc/item/1g89p8dn.
    \488\ Wang, G., Miller, M., and Fulton, L.'' Estimating 
Maintenance and Repair Costs for Battery Electric and Fuel Cell 
Heavy Duty Trucks, 2022. Available online: https://escholarship.org/content/qt36c08395/qt36c08395_noSplash_589098e470b036b3010eae00f3b7b618.pdf?t=r6zwjb.
    \489\ Burnham, A., Gohlke, D., Rush, L., Stephens, T., Zhou, Y., 
Delucchi, M.A., Birky, A., Hunter, C., Lin, Z., Ou, S., Xie, F., 
Proctor, C., Wiryadinata, S., Liu, N., Boloor, M. ``Comprehensive 
Total Cost of Ownership Quantification for Vehicles with Different 
Size Classes and Powertrains''. Argonne National Laboratory. April 
1, 2021. Available online: https://publications.anl.gov/anlpubs/2021/05/167399.pdf.
---------------------------------------------------------------------------

    In our payback analysis in HD TRUCS, we did not account for 
potential diesel engine rebuild costs for ICE vehicles, potential 
replacement battery costs for BEVs, or potential replacement fuel cell 
stack costs for FCEVs because our payback analysis typically covers a 
shorter period of time than the expected life of these components. 
Typical battery warranties being offered by HD BEV manufacturers range 
between 8 and 15 years today.\490\ A BEV battery replacement may be 
practically necessary over the life of a vehicle if the battery 
deteriorates to a point where the vehicle range no longer meets the 
vehicle's operational needs. We believe that proper vehicle and battery 
maintenance and management can extend battery life. For example, 
manufacturers will utilize battery management system to maintain the 
temperature of the battery \491\ as well active battery balancing to 
extend the life of the battery.492 493 Likewise, pre-
conditioning has also shown to extend the life of the battery as 
well.\494\ Furthermore, research suggests that battery life is expected 
to improve with new batteries over time as battery chemistry and 
battery charging strategies improve, such that newer MY BEVs will have 
longer battery life. We request comment on this approach for both ICE 
vehicles and ZEVs, in addition to data on battery and fuel stack 
replacement costs, engine rebuild costs, and expected component 
lifetime periods.
---------------------------------------------------------------------------

    \490\ Type C BEV school bus battery warranty range five to 
fifteen years according to https://www.nyapt.org/resources/Documents/WRI_ESB-Buyers-Guide_US-Market_2022.pdf. The Freightliner 
electric walk-in van includes an eight year battery warranty 
according to https://www.electricwalkinvan.com/wp-content/uploads/2022/05/MT50e-specifications-2022.pdf.
    \491\ Basma, Hussein, Charbel Mansour, Marc Haddad, Maroun 
Nemer, Pascal Stabat. ``Comprehensive energy modeling methodology 
for battery electric buses''. Energy: Volume 207, 15 September 2020, 
118241. Available online: https://www.sciencedirect.com/science/article/pii/S0360544220313487.
    \492\ Bae, SH., Park, J.W., Lee, S.H. ``Optimal SOC Reference 
Based Active Cell Balancing on a Common Energy Bus of Battery'' 
Available online: http://koreascience.or.kr/article/JAKO201709641401357.pdf.
    \493\ Azad, F.S., Ahasan Habib, A.K.M., Rahman, A., Ahmed I. 
``Active cell balancing of Li-Ion batteries using single capacitor 
and single LC series resonant circuit.'' https://beei.org/index.php/EEI/article/viewFile/1944/1491.
    \494\ ``How to Improve EV Battery Performance in Cold Weather'' 
Accessed on March 31, 2023. https://www.worktruckonline.com/10176367/how-to-improve-ev-battery-performance-in-cold-weather.
---------------------------------------------------------------------------

ii. Fuel, Electricity, and Hydrogen Costs
    The annual fuel cost for operating a diesel-fueled ICE vehicle is a 
function of its yearly fuel consumption and the cost of diesel fuel. 
The yearly fuel consumption is described in DRIA Chapter 2.3.4.3. We 
used the DOE Energy Information Administration's (EIA) Annual Energy 
Outlook (AEO) 2022 transportation sector reference case projection for 
diesel fuel for on-road use for diesel prices.\495\ This value includes 
Federal and State taxes but excludes county and local taxes. The 
average annual fuel cost is averaged over a 10-year period.
---------------------------------------------------------------------------

    \495\ U.S. Energy Information Administration. Annual Energy 
Outlook 2022. Last accessed on 9/28/2022 at https://www.eia.gov/
outlooks/aeo/data/browser/#/?id=3-
AEO2022&cases=ref2022~highmacro~lowmacro~highprice~lowprice~highogs~l
owogs~hirencst~lorencst~aeo2019ref&sourcekey=0.
---------------------------------------------------------------------------

    The annual electricity cost for operating a HD electric vehicle is 
a function of the electricity price, daily energy consumption of the 
vehicle, and number of operating days in a year. In HD TRUCS, we used 
the DOE EIA AEO 2022 reference case commercial electricity end-use rate 
projection.\496\ We selected this value instead of the transportation 
end use prices in AEO because those are similar to the prices for the 
residential sector, which implies they may be more relevant to light-
duty vehicle charging than commercial truck charging.
---------------------------------------------------------------------------

    \496\ U.S. Department of Energy, Energy Information 
Administration. Annual Energy Outlook 2022, Table 8: Electricity 
Supply, Disposition, Prices, and Emissions. September 21, 2022. 
Available online: https://www.eia.gov/outlooks/aeo/data/browser/#/?id=8-AEO2022&cases=ref2022&sourcekey=0.
---------------------------------------------------------------------------

    For the purposes of the HD TRUCS analysis, rather than focusing on 
depot hydrogen fueling infrastructure costs that would be incurred 
upfront, we included infrastructure costs in our per-kilogram retail 
price of hydrogen. The retail price of hydrogen is the total price of 
hydrogen when it becomes available to the end user, including the costs 
of production, distribution, storage, and dispensing at a fueling 
station. This price per kilogram of hydrogen includes the amortization 
of the station capital costs. This approach is consistent with the 
method we use in HD TRUCS for ICE vehicles, where the equivalent diesel 
fuel costs are included in the diesel fuel price instead of accounting 
for the costs of fuel stations separately.
    We acknowledge that this market is still emerging and that hydrogen 
fuel providers will likely pursue a diverse range of business models. 
For example, some businesses may sell hydrogen to fleets through a 
negotiated contract rather than at a flat market rate on a given day. 
Others may offer to absorb the infrastructure development risk for the 
consumer, in exchange for the ability to sell excess hydrogen to other 
customers and more quickly amortize the cost of building a fueling 
station. FCEV manufacturers may offer a ``turnkey'' solution to fleets, 
where they provide a vehicle with fuel as a package deal. These 
uncertainties are not reflected in our hydrogen price estimates 
presented in the DRIA.
    As discussed in DRIA Chapter 1.3.2 and 1.8, large incentives are in 
place to reduce the price of hydrogen production, particularly from 
electrolytic sources. In June 2021, DOE launched a Hydrogen Shot goal 
to reduce the cost of renewable hydrogen

[[Page 25988]]

production by 80 percent to $1 per kilogram in one decade.\497\ The BIL 
and IRA included funding for several hydrogen programs to accelerate 
progress towards the Hydrogen Shot and jumpstart the hydrogen market in 
the U.S.
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    \497\ Satyapal, Sunita. ``2022 AMR Plenary Session''. U.S. 
Department of Energy, Hydrogen and Fuel Cell Technologies Office. 
June 6, 2022. Available online: https://www.energy.gov/sites/default/files/2022-06/hfto-amr-plenary-satyapal-2022-1.pdf.
---------------------------------------------------------------------------

    For example, the BIL requires development of a National Clean 
Hydrogen Strategy and Roadmap. In September 2022, DOE released a draft 
of a holistic plan that shows how low-GHG hydrogen can help reduce 
emissions throughout the country by about 10 percent by 2050 relative 
to 2005 levels.\498\ DRIA Chapter 2.5.3.1 further discusses DOE's 
National Clean Hydrogen Strategy and Roadmap.
---------------------------------------------------------------------------

    \498\ U.S. Department of Energy. ``DOE National Clean Hydrogen 
Strategy and Roadmap''. Draft September 2022. Available online: 
https://www.hydrogen.energy.gov/pdfs/clean-hydrogen-strategy-roadmap.pdf.
---------------------------------------------------------------------------

    Recent analysis from ANL using BEAN includes a hydrogen price of 
$4.37 per gallon diesel equivalent (gde) in 2030,\499\ which equates to 
roughly $3.92 per kg hydrogen.500 501 This analysis was 
published after the IRA was passed, and reflects a lower H2 price in 
2030 than was in the previous year's analysis.\502\ This price is at 
the low end of the range published in DOE's ``Pathways to Commercial 
Liftoff'' report on Clean Hydrogen (``Liftoff Report''), which projects 
that heavy-duty road transport can expect to pay a retail price of 
between $4 and $5 per kg of hydrogen in 2030 if advances in 
distribution and storage are commercialized.\503\ This price 
incorporates BIL and IRA incentives for hydrogen.\504\ Other DOE 
estimates prior to the IRA ranged from $6-$7 per kg in 2030, inclusive 
of production, delivery, and dispensing, with the range representing 
uncertainty in the assumed rate of technological 
progress.505 506 507
---------------------------------------------------------------------------

    \499\ Islam, Ehsan Sabri, Ram Vijayagopal, Aymeric Rousseau. ``A 
Comprehensive Simulation Study to Evaluate Future Vehicle Energy and 
Cost Reduction Potential'', Report to the U.S. Department of Energy, 
Contract ANL/ESD-22/6, October 2022. See Medium- and heavy-duty 
vehicles (techno-economic analysis with BEAN). Available online: 
https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.
    \500\ The conversion used was 1 gallon of diesel is equivalent 
to 1.116 kg of hydrogen, based on a lower heating value.
    \501\ Hydrogen Tools ``Energy Equivalency of Fuels (LHV)''. U.S. 
Department of Energy: Pacific Northwest National Laboratory. 
Available online: https://h2tools.org/hyarc/hydrogen-data/energy-equivalency-fuels-lhv.
    \502\ Islam, Ehsan Sabri. Ram Vijayagopal, Ayman Moawad, Namdoo 
Kim, Benjamin Dupont, Daniela Nieto Prada, Aymeric Rousseau, ``A 
Detailed Vehicle Modeling & Simulation Study Quantifying Energy 
Consumption and Cost Reduction of Advanced Vehicle Technologies 
Through 2050,'' Report to the U.S. Department of Energy, Contract 
ANL/ESD-21/10, October 2021. See previous reports and analysis: 
2021. Available online: https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.
    \503\ U.S. Department of Energy. ``Pathways to Commercial 
Liftoff: Clean Hydrogen''. March 2023. Available online: https://liftoff.energy.gov/wp-content/uploads/2023/03/20230320-Liftoff-Clean-H2-vPUB.pdf.
    \504\ The Liftoff Report and draft National Strategy say that 
fuel cell trucks and buses can be one of the first new sectors to 
adopt hydrogen because of a higher ``willingness to pay'' for fuel 
(i.e., a threshold price at which they can remain competitive) 
compared to other hard-to-decarbonize sectors like chemicals and 
steel.
    \505\ Islam, Ehsan Sabri., Ram Vijayagopal, Ayman Moawad, Namdoo 
Kim, Benjamin Dupont, Daniela Nieto Prada, Aymeric Rousseau, ``A 
Detailed Vehicle Modeling & Simulation Study Quantifying Energy 
Consumption and Cost Reduction of Advanced Vehicle Technologies 
Through 2050,'' Report to the U.S. Department of Energy, Contract 
ANL/ESD-21/10, October 2021. See previous reports and analysis: 
2021. Available online: https://vms.taps.anl.gov/research-highlights/u-s-doe-vto-hfto-r-d-benefits/.
    \506\ Hunter, Chad, Michael Penev, Evan Reznicek, Jason 
Lustbader, Alicia Birkby, and Chen Zhang. ``Spatial and Temporal 
Analysis of the Total Cost of Ownership for Class 8 Tractors and 
Class 4 Parcel Delivery Trucks''. National Renewable Energy Lab. 
September 2021. Available online: https://www.nrel.gov/docs/fy21osti/71796.pdf.
    \507\ Ledna et al. ``Decarbonizing Medium- & Heavy-Duty On-Road 
Vehicles: Zero-Emission Vehicles Cost Analysis''. U.S. Department of 
Energy, National Renewable Energy Laboratory. March 2022. Available 
online: https://www.nrel.gov/docs/fy22osti/82081.pdf.
---------------------------------------------------------------------------

    Other available estimates explore clean hydrogen production costs 
alone. For example, Rhodium Group found a hydrogen producer price of 
$0.39-1.92 per kg, including the IRA hydrogen production tax credit and 
assuming the use of utility-scale solar to produce hydrogen.\508\ 
McKinsey projected green hydrogen costs of roughly $1.30-2.30 per kg in 
2030, produced using alkaline electrolyzers. Their analysis did not 
mention the IRA. It showed lower costs for blue and grey hydrogen in 
2030 before green hydrogen out-competes both by around 2040.\509\ An 
ICCT estimate of average hydrogen production costs in 2030 is closer to 
$3.10 per kg, but their analysis did not consider IRA impacts.\510\
---------------------------------------------------------------------------

    \508\ Larsen, John et al. ``Assessing the Climate and Clean 
Energy Provisions in the Inflation Reduction Act''. Rhodium Group. 
August 12, 2022. Available online: https://rhg.com/research/climate-clean-energy-inflation-reduction-act/.
    \509\ Heid, Bernd et al. ``Five charts on hydrogen's role in a 
net-zero future''. McKinsey Sustainability. October 25, 2022. 
Available online: https://www.mckinsey.com/capabilities/sustainability/our-insights/five-charts-on-hydrogens-role-in-a-net-zero-future.
    \510\ Zhou, Yuanrong, et al. ``Current and future cost of e-
kerosene in the United States and Europe''. Working Paper 2022-14: 
The International Council on Clean Transportation. March 2022. 
Available online: https://theicct.org/wp-content/uploads/2022/02/fuels-us-europe-current-future-cost-ekerosene-us-europe-mar22.pdf.
---------------------------------------------------------------------------

    According to the Hydrogen Council, increasing the scale and rate of 
use of hydrogen across sectors could substantially reduce the costs of 
local distribution. As trucking capacity increases and the use, size, 
and density of refueling stations increases, equipment manufacturing 
costs could decline. For example, they suggest that 2020 distribution 
costs of about $5-6 per kg could decline by approximately 80 percent to 
get to $1-1.50 per kg in 2030.\511\ A 2018 DOE document details similar 
opportunities to reach $2 per kg in distribution and dispensing costs. 
In addition to learning and economies of scale associated with scaled 
use, they suggest that potential research and development advancements 
related to the efficiency and reliability of components could help meet 
related DOE price targets.\512\
---------------------------------------------------------------------------

    \511\ Hydrogen Council. ``Path to hydrogen competitiveness: A 
cost perspective''. January 20, 2020. Available online: https://hydrogencouncil.com/wp-content/uploads/2020/01/Path-to-Hydrogen-Competitiveness_Full-Study-1.pdf.
    \512\ Rustagi, Neha et al. Record 18003: ``Current Status of 
Hydrogen Delivery and Dispensing Costs and Pathways to Future Cost 
Reductions''. U.S. Department of Energy. December 17, 2018. 
Available online: https://www.hydrogen.energy.gov/pdfs/18003_current_status_hydrogen_delivery_dispensing_costs.pdf.
---------------------------------------------------------------------------

    As further explained in DRIA Chapter 2.5.3.1, for use in HD TRUCS, 
we projected the future hydrogen prices shown in Table II-18 for 2027-
2030 and beyond. These values are based on ANL BEAN values and are in 
line with price projections in DOE's Liftoff Report that consider the 
impacts of BIL and IRA. We converted the $/kg estimates for 2025 and 
2030 included in BEAN to dollar per kg by using the conversion factor 
of 1 gallon of diesel is equivalent to 1.116 kg of hydrogen, based on 
its lower heating value. We rounded up to the nearest $0.50 increment 
given the uncertainty of projections, and then interpolated for 2027 to 
2029. Prices for 2030 and beyond are held constant in BEAN and in HD 
TRUCS.

[[Page 25989]]

            Table II-18--Price of Hydrogen for CYs 2027-2030+
                                 [2021$]
------------------------------------------------------------------------
                                                                2030 and
                                 2027       2028       2029      beyond
------------------------------------------------------------------------
$/kg H2.....................      6.10       5.40       4.70       4.00
------------------------------------------------------------------------

    We request comment on our approach and assessment of future fuel, 
electricity, and hydrogen prices for the transportation sector.
6. Payback
    After assessing the suitability of the technology and costs 
associated with ZEVs, a payback calculation was performed on each of 
the 101 HD TRUCS vehicles for the BEV technology and FCEV technology 
that we were considering for the technology packages for each use case 
for each MY in the MY 2027-2032 timeframe. The payback period was 
calculated by determining the number of years that it would take for 
the annual operational savings of a ZEV to offset the incremental 
upfront purchase price of a BEV or FCEV (after accounting for the IRA 
section 13502 battery tax credit and IRA section 13403 vehicle tax 
credit as described in DRIA Chapters 2.4.3.1 and 2.4.3.5, respectively) 
and charging infrastructure costs (for BEVs) when compared to 
purchasing a comparable ICE vehicle. The ICE vehicle and ZEV costs 
calculated include the retail price equivalent (RPE) multiplier of 1.42 
to include both direct and indirect manufacturing costs, as discussed 
further in DRIA Chapter 3. The operating costs include the diesel, 
hydrogen or electricity costs, DEF costs, and the maintenance and 
repair costs. The payback results are shown in Table 2-75 and Table 2-
76 for BEVs for MY 2027 and MY 2032, and in Table 2-77 for FCEVs for MY 
2032 of DRIA Chapter 2.

F. Proposed Standards

    Similar to the approach we used to support the feasibility of the 
HD GHG Phase 2 vehicle CO2 emission standards, we developed 
technology packages that, on average, would meet each of the proposed 
standards for each regulatory subcategory of vocational vehicles and 
tractors after considering the various factors described in this 
section, including technology costs for manufacturers and costs to 
purchasers. We applied these technology packages to nationwide 
production volumes to support the proposed Phase 3 GHG vehicle 
standards. The technology packages utilize the averaging portion of the 
longstanding ABT program, and we project manufacturers would produce a 
mix of HD vehicles that utilize ICE-powered vehicle technologies and 
ZEV technologies, with specific adoption rates for each regulatory 
subcategory of vocational vehicles and tractors for each MY. Note that 
we have analyzed a technology pathway to support the feasibility and 
appropriateness of each proposed level of stringency for each proposed 
standard, but manufacturers would be able to use a combination of HD 
engine or vehicle GHG-reducing technologies, including zero-emission 
and ICE technologies, to meet the standards.
    The proposed standards are shown in Table II-19 and Table II-20 for 
vocational vehicles and Table II-21and Table II-22 for tractors. We 
request comment and data on our proposal as well as comment and data 
supporting more or less stringent HD vehicle GHG standards than those 
proposed, as specified in Section II.H. We also request comment on 
setting additional new HD vehicle GHG standards in MYs 2033 through 
2035 that are more progressively stringent than the MY 2032 standards 
and that either continue the approach and trajectory of the proposed 
standards or utilize a different approach and trajectory that we 
solicited comment on in this proposal.
    The approach we used to select the proposed standards, described in 
this Section II, does not specifically include accounting for ZEV 
adoption rates that would result from compliance with the California 
ACT program. The approach we used developed ZEV technology adoption 
rates on a nationwide basis. EPA granted the California ACT waiver 
request on March 30, 2023, which did not allow sufficient time for us 
to consider an alternative approach for this proposal. With the 
granting of the California ACT waiver, we intend to consider for the 
final rule how vehicles sold to meet the ACT requirement in California 
and other states that may adopt it under CAA section 177 would impact 
or be accounted for in the standard setting approach described in this 
Section II. For example, we may adjust our reference case to reflect 
the ZEV levels projected from ACT in California and other states. We 
also may consider increasing the technology adoption rates in the 
technology packages and correspondingly increase the stringency of the 
proposed Phase 3 emission standards to account for the incremental 
difference in the projected ZEV adoption levels from the proposed Phase 
3 emission standards and the adoption levels projected from ACT in 
those states. We welcome comment on how to consider this ACT in our 
proposed approach or in other approaches.

              Table II-19--Proposed MY 2027 Through 2032+ Vocational Vehicle CO2 Emission Standards
                                                [Grams/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                       CI light    CI medium   CI heavy    SI light    SI medium
           Model year                 Subcategory        heavy       heavy       heavy       heavy       heavy
----------------------------------------------------------------------------------------------------------------
2027............................  Urban.............         294         213         232         340         252
                                  Multi-Purpose.....         257         190         193         299         223
                                  Regional..........         218         173         152         246         202
2028............................  Urban.............         275         209         228         321         248
                                  Multi-Purpose.....         238         186         189         280         219
                                  Regional..........         199         169         148         227         198
2029............................  Urban.............         255         202         225         301         241
                                  Multi-Purpose.....         218         179         186         260         212

[[Page 25990]]

 
                                  Regional..........         179         162         145         207         191
2030............................  Urban.............         238         195         200         284         234
                                  Multi-Purpose.....         201         172         161         243         205
                                  Regional..........         162         155         120         190         184
2031............................  Urban.............         219         188         193         265         227
                                  Multi-Purpose.....         182         165         154         224         198
                                  Regional..........         143         148         113         171         177
2032 and later..................  Urban.............         179         176         177         225         215
                                  Multi-Purpose.....         142         153         138         184         186
                                  Regional..........         103         136          97         131         165
----------------------------------------------------------------------------------------------------------------

  Table II-20--Proposed MY 2027 Through 2032+ Optional Custom Chassis Vocational Vehicle CO2 Emission Standards
                                                [Grams/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                                                                        MY 2032
   Optional custom chassis vehicle category      MY 2027    MY 2028    MY 2029    MY 2030    MY 2031   and later
----------------------------------------------------------------------------------------------------------------
School Bus....................................        190        182        176        168        163        149
Other Bus.....................................        286        269        255        237        220        189
Coach Bus.....................................        205        205        205        185        164        154
Refuse Hauler.................................        253        241        232        221        212        191
Concrete Mixer................................        259        250        240        231        224        205
Motor home....................................        226        226        226        226        226        226
Mixed-use vehicle.............................        316        316        316        316        316        316
Emergency vehicle.............................        319        319        319        319        319        319
----------------------------------------------------------------------------------------------------------------

                  Table II-21--Proposed MY 2027 Through MY 2032+ Tractor CO2 Emission Standards
                                                [Grams/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                                    Class 7 all     Class 8 day       Class 8
              Model year                       Roof height          cab styles          cab         sleeper cab
----------------------------------------------------------------------------------------------------------------
2027..................................  Low Roof................            86.6            66.1            64.1
                                        Mid Roof................            93.1            70.2            69.6
                                        High Roof...............            90.0            68.1            64.3
2028..................................  Low Roof................            84.7            64.6            64.1
                                        Mid Roof................            91.0            68.6            69.6
                                        High Roof...............            88.0            66.6            64.3
2029..................................  Low Roof................            81.8            62.4            64.1
                                        Mid Roof................            87.9            66.3            69.6
                                        High Roof...............            85.0            64.3            64.3
2030..................................  Low Roof................            77.0            58.7            57.7
                                        Mid Roof................            82.7            62.4            62.6
                                        High Roof...............            80.0            60.6            57.9
2031..................................  Low Roof................            67.3            51.4            51.3
                                        Mid Roof................            72.4            54.6            55.7
                                        High Roof...............            70.0            53.0            51.4
2032 and Later........................  Low Roof................            63.5            48.4            48.1
                                        Mid Roof................            68.2            51.5            52.2
                                        High Roof...............            66.0            50.0            48.2
----------------------------------------------------------------------------------------------------------------

  Table II-22--Proposed MY 2027 Through MY 2032+ Heavy-Haul Tractor CO2
                           Emission Standards
                            [Grams/ton-mile]
------------------------------------------------------------------------
                                                           CO2 emission
                       Model year                            standards
 
------------------------------------------------------------------------
2027....................................................            48.3
2028....................................................            48.3
2029....................................................            48.3
2030....................................................            43.0
2031....................................................            42.5
2032 and Later..........................................            41.1
------------------------------------------------------------------------

    We are proposing new CO2 emission standards using the 
regulatory subcategories we adopted in HD GHG Phase 2, as discussed in 
Section II.C. As we discuss later in this subsection, the fraction of 
ZEVs and fraction of ICE vehicles in the technology packages varies 
across the 101 HD TRUCS vehicle types and thus in the regulatory 
subcategories. We recognize there may be different regulatory 
structures that could be used to reduce GHG emissions from the HD 
vehicles.

[[Page 25991]]

    During the development of this proposed action, EPA has heard 
requests from several stakeholders that EPA consider establishing 
CO2 standards for specific vehicle applications (e.g., 
school buses, urban buses, pick-up and delivery vehicles, drayage 
trucks, etc.), as a complement to CO2 emission standards 
that utilize the existing HD GHG Phase 2 program structure. There are 
several reasons stakeholders have explained for asking EPA to consider 
this approach. One reason is to target specific applications which may 
be the most suited for more stringent CO2 standards at a 
more rapid pace than a broader regulatory subcategory. For example, a 
pick-up and delivery application may be more suitable for faster 
adoption of BEV technology than the broader subcategory of medium 
heavy-duty vocational vehicles. This approach could further support the 
industry and marketplace focusing resources on specific applications in 
the near term in response to more stringent EPA standards, rather than 
potentially spreading those resources across a broader range of 
products. Another reason some stakeholders suggested EPA consider an 
application-specific approach would be to accelerate the deployment of 
ZEVs that are concentrated in frontline communities to reduce air 
pollution more quickly in those communities.
    We note the current HD GHG Phase 2 program structure includes 
standards at broad vehicle subcategory levels (e.g., light heavy-duty 
vocational vehicles, medium heavy-duty vocational vehicles, etc.) as 
well as optional CO2 emission standards for seven specific 
custom chassis applications (e.g., emergency vehicles, motor homes, 
cement mixers, school buses). It is important to note the suggestions 
from stakeholders for EPA to establish application-specific standards 
for some heavy-duty vehicles to accelerate emission reductions in the 
Phase 3 program are much different than the reasons EPA established the 
HD GHG Phase 2 optional custom chassis standards. EPA established the 
optional custom chassis program for a number of reasons, including: a 
recognition there are manufacturers who produce specialized heavy-duty 
vocational vehicles where some of the technologies EPA used for the 
primary program standards would be unsuited for use, concern that the 
primary program drive cycles are either unrepresentative or unsuitable 
for certain specialized heavy-duty vocational vehicles, concern that 
some manufacturers of these specialized vocational vehicles have 
limited product offerings such that the primary program's emissions 
averaging is not of practical value as a compliance flexibility, and 
also concern regarding the appropriateness of the primary program's 
vocational vehicle standards as applied to certain specialized/custom 
vocational vehicles (See 81 FR 73531 and 81 FR 73686, October 25, 
2016).
    Potential challenges EPA recognizes with an application-specific, 
more stringent CO2 standard approach include determining 
what criteria EPA would use to establish application-specific 
standards, how such standards would fit in the overall Phase 3 program 
structure, and the difficulty in defining some applications. For 
example, a drayage truck in general can be any Class 8 tractor (both 
sleeper cab and day cab) that is used to move shipping containers to 
and from ports from other locations, including rail yards, shipping 
terminals, or other destinations. A drayage tractor is not a unique 
application nor do these tractors contain unique design features to 
differentiate them from other tractors--nearly any tractor can be used 
for drayage operation. Nevertheless, in consideration of potentially 
targeting specific applications most suited for more stringent 
CO2 standards at a more rapid pace than a broader regulatory 
subcategory, EPA requests comment on a standards structure for Phase 3 
which would establish unique, mandatory, application-specific standards 
for some subset of heavy-duty vehicle applications. EPA requests 
comment on what data, what program structure, what applications, and 
what criteria EPA should consider for designing application-specific 
standards. EPA also requests comment on how the application-specific 
CO2 standards would interact with the broader Phase 3 
program structure EPA has included in this proposal, including the 
CO2 emissions averaging, banking, and trading program. For 
example, if EPA were to separate these applications and apply more 
stringent standards, EPA requests comment on whether emission credits 
should be allowed to be averaged across the primary Phase 3 program and 
the application specific standards, and if yes, what limits if any 
should apply to those standards. Under this example, EPA may consider 
that allowing credits to flow into an application-specific category 
could undermine the reasons for establishing such a category (to 
accelerate the application of technology and accelerate emission 
reductions), while allowing credits generated within an application 
specific category to flow into the primary program may provide 
incentive for even greater reductions from the application-specific 
category.
    To support that the proposed standards are achievable through the 
technology pathway projected in the technology packages, the proposed 
CO2 standards for each subcategory were determined in two 
steps giving consideration to costs, lead time, and other factors, as 
described in this section and Section II.G. First, we determined the 
technology packages that include ZEVs and ICE vehicles with GHG-
reducing technologies for each of the vocational vehicle and tractor 
subcategories as discussed in Section II.F.1. Then we determined the 
numeric level of the proposed standards as discussed in Sections II.F.2 
and II.F.3.
1. Technology Adoption Rates in the Technology Packages
    We based the proposed standards on technology packages that include 
both ICE vehicle and ZEV technologies. In our analysis, the ICE 
vehicles include a suite of technologies that represent a vehicle that 
meets the existing MY 2027 Phase 2 CO2 emission standards. 
These technologies exist today and continue to evolve to improve the 
efficiency of the engine, transmission, drivetrain, aerodynamics, and 
tire rolling resistance in HD vehicles and therefore reduce their 
CO2 emissions. There also may be opportunity for further 
adoption of these Phase 2 ICE technologies beyond the adoption rates 
used in the HD GHG Phase 2 rule. In addition, the heavy-duty industry 
continues to develop CO2-reducing technologies such as 
hybrid powertrains and H2-ICE powered vehicles.
    In the transportation sector, new technology adoption rates often 
follow an S-shape. As discussed in the preamble to the HD GHG Phase 2 
final rule, the adoption rates for a specific technology are initially 
slow, followed by a rapid adoption period, then leveling off as the 
market saturates, and not always at 100 percent.\513\ For this 
proposal, we developed a method to project adoption rates of BEVs and 
FCEVs in the HD vehicle market after considering methods in the 
literature. Our adoption function, and methods considered and explored 
in the formulation of the method used in this proposal, are described 
in DRIA Chapter 2.7.9. As stated there, given information currently 
available and our experience with the HD vehicle industry, when 
purchasing a new vehicle, we believe that the payback period is the 
most

[[Page 25992]]

relevant metric to determine adoption rates in the HD vehicle industry.
---------------------------------------------------------------------------

    \513\ 81 FR 73558, Oct 25, 2016.
---------------------------------------------------------------------------

    The ZEV adoption rate schedule, shown in Table II-23, shows that 
when the payback is immediate, we project up to 80 percent of a 
manufacturer's fleet to be ZEV, with diminishing adoption as the 
payback period increases.\514\ The schedule was used to assign ZEV 
adoption rates to each of the 101 HD TRUCS vehicle types based on its 
payback period for MYs 2027 and 2032.
---------------------------------------------------------------------------

    \514\ See DRIA Chapter 2.7.9 for additional information on the 
development of the adoption rate schedule for the technology 
packages for the proposed standards.
---------------------------------------------------------------------------

    We phased in the proposed standards gradually between MYs 2027 and 
2032 to address potential lead time concerns associated with 
feasibility for manufacturers to deploy ZEV technologies that include 
consideration of time necessary to ramp up battery production, 
including the need to increase the availability of critical raw 
materials and expand battery production facilities, as discussed in 
Section II.D.2.ii. We also phased in the proposed standards recognizing 
that it will take time for installation of EVSE by the BEV purchasers. 
We project BEV adoption as early as MY 2027, and we project adoption of 
FCEVs in the technology packages starting in MY 2030 for select 
applications that travel longer distances and/or carry heavier loads 
(i.e., coach buses, heavy-haul tractors, sleeper cab tractors, and day 
cab tractors). There has been only limited development of FCEVs for the 
HD market to date, therefore our assessment is that it would be 
appropriate to provide manufacturers with additional lead time to 
design, develop, and manufacture FCEV models, but that it would be 
feasible by MY 2030. With substantial Federal investment in low-GHG 
hydrogen production (see DRIA Chapter 1.8.2), we anticipate that the 
price of hydrogen fuel could drop enough by 2030 to make HD FCEVs cost-
competitive with comparable ICE vehicles for some duty cycles. We also 
note that the hydrogen infrastructure is expected to need additional 
time to further develop, as discussed in greater detail in DRIA Chapter 
1.8, but we expect the refueling needs can be met by MY 2030. We also 
recognize the impact regulations can have on technology and recharging/
refueling infrastructure development and deployment. Thus we request 
comment and data on our proposed adoption rate, including schedule and 
methods. We also request comment and data to support other adoption 
rate schedules; see also Section II.H.

             Table II-23--Adoption Rate Schedule in HD TRUCS
------------------------------------------------------------------------
                                                              MY 2032
                                              MY 2027     adoption rates
              Payback (yr)                adoption rates   for BEVs and
                                           for BEVs (%)      FCEVs (%)
------------------------------------------------------------------------
<0......................................              80              80
0-1.....................................              55              55
1-2.....................................              32              45
2-4.....................................              18              35
4-7.....................................              13              25
7-10....................................              10              20
10-15...................................               5              15
>15.....................................               0               5
------------------------------------------------------------------------

    We applied an additional constraint within HD TRUCS that limited 
the maximum penetration rate to 80 percent for any given vehicle type. 
This conservative limit was developed after consideration of the actual 
needs of the purchasers related to two primary areas of our analysis. 
First, this 80 percent volume limit takes into account that we sized 
the batteries, power electronics, e-motors, and infrastructure for each 
vehicle type based on the 90th percentile of the average VMT. We 
utilize this technical assessment approach because we do not expect 
heavy-duty OEMs to design ZEV models for the 100th percentile VMT daily 
use case for vehicle applications, as this could significantly increase 
the ZEV powertrain size, weight, and costs for a ZEV application for 
all users, when only a relatively small part of the market would need 
such capabilities. Therefore, the ZEVs we analyzed and have used for 
the feasibility and cost projections for this proposal are likely not 
appropriate for 100 percent of the vehicle applications in the real-
world. Our second consideration for including an 80 percent volume 
limit for ZEVs is that we recognize there is a wide variety of real-
world operation even for the same type of vehicle. For example, some 
owners may not have the ability to install charging infrastructure at 
their facility, or some vehicles may need to be operational 24 hours a 
day. Under our proposed standards, ICE vehicles would continue to be 
available to address these specific vehicle applications. We request 
comment, data, and analysis on both of these considerations and our use 
of an 80 percent volume limit. Our request for comment includes a 
request for data to inform an assessment of the distribution of daily 
miles traveled and the distribution of the number of hours available 
daily to charge for each of the vehicle types that we could use to 
update a constraint like this in the final rulemaking analysis.
    After the technology assessment, as described in Section II.D.4 and 
DRIA Chapter 2, and payback analysis, as described in Section II.E.6 
and DRIA Chapter 2.8.2, EPA determined the ICE vehicle and ZEV adoption 
rates for each regulatory subcategory. We first determined the ZEV 
adoption rates projected for each of the 101 vehicle types for MYs 2027 
and 2032, which can be found in DRIA Chapter 2.8.3.1. We then 
aggregated the projected ZEV adoption rates for the specific vehicle 
types into their respective regulatory subcategories relative to the 
vehicle's sales weighting, as described in DRIA Chapter 2.9.1. The 
resulting projected ZEV adoption rates (shown in Table II-24) and 
projected ICE vehicle adoption rates that achieve a level of 
CO2 emissions performance equal to the existing MY 2027 
emission standards (shown in Table II-21) were built into our 
technology packages. We request comment and data on our projected 
adoption rates in the technology packages as well as data supporting 
higher or lower adoption rates than the projected levels. We also 
request comment on projecting adoption rates out through MY 2035.

                 Table II-24--Projected ZEV Adoption Rates for MYs 2027-2032 Technology Packages
----------------------------------------------------------------------------------------------------------------
      Regulatory subcategory        MY 2027 (%)  MY 2028 (%)  MY 2029 (%)  MY 2030 (%)  MY 2031 (%)  MY 2032 (%)
----------------------------------------------------------------------------------------------------------------
LHD Vocational....................           22           28           34           39           45           57
MHD Vocational....................           19           21           24           27           30           35
HHD Vocational....................           16           18           19           30           33           40
MHD All Cab and HHD Day Cab                  10           12           15           20           30           34
 Tractors.........................
Sleeper Cab Tractors..............            0            0            0           10           20           25
Heavy Haul Tractors...............            0            0            0           11           12           15

[[Page 25993]]

 
Optional Custom Chassis: School              30           33           35           38           40           45
 Bus..............................
Optional Custom Chassis: Other Bus            0            6           11           17           23           34
Optional Custom Chassis: Coach Bus            0            0            0           10           20           25
 \515\............................
Optional Custom Chassis: Refuse              15           19           22           26           29           36
 Hauler...........................
Optional Custom Chassis: Concrete            18           21           24           27           29           35
 Mixer............................
Optional Custom Chassis: Emergency            0            0            0            0            0            0
 Vehicles.........................
Optional Custom Chassis:                      0            0            0            0            0            0
 Recreational Vehicles............
Optional Custom Chassis: Mixed Use            0            0            0            0            0            0
----------------------------------------------------------------------------------------------------------------

   Table II-25--Projected Adoption Rates for MYs 2027-2032 ICE Vehicles With CO2-Reducing Technologies in the
                                               Technology Packages
----------------------------------------------------------------------------------------------------------------
      Regulatory subcategory        MY 2027 (%)  MY 2028 (%)  MY 2029 (%)  MY 2030 (%)  MY 2031 (%)  MY 2032 (%)
----------------------------------------------------------------------------------------------------------------
LHD Vocational....................           78           72           66           61           55           43
MHD Vocational....................           81           79           76           73           70           65
HHD Vocational....................           84           82           81           70           67           60
MHD All Cab and HHD Day Cab                  90           88           85           80           70           66
 Tractors.........................
Sleeper Cab Tractors..............          100          100          100           90           80           75
Heavy Haul Tractors...............          100          100          100           89           88           85
Optional Custom Chassis: School              70           67           65           62           60           55
 Bus..............................
Optional Custom Chassis: Other Bus          100           94           89           83           77           66
Optional Custom Chassis: Coach Bus          100          100          100           90           80           75
 \516\............................
Optional Custom Chassis: Refuse              85           81           78           74           71           64
 Hauler...........................
Optional Custom Chassis: Concrete            82           79           76           73           71           65
 Mixer............................
Optional Custom Chassis: Emergency          100          100          100          100          100          100
 Vehicles.........................
Optional Custom Chassis:                    100          100          100          100          100          100
 Recreational Vehicles............
Optional Custom Chassis: Mixed Use          100          100          100          100          100          100
----------------------------------------------------------------------------------------------------------------

2. Calculation of the Proposed Tractor Standards
---------------------------------------------------------------------------

    \515\ We are proposing to use the same adoption rates projected 
for sleeper cab tractors, which are also projected to be FCEVs in 
MYs 2030-2032.
    \516\ We are proposing to use the same adoption rates projected 
for sleeper cab tractors, which are also projected to be FCEVs in 
MYs 2030-2032.
---------------------------------------------------------------------------

    The proposed CO2 emission standards for the tractor 
subcategories are calculated by determining the CO2 
emissions from a technology package that consists of both ICE-powered 
vehicles and ZEVs. The projected fraction of ZEVs that emit zero grams 
CO2/ton-mile at the tailpipe are shown in Table II-24. The 
remaining fraction of vehicles in the technology package are ICE-
powered vehicles that include the technologies listed in Table II-1 
(reflecting the GEM inputs for the individual technologies that make up 
the technology packages that meets the existing MY 2027 CO2 
tractor emission standards). Thus, in the technology packages, the ICE-
powered vehicles emit at the applicable existing MY 2027 CO2 
emission standards, as shown in Table II-26. We request comment on ICE 
vehicle technologies that could support more stringent standards than 
those proposed.
    The proposed CO2 emission standards for each model year 
are calculated by multiplying the fraction of ICE-powered vehicles in 
each technology package by the applicable existing MY 2027 
CO2 emission standards. The proposed standards are presented 
in Section II.F.

                     Table II-26--Existing MY 2027 and Later Tractor CO2 Emission Standards
                                                [Grams/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                    Class 7 All     Class 8 Day       Class 8
                                                    cab styles          cab         Sleeper cab     Heavy-haul
----------------------------------------------------------------------------------------------------------------
Low Roof........................................            96.2            73.4            64.1            48.3
Mid Roof........................................           103.4            78.0            69.6
High Roof.......................................           100.0            75.7            64.3
----------------------------------------------------------------------------------------------------------------

3. Calculation of the Proposed Standards for Vocational Vehicles
    The proposed CO2 emission standards for the vocational 
vehicles regulatory subcategories are calculated by determining the 
CO2 emissions from a technology package that consists of 
both ICE-powered vehicles and ZEVs. The projected fraction of ZEVs that 
emit zero grams CO2/ton-mile at the tailpipe are shown in 
Table II-24. The remaining fraction of vehicles in the technology 
package are ICE-powered vehicles that include the technologies listed 
in Table II-2 (reflecting the GEM inputs for the individual 
technologies that make up the technology packages that meets the 
existing MY 2027 CO2 vocational vehicles emission 
standards). We request comment on ICE vehicle technologies that could 
support more stringent standards than those proposed.

[[Page 25994]]

    As discussed in Section II.C, vocational vehicle CO2 
emission standards are subdivided by weight class, SI-powered or CI-
powered vehicles, and by operation. There are a total of 15 different 
vocational vehicle standards in the primary program for each model 
year, in addition to the optional custom chassis standards. The 
existing MY 2027 vocational vehicle emission standards are shown in 
Table II-27 (which, like tractors, are what the ICE-powered vehicles 
emit at in the proposed technology packages). The HD GHG Phase 2 
structure enables the technologies that perform best during urban 
driving or the technologies that perform best at highway driving to 
each be properly recognized over the appropriate drive cycles. The HD 
GHG Phase 2 structure was developed recognizing that there is not a 
single package of engine, transmission, and driveline technologies that 
is suitable for all ICE-powered vocational vehicle applications. In 
this proposal, we are continuing the current approach of deeming 
tailpipe emissions of regulated GHG pollutants (including 
CO2) to be zero from electric vehicles and hydrogen fuel 
cell vehicles.\517\ Therefore, the need to recognize the variety in 
vocational vehicle CO2 emissions may no longer be necessary 
for ZEVs because ZEVs are deemed to have zero CO2 emissions. 
Similarly, the existing SI and CI distinction within vocational vehicle 
regulatory subcategory structure is not optimal for vocational ZEVs 
because they cannot be technically described as either SI-powered or 
CI-powered.
---------------------------------------------------------------------------

    \517\ See 40 CFR 1037.150(f) for our proposed interim provision 
that CO2 emissions would be deemed to be zero, with no 
CO2-related testing, for BEVs, FCEVs, and vehicles 
powered by H2-ICE that solely use hydrogen fuel.

                Table II-27--Existing MY 2027 and Later Vocational Vehicle CO2 Emission Standards
                                                [Grams/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                   CI light    CI medium     CI heavy     SI light    SI medium
                                                    heavy        heavy        heavy        heavy        heavy
----------------------------------------------------------------------------------------------------------------
Urban..........................................          367          258          269          413          297
Multi-Purpose..................................          330          235          230          372          268
Regional.......................................          291          218          189          319          247
----------------------------------------------------------------------------------------------------------------
Optional Custom Chassis: School Bus............                                271
----------------------------------------------------------------------------------------------------------------
Optional Custom Chassis: Other Bus.............                                286
----------------------------------------------------------------------------------------------------------------
Optional Custom Chassis: Coach Bus.............                                205
----------------------------------------------------------------------------------------------------------------
Optional Custom Chassis: Refuse Hauler.........                                298
----------------------------------------------------------------------------------------------------------------
Optional Custom Chassis: Concrete Mixer........                                316
----------------------------------------------------------------------------------------------------------------
Optional Custom Chassis: Motor Home............                                226
----------------------------------------------------------------------------------------------------------------
Optional Custom Chassis: Mixed-Use Vehicle.....                                316
----------------------------------------------------------------------------------------------------------------
Optional Custom Chassis: Emergency Vehicle.....                                319
----------------------------------------------------------------------------------------------------------------

    Also discussed in Section II.C, the vehicle ABT program allows 
credits to exchange with all vehicles within a weight class. ABT 
CO2 emission credits are determined using the equation in 40 
CFR 1037.705. The credits are calculated based on the difference 
between the applicable standard for the vehicle and the vehicle's 
family emission limit multiplied by the vehicle's regulatory payload 
and useful life. For example, as shown in Table II-28, using the 
existing light heavy-duty vocational vehicle MY 2027 CO2 
emission standards, the amount of credit a ZEV would earn varies 
between 124 Mg and 177 Mg, depending on the regulatory subcategory it 
would be certified to. We recognize that in many cases it may not be 
clear to the manufacturer whether to certify the vocational ZEV to a SI 
or CI regulatory subcategory, i.e. for the manufacturer to know whether 
the ZEV was purchased in lieu of a comparable CI-powered or SI-powered 
vehicle. Furthermore, as just discussed, because ZEVs have zero 
CO2vehicle exhaust emissions the programmatic basis for 
requiring the manufacturer to differentiate the ZEVs by operation to 
appropriately account for the variety of driveline configurations would 
not exist, though the amount of credit the ZEV would earn would depend 
on the regulatory subcategory selected for certification. In short, we 
recognize the difficulties in, and consequences of, determining which 
of the regulatory subcategories to which a ZEV should be certified 
under the existing HD GHG Phase 2 emission standards' structure for 
vocational vehicles. To address this concern, we are proposing a two-
step approach. First, we propose to revise the ABT credit calculation 
regulations; this change would begin in MY 2027. Second, we derived the 
proposed MY 2027 and later standards accounting for the proposed 
changes to the ABT credit calculations. Note that BEVs, FCEVs, and H2-
ICE vehicles would still be able to be certified to the vocational 
vehicle urban, multi-purpose, or regional standards or to the 
applicable optional custom chassis standards.

[[Page 25995]]

   Table II--28 Example CO2 Emission Credit Calculations for Light Heavy-Duty (LHD) BEV/FCEVs by Regulatory Subcategory Based Off the Existing MY 2027
                                                                        standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          SI LHD  multi-      SI LHD                      CI LHD  multi-      CI LHD
                                                           SI LHD urban       purpose        regional      CI LHD urban       purpose        regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing MY 2027 Standard (gCO2/ton-mile)...............             413             372             319             367             330             291
CO2 credit per BEV or FCEV (Mg).........................             177             159             136             157             141             124
--------------------------------------------------------------------------------------------------------------------------------------------------------

    EPA proposes to revise the definition of the variable ``Std'' in 40 
CFR 1037.705 to establish a common reference emission standard for 
vocational vehicles with tailpipe CO2 emissions deemed to be 
zero (i.e., BEVs, FCEVs, and vehicles with engines fueled with pure 
hydrogen).\518\ Beginning in MY 2027, manufacturers would use the 
applicable Compression-Ignition Multi-Purpose (CI MP) standard for 
their vehicle's corresponding weight class when calculating ABT 
emission credits for vocational vehicles with tailpipe CO2 
emissions deemed to be zero.\519\ We selected the CI MP standard 
because it is the regulatory subcategory with the highest production 
volume in MY 2021. We also recognize a need to balance two different 
timing considerations concerning the potential impacts of this proposed 
change. First, prior to the effective date of this proposed change, 
there is a potential for manufacturers producing BEVs, FCEVs, and 
certain H2-ICE vehicles to generate larger credits than they would 
after this change, depending on the vocational vehicle subcategory to 
which a vehicle is certified. Second, we recognize that manufacturers 
develop their emissions compliance plans several years in advance to 
manage their R&D and manufacturing investments. After taking these into 
account, we propose that this regulation revision become effective 
beginning in MY 2027 to provide manufacturers with sufficient time to 
adjust their production plans, if necessary. We request comment on this 
proposed revision.
---------------------------------------------------------------------------

    \518\ See the proposed updates to 40 CFR 1037.150(f).
    \519\ See 40 CFR 1037.105 for the compression-ignition multi-
purpose CO2 standards.
---------------------------------------------------------------------------

    Taking the proposed change to the ZEV ABT credit calculation into 
account, if we calculated the proposed standards by multiplying the 
fraction of ICE-powered vehicles in the technology package (by model 
year) by the applicable existing MY 2027 CO2 emission 
standards, like we did for tractors, then this would lead to a scenario 
where it would take different levels of ZEV adoption rates to meet the 
proposed standards in each regulatory subcategory than we included in 
our assessment. Therefore, we used an alternate approach that maintains 
the same level of ZEV adoption rates in each regulatory subcategory 
within a weight class, taking the proposed change to the ZEV ABT credit 
calculation into account. The equation for calculating the proposed MY 
2032 vocational vehicle standards is shown in Equation II-1. This 
equation is used to calculate the proposed standards for each 
vocational vehicle regulatory subcategory, using the existing MY 2027 
CI MP standard for each corresponding weight class (LH, MH, HH). 
Equation II-2 through Equation II-4 show how the proposed Equation II-1 
would be used for each regulatory subcategory for an example model year 
(MY 2032). The existing MY 2027 standards can be found in Table II-27, 
and the projected ZEV adoption rates by model year are in Table II-24. 
The same equations were used for the proposed MY 2027 through 2031 
standards but replacing the MY 2032 Standards and ZEV adoption rates 
with values for the specific model year. The results of the 
calculations for the MY 2032 LHD vocational vehicles are shown in Table 
II-29. The calculations for the other model years and vocational 
vehicle subcategories are shown in DRIA Chapter 2.9.

Equation II-1: Proposed Vocational Vehicle Standard Calculation

MY 2032 StdRegSubcat = Existing 2027 
StdRegSubcat-(MY 2027 Existing CI MP StdRegSubcat 
* MY 2032 ZEV%)

Equation II-2: Proposed Vocational Vehicle Standard Calculation Light 
Heavy-Duty Regulatory Subcategories for MY 2032

MY 2032 StdRegSubcat = Existing 2027 
StdRegSubcat-(330 g/mi * 57%)

Equation II-3: Proposed Vocational Vehicle Standard Calculation Medium 
Heavy-Duty Regulatory Subcategories for MY 2032

MY 2032 StdRegSubcat = Existing 2027 
StdRegSubcat-(235 g/mi * 35%)

Equation II-4: Proposed Vocational Vehicle Standard Calculation Heavy 
Heavy-Duty Regulatory Subcategories for MY 2032

MY 2032 StdRegSubcat = Existing 2027 StdRegSubcat 
- (230 g/mi * 40%)

                 Table II-29--Calculations of the Proposed MY 2032 CO2 Emission Standards for Light Heavy-Duty (LHD) Vocational Vehicles
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          SI LHD  multi-      SI LHD                      CI LHD  multi-      CI LHD
                                                           SI LHD urban       purpose        regional      CI LHD urban       purpose        regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
Existing MY 2027 Standard (gCO2/ton-mile)...............             413             372             319             367             330             291
ZEV Adoption Rate in Technology Package.................             57%             57%             57%             57%             57%             57%
Proposed CO2 Emission Standard (gCO2/ton-mile)..........             225             184             131             179             142             103
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The calculations for the other model years and vocational vehicle 
subcategories are shown in DRIA Chapter 2.9. We welcome comment on this 
approach to taking the proposed change to the ZEV ABT credit

[[Page 25996]]

calculation into account in setting vocational vehicle standards. We 
also request comment alternatively on using the same approach for 
vocational vehicles as we are proposing for tractors (see Section 
II.F.2).
    After considering the potential concerns with ZEVs fitting into the 
existing HD GHG Phase 2 vocational vehicle regulatory subcategories 
structure, we are proposing to maintain the existing HD GHG Phase 2 
vocational vehicle regulatory subcategories with the proposed changes 
noted in this section. We request comment on possible alternative 
vocational vehicle regulatory subcategory structures, such as reducing 
the number of vocational vehicle subcategories to only include the 
Multi-Purpose standards in each weight class, and/or maintaining Urban, 
Multipurpose, and Regional but combining SI and CI into a standard for 
each weight class.
    The HD GHG Phase 2 program includes optional custom chassis 
emission standards for eight specific vehicle types. Those vehicle 
types may either meet the primary vocational vehicle program standards 
or, at the vehicle manufacturer's option, they may comply with these 
optional standards. The existing optional custom chassis standards are 
numerically less stringent than the primary HD GHG Phase 2 vocational 
vehicle standards, but the ABT program is more restrictive for vehicles 
certified to these optional standards. Banking and trading of credits 
is not permitted, with the exception that small businesses that may use 
traded credits to comply. Averaging is only allowed within each 
subcategory for vehicles certified to these optional standards. If a 
manufacturer wishes to generate tradeable credits from the production 
of these vehicles, they may certify them to the primary vocational 
vehicle standards.
    In this action, we are proposing to establish more stringent 
standards for several, but not all, of these optional custom chassis 
subcategories. We are proposing revised MY 2027 emission standards and 
new MY 2028 through MY 2032 and later emission standards for the school 
bus, other bus, coach bus, refuse hauler, and concrete mixer optional 
custom chassis regulatory subcategories. We are not proposing any 
changes to the existing ABT program restrictions for the optional 
custom chassis regulatory subcategories. Because vehicles certified to 
the optional custom chassis standards would continue to have restricted 
credit use and can only be used for averaging within a specific custom 
chassis regulatory subcategory, we do not have the same potential 
credit concern as we do for the primary vocational vehicle standards. 
Therefore, we determined the proposed optional custom chassis emission 
standards by multiplying the fraction of ICE-powered vehicles in the 
technology package (by model year) by the applicable existing MY 2027 
CO2 emission standards, like we did for determining the 
proposed tractor emission standards.
    We are not proposing new standards for motor homes certified to the 
optional custom chassis regulatory subcategory because of the projected 
impact of the weight of batteries in BEVs in the MYs 2027-2032, as 
described in DRIA Chapter 2.8.1. Furthermore, we also are not proposing 
new standards for emergency vehicles certified to the optional custom 
chassis regulatory subcategory due to our assessment that these 
vehicles have unpredictable operational requirements and may have 
limited access to recharging facilities while handling emergency 
situations in the MYs 2027-2032 timeframe. Finally, we are not 
proposing new standards for mixed-use vehicle optional custom chassis 
regulatory subcategory because these vehicles are designed to work 
inherently in an off-road environment (such as hazardous material 
equipment or off-road drill equipment) or be designed to operate at low 
speeds such that it is unsuitable for normal highway operation and 
therefore may have limited access to on-site depot or public charging 
facilities in the MYs 2027-2032 timeframe.\520\ We do not have concerns 
that manufacturers could inappropriately circumvent the proposed 
vocational vehicle standards or proposed optional custom chassis 
standards because vocational vehicles are built to serve a purpose. For 
example, a manufacturer cannot certify a box truck to the emergency 
vehicle custom chassis standards. We request comment on specific 
considerations and impacts the proposed standards would have on 
vehicles certified to these optional custom chassis standards. We also 
request comment and data regarding the potential for more stringent GHG 
standards for the motor homes, emergency vehicles, or mixed-use 
vehicles optional custom chassis regulatory subcategories in this time 
frame.
---------------------------------------------------------------------------

    \520\ Mixed-use vehicles must meet the criteria as described in 
40 CFR 1037.105(h)(1), 1037.631(a)(1), and 1037.631(a)(2).
---------------------------------------------------------------------------

4. Summary of Costs To Meet the Proposed Emission Standards
    We based the proposed standards on technology packages that include 
both ICE vehicle and ZEV technologies. In our analysis, the ICE 
vehicles include a suite of technologies that represent a vehicle that 
meets the existing MY 2027 Phase 2 CO2 emission standards. 
We accounted for these technology costs as part of the HD GHG Phase 2 
final rule. Therefore, our technology costs for the ICE vehicles are 
considered to be $0 because we did not add additional CO2-
reducing technologies to the ICE vehicles beyond those in the baseline 
vehicle. The incremental cost of a heavy-duty ZEV is the marginal cost 
of ZEV powertrain components compared to ICE powertrain components on a 
comparable ICE vehicle. This includes the removal of the associated 
costs of ICE-specific components from the baseline vehicle and the 
addition of the ZEV components and associated costs. DRIA Chapter 2.3.2 
and 2.4.3 includes the ICE powertrain and BEV powertrain cost estimates 
for each of the 101 HD vehicle types. DRIA Chapter 2.5.2 includes the 
FCEV powertrain cost projections for the coach buses, heavy-haul 
tractors, sleeper cab tractors, and day cab tractors.
i. Manufacturer Costs
    Table II-30 and Table II-31 show the ZEV technology costs for 
manufacturers relative to the reference case described in Section 
V.A.1, including the direct manufacturing costs that reflect learning 
effects, the indirect costs, and the IRA section 13502 Advanced 
Manufacturing Production Credit, on average aggregated by regulatory 
group for MYs 2027 and 2032, respectively.\521\ The incremental ZEV 
adoption rate reflects the difference between the ZEV adoption rates in 
the technology packages that support our proposed standards and the 
reference case. As shown in Table II-30 and Table II-31, we project 
that some vocational vehicle types will achieve technology cost parity 
between comparable ICE vehicles and ZEVs for manufacturers by MY 2032. 
These vehicles in our analysis include school buses and single unit 
trucks (which include vehicles such as delivery trucks). Our analysis 
is consistent with other studies. For example, an EDF/Roush study found 
that by MY 2027, BEV transit buses, school buses, delivery vans, and 
refuse haulers would each cost less upfront

[[Page 25997]]

than a comparable ICE vehicle.\522\ ICCT similarly found that 
``although zero-emission trucks are more expensive in the near-term 
than their diesel equivalents, electric trucks will be less expensive 
than diesel in the 2025-2030 time frame, due to declining costs of 
batteries and electric motors as well as increasing diesel truck costs 
due to emission standards compliance.'' \523\ These studies were 
developed prior to passage of the IRA, and therefore we would expect 
the cost comparisons to be even more favorable after considering the 
IRA provisions. For example, the Rocky Mountain Institute found that 
because of the IRA, the TCO of electric trucks will be lower than the 
TCO of comparable diesel trucks about five years faster than without 
the IRA. They expect cost parity as soon as 2023 for urban and regional 
duty cycles that travel up to 250 miles and 2027 for long-hauls that 
travel over 250 miles.\524\
---------------------------------------------------------------------------

    \521\ Indirect costs are described in detail in Section IV.B.2.
    \522\ Nair, Vishnu; Sawyer Stone; Gary Rogers; Sajit Pillai; 
Roush Industries, Inc. ``Technical Review: Medium and Heavy Duty 
Electrification Costs for MY 2027-2030.'' February 2022. Page 18. 
Last accessed on February 9, 2023 at https://blogs.edf.org/climate411/files/2022/02/EDF-MDHD-Electrification-v1.6_20220209.pdf.
    \523\ Hall, Dale and Nic Lutsey. ``Estimating the Infrastructure 
Needs and Costs for the Launch of Zero-Emission Trucks.'' February 
2019. Page 4. Last accessed on February 9, 2023 at https://theicct.org/wp-content/uploads/2021/06/ICCT_EV_HDVs_Infrastructure_20190809.pdf.
    \524\ Kahn, Ari, et al. ``The Inflation Reduction Act Will Help 
Electrify Heavy-Duty Trucking''. Rocky Mountain Institute. August 
25, 2022. Available online: https://rmi.org/inflation-reduction-act-will-help-electrify-heavy-duty-trucking/.

      Table II-30--Manufacturer Costs To Meet the Proposed MY 2027 Standards Relative to the Reference Case
                                                     [2021$]
----------------------------------------------------------------------------------------------------------------
                                                                    Incremental
                                                                   ZEV adoption       Per-ZEV      Fleet-average
                        Regulatory group                              rate in      manufacturer     per-vehicle
                                                                    technology    RPE on average   manufacturer
                                                                    package (%)                         RPE
----------------------------------------------------------------------------------------------------------------
LHD Vocational..................................................              18          $1,750            $323
MHD Vocational..................................................              15          15,816           2,411
HHD Vocational..................................................              12            -505             -62
Day Cab Tractors................................................               8          64,121           5,187
Sleeper Cab Tractors............................................               0             N/A               0
----------------------------------------------------------------------------------------------------------------

      Table II-31--Manufacturer Costs To Meet the Proposed MY 2032 Standards Relative to the Reference Case
                                                     [2021$]
----------------------------------------------------------------------------------------------------------------
                                                                    Incremental
                                                                   ZEV adoption       Per-ZEV      Fleet-average
                        Regulatory group                              rate in      manufacturer     per-vehicle
                                                                    technology    RPE on average   manufacturer
                                                                    package (%)                         RPE
----------------------------------------------------------------------------------------------------------------
LHD Vocational..................................................              45         -$9,515         -$4,326
MHD Vocational..................................................              24           1,358             326
HHD Vocational..................................................              28           8,146           2,300
Day Cab Tractors................................................              30          26,364           8,013
Sleeper Cab Tractors............................................              21          54,712          11,445
----------------------------------------------------------------------------------------------------------------

i. Purchaser Costs
    We also evaluated the costs of the proposed standards for 
purchasers on average by regulatory group, as shown in Table II-32 and 
Table II-33. Our assessment of the upfront purchaser costs include the 
incremental cost of a ZEV relative to a comparable ICE vehicle after 
accounting for the two IRA tax credits (IRA section 13502, ``Advanced 
Manufacturing Production Credit,'' and IRA section 13403, ``Qualified 
Commercial Clean Vehicles'') and the associated EVSE costs, if 
applicable. We also assessed the incremental annual operating savings 
of a ZEV relative to a comparable ICE vehicle. The payback periods 
shown reflect the number of years it would take for the annual 
operating savings to offset the increase in total upfront costs for the 
purchaser.

                                Table II-32--MY 2027 Purchaser Per-ZEV Upfront Costs, Operating Costs, and Payback Period
                                                                         [2021$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Total          Annual
                                                           Adoption rate    Incremental                     incremental     incremental   Payback period
                    Regulatory group                       in technology    per-ZEV RPE   EVSE costs Per-  upfront per-      operating       (year) on
                                                            package (%)       cost on     ZEV on average   ZEV costs on      costs on         average
                                                                              average                         average         average
--------------------------------------------------------------------------------------------------------------------------------------------------------
LHD Vocational..........................................              22         -$1,733         $10,562          $8,828         -$4,474               3
MHD Vocational..........................................              19             482          14,229          14,711          -5,194               3

[[Page 25998]]

 
HHD Vocational..........................................              16          -9,531          19,756          10,225          -4,783               3
Day Cab Tractors........................................              10          24,121          37,682          61,803          -7,275               8
Sleeper Cab Tractors....................................               0             N/A             N/A             N/A             N/A             N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The average costs represent the average across the regulatory group, for example the first row represents the average across all Light Heavy-Duty
  vocational vehicles.

                                Table II-33--MY 2032 Purchaser Per-ZEV Upfront Costs, Operating Costs, and Payback Period
                                                                         [2021$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Total          Annual
                                                           Adoption rate    Incremental                     incremental     incremental   Payback period
                    Regulatory group                       in technology    per-ZEV RPE   EVSE costs Per-  upfront per-      operating       (year) on
                                                            package (%)       cost on     ZEV on average   ZEV costs on      costs on         average
                                                                              average                         average         average
--------------------------------------------------------------------------------------------------------------------------------------------------------
LHD Vocational..........................................              57         -$9,608         $10,552            $944         -$4,043               1
MHD Vocational..........................................              35          -2,907          14,312          11,405          -5,397               3
HHD Vocational..........................................              40          -8,528          17,233           8,705          -7,436               2
Day Cab Tractors........................................              34             582          16,753          17,335          -6,791               3
Sleeper Cab Tractors....................................              25          14,712               0          14,712          -2,290               7
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown in Table II-33, under our proposal we estimate that the 
average upfront cost per vehicle to purchase a new MY 2032 vocational 
ZEV and associated EVSE compared to a comparable ICE vehicle (after 
accounting for two IRA tax credits, IRA section 13502, ``Advanced 
Manufacturing Production Credit,'' and IRA section 13403, ``Qualified 
Commercial Clean Vehicles''), would be offset by operational costs 
(i.e., savings that come from the lower costs to operate, maintain, and 
repair ZEV technologies), such that we expect the upfront cost increase 
would be recouped due to operating savings in one to three years, on 
average for vocational vehicles. For a new MY 2032 day cab tractor ZEV 
and associated EVSE, under our proposal we estimate the average 
incremental upfront cost per vehicle would be recovered in three years, 
on average. Similarly, for sleeper cab tractors, we estimate that the 
initial cost increase would be recouped in seven years. We discuss this 
in more detail in DRIA Chapter 2.
    The average per-vehicle purchaser costs shown in Table II-32 for MY 
2027 are higher than the MY 2032 per-vehicle costs. The reduction in 
costs over time are reflective of technology learning, as discussed in 
Section IV.B. It is worth noting that though the upfront costs of a BEV 
day cab tractor, for example, are higher when one considers both the 
vehicle and the EVSE, purchasers would still recoup these upfront costs 
within eight years of ownership on average. Also of note, our proposed 
standards in MY 2027 have a lower adoption rate of 10 percent for these 
day cab tractors, in recognition of the higher cost in MY 2027 than in 
MY 2032. The upfront vehicle cost increase projected at $24,000 
represents a less than a 25 percent increase when compared to the 
average price of $100,000 for a new day cab tractor. Purchasers also 
would have the option to consider alternatives to purchasing an EVSE at 
the time of purchasing a vehicle. For example, depending on the 
location of the vehicle, heavy-duty public charging may be a better 
solution than depot charging. The purchaser could instead of spending 
over $37,000 upfront on average for EVSE, they could instead spread the 
cost over time through public charging where the EVSE costs would be 
built into the electricity cost.
5. Lead Time Assessment
    Two of the significant aspects of the IRA are the tax credit 
available for the manufacturing of batteries and the tax credit 
available for the purchase of HD zero-emission vehicles, where the IRA 
provisions' qualifications are met. The tax credits significantly 
reduce, and in many cases erase, the incremental cost of purchasing a 
HD ZEV when compared to the cost of purchasing a comparable ICE 
vehicle. Therefore, as explained in our payback analysis, we expect the 
IRA will incentivize the demand and purchaser acceptance for HD ZEVs. 
However, demand and purchaser acceptance are only two of the factors we 
consider when evaluating the feasibility of HD ZEV technologies in the 
MY 2027 through MY 2032 timeframe. As we propose standards for MYs 2027 
through 2032, which are between four and nine years from now, we 
considered the lead time required for manufacturers to design, develop, 
and produce the ZEV and ICE vehicle technologies in the technology 
packages, in addition to lead time considerations for the charging and 
hydrogen refueling infrastructure. We welcome comment on our assessment 
of lead time in these areas.
    Manufacturers require time to design, develop, and build new 
vehicles. Based on discussions with heavy-duty manufacturers, depending 
on the amount of content that is new on a vehicle, it could take two to 
four years or more years to design, develop and prove the safety and 
reliability of a new HD vehicle. A typical design process includes the 
design and building of prototype or demonstration vehicles that are 
evaluated over several months or years in real world operation. The 
manufacturers need to accumulate miles and experience a wide variety of 
environmental conditions on these

[[Page 25999]]

prototype vehicles to demonstrate the product's durability and 
reliability. Then manufacturers would work to commercialize the vehicle 
and in turn build it in mass production. We also considered that 
manufacturers are likely limited in terms of the financial resources, 
human resources, and testing facilities to redesign all of their 
vehicles at the same time. Typically, manufacturers would focus on the 
applications with the best business case because these would be where 
the customers would be most willing to purchase, therefore the proposed 
standards phase in over a period of time starting in MY 2027 through MY 
2032. For HD BEVs, we have considered that BEV technology has been 
demonstrated to be technically feasible in heavy-duty transportation 
and that manufacturers will learn from the research and development 
work that has gone into developing the significant number of LD and HD 
electric vehicle models that are on the road today, as noted in Section 
II.D.2 and DRIA Chapter 1.5.5, and our proposed standards are supported 
by technology packages with increasing BEV adoption rates beginning in 
MY 2027 (see also our discussion in this subsection regarding our 
consideration of adequate time for infrastructure development for HD 
BEVs). For HD FCEVS, as discussed in Section II.D.3 and II.D.4, along 
with DRIA Chapter 1.7.5, fuel cell technology in other sectors has been 
in existence for decades, has been demonstrated to be technically 
feasible in heavy-duty transportation, and there are a number of HD 
FCEV models that are commercially available today with more expected to 
become available by 2024. However, we included this technology for our 
proposed standards starting in MY 2030 in part to take into 
consideration additional lead time to allow manufacturers to design, 
develop, and manufacture HD FCEV models (see also our discussion in 
this subsection regarding our consideration of adequate time for 
infrastructure development for HD FCEVs).
    We discuss in Sections II.D.1 and II.F.1 the need for ICE vehicles 
to continue to install CO2-reducing technologies, such as 
advanced aerodynamics, efficient powertrains, and lower rolling 
resistance tires. In our technology assessment for this proposal, we 
included the technology packages we considered in setting the existing 
Phase 2 MY 2027 CO2 emission standards. Each of these 
technologies exists today and continues to be developed by 
manufacturers. As noted in 2016 when we issued the HD GHG Phase 2 final 
rule, at that time we provided over ten years of lead time to the 
manufacturers to continue the development and deployment of these 
technologies. Our current assessment is that these ICE vehicle 
technologies continue to be feasible in the MY 2027 and later 
timeframe.
    As a new vehicle is being designed and developed, we considered 
that manufacturers will also need time to significantly increase HD ZEV 
production volumes from today's volumes. In particular, manufacturers 
will need to build new or modify existing manufacturing production 
lines to assemble the new products that include ZEV powertrains. We 
also considered that manufacturers will require time to source new 
components, such as heavy-duty battery packs, motors, fuel cell stacks, 
and other ZEV components, including the sourcing of the critical 
materials, as discussed in Section II.D.2.ii. As described in Section 
II.D.5, we anticipate that manufacturers will not develop vehicles to 
cover all types of HD vehicles at once but will focus on those with the 
most favorable business case first, increase the adoption of those 
vehicles over time, and then develop other applications. We believe our 
approach described in Section II.D.5 shows the adoption rates for the 
applications we have considered would be achievable in the MY 2027 and 
later timeframe. We welcome comment on the manufacturer lead time 
requirements for HD ZEVs.
    Purchasers of BEVs will also need to consider how they will charge 
their vehicles. Our assessment of the availability of public charging 
infrastructure, EVSE technology, and costs associated with depot 
charging are included in Section II.E.2 of this preamble, DRIA Chapter 
1 and DRIA Chapter 2. As noted in DRIA Chapter 2, we anticipate that 
many first-time BEV owners may opt to purchase and install EVSE at or 
near the time of vehicle purchase and we therefore account for these 
capital costs upfront. In terms of EVSE for HD BEVs, this equipment is 
available today for purchase. However, it takes time for individual or 
fleet owners to develop charging site plans for their facility, obtain 
permits, purchase the EVSE, and have it installed. For the depots that 
may be charging a greater number of vehicles or with high-power DCFC 
ports, an upgrade to the electricity distribution system may be 
required. As noted in DRIA Chapter 1, we expect significant increases 
in HD charging infrastructure due to a combination of public and 
private investments. This includes Federal funding available through 
the BIL \525\ and the IRA.\526\ As discussed in DRIA Chapter 1.6.2.2, 
states, OEMs, utilities, EVSE providers and others are also investing 
in and supporting the deployment of charging infrastructure. For 
example, Daimler Trucks North America, Volvo Trucks, Navistar, and 
PACCAR are a few of the HD manufacturers investing in EVSE, sometimes 
packaging the sale of EVSE with the vehicle.527 528 529 530 
Because of these projected increases and the funding available through 
the BIL and IRA, and as we are proposing more stringent standards that 
begin in MY 2027, our assessment supports that there is sufficient time 
for the infrastructure, especially for depot charging, to gradually 
increase over the remainder of this decade to levels that support the 
stringency of the proposed standards for the timeframe they would 
apply. We request comment on time considerations for all levels of HD 
charging infrastructure, including Level 2 up to 350 kW DCFC systems.
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    \525\ Infrastructure Investment and Jobs Act, Public Law 117-58, 
135 Stat. 429 (2021), available at https://www.congress.gov/117/plaws/publ58/PLAW-117publ58.pdf.
    \526\ Inflation Reduction Act, Public Law 117-169, 136 Stat. 
1818 (2022).
    \527\ Daimler Truck North America. ``Daimler Trucks North 
America, Portland General Electric open first-of-its-kind heavy-duty 
electric truck charging site''. April 21, 2021. Available online: 
https://northamerica.daimlertruck.com/PressDetail/daimler-trucks-north-america-portland-general-2021-04-21.
    \528\ Volvo Trucks USA. ``Volvo Trucks Simplifies EV Charger 
Procurement with Vendor Direct Shipping Program''. September 29, 
2022. Available online: https://www.volvotrucks.us/news-and-stories/press-releases/2022/september/volvo-trucks-simplifies-ev-charger-procurement-with-vendor-direct-shipping-program.
    \529\ Navistar. ``Navistar and In-Charge Energy Now Offer 
Carbon-Neurtral Electric Vehicle Charging''. Available online: 
https://news.navistar.com/2021-10-25-Navistar-and-In-Charge-Energy-Now-Offer-Carbon-Neutral-Electric-Vehicle-Charging.
    \530\ Paccar Parts. ``Electric Vehicle Chargers''. Available 
online: https://www.paccarparts.com/technology/ev-chargers/.
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    Purchasers of FCEVs will need to consider how they will obtain 
hydrogen to refuel the vehicles. As discussed in DRIA Chapter 1.8, 
there are currently 54 public retail hydrogen fueling stations in the 
United States, primarily for light-duty vehicles in California 
according to DOE's Alternative Fuels Data Center. When including 
private and planned stations in a search, there are over 130 refueling 
station locations nationwide.\531\ There are also numerous nationally 
designated hydrogen-ready or hydrogen-pending Alternative Fueling 
Corridors. Corridor-ready designations

[[Page 26000]]

have public hydrogen stations no greater than 100 miles apart and no 
greater than five miles off the highway. Corridor-pending designations 
have public hydrogen stations separated by more than 100 miles but no 
greater than five miles off the highway.532 533 In addition, 
DOE's draft Clean Hydrogen Strategy and Roadmap suggests a regional 
``clean hydrogen hub'' approach to infrastructure. Under provisions of 
the BIL, DOE is investing $8 billion through 2026 to support the 
development of at least four hubs that can demonstrate the production, 
processing, delivery, storage, and end use of clean hydrogen.
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    \531\ U.S. Department of Energy, Alternative Fuels Data Center. 
``Hydrogen Fueling Station Locations''. Last accessed on January 27, 
2023. Available online: https://afdc.energy.gov/fuels/hydrogen_locations.html#/analyze?fuel=HY.
    \532\ U.S. Department of Transportation, Federal Highway 
Administration. ``Alternative Fuel Corridors: Hydrogen''. Available 
online: https://hepgis.fhwa.dot.gov/fhwagis/
ViewMap.aspx?map=Highway+Information[bond]Hydrogen+(HY-
Round+1,2,3,4,5+and+6)#.
    \533\ U.S. Department of Transportation, Federal Highway 
Administration. ``Alternative Fuel Corridors; Frequently Asked 
Questions FAST Act Section 1413--Alternative Fuel Corridor 
Designations Updated December 2020 to Support Round 5''. Available 
online: https://www.fhwa.dot.gov/environment/alternative_fuel_corridors/resources/faq/.
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    DOE released a Liftoff Report on clean hydrogen to establish a 
common fact base moving forward for dialogue and coordinated action 
across the full technology value chain (e.g., from upstream production 
to downstream end uses). The report considers the impact of hub funding 
and tax credits under BIL and IRA, including the hydrogen production 
tax credit (PTC). It identifies three phases of rapid market growth: 
near-term expansion (~2023-2026), industrial scaling (~2027-2034), and 
long-term growth (~2035+). The report acknowledges that there are both 
opportunities and challenges for sectors with few decarbonization 
alternatives like heavy-duty transportation end uses, including long-
haul trucks. During the timeframe of this rule (i.e., through 2032), 
the Liftoff Report supports a scenario where low-GHG hydrogen will be 
emerging for long-haul trucks.\534\ We project that hydrogen 
consumption from FCEVs in this proposal would be a small proportion of 
total low-GHG hydrogen expected to be produced through 2030 in the 
United States.
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    \534\ U.S. Department of Energy. ``Pathways to Commercial 
Liftoff: Clean Hydrogen''. March 2023. Available online: https://liftoff.energy.gov/wp-content/uploads/2023/03/20230320-Liftoff-Clean-H2-vPUB.pdf.
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    To meet more immediate needs, end users may expect to rely on 
hydrogen deliveries from central production facilities. After 
evaluating the existing and future hydrogen refueling 
infrastructure,\535\ we considered FCEVs only in the MY 2030 and later 
timeframe to better ensure we have provided adequate time for 
infrastructure development and because we expect that refueling needs 
can be met by MY 2030, as discussed in Section II.D.4 and in DRIA 
Chapter 2.1. We request comment on lead time considerations related to 
the development of HD hydrogen fueling infrastructure.
---------------------------------------------------------------------------

    \535\ U.S. Department of Energy. ``Pathways to Commercial 
Liftoff: Clean Hydrogen''. March 2023. Available online: https://liftoff.energy.gov/wp-content/uploads/2023/03/20230320-Liftoff-Clean-H2-vPUB.pdf.
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    Giving consideration to these factors, our analysis supports that 
there is sufficient lead time to meet the proposed standards, which 
manufacturers may comply with through application of BEV technologies, 
FCEV technologies, or further improvements to ICE vehicles, including 
H2-ICE powered vehicles. However, we also considered and are requesting 
comment on an alternative standards reflecting a slower phase-in of HD 
ZEV adoption rates, and are also seeking comment on more stringent 
standards reflecting a more aggressive phase-in of HD ZEV adoption 
rates, as described in Section II.H.
    Additionally, while we believe there is sufficient time for the 
charging and refueling infrastructure to develop for the reasons 
explained in this section, EPA recognizes that such infrastructure for 
BEVs and FCEVs is important for the success of the increasing 
development and adoption of these vehicle technologies. EPA carefully 
considered that there are significant efforts already underway to 
develop and expand heavy-duty electric charging and hydrogen refueling 
infrastructure both at the local, State and Federal government level as 
well as from private industry, as discussed in DRIA Chapters 1 and 2 
and this section. Those are important early actions that, as we just 
explained, will support the increase in ZEV charging and refueling 
infrastructure needed for the future growth of ZEV technology of the 
magnitude EPA is projecting in this proposal's technology packages. EPA 
has heard from some representatives from the heavy-duty vehicle 
manufacturing industry both optimism regarding the heavy-duty 
industry's ability to produce ZEV technologies in future years at high 
volume, but also concern that a slow growth in ZEV refueling 
infrastructure can slow the growth of heavy-duty ZEV adoption, and that 
this may present challenges for vehicle manufacturers' ability to 
comply with future EPA GHG standards. EPA has a vested interest in 
monitoring industry's performance in complying with mobile source 
emission standards, including the highway heavy-duty industry. EPA 
monitors industry's performance through a range of approaches, 
including regular meetings with individual companies and regulatory 
requirements for data submission as part of the annual certification 
process. EPA also provides transparency to the public through actions 
such as publishing industry compliance reports (such as has been done 
during the heavy-duty GHG Phase 1 program).\536\ EPA requests comment 
on what, if any, additional information and data EPA should consider 
collecting and monitoring during the implementation of the Phase 3 
standards; we also request comment on whether there are additional 
stakeholders EPA should work with during implementation of the Phase 3 
standards and what measures EPA should include to help ensure success 
of the Phase 3 program, including with respect to the important issues 
of refueling and charging infrastructure for ZEVs.
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    \536\ See EPA Reports EPA-420-R-21-001B covering Model Years 
2014-2018, and EPA report EPA-420-R-22-028B covering Model Years 
2014-2020, available online at https://www.epa.gov/compliance-and-fuel-economy-data/epa-heavy-duty-vehicle-and-engine-greenhouse-gas-emissions.
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G. EPA's Basis That the Proposed Standards Are Feasible and Appropriate 
Under the Clean Air Act

1. Overview
    As discussed in Section II.A of this preamble, there is a critical 
need for further GHG reductions to address the adverse impacts of air 
pollution from HD vehicles on public health and welfare. With continued 
advances in internal combustion emissions controls and vehicle zero 
emission technologies coming into the mainstream as key vehicle 
emissions controls, EPA believes substantial further emissions 
reductions are feasible and appropriate under the Clean Air Act.
    The Clean Air Act authorizes EPA to establish emissions standards 
for motor vehicles to regulate emissions of air pollutants that 
contribute to air pollution which, in the Administrator's judgment, may 
reasonably be anticipated to endanger public health or welfare. Heavy-
duty vehicles are significant contributors to the U.S. GHG emissions 
inventories, and additional reductions in GHGs from vehicles are needed 
to avoid the worst consequences of climate change as discussed in 
Section II.A.

[[Page 26001]]

    This proposed rule also considers the large potential impact that 
the Inflation Reduction Act (IRA) will have on facilitating production 
and adoption of ZEV technologies. The IRA provides powerful incentives 
in reducing the cost to manufacture and purchase ZEVs, as well as 
reducing the cost of charging infrastructure, that will help facilitate 
increased market penetration of ZEV technology in the time frame 
considered in this rulemaking. Thus, it is an important element of 
EPA's cost and feasibility assessment, and EPA has considered the 
impacts of the IRA in our assessment of the appropriate proposed 
standards.
    As we did in HD GHG Phase 1 and Phase 2 rulemakings, in this Phase 
3 proposal we considered the following factors: the impacts of 
potential standards on emissions reductions of GHG emissions; technical 
feasibility and technology effectiveness; the lead time necessary to 
implement the technologies; costs to manufacturers; costs to purchasers 
including operating savings; reduction of non-GHG emissions; the 
impacts of standards on oil conservation and energy security; impacts 
of standards on the truck industry; other energy impacts; as well as 
other relevant factors such as impacts on safety.\537\ See Section 
II.G.5 for further discussion of how we balanced the factors we 
considered for the proposed Phase 3 standards.
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    \537\ 81 FR 73512 (October 25, 2016) and 76 FR 57129 (September 
15, 2011).
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2. Consideration of Technological Feasibility, Compliance Costs and 
Lead Time
    The technological readiness of the heavy-duty industry to meet the 
proposed standards for model years 2027-2032 and beyond is best 
understood in the context of over a decade of heavy-duty vehicle 
emissions reduction programs in which the HD industry has introduced 
emissions reducing technologies in a wide lineup of ever more efficient 
and cost-competitive vehicle applications. Electrification technologies 
have seen particularly rapid development over the last several years 
such that early HD ZEV models are in use today for some applications 
and and are expected to expand to many more applications, as discussed 
DRIA Chapters 1.5 and 2, and as a result the number of ZEVs projected 
in the proposal and across all the alternatives considered here is much 
higher than in any of EPA's prior rulemaking analyses.
    As discussed in DRIA Chapter 1.5.5 and Section I, the ZEV 
technology necessary to achieve significantly more stringent standards 
has already been developed and deployed. Additionally, manufacturers 
have announced plans to rapidly increase their investments in ZEV 
technologies over the next decade. In addition, the IRA and the BIL 
provide many monetary incentives for the production and purchase of 
ZEVs in the heavy-duty market, as well as incentives for electric 
vehicle charging infrastructure. Furthermore, there have been multiple 
actions by states to accelerate the adoption of heavy-duty ZEVs, such 
as (1) a multi-state Memorandum of Understanding for the support of 
heavy-duty ZEV adoption; \538\ and (2) the State of California's ACT 
program, which has also been adopted by other states and includes a 
manufacturer requirement for zero-emission truck sales.\539\ Together 
with the range of ICE technologies that have been already demonstrated 
over the past decade, BEVs and FCEVs with no tailpipe emissions (and 0 
g CO2/ton-mile certification values) are capable of 
supporting rates of annual stringency increases that are much greater 
than were typical in earlier GHG rulemakings.
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    \538\ NESCAUM MOU, available at https://www.nescaum.org/documents/mhdv-zev-mou-20220329.pdf.
    \539\ EPA granted the ACT rule waiver requested by California 
under CAA section 209(b) on March 30, 2023. The ACT had been adopted 
by five states under CAA section 177: Oregon, Washington, New York, 
New Jersey, and Massachusetts. Oregon and Washington adopted ACT as-
is, whereas New York, New Jersey, and Massachusetts adopted ACT on a 
one-year delay.
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    In setting standards for a future model year, EPA considers the 
extent deployment of advanced technologies would be available and 
warranted in light of the benefits to public health and welfare in GHG 
emission reductions, and potential constraints, such as cost of 
compliance, lead time, raw material availability, component supplies, 
redesign cycles, charging and refueling infrastructure, and purchasers' 
willingness to purchase (including payback). The extent of these 
potential constraints has diminished significantly in light of 
increased and further projected investment by manufacturers, increased 
and further projected acceptance by purchasers, and significant support 
from Congress to address such areas as upfront purchase price, charging 
infrastructure, critical mineral supplies, and domestic supply chain 
manufacturing. In response to the increased stringency of the proposed 
standards, manufacturers would be expected to adopt advanced 
technologies, such as increased electrification, at an increasing pace 
across more of their vehicles. To evaluate the feasibility of BEVs and 
FCEVs in our technology packages that support the proposed standards, 
EPA developed a tool called HD TRUCS, to evaluate the design features 
needed to meet the energy and power demands of various HD vehicle types 
when using ZEV technologies. The overarching design and functionality 
of HD TRUCS is premised on ensuring each of the 101 ZEV types could 
perform the same work as a comparable ICE vehicle counterpart. Within 
the HD TRUCS modeling that EPA conducted to support this proposal, we 
have imposed constraints to reflect the rate at which a manufacturer 
can deploy ZEV technologies that include consideration of time 
necessary to ramp up battery production, including the need to increase 
the availability of critical raw materials and expand battery 
production facilities, as discussed in Section II.D.2.ii.
    Constraints on the technology adoption limits in our compliance 
modeling as well as other aspects of our lead time assessment are 
described in Section II.F. Overall, given the number and breadth of 
current low or zero emission vehicles and the constraints we have made 
to limit the rate of development for new HD vehicles, our assessment 
shows that there is sufficient lead time for the industry to more 
broadly deploy existing technologies and successfully comply with the 
proposed standards.
    Our analysis projects that for the industry overall, nearly 50 
percent of new vocational vehicles and 25 to 35 percent of new tractors 
in MY 2032 would be ZEVs. EPA believes that this is an achievable level 
based on our technical assessment for this proposal that includes 
consideration of the feasibility and lead time required for ZEVs and 
appropriate consideration of the cost of compliance for manufacturers. 
Our assessment of the appropriateness of the level of ZEVs in our 
analysis is also informed by public announcements by manufacturers 
about their plans to transition fleets to electrified vehicles, as 
described in Section I.A.2 of this preamble. More detail about our 
technical assessment, and our assessment of the production feasibility 
of ZEVs is provided in Section II.D and II.E of this Preamble and 
Chapters 1 and 2 of the DRIA. At the same time, we note that the 
proposed standards are performance-based and do not mandate any 
specific technology for any manufacturer or any vehicles. Moreover, the 
overall industry does not necessarily need to reach this level of ZEVs 
in order to comply--this

[[Page 26002]]

is one of many possible compliance pathways that manufacturers could 
choose to take under the performance-based standards. For example, 
manufacturers that choose to increase their sales of hybrid vehicle 
technologies or apply more advanced technology to non-hybrid ICE 
vehicles would require a smaller number of ZEVs than we have projected 
in our assessment to comply with the proposed standards.
    In considering feasibility of the proposed standards, EPA also 
considers the impact of available compliance flexibilities on 
manufacturers' compliance options. Manufacturers widely utilize the 
program's established averaging, banking and trading (ABT) provisions 
which provide a variety of flexible paths to plan compliance. We have 
discussed this dynamic in past rules, and we anticipate that this same 
dynamic will support compliance with this rulemaking. The GHG credit 
program was designed to recognize that manufacturers typically have a 
multi-year redesign cycle and not every vehicle will be redesigned 
every year to add emissions-reducing technology. Moreover, when 
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,'' over-performing compared to their respective 
CO2 emission standards in that model year, while other 
vehicles will be ``debit generators'' and under-performing against 
their standards. As the proposed standards reach increasingly lower 
numerical levels, some vehicle designs that had generated credits 
against their CO2 emission standard in earlier model years 
may instead generate debits in later model years. In MY 2032 when the 
proposed standards reach the lowest level, it is possible that only 
BEVs, FCEVs, and H2-ICE vehicles are generating positive credits, and 
all ICE vehicles generate varying levels of deficits. Even in this 
case, the application of ICE technologies can remain an important part 
of a manufacturer's compliance strategy by reducing the amount of 
debits generated by these vehicles. A greater application of ICE 
technologies (e.g., hybrids) can enable compliance with fewer ZEVs than 
if less ICE technology was adopted, and therefore enable the tailoring 
of a compliance strategy to the manufacturer's specific market and 
product offerings. Together, a manufacturer's mix of credit-generating 
and debit-generating vehicles contribute to its sales-weighted average 
performance, compared to its standard, for that year.
    Just as the averaging approach in the HD 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 banking allows credits to carry-over 
for up to five years and allows manufacturers up to three years to 
address any credit deficits. Credit trading is a compliance flexibility 
provision that allows one vehicle manufacturer to purchase credits from 
another, though trading of GHG credits has not occurred with HD GHG 
credits.
    The proposed performance-based standards with ABT provisions give 
manufacturers a degree of flexibility in the design of specific 
vehicles and their fleet offerings, while allowing industry overall to 
meet the standards and thus achieve the health and environmental 
benefits projected for this rulemaking. EPA has considered the 
averaging portion of the ABT program in the feasibility assessments for 
previous rulemakings and continues that practice here. We also continue 
to acknowledge that the other provisions in ABT that provide 
manufacturers additional flexibility also support the feasibility of 
the proposed standards. By averaging across vehicles in the vehicle 
averaging sets and by allowing for credit banking across years, 
manufacturers have the flexibility to adopt emissions-reducing 
technologies in the manner that best suits their particular market and 
business circumstances. EPA's annual Heavy-Duty Vehicle and Engine 
Greenhouse Gas Emissions Compliance Report illustrates how different 
manufacturers have chosen to make use of the GHG program's various 
credit features.\540\ It is clear that manufacturers are widely 
utilizing several of the credit programs available, and we expect that 
manufacturers will continue to take advantage of the compliance 
flexibilities and crediting programs to their fullest extent, thereby 
providing them with additional tools in finding the lowest cost 
compliance solutions in light of the proposed standards.
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    \540\ ``The Final Phase 1 EPA Heavy-Duty Vehicle and Engine 
Greenhouse Gas Emissions Compliance Report (Model Years 2014-20),'' 
EPA-420-R-22-028. November 2022. Last accessed on February 9, 2023 
at https://www.epa.gov/compliance-and-fuel-economy-data/epa-heavy-duty-vehicle-and-engine-greenhouse-gas-emissions.
---------------------------------------------------------------------------

    In addition to technological feasibility and lead time, EPA has 
considered the cost for the heavy-duty industry to comply with the 
proposed standards. See Section II.F.4 and Chapter 2 of the DRIA for 
our analysis of compliance costs for manufacturers. We estimate that 
the MY 2032 fleet average per-vehicle cost to manufacturers by 
regulatory group would range between a cost savings for LHD vocational 
vehicles to $2,300 for HHD vocational vehicles and between $8,000 and 
$11,400 per tractor. EPA notes the projected costs per vehicle for this 
proposal are similar to the fleet average per-vehicle costs projected 
for the HD GHG Phase 2 rule that we considered to be reasonable. The 
Phase 2 tractor standards were projected to cost between $10,200 and 
$13,700 per vehicle (81 FR 73621). The Phase 2 vocational vehicle 
standards were projected to cost between $1,486 and $5,670 per vehicle 
(81 FR 73718). Furthermore, the estimated MY 2032 costs to 
manufacturers represent less than about ten percent of the average 
price of a new heavy-duty tractor today (conservatively estimated at 
$100,000 in 2022).\541\ For this proposal, EPA finds that the expected 
vehicle compliance costs are reasonable in light of the emissions 
reductions in air pollutants and the resulting benefits for public 
health and welfare.
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    \541\ Note that these values are averages across all vehicles 
and there will be differences for each individual vehicle.
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3. Consideration of Emissions of GHGs
    An essential factor that EPA considered in determining the 
appropriate level of the proposed standards is the reductions in GHG 
emissions and associated public health and welfare impacts.\542\
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    \542\ As further explained in Section II.G.4, we note that we 
also expect the proposed GHG emission standards would lead to an 
increase in HD ZEVs, which would also result in reductions of 
vehicle emissions of non-GHG pollutants that contribute to ambient 
concentrations of ozone, particulate matter (PM2.5), 
NO2, CO, and air toxics. EPA did not select the proposed 
GHG emission standards based on non-GHG reductions of vehicle 
emissions; nonetheless, the GHG and non-GHG reductions of vehicle 
emissions of the proposed program reinforce our view that the 
proposed standards represent an appropriate weighing of the 
statutory factors and other relevant considerations.
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    The proposed GHG standards would achieve significant reductions in 
GHG emissions. The proposed standards would achieve approximately 1.8 
billion metric tons in net CO2 cumulative emission 
reductions from calendar years 2027 through 2055 (see Section V of the 
preamble and Chapter 4 of the DRIA). As discussed in Section VI of this

[[Page 26003]]

preamble, these GHG emission reductions would make an important 
contribution to efforts to limit climate change and its anticipated 
impacts.
    The proposed CO2 emission standards would reduce adverse 
impacts associated with climate change and would yield significant 
benefits, including those we can monetize and those we are unable to 
fully monetize due to data and modeling limitations. The program would 
result in significant social benefits including $87 billion in climate 
benefits (with the average SC-GHGs at a 3 percent discount rate). A 
more detailed description and breakdown of these benefits can be found 
in Section VII of the preamble and Chapter 7 of the DRIA.
    As discussed in Section VII, we monetize benefits of the proposed 
CO2 standards and evaluate other costs in part to better 
enable a comparison of costs and benefits pursuant to E.O. 12866, but 
we recognize that there are benefits we are unable to fully quantify. 
EPA's consistent practice has been to set standards to achieve improved 
air quality consistent with CAA section 202, and not to rely on cost-
benefit calculations, with their uncertainties and limitations, in 
identifying the appropriate standards. Nonetheless, 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.
4. Consideration of Impacts on Purchasers, Non-GHG Emissions, Energy, 
Safety and Other Factors
    Another factor that EPA considered in determining the proposed 
standards is the impact of the proposed HD CO2 standards on 
purchasers, consistent with the approach we used in HD GHG Phase 1 and 
Phase 2. In this proposal, we considered willingness to purchase (such 
as practicability, payback, and costs for vehicle purchasers including 
EVSE) in determining the appropriate level of the proposed standards. 
Businesses that operate HD vehicles are under competitive pressure to 
reduce operating costs, which should encourage purchasers to identify 
and rapidly adopt vehicle technologies that provide a positive total 
cost of ownership. Outlays for labor and fuel generally constitute the 
two largest shares of HD vehicle operating costs, depending on the 
price of fuel, distance traveled, type of HD vehicle, and commodity 
transported (if any), so businesses that operate HDVs face strong 
incentives to reduce these costs.543 544 However, as noted 
in DRIA Chapter 6.2, there are a number of other considerations that 
may impact a purchaser's willingness to adopt new technologies. Within 
HD TRUCS, we considered the impact on purchasers through our evaluation 
of payback periods. The payback period is the number of years that it 
would take for the annual operational savings of a ZEV to offset the 
incremental upfront purchase price of a BEV or FCEV (after accounting 
for the IRA section 13502 battery tax credit and IRA section 13403 
vehicle tax credit) and charging infrastructure costs (for BEVs) when 
compared to purchasing a comparable ICE vehicle. The average per-
vehicle costs to a purchaser by regulatory group for a MY 2032 heavy-
duty vehicle, including associated EVSE and after considering the IRA 
battery-manufacturer and vehicle-purchaser tax credits, are projected 
to range between $900 and $11,000 for vocational vehicles and $14,700 
and $17,300 for tractors. As noted in Section II.F.4.ii, EPA concludes 
that the proposed standards would be beneficial for purchasers because 
the lower operating costs during the operational life of the vehicle 
would offset the increase in vehicle technology costs. For example, 
purchasers of MY 2032 vocational vehicles and day cab tractors on 
average by regulatory group would recoup the upfront costs through 
operating savings within the first three years of ownership. 
Furthermore, the purchasers would benefit from annual operating cost 
savings for each year after the payback occurs. EPA finds that these 
average costs to purchasers are reasonable considering the operating 
savings which more than offsets these costs, as was also the case with 
the HD GHG Phase 2 rule. See 81 FR 73482.
---------------------------------------------------------------------------

    \543\ American Transportation Research Institute, An Analysis of 
the Operational Costs of Trucking, September 2013. Docket ID: EPA-
HQ-OAR-2014-0827-0512.
    \544\ Transport Canada, Operating Cost of Trucks, 2005. Docket 
ID: EPA-HQ-OAR-2014-0827-0070.
---------------------------------------------------------------------------

    We also considered the practicability and suitability of the 
proposed standards as we applied an additional constraint within HD 
TRUCS that limited the maximum ZEV adoption rate to 80 percent for any 
given vehicle type. This conservative limit was developed after 
consideration of the actual needs of the purchasers, as discussed in 
Section II.F.1.
    Within our analysis, to support the practicability and suitability 
of the proposed standards we also considered the lead time necessary 
for purchasers to install depot charging and the lead time necessary 
for development of hydrogen infrastructure that would be required for 
the use of these technologies. As further explained in DRIA Chapter 1.6 
and Sections II.E.2 and II.F.5, our assessment supports that depot 
charging can be installed in time for the purchase and use of the 
volume of MY 2027 BEVs we project could be used to comply with the 
proposed standards. With respect to hydrogen infrastructure, as further 
explained in DRIA Chapter 1.8 and Section II.F.5, we recognize that 
this may take longer to develop, and therefore included a constraint 
for FCEVs such that we did not propose new standards for long-haul 
vehicles until MY 2030, when we expect refueling needs can be met for 
the volume of FCEVs we project could be used to comply with the 
proposed standards. Furthermore, we also assessed the impact of future 
HD BEVs on the grid, as discussed in Section II.E.2. Our assessment is 
that grid reliability is not expected to be adversely affected by the 
modest increase in electricity demand associated with HD BEV charging 
and thus was not considered to be a constraining consideration.
    EPA considers our analysis of the impact of the proposed 
CO2 emission standards on vehicle and upstream emissions for 
non-GHG pollutants as supportive of the proposed standards. The 
proposed standards would decrease vehicle emissions of non-GHG 
pollutants that contribute to ambient concentrations of ozone, 
particulate matter (PM2.5), NO2, CO, and air 
toxics. By 2055, when considering downstream vehicle, EGU, and refinery 
emissions, we estimate a net decrease in emissions from all pollutants 
modeled (i.e., NOX, PM2.5, VOC, and 
SO2) (see Section V of the preamble and Chapter 4 of the 
DRIA for more detail).
    As also explained in Section II.G.3, and as discussed in Section 
VII, we monetize benefits of the proposed standards and evaluate other 
costs in part to better enable a comparison of costs and benefits 
pursuant to E.O. 12866, but we recognize that there are benefits we are 
unable to fully quantify. EPA's consistent practice has been to set 
standards to achieve improved air quality consistent with CAA section 
202, and not to rely on cost-benefit calculations, with their 
uncertainties and limitations, in identifying the appropriate 
standards.
    EPA also evaluated the impacts of the proposed HD GHG standards on 
energy, in terms of oil conservation and energy security through 
reductions in fuel consumption. This proposal is projected to reduce 
U.S. oil imports 4.3 billion gallons through 2055 (see Section VI.F).

[[Page 26004]]

We estimate the benefits due to reductions in energy security 
externalities caused by U.S. petroleum consumption and imports would be 
approximately $12 billion under the proposed program. EPA considers 
this proposal to be beneficial from an energy security perspective and 
thus this factor was considered to be a supportive and not constraining 
consideration.
    EPA estimates that the present value of monetized net benefits to 
society would be approximately $320 billion through the year 2055 
(annualized net benefits of $17 billion through 2055), more than 5 
times the cost in vehicle technology and associated electric vehicle 
supply equipment (EVSE) combined. Regarding social costs, EPA estimates 
that the cost of vehicle technology (not including the vehicle or 
battery tax credits) and EVSE would be approximately $9 billion and $47 
billion respectively, and that the HD industry would save approximately 
$250 billion in operating costs (e.g., savings that come from less 
liquid fuel used, lower maintenance and repair costs for ZEV 
technologies as compared to ICE technologies, etc.). The program would 
result in significant social benefits including $87 billion in climate 
benefits (with the average SC-GHGs at a 3 percent discount rate). 
Between $15 and $29 billion of the estimated total benefits through 
2055 are attributable to reduced emissions of non-GHG pollutants, 
primarily those that contribute to ambient concentrations of 
PM2.5. Finally, the benefits due to reductions in energy 
security externalities caused by U.S. petroleum consumption and imports 
would be approximately $12 billion under the proposed program. A more 
detailed description and breakdown of these benefits can be found in 
Section VIII of the preamble and Chapter 7 of the DRIA. 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.
    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 history of considering the safety implications of its 
emission standards, including the HD Phase 1 and Phase 2 rule. We 
highlight the numerous industry standards and safety protocols that 
exist today for heavy-duty BEVs and FCEVs that provide guidance on the 
safe design of these vehicles in Section II.D and DRIA Chapter 1 and 
thus this factor was considered to be a supportive and not constraining 
consideration.
5. Selection of Proposed Standards Under CAA 202(a)
    Under section 202(a), EPA has a statutory obligation to set 
standards to reduce emissions of air pollutants from classes of motor 
vehicles that the Administrator has found contribute to air pollution 
that may be expected to endanger public health and welfare. In setting 
such standards, the Administrator must provide adequate lead time for 
the development and application of technology to meet the standards, 
taking into consideration the cost of compliance. EPA's proposed 
standards properly implement this statutory provision, as discussed in 
this Section II.G. In setting standards for a future model year, EPA 
considers the extent deployment of advanced technologies would be 
available and warranted in light of the benefits to public health and 
welfare in GHG emission reductions, and potential constraints, such as 
cost of compliance, lead time, raw material availability, component 
supplies, redesign cycles, charging and refueling infrastructure, and 
purchasers' willingness to purchase (including payback). The extent of 
these potential constraints has diminished significantly in light of 
increased and further projected investment by manufacturers, increased 
and further projected acceptance by purchasers, and significant support 
from Congress to address such areas as upfront purchase price, charging 
infrastructure, critical mineral supplies, and domestic supply chain 
manufacturing. The proposed standards would achieve significant and 
important reductions in GHG emissions that endanger public health and 
welfare. Furthermore, as discussed throughout this preamble, the 
emission reduction technologies needed to meet the proposed standards 
have already been developed and are feasible and available for 
manufacturers to utilize in their fleets at reasonable cost in the 
timeframe of these proposed standards, even after considering key 
elements including battery manufacturing capacity and critical 
materials availability.
    As discussed throughout this preamble, the emission reduction 
technologies needed to meet the proposed standards are feasible and 
available for manufacturers to utilize in HD vehicles in the timeframe 
of these proposed standards. The proposed emission standards are based 
on one potential technology path (represented in multiple technology 
packages for the various HD vehicle regulatory subcategories per MY) 
that includes adoption rates for both ICE vehicle technologies and 
zero-emission vehicle technologies that EPA regards as feasible and 
appropriate under CAA section 202(a) for the reasons given in this 
Section II.G, and as further discussed throughout Section II and DRIA 
Chapter 2. For the reasons described in that analysis, EPA believes 
these technologies can be developed and applied in HD vehicles and 
adopted at the projected rates for these proposed standards within the 
lead time provided, as discussed in Section II.F.6 and in DRIA Chapter 
2.
    EPA also gave appropriate consideration of cost of compliance in 
the selection of the proposed standards as described in this Section 
II.G, and as further discussed in Section II.F and DRIA Chapter 2. The 
MY 2027 through MY 2031 emission standards were developed using less 
aggressive application rates and, therefore, are projected to have 
lower technology package costs than the proposed MY 2032 standards. 
Additionally, as described in this Section II.G and as further 
discussed in Section II.F and DRIA Chapter 2, we considered impacts on 
vehicle purchasers and willingness to purchase (including 
practicability, payback, and costs to vehicle purchasers) in applying 
constraints in our analysis and selecting the proposed standards.\545\ 
For example, in MY 2032, we estimated that the incremental cost to 
purchase a ZEV would be recovered in the form of operational savings 
during the first one to three years of ownership, on average by 
regulatory group, for the vocational vehicles; approximately three 
years, on average by regulatory group, for short-haul tractors; and 
seven years, on average by regulatory group, for long-haul tractors, as 
shown in the payback analysis included in Section II.F.4. The length of 
ownership of new tractors varies. One study found that first ownership 
is customarily four to seven years for For-Hire companies and seven to 
12 years for Private fleets.\546\ Another survey

[[Page 26005]]

found that the average trade-in cycle for tractors was 8.7 years.\547\ 
Therefore, we find that these tractor technologies on average by 
regulatory group pay for themselves within the customary ownership 
timeframe for the initial owner. As we discussed in the HD GHG Phase 2 
rulemaking, vocational vehicles generally accumulate far fewer annual 
miles than tractors and would lead owners of these vehicles to keep 
them for longer periods of time.\548\ To the extent vocational vehicle 
owners may be similar to owners of tractors in terms of business 
profiles, they are more likely to resemble private fleets or owner-
operators than for-hire fleets. Regardless, the technologies would also 
pay for themselves on average by regulatory group within the ownership 
timeframe for vocational vehicles as well.
---------------------------------------------------------------------------

    \545\ Although EPA sometimes describes purchaser response 
(including purchaser costs) as part of our analysis of feasibility, 
we emphasize that purchaser response is not a statutorily enumerated 
factor under section 202(a)(1)-(2). Rather EPA has considered 
purchaser response in exercising our discretion under the statute, 
and based on the record before us, the agency views purchaser 
response as a material aspect of the real-world feasibility of the 
proposed standards.
    \546\ Roeth, Mike, et al. ``Barriers to Increased Adoption of 
Fuel Efficiency Technologies in Freight Trucking,'' Page 24. July 
2013. International Council for Clean Transportation. Available at 
https://theicct.org/sites/default/files/publications/ICCT-NACFE-CSS_Barriers_Report_Final_20130722.pdf.
    \547\ American Transportation Research Institute. ``An Analysis 
of the Operational Costs of Trucking: 2021 Update.'' November 2021. 
Page 14.
    \548\ 81 FR 73719 (October 25, 2016).
---------------------------------------------------------------------------

    Moreover, the additional flexibilities beyond averaging already 
available under EPA's existing regulations, including banking and 
trading provisions in the ABT program--which, for example, in effect 
enable manufacturers to spread the compliance requirement for any 
particular model year across multiple model years--further support 
EPA's conclusion that the proposed standards provide sufficient time 
for the development and application of technology, giving appropriate 
consideration to cost.
    The Administrator has significant discretion to weigh various 
factors under CAA section 202, and, as with the HD GHG Phase 1 and 
Phase 2 rules, the Administrator 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. 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 propose 
standards that, when implemented, would result in meaningful reductions 
of HD vehicle GHG emissions both near term and over the longer term, 
and to select such standards taking into consideration the enumerated 
statutory factors of technological feasibility and cost of compliance 
within the available lead time, as well as the discretionary factor of 
impacts on purchasers and willingness to purchase. In identifying the 
proposed standards, EPA's goal was to maximize emissions reductions 
given our assessment of technological feasibility and accounting for 
cost of compliance, lead time, and impacts on purchasers and 
willingness to purchase. The Administrator concludes that this approach 
is consistent with the text and purpose of CAA section 202.
    There have been very significant developments in the adoption of 
ZEVs since EPA promulgated the HD GHG Phase 2 rule. One of the most 
significant developments for U.S. heavy-duty manufacturers and 
purchasers is the adoption of the IRA, which takes a comprehensive 
approach to addressing many of the potential barriers to wider adoption 
of heavy-duty ZEVs in the United States. As noted in Section I, the IRA 
provides tens of billions of dollars in tax credits and direct Federal 
funding to reduce the upfront cost of purchasing ZEVs, to increase the 
number of charging stations across the country, to reduce the cost of 
manufacturing batteries, and to promote domestic source of critical 
minerals and other important elements of the ZEV supply chain. By 
addressing all of these potential obstacles to wider ZEV adoption in a 
coordinated, well-financed, strategy, Congress significantly advanced 
the potential for ZEV adoption in the near term.
    In developing this estimate, EPA considered a variety of 
constraints which have to date limited ZEV adoption and/or could limit 
it in the future, including: cost to manufacturers and purchasers; 
availability of raw materials, batteries, and other necessary supply 
chain elements; adequate electricity supply and distribution; and 
availability of hydrogen. EPA has consulted with analysts from other 
agencies, including the Federal Energy Regulatory Commission, DOE, DOT, 
and the Joint Office for Energy and Transportation, extensively 
reviewed published literature and other data, and, as discussed 
thoroughly in this preamble and the accompanying DRIA, has incorporated 
limitations into our modeling to address these potential constraints, 
as appropriate.
    As discussed in Section II.G.4, there are additional considerations 
that support, but were not used to select, the proposed standards. 
These include the non-GHG emission and energy impacts, energy security, 
safety, and net benefits. EPA estimates that the present value of 
monetized net benefits to society would be approximately $320 billion 
through the year 2055 (annualized net benefits of $17 billion through 
2055),\549\ more than five times the cost in vehicle technology and 
associated electric vehicle supply equipment (EVSE) combined (see 
preamble Section VII and Chapter 8 of the DRIA). We recognize the these 
estimates do not reflect unquantified benefits, and the Administrator 
has not relied on these estimates in identifying the appropriate 
standards under CAA section 202. Nonetheless, 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.
---------------------------------------------------------------------------

    \549\ Using 3 percent discount rate and climate benefits 
calculated with the average SC-GHGs at a 3 percent discount rate.
---------------------------------------------------------------------------

    In addition to our proposed standards, we also considered and are 
seeking comment on a range of alternatives above and below the proposed 
standards, as specified and discussed in Section II.H and Section IX. 
Our approach and goal in selecting standards were generally the same 
for the range of alternative standards as they were for the proposed 
standards, while also recognizing that there are uncertainties in our 
projections and aiming to identify where additional information that 
may become available during the course of the rulemaking may support 
standards within that range as feasible and reasonable. EPA anticipates 
that the appropriate choice of final standards within this range will 
reflect the Administrator's judgments about the uncertainties in EPA's 
analyses as well as consideration of public comment and updated 
information where available. We considered an alternative with a slower 
phase-in with less stringent CO2 emission standards; 
however, we did not select this level for the proposed standards 
because our assessment in this proposal is that feasible and 
appropriate standards are available that provide for greater GHG 
emission reductions than would be provided by this slower phase-in 
alternative. We also considered a more stringent alternative with 
emission standards similar to those required by the CA ACT program. At 
this time, we consider the proposed standards as the appropriate 
balancing of the factors. However, if our analysis for the final rule 
of relevant existing information, public comments, or new information 
that becomes available between the proposal and the final rule supports 
a set of standards within the range of alternatives we are requesting 
comment on, we may promulgate final CO2 emission standards 
different from

[[Page 26006]]

those proposed if we determine that those emission standards are 
feasible and appropriate. For example, we could finalize different 
standards based on different ZEV adoption rates than described for the 
proposed standards based on different considerations within the inputs 
of HD TRUCS or other approaches that we have requested comment on in 
this proposal (e.g. payback schedules, consideration of technology 
development lead time, ZEV refueling infrastructure growth, 
consideration of the need for and level of emissions reductions which 
can be achieved through the standards to protect public health, etc.).
    In summary, after consideration of the very significant reductions 
in GHG emissions, given the technical feasibility of the proposed 
standards and the moderate costs per vehicle in the available lead 
time, and taking into account a number of other factors such as the 
savings to purchasers in operating costs over the lifetime of the 
vehicle, safety, the benefits for energy security, 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.

H. Potential Alternatives

    EPA developed and considered an alternative level of proposed 
stringency for this rule which we are seeking comment on. The results 
of the analysis of this alternative are included in Section IX of the 
preamble. We also request comment, including supporting data and 
analysis, if there are certain market segments, such as heavy-haul 
vocational trucks or long-haul tractors which may require significant 
energy content for their intended use, that it may be appropriate to 
set standards less stringent than the alternative for the specific 
corresponding regulatory subcategories in order to provide additional 
lead time to develop and introduce ZEV or other low emissions 
technology for those specific vehicle applications. As described in 
more detail throughout this preamble, we also are seeking comment on 
setting GHG standards that would reflect values less stringent than the 
lower stringency alternative for certain market segments, values in 
between the proposed standards and the alternative standards, values in 
between the proposed standards and those that would reflect ZEV 
adoption levels used in California's ACT, values that would reflect the 
level of ZEV adoption in the ACT program, and values beyond those that 
would reflect ZEV adoption levels in ACT such as the 50- to 60-percent 
ZEV adoption range represented by the publicly stated goals of several 
major OEMs for 2030.550 551 552 553 554 For all of these 
scenarios we are requesting comment on, EPA anticipates that the same 
approach explained in Section II and DRIA Chapter 2 would generally be 
followed, including for estimating costs, though the rationale for the 
different ZEV adoption rates may be based on different considerations 
within the inputs of HD TRUCS or other approaches that we have 
requested comment on in this proposal (e.g. payback schedules, 
consideration of technology development lead time, ZEV refueling 
infrastructure growth, etc.). As explained in this Section I.D of the 
preamble, EPA has significant discretion in choosing an appropriate 
balance among factors in setting standards under CAA section 202(a)(1)-
(2). If our analysis for the final rule of relevant existing 
information, public comments, or new information that becomes available 
between the proposal and final rule supports a slower or a more 
accelerated implementation of the proposed standards, we may promulgate 
final CO2 emission standards different from those proposed 
(within the range between the less stringent alternative and the most 
stringent standards we request comment on in this section) if we 
determine that those emission standards are feasible and appropriate.
---------------------------------------------------------------------------

    \550\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \551\ Scania, `Scania's Electrification Roadmap,' Scania Group, 
November 24, 2021, https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html.
    \552\ AB Volvo, `Volvo Trucks Launches Electric Truck with 
Longer Range,' Volvo Group, January 14, 2022, https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html.
    \553\ Deborah Lockridge, `What Does Daimler Truck Spin-off Mean 
for North America?,' Trucking Info (November 11, 2021). https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america.
    \554\ Navistar presentation at the Advanced Clean Transportation 
(ACT) Expo, Long Beach, CA (May 9-11, 2022).
---------------------------------------------------------------------------

    While our assessment in this proposal is that the proposed 
standards provide adequate lead time, in order to ensure fulsome 
comment on all of dynamics involved in the market responding to the 
proposed standards, we also considered an alternative with less 
stringent standards and a more gradual phase-in. As discussed in 
Section II.F.6, we considered while developing the proposed standards 
that manufacturers would need time to ramp up ZEV production from the 
numbers of ZEVs produced today to the higher adoption rates we project 
in the proposed standards that begin between four and eight years from 
now. Manufacturers would need to conduct research and develop 
electrified configurations for a diverse set of applications. They 
would also need time to conduct durability assessments because downtime 
is very critical in the heavy-duty market. Furthermore, manufacturers 
would require time to make new capital investments for the 
manufacturing of heavy-duty battery cells and packs, motors, and other 
EV components, along with changing over the vehicle assembly lines to 
incorporate an electrified powertrain. In addition, the purchasers of 
HD BEVs would need time to design and install charging infrastructure 
at their facilities or determine their hydrogen refueling logistics for 
FCEVs. Therefore, we developed and considered an alternative that 
reflects a more gradual phase-in of ZEV adoption rates to account for 
this uncertainty. The ZEV adoption rates associated with level of 
stringency of the proposed CO2 emission standards shown in 
Section II.F.4 and the alternative CO2 emission standards 
shown in Section IX.A.1 are shown in Table II-34. We are not proposing 
this alternative set of standards because, as already described, our 
assessment is that feasible and appropriate standards are available 
that provide for greater emission reductions than provided under this 
alternative. We request comment on whether our assessment that there is 
adequate lead time provided in the proposed standards is correct or if 
a more gradual phase in like the one described in this alternative 
would be more appropriate.

[[Page 26007]]

  Table II-34--Comparison of ZEV Technology Adoption Rates in the Technology Packages Considered for the Proposed Standards and Alternative Considered
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            MY 2032 and
                                                            MY 2027 (%)     MY 2028 (%)     MY 2029 (%)     MY 2030 (%)     MY 2031 (%)      later (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Proposal
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vocational..............................................              20              25              30              35              40              50
Short-Haul Tractors.....................................              10              12              15              20              30              35
Long-Haul Tractors......................................               0               0               0              10              20              25
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vocational..............................................              14              20              25              30              35              40
Short-Haul Tractors.....................................               5               8              10              15              20              25
Long-Haul Tractors......................................               0               0               0              10              15              20
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In consideration of the environmental impacts of HD vehicles and 
the need for significant emission reductions, as well as the views 
expressed by stakeholders in comments on the HD2027 NPRM such as 
environmental justice communities, environmental nonprofit 
organizations, and state and local organizations for rapid and 
aggressive reductions in GHG emissions,555 556 557 558 we 
are also requesting comment on a more stringent set of GHG standards 
starting in MYs 2027 through 2032 than the proposed standards and 
requesting that commenters provide supporting information regarding 
whether such standards are feasible, appropriate, and consistent with 
our CAA section 202 authority for a national program. We specifically 
are seeking comment on values that would reflect the level of ZEV 
adoption used in California's ACT program (as shown in Table II-35), 
values in between the proposed standards and those that would reflect 
ZEV adoption levels in ACT, and values beyond those that would reflect 
ZEV adoption levels in ACT, such as the 50-60 percent ZEV adoption 
range represented by the publicly stated goals of several major OEMs 
for 2030.559 560 561 562 563 Under any of these more 
stringent set of standards that we are requesting comment on, we 
estimate that the individual per-vehicle ZEV technology and operating 
costs reflecting these higher level of ZEV technology adoption rates 
would be the same as the individual per-vehicle ZEV costs of the 
proposed standards, as described in DRIA Chapter 2.8.2 because the 
costs were calculated as the incremental cost between a ZEV and a 
comparable ICE vehicle. Also under a scenario with more stringent 
standards, the total costs across the fleet would be higher but the 
total emission reductions would be greater. The MYs 2027 through 2032 
and beyond emission standards reflecting the ZEV adoptions levels in 
California's ACT that we are requesting comment on can be found in a 
memo to the docket.\564\
---------------------------------------------------------------------------

    \555\ ACEEE Comments to the HD2027 NPRM. See Docket Entry EPA-
HQ-OAR-2019-0055-2852-A1. Referencing Catherine Ledna et al., 
`Decarbonizing Medium-& Heavy-Duty On-Road Vehicles: Zero-Emission 
Vehicles Cost Analysis' (NREL, March 2022), https://www.nrel.gov/docs/fy22osti/82081.pdf.
    \556\ EDF Comments to the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1265-A1, pp.16-17.
    \557\ ICCT Comments to the HD2027 NPRM. See Docket Entry EPA-HQ-
OAR-2019-0055-1211-A1, p. 6.
    \558\ Moving Forward Network Comments to the HD2027 NPRM. See 
Docket Entry EPA-HQ-OAR-2019-0055-1277-A1, pp. 19-20.
    \559\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
    \560\ Scania, `Scania's Electrification Roadmap,' Scania Group, 
November 24, 2021, https://www.scania.com/group/en/home/newsroom/news/2021/Scanias-electrification-roadmap.html.
    \561\ AB Volvo, `Volvo Trucks Launches Electric Truck with 
Longer Range,' Volvo Group, January 14, 2022, https://www.volvogroup.com/en/news-and-media/news/2022/jan/news-4158927.html.
    \562\ Deborah Lockridge, `What Does Daimler Truck Spin-off Mean 
for North America?,' Trucking Info (November 11, 2021). https://www.truckinginfo.com/10155922/what-does-daimler-truck-spin-off-mean-for-north-america.
    \563\ Navistar presentation at the Advanced Clean Transportation 
(ACT) Expo, Long Beach, CA (May 9-11, 2022).
    \564\ U.S. EPA. ``Memo to Docket: Potential Federal Heavy-Duty 
GHG Emission Standards Reflecting Technology Packages Including 
California's ACT Levels of ZEV Adoption.'' March 2023. Docket EPA-
HQ-OAR-2022-0985.

                       Table II-35--Comparison of ZEV Technology Adoption Rates Between the Proposed Standards and California ACT
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            MY 2032 and
                                                            MY 2027 (%)     MY 2028 (%)     MY 2029 (%)     MY 2030 (%)     MY 2031 (%)      later (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Proposed
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vocational..............................................              20              25              30              35              40              50
Short-Haul Tractors.....................................              10              12              15              20              30              35
Long-Haul Tractors......................................               0               0               0              10              20              25
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        CARB ACT
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vocational..............................................              20              30              40              50              55              60
Tractors................................................              15              20              25              30              35              40
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 26008]]

I. Small Businesses

    EPA is proposing to make no changes to (i.e., maintain the 
existing) MY 2027 and later GHG vehicle emission standards for any 
heavy-duty manufacturers that meet the ``small business'' size criteria 
set by the Small Business Administration.\565\ In other words, these 
manufacturers would not be subject to the proposed revised MY 2027 and 
new MYs 2028 through 2032 and later HD vehicle CO2 emission 
standards but would remain subject to the HD vehicle CO2 
emission standards previous set in HD GHG Phase 2.\566\ Additionally, 
we are proposing that qualifying small business manufacturers could 
continue to average within their averaging sets for each 2027 and later 
model year to achieve the applicable standards; however, we are 
proposing to restrict banking, trading, and the use of advanced 
technology credit multipliers for credits generated against the Phase 2 
standards for qualifying manufacturers that utilize this small business 
interim provision.
---------------------------------------------------------------------------

    \565\ See our proposed updates to the definition of ``small 
business'' in 40 CFR 1037.801.
    \566\ See Section XI.C for our regulatory flexibility assessment 
of the potential burden on small businesses. See also Section 
III.C.2 for a description of the proposed revisions to 40 CFR 
1037.150(c) that clarify the standards and proposed restrictions on 
participation in the ABT program for MYs 2027 and later that we are 
proposing would apply for qualifying small business vehicle 
manufacturers that utilize the proposed interim provision.
---------------------------------------------------------------------------

    We are also proposing that vehicle manufacturers that qualify as a 
small business may choose not to utilized the proposed interim 
provision and voluntarily certify their vehicles to the Phase 3 
standards without ABT participation restrictions if they certify all 
their vehicle families within a given averaging set to the Phase 3 
standards for the given MY. In other words, small businesses that opt 
into the Phase 3 program for a given MY for all their vehicle families 
within a given averaging set would be eligible for the full ABT program 
for those vehicle families for that MY, including advanced technology 
credit multipliers. While we are proposing not to apply the proposed 
new standards for vehicles produced by small businesses, we propose 
that some small business manufacturers would be subject to some other 
new requirements we are proposing in this rule related to ZEVs, such as 
the battery durability monitor and warranty provisions proposed in 40 
CFR 1037.115(f) and described in Section III.B.
    EPA may consider new GHG emission standards to apply for vehicles 
produced by small business vehicle manufacturers as part of a future 
regulatory action. At this time, we believe the proposed new standards, 
which were developed based on technology packages using increasing 
adoption of ZEVs, may create a disproportionate burden on small 
business vehicle manufacturers. As described in DRIA Chapter 9, we have 
identified a small number of manufacturers that would appear to qualify 
as small businesses under the heavy-duty vehicle manufacturer category. 
The majority of these small businesses currently only produce ZEVs, 
while one company currently produces ICE vehicles.
    Since there would only be a small emissions benefit from applying 
the proposed standards to the relatively low production volume of ICE 
vehicles produced by small businesses, we believe that maintaining the 
existing HD vehicle CO2 standards for these companies at 
this time would have a negligible impact on the overall GHG emission 
reductions that the program would otherwise achieve. We request comment 
on our assessment that the emission impact of this approach for small 
businesses would be small considering the number and type of vehicle 
manufacturers described in DRIA Chapter 9.

III. Compliance Provisions, Flexibilities, and Test Procedures

    In this proposed rule, we are retaining the general compliance 
structure of existing 40 CFR part 1037 with some revisions described in 
this section. Vehicle manufacturers would continue to demonstrate that 
they meet emission standards using emission modeling and EPA's 
Greenhouse gas Emissions Model (GEM) and would use fuel-mapping or 
powertrain test information from procedures established and revised in 
previous rulemakings.\567\
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    \567\ See the HD GHG Phase 2 rule (81 FR 73478, October 25, 
2016), the Heavy-Duty Engine and Vehicle Technical Amendment rule 
(86 FR 34308, June 29, 2021), and the HD2027 rule (88 FR 4296, 
January 24, 2023). In this rulemaking, EPA is not reopening any 
portion of our heavy-duty compliance provisions, flexibilities, and 
testing procedures, including those in 40 CFR parts 1037, 1036, and 
1065, other than those specifically identified in this document as 
the subject of our proposal or a solicitation for comment. For 
example, while EPA is proposing to revise discrete elements of the 
HD ABT program, EPA is not reopening the general availability of 
ABT.
---------------------------------------------------------------------------

    The existing HD GHG Phase 2 program provides flexibilities, 
primarily through the HD GHG ABT program, that facilitate compliance 
with the emission standards. In addition to the general ABT provisions, 
the current HD GHG Phase 2 program also includes advanced technology 
credit (including for BEVs and FCEVs) and innovative technology credit 
provisions. As described in Section II of this preamble, the proposed 
revisions to the existing MY 2027 Phase 2 GHG emission standards and 
new proposed standards for MYs 2028 through 2032 are premised on 
utilization of a variety of technologies, including technologies that 
are considered advanced technologies in the existing HD GHG Phase 2 ABT 
program. As also explained in Section II, we consider averaging in 
supporting the feasibility of the proposed Phase 3 GHG standards in 
this rule. Averaging and other aspects of the ABT program would also 
continue to help provide additional flexibility for manufacturers to 
make necessary technological improvements and reduce the overall cost 
of the program, without compromising overall environmental objectives.
    We are not proposing any changes to and are not reopening the use 
of credits from MY 2027 and earlier in MY 2027 and later. In other 
words, credits earned in HD GHG Phase 2 would be allowed to carry over 
into Phase 3, subject to the existing credit life limitation of five 
years, as described in 40 CFR 1037.740(c). Similarly, we are not 
proposing any revisions to and are not reopening the allowance that 
provides manufacturers three years to resolve credit deficits, as 
detailed in 40 CFR 1037.745.
    In Section III.A, we describe the general ABT program and how we 
expect manufacturers to apply ABT to meet the proposed standards. In 
Section III.A, we propose a revision to the definition of ``U.S.-
directed production volume'' to clarify consideration in this 
rulemaking of nationwide production volumes, including those that may 
in the future be certified to different state emission standards.\568\ 
This proposed revision is intended to address a potential interaction 
between the existing definition of U.S.-directed production volume and 
the ACT regulation for HD vehicles.\569\ Section III.A.2 includes 
proposed updates to advanced technology credit provisions after 
considering comments received on the HD2027 NPRM (87 FR 17592, March 
28, 2022). In Section III.A.3, we request comment on other 
flexibilities, including how credits could be used across averaging 
sets. In Section III.B,

[[Page 26009]]

we propose durability monitoring requirements for BEVs and PHEVs, 
clarify existing warranty requirements for PHEVs, and propose warranty 
requirements for BEVs and FCEVs. Finally, in Section III.C, we propose 
additional clarifying and editorial amendments to the HD highway engine 
provisions of 40 CFR part 1036, the HD vehicle provisions of 40 CFR 
part 1037 and the test procedures for HD engines in 40 CFR part 1065.
---------------------------------------------------------------------------

    \568\ The proposed definition update includes corresponding 
proposed clarifications throughout the HD engine and vehicle 
regulations of 40 CFR parts 1036 and 1037, respectively.
    \569\ EPA granted the ACT rule waiver requested by California 
under CAA section 209(b) on March 30, 2023.
---------------------------------------------------------------------------

A. Proposed Revisions to the ABT Program

    As noted in the introduction to this section, we are generally 
retaining the HD GHG Phase 2 ABT program that allows for emission 
credits to be averaged, banked, or traded within each of the averaging 
sets specified in 40 CFR 1037.740(a). To generate credits, a vehicle 
manufacturer must reduce CO2 emission levels below the level 
of the standard for one or more vehicle families. The manufacturer can 
use those credits to offset higher emission levels from vehicles in the 
same averaging set such that the averaging set meets the standards on 
``average'', ``bank'' the credits for later use, or ``trade'' the 
credits to another manufacturer. The credits are calculated based on 
the production volume of the vehicles in the averaging set and their 
respective emission levels relative to the standard. To incentivize the 
research and development of the new technologies, the current HD 
vehicle ABT program also includes credit multipliers for certain 
advanced technologies. In this Section III.A, we describe proposed 
changes to two aspects of the ABT program: the applicable production 
volume for use in calculating ABT credits and credit multipliers for 
advanced technologies. We also request comment on other potential 
flexibilities we could consider adopting in this rule.
1. U.S-Directed Production Volume
    As described in Section II, the proposed Phase 3 GHG vehicle 
standards include consideration of nationwide production volumes. 
Correspondingly, we are proposing that the GHG ABT program for 
compliance with those standards would be applicable to the same 
production volumes considered in setting the standards. In Section II, 
we also request comment on how to account for ZEV adoption rates that 
would result from compliance with the California ACT program in setting 
the proposed GHG standards.\570\ The existing HD GHG Phase 2 vehicle 
program has certain provisions (based off the regulatory definition of 
``U.S.-directed production volume'') that would exclude production 
volumes that are certified to different state emission standards, 
including exclusion from participation in ABT. To address this 
potential interaction between the existing definition of U.S.-directed 
production volume and the ACT regulation for HD vehicles, we propose a 
revision to the definition of ``U.S.-directed production volume.'' The 
proposed revision would clarify that in this rulemaking we consider 
nationwide production volumes, including those that may in the future 
be certified to different state emission standards, within the proposed 
Phase 3 standards described in Section II and within the ABT GHG 
vehicle program.
---------------------------------------------------------------------------

    \570\ EPA granted the ACT rule waiver requested by California 
under CAA section 209(b) on March 30, 2023.
---------------------------------------------------------------------------

    The exclusion of engines and vehicles certified to different state 
standards in the existing definitions have not impacted the HD GHG 
program under parts 1036 and 1037 to-date because California has 
adopted GHG emission standards for HD engines and vehicles that align 
with the Federal HD GHG Phase 1 and Phase 2 
standards.571 572 As discussed in Section I, the ACT 
regulation requires manufacturers to produce and sell increasing 
numbers of zero-emission medium- and heavy-duty highway vehicles. Given 
the distinct difference between what is required under the ACT compared 
to the existing Phase 2 vehicle program and the HD vehicle GHG 
standards proposed under this rulemaking, we are considering the impact 
of the ACT on the HD GHG vehicle program. To that end, we are proposing 
that the revision to this definition revision apply starting with MY 
2024 to provide consistent treatment of any production volumes 
certified to ACT. We request comment on the MY 2024 start and whether 
other options should be considered for transitioning to this new 
definition.
---------------------------------------------------------------------------

    \571\ California Air Resources Board. ``Final Regulation Order 
for Phase 1 Greenhouse Gas Regulations.'' December 5, 2014, 
available at https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2013/hdghg2013/hdghgfrot13.pdf.
    \572\ California Air Resources Board. ``Final Regulation Order 
for Phase 2 Greenhouse Gas Regulations and Tractor-Trailer GHG 
Regulations.'' April 1, 2019, available at https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2018/phase2/finalatta.pdf?_ga=2.122416523.1825165293.1663635303-1124543041.1635770745.
---------------------------------------------------------------------------

    The existing definition of ``U.S.-directed production volume'' for 
HD vehicles explicitly does not include vehicles certified to state 
emission standards that are different than the emission standards in 40 
CFR part 1037.\573\ The term U.S.-directed production volume is key in 
how the existing regulations direct manufacturers to calculate credits 
in the HD vehicle ABT GHG program, in 40 CFR part 1037, subpart H. In 
the existing regulations, vehicle production volumes that are excluded 
from that term's definition cannot generate credits. EPA first excluded 
such production volumes from participation in HD ABT in a 1990 
rulemaking on NOX emissions from HD engines. In the preamble 
to that rulemaking, which established NOX and PM banking and 
trading and expanded the averaging program for HD engines, EPA 
explained that HDEs certified under the California emission control 
program are excluded from this program.\574\ We further explained that 
HDEs certified under the California emission control program may not 
generate credits for use by Federal engines (49-state) or use credits 
generated by Federal engines.\575\ In addition, we explained that while 
fifty-state engines participating in the Federal banking, trading or 
averaging programs may be sold in California if their FELs are lower 
than the applicable emission standard, California engines may not 
generate credits for the Federal program.\576\
---------------------------------------------------------------------------

    \573\ An equivalent definition of ``U.S-directed production 
volume'' can be found at 40 CFR 1036.801 for HD engines.
    \574\ 55 FR 30592, July 26, 1990.
    \575\ 55 FR 30592, July 26, 1990.
    \576\ 55 FR 30592, July 26, 1990.
---------------------------------------------------------------------------

    In 2001, in a rulemaking that established criteria pollutant 
emission standards phasing in to MY 2010 and later for HD engines and 
vehicles, EPA adopted a definition for ``U.S.-directed production.'' 
The adopted definition included similar regulatory language to our 
existing part 1037 definition.\577\ Regarding compliance with the MY 
2007-2009 emission standards phase-in requirements, which were based on 
percentage of production volumes meeting the MY 2010 and later 
standards, EPA again noted our intent to exclude production volumes 
certified to different state standards. We explained that we were 
clarifying that this phase-in excludes California complete heavy-

[[Page 26010]]

duty vehicles, which are already required to be certified to the 
California emission standards.\578\ We further explained that the 
phase-in also excludes vehicles sold in any state that has adopted 
California emission standards for complete heavy-duty vehicles.\579\ We 
also explained that it would be inappropriate to allow manufacturers to 
``double-count'' the vehicles by allowing them to count those vehicles 
both as part of their compliance with this phase-in and for compliance 
with California requirements.\580\ In addition, we noted that we would 
handle HD engines similarly if California were to adopt different 
emission standards than those being established by this rule.\581\
---------------------------------------------------------------------------

    \577\ 66 FR 5002, 5159, January 18, 2001 (amending 40 CFR 
86.004-2 to add a definition for ``U.S.-directed production'' where 
``U.S.-directed production means the engines and/or vehicles (as 
applicable) produced by a manufacturer for which the manufacturer 
has reasonable assurance that sale was or will be made to ultimate 
purchasers in the United States, excluding engines and/or vehicles 
that are certified to state emission standards different than the 
emission standards in [40 CFR part 86].'').
    \578\ 66 FR at 5043, January 18, 2001.
    \579\ 66 FR at 5043, January 18, 2001.
    \580\ 66 FR at 5043, January 18, 2001.
    \581\ 66 FR at 5043, January 18, 2001.
---------------------------------------------------------------------------

    In the HD GHG Phase 1 rule, EPA adopted the existing definitions of 
U.S.-directed production volume in 40 CFR 1036.801 and 1037.801, which 
were unchanged in HD GHG Phase 2 and currently apply for HD engines and 
vehicles.\582\
---------------------------------------------------------------------------

    \582\ 76 FR 57397 and 57431, September 15, 2011; 81 FR 74043 and 
74123, October 25, 2016.
---------------------------------------------------------------------------

    We are proposing a revision to the definition of ``U.S.-directed 
production volume'' in 40 CFR 1037.801 such that it represents the 
total nationwide production volumes, including vehicles certified to 
state emission standards that are different than the emission standards 
of 40 CFR part 1037. As described in Section II, the proposed standards 
are feasible and appropriate based on nationwide adoption rates of 
technology packages that include adoption of ZEV technologies. 
Manufacturers may be motivated to produce ZEVs by this rule and in 
response to other initiatives and we want to support any U.S. adoption 
of these technologies by allowing manufacturers to account for their 
nationwide production volumes to comply with the proposed standards. We 
recognize that the existing definition of ``U.S.-directed production 
volume'' may cause challenges to manufacturer plans, including long-
term compliance planning, due to the uncertainty surrounding whether 
additional states may adopt more stringent standards in the future.
    Given that EPA granted the ACT rule waiver requested by California 
under CAA section 209(b) on March 30, 2023, the existing definition of 
U.S.-directed production volume excludes all vehicles (ICE vehicles and 
ZEVs) certified to meet the ACT program in California and any other 
states that adopt the ACT.\583\ In this scenario, the ZEV production 
volumes destined for California and other states would correspond to a 
large portion of the nationwide production on which the proposed EPA 
standards are based, and it would be challenging for vehicle 
manufacturers to comply with the proposed standards if they could not 
account for those ZEVs. As described in Section II, we request comment 
on how to account for ZEV adoption rates that would result from 
compliance with the California ACT program in setting the proposed GHG 
standards. If we were to finalize standards that account for the ACT 
program, we expect to similarly base the final standards on nationwide 
production volumes that would continue to rely on our proposal to 
revise the current definition of U.S.-directed production volume to 
include nationwide production.
---------------------------------------------------------------------------

    \583\ As of September 2022, the following states have adopted 
California's ACT program: Massachusetts, New York, New Jersey, 
Washington, and Oregon.
---------------------------------------------------------------------------

    We are proposing this revision consistent with our intended 
approach of considering such production volumes in setting the 
stringency of the Phase 3 standards in this rulemaking, as well as 
allowing inclusion of such production volumes in demonstrating 
compliance with the standards through participation in the HD vehicle 
ABT GHG program. We believe this approach would address both the 
potential ``double counting'' issue EPA previously articulated in past 
HD rulemakings and the potential difficulties surrounding 
manufacturers' long-term compliance planning (due to the uncertainty 
surrounding whether additional states may adopt the California ACT 
program in the future) we recognize in the context of this rulemaking. 
Our proposed revision would also align with the approach in the LD GHG 
program.
    In addition to this proposed revision to the definition of ``U.S.-
directed production volume'', we are proposing additional conforming 
amendments throughout 40 CFR part 1037 to streamline references to the 
revised definition; see Section III.E.3 for further discussion on one 
of those proposed revisions.\584\
---------------------------------------------------------------------------

    \584\ As discussed in Section III.C.3, we are also proposing a 
similar update to the heavy-duty highway engine definition of 
``U.S.-directed production volume'' in 40 CFR 1036.801, with 
additional proposed updates where it is necessary to continue to 
exclude production volumes certified to different standards (i.e., 
the ABT program for highway heavy-duty engines).
---------------------------------------------------------------------------

2. Advanced Technology Credits for CO2 Emissions
    In HD GHG Phase 1, we provided advanced technology credits for 
hybrid powertrains, Rankine cycle waste heat recovery systems on 
engines, all-electric vehicles, and fuel cell electric vehicles to 
promote the implementation of advanced technologies that were not 
included in our technical basis of the feasibility of the Phase 1 
emission standards (see 40 CFR 86.1819-14(k)(7), 1036.150(h), and 
1037.150(p)). The HD GHG Phase 2 CO2 emission standards that 
followed Phase 1 were premised on the use of mild hybrid powertrains in 
vocational vehicles and waste heat recovery systems in a subset of the 
engines and tractors, and we removed mild hybrid powertrains and waste 
heat recovery systems as options for advanced technology credits. At 
the time of the HD GHG Phase 2 final rule, we believed the HD GHG Phase 
2 standards themselves provided sufficient incentive to develop those 
specific technologies. However, none of the HD GHG Phase 2 standards 
were based on projected utilization of the other even more-advanced 
Phase 1 advanced credit technologies (e.g., plug-in hybrid electric 
vehicles, all-electric vehicles, and fuel cell electric vehicles). For 
HD GHG Phase 2, EPA promulgated advanced technology credit multipliers 
through MY 2027, as shown in Table III-1 (see also 40 CFR 1037.150(p)).

 Table III-1--Advanced Technology Multipliers in Existing HD GHG Phase 2
                        for MYs 2021 Through 2027
------------------------------------------------------------------------
                       Technology                           Multiplier
------------------------------------------------------------------------
Plug-in hybrid electric vehicles........................             3.5
All-electric vehicles...................................             4.5
Fuel cell electric vehicles.............................             5.5
------------------------------------------------------------------------

    As stated in the HD GHG Phase 2 rulemaking, our intention with 
these multipliers was to create a meaningful incentive for those 
manufacturers considering developing and applying these qualifying 
advanced technologies into their vehicles. The multipliers under the 
existing program are consistent with values recommended by CARB in 
their HD GHG Phase 2 comments.\585\ CARB's values were based on a cost 
analysis that compared the costs of these advanced technologies to 
costs of other GHG-reducing

[[Page 26011]]

technologies. CARB's cost analysis showed that multipliers in the range 
we ultimately promulgated as part of the HD GHG Phase 2 final rule 
would make these advanced technologies more competitive with the other 
GHG-reducing technologies and could allow manufacturers to more easily 
generate a viable business case to develop these advanced technologies 
for HD vehicles and bring them to market at a competitive price.
---------------------------------------------------------------------------

    \585\ Letter from Michael Carter, CARB, to Gina McCarthy, 
Administrator, EPA and Mark Rosekind, Administrator, NHTSA, June 16, 
2016. EPA Docket ID EPA-HQ-OAR-2014-0827_attachment 2.
---------------------------------------------------------------------------

    In establishing the multipliers in the HD GHG Phase 2 final rule, 
we also considered the tendency of the HD sector to lag behind the 
light-duty sector in the adoption of a number of advanced technologies. 
There are many possible reasons for this, such as:
     HD vehicles are more expensive than light-duty vehicles, 
which makes it a greater monetary risk for purchasers to invest in new 
technologies.
     These vehicles are primarily work vehicles, which makes 
predictable reliability and versatility important.
     Sales volumes are much lower for HD vehicles, especially 
for specialized vehicles.
    At the time of the HD GHG Phase 2 rulemaking, we concluded that as 
a result of factors such as these, and the fact that adoption rates for 
the aforementioned advanced technologies in HD vehicles were 
essentially non-existent in 2016, it seemed unlikely that market 
adoption of these advanced technologies would grow significantly within 
the next decade without additional incentives.
    As we stated in the HD GHG Phase 2 final rule preamble, our 
determination that it was appropriate to provide large multipliers for 
these advanced technologies, at least in the short term, was because 
these advanced technologies have the potential to lead to very large 
reductions in GHG emissions and fuel consumption, and advance 
technology development substantially in the long term. However, because 
the credit multipliers are so large, we also stated that they should 
not necessarily be made available indefinitely. Therefore, they were 
included in the HD GHG Phase 2 final rule as an interim program 
continuing only through MY 2027.
    The HD GHG Phase 2 CO2 emission credits for HD vehicles 
are calculated according to the existing regulations at 40 CFR 
1037.705. For BEVs and FCEVs, the family emission level (FEL) value for 
CO2 emissions is deemed to be 0 grams per ton-mile.\586\ 
Under those existing regulations, the CO2 emission credits 
for HD BEVs built between MY 2021 and MY 2027 would be multiplied by 
4.5 (or the values shown in Table III-1 for the other technologies) 
and, for discussion purposes, can be visualized as split into two 
shares.\587\ The first share of credits would come from the reduction 
in CO2 emissions realized by the environment from a BEV that 
is not emitting from the tailpipe, represented by the first 1.0 portion 
of the multiplier. Therefore, each BEV or FCEV produced receives 
emission credits equivalent to the level of the standard, even before 
taking into account the effect of a multiplier. The second share of 
credits does not represent CO2 emission reductions realized 
in the real world but rather, as just explained, was established by EPA 
to help incentivize a nascent market: in this example, the emission 
credits for BEVs built between MY 2021 and 2027 receive an advanced 
technology credit multiplier of 4.5, i.e., an additional 3.5 multiple 
of the standard.
---------------------------------------------------------------------------

    \586\ 40 CFR 1037.150(f).
    \587\ 40 CFR 1037.705.
---------------------------------------------------------------------------

    The HD GHG Phase 2 advanced technology credit multipliers represent 
a tradeoff between incentivizing new advanced technologies that could 
have significant benefits well beyond what is required under the 
standards and providing credits that do not reflect real world 
reductions in emissions, which could allow higher emissions from 
credit-using engines and vehicles. At low adoption levels, we believe 
the balance between the benefits of encouraging additional 
electrification as compared to any negative emissions impacts of 
multipliers would be appropriate and would justify maintaining the 
current advanced technology multipliers. At the time we finalized the 
HD GHG Phase 2 program in 2016, we balanced these factors based on our 
estimate that there would be very little market penetration of ZEVs in 
the heavy-duty market in the MY 2021 to MY 2027 timeframe, during which 
the advanced technology credit multipliers would be in effect. 
Additionally, the primary technology packages in our technical basis of 
the feasibility of the HD GHG Phase 2 standards did not include any 
ZEVs.
    In our assessment conducted during the development of HD GHG Phase 
2, we found only one manufacturer had certified HD BEVs through MY 
2016, and we projected ``limited adoption of all-electric vehicles into 
the market'' for MYs 2021 through 2027.\588\ However, as discussed in 
Section II, we are now in a transitional period where manufacturers are 
actively increasing their PHEV, BEV, and FCEV HD vehicle offerings and 
are being further supported through the IRA tax credits, and we expect 
this growth to continue through the remaining timeframe for the HD GHG 
Phase 2 program and into the proposed Phase 3 program timeframe.
---------------------------------------------------------------------------

    \588\ 81 FR 75300 (October 25, 2016).
---------------------------------------------------------------------------

i. Advanced Technology Credits in the HD2027 NPRM
    We requested comment in the HD2027 NPRM on three approaches that 
would reduce the number of incentive credits produced by battery 
electric vehicles in the MY 2024 through MY 2027 timeframe. The three 
approaches considered in the HD2027 NPRM (87 FR 17605-17606) are 
summarized as follows:
     Approach 1: The MY 2024 through MY 2027 ZEVs certified in 
California to meet the ACT program would not receive the advanced 
technology credit multipliers that currently exist.
     Approach 2: The advanced technology credits generated by a 
manufacturer would be capped on an annual basis. Advanced technology 
credits generated for EVs on an annual basis that are under a cap would 
remain unchanged. Above the cap, the multipliers would effectively be a 
value of 1.0; in other words, after a manufacturer reaches their cap in 
any model year, the multipliers would no longer be available and would 
have no additional effect on credit calculations. This advanced 
technology credit cap approach would limit the credits generated by a 
manufacturer's use of the advanced technology credit multipliers for 
battery electric vehicles to the following levels of CO2 per 
manufacturer per model year beginning in MY 2024 and extending through 
MY 2027:
    [cir] Light Heavy-Duty Vehicle Averaging Set: 42,000 Mg 
CO2.
    [cir] Medium Heavy-Duty Vehicle Averaging Set: 75,000 Mg 
CO2.
    [cir] Heavy Heavy-Duty Vehicle Averaging Set: 325,000 Mg 
CO2.
     Approach 3: Phase-out the magnitude of the credit 
multipliers from MY 2024 through MY 2027.
    EPA received a number of comments on the HD2027 NPRM in response to 
our request for comment on potential approaches to modify the existing 
Advanced Technology Credit multipliers. The entire set of comments may 
be found in Section 28 of EPA's Response to Comments Document for the 
HD2027 final rule.\589\
---------------------------------------------------------------------------

    \589\ U.S. EPA, ``Control of Air Pollution from New Motor 
Vehicles: Heavy-Duty Engine and Vehicle Standards--Response to 
Comments.'' Section 28. Docket EPA-HQ-OAR-2019-0055.
---------------------------------------------------------------------------

    Several commenters supported Approach 1, sometimes along with

[[Page 26012]]

Approach 3. A common theme in these comments was that the incentive 
provided by the credit multipliers is not warranted for ZEVs that will 
already be produced due to state requirements. Some commenters also 
stated that the credit multipliers should not apply to any state that 
adopts ACT and should not be limited to California. Another commenter 
suggested an alternate approach whereby credit multipliers would not be 
provided for the vehicle segments targeted in the HD2027 NPRM for early 
adoption, such as some vocational vehicles and short-haul tractors, but 
remain available for other vehicle segments.
    Other commenters raised concerns with Approach 1. For example, some 
commenters stated that the states' adoption of the ACT rule is 
unpredictable and may have a negative impact on manufacturer and 
supplier development plans. Another commenter raised a concern that 
eliminating the credit multipliers for ZEVs sold in California could 
impact manufacturers unequally and have a greater negative impact on 
manufacturers with more ZEV sales in California. One commenter 
suggested that this approach would create a disincentive for additional 
states to adopt ACT. Another commenter recommended that if EPA selects 
this approach, then EPA should consider allowing credit multipliers for 
ZEVs sold in California that exceed the ACT sales requirements. 
Finally, another commenter raised concerns about the implementation of 
this approach because it is difficult for manufacturers to account for 
sales by state in the heavy-duty market.
    No commenters expressed support for Approach 2, and some commenters 
raised potential concerns with this approach. For example, a commenter 
stated this approach creates a disincentive to produce ZEVs above the 
annual cap and would negatively impact manufacturers that sell a 
greater number of ZEVs by making a smaller percentage of their fleet 
eligible for the credit multipliers. One commenter questioned whether a 
cap approach, while an incentive to small manufacturers and low volume 
ZEV producers, would incentivize additional sales beyond what is 
required by the states that adopt ACT under CAA section 177.
    Many commenters supported a phase out or elimination of the credit 
multipliers, similar to Approach 3. A theme among many of the 
commenters was to phase out the credit multiplier as soon as 
practicable, with some commenters suggesting the phase out begin as 
early as MY 2024. On the other hand, two commenters suggested an annual 
decrease in the value of the credit multipliers to prevent a potential 
pre-buy situation. Common themes expressed by the commenters supporting 
an elimination of phase-out of the credit multipliers included stating 
that the credit multipliers are no longer necessary because of state 
requirements and that the credit multipliers reduce the overall 
effectiveness of the HD GHG regulatory program. One concern raised by a 
commenter is that the existing credit multipliers would slow the 
progression of CO2-reducing technologies for HD vehicles 
that are powered by ICE. Some commenters suggested removing the credit 
multipliers for all of the existing technologies qualifying for 
advanced technology credits, including PHEVs, BEVs, and FCEVs.
    Some of the commenters opposed any changes to the existing credit 
multipliers. Some commenters indicated that the credit multipliers are 
necessary to justify the research and development of these new and 
higher-cost technologies into new markets. They also noted that the 
credit multipliers provide a role in the overall suite of incentives 
for ZEVs and infrastructure in the HD market. Two commenters suggested 
extending the credit multipliers beyond MY 2027 to allow the HD ZEV 
market to further mature.
ii. Proposed Changes to the Advanced Technology Credit Multipliers
    While we did anticipate some growth in electrification would occur 
due to the credit incentives in the HD GHG Phase 2 final rule when we 
finalized the rule, we did not expect the level of innovation since 
observed, the IRA or BIL incentives, or that California would adopt the 
ACT rule at the same time these advanced technology multipliers were in 
effect. Based on this new information, we believe the existing advanced 
technology multiplier credit levels may no longer be appropriate for 
maintaining the balance between encouraging manufacturers to continue 
to invest in new advanced technologies over the long term and potential 
emissions increases in the short term. We believe that, if left as is, 
the multiplier credits could allow for backsliding of emission 
reductions expected from ICE vehicles for some manufacturers in the 
near term (i.e., the generation of excess credits which could delay the 
introduction of technology in the near or mid-term) as sales of 
advanced technology vehicles which can generate the incentive credit 
continue to increase.
    After considering the comments received on the HD2027 NPRM and the 
proposed HD vehicle Phase 3 GHG standards and program described in 
Section II and this Section III, we propose to phase-out the advanced 
technology credit multipliers for HD plug-in hybrid and battery 
electric vehicles after MY 2026, one year earlier than what is 
currently in the regulations. We weighed several considerations in 
proposing this one year earlier phase-out. We do not foresee a need for 
any advanced technology credits for these technologies to extend past 
MY 2026. We recognize the need to continue to incentivize the 
development of BEVs in the near-term model years, prior to MY 2027. 
However, our analysis of the feasibility of PHEVs and BEVs described in 
Section II indicates there is sufficient incentive for those 
technologies for the model years we are proposing HD vehicle Phase 3 
GHG emission standards (MYs 2027 through 2032). We note that we did not 
rely on credits generated from credit multipliers in developing the 
proposed HD vehicle Phase 3 emission standards, however this 
flexibility further supports the feasibility of the proposed Phase 3 
emission standards.
    As explained earlier in this subsection, we recognize that a 
portion of the credits that result from an advanced technology 
multiplier do not represent CO2 emission reductions realized 
in the real world and thus should be carefully balanced amongst the 
other considerations. We considered that we are proposing to revise the 
existing regulatory definition of ``U.S.-directed production volume,'' 
as discussed in Section II, such that vehicle production volumes sold 
in California or Section 177 states that adopt ACT would be included in 
the ABT credit calculations and continuing to allow these multipliers 
could create a large bank of credits with the potential to delay the 
real world benefits of the proposed program. We also took into 
consideration that the IRA and other new incentives are available that 
could help reduce the role of the multipliers. Finally, we recognize 
that some manufacturers' long-term product plans for PHEV or BEV 
technologies may have extended to model years closer to MY 2027 when 
the HD GHG Phase 2 standards were at their most stringent levels. We 
are proposing a MY 2026 phase-out for PHEV and BEV credit multipliers, 
in part, because it is expected to have a lesser impact on current 
manufacturer product plans. We request comment on our proposed MY

[[Page 26013]]

2026 phase-out date or whether we should consider other approaches to 
account for ACT or incentive programs.
    We propose to revise existing 40 CFR 1037.150(p) to reflect the 
proposed phase-out of advanced technology credit multipliers for BEVs 
and PHEVs and clarify the applicable standards for calculating credits. 
We propose parallel edits to existing 40 CFR 1037.615(a) to clarify 
when the advanced technology credit calculations described in that 
section would apply. We are not proposing any changes to the existing 
advanced technology multipliers for fuel cell electric vehicles, which 
continue to apply through MY 2027. We believe it is still appropriate 
to incentivize fuel cell technology, because it has been slower to 
develop in the HD market, as discussed in Section II.D, but request 
comment on this approach for FCEVs. Additionally, we are retaining and 
are not reopening the existing off-cycle provisions of 40 CFR 1037.610 
that allow manufacturers to request approval for other ``innovative'' 
technologies not reflected in GEM.
3. Other Potential HD CO2 Emission Credit Flexibilities
    We recognize that the proposed HD GHG Phase 3 standards would 
require significant investments from manufacturers to reduce GHG 
emissions from HD vehicles. We request comment on the potential need 
for additional flexibilities to assist manufacturers in the 
implementation of Phase 3.
    Specifically, we request comment on providing the flexibility for 
manufacturers to use advanced technology credits across averaging sets, 
subject to a cap. In HD GHG Phase 1, the advanced technology credits 
earned a multiplier of 1.5 and they could be applied to any heavy-duty 
engine or vehicle averaging set.\590\ To prevent market distortions, we 
capped the amount of advanced credits that could be brought into any 
service class in any model year of the Phase 1 program at 60,000 Mg. In 
HD GHG Phase 2, we adopted larger advanced technology multipliers, and 
we discontinued the allowance for advanced technology credits to be 
used across averaging sets. The primary reason for the averaging set 
restriction was to reduce the risk of market distortions if we allowed 
the use of the credits across averaging sets combined with the larger 
credit multipliers.\591\ As discussed in Section III.A.2, we are 
proposing to phase-out the advanced technology credit multipliers for 
HD plug-in hybrid and battery electric vehicles after MY 2026, one year 
earlier than what is currently in the regulations, and under the 
existing regulations the fuel cell electric vehicle advanced technology 
multipliers end after MY 2027.
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    \590\ 40 CFR 1036.740(c) and 1037.740(b).
    \591\ 81 FR 73498 (October 25, 2016).
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    We recognize the proposed Phase 3 standards would require the 
increasing use of CO2 emission reducing technologies. During 
this proposed Phase 3 standards transition, we are considering whether 
additional flexibilities in the Phase 3 program emissions credit ABT 
program design may be warranted, similar to the Phase 1 provision which 
allowed credits generated from advanced technologies to be transferred 
across averaging sets. We request comment on including a similar 
flexibility for the Phase 3 program. For example, we may consider an 
interim provision that would allow vehicle CO2 credits 
generated by PHEVs, BEVs, and FCEVs to be used across vehicle averaging 
sets or possibly across engine averaging sets as specified in 40 CFR 
part 1036. If we were to adopt such an allowance, we would expect this 
flexibility to begin with MY 2027 and end after the last year the new 
Phase 3 standards phase-in, which as proposed is after MY 2032. We also 
would expect to restrict the number of credits (i.e., the quantity of 
CO2 megagrams) that could be transferred from one averaging 
set to another in a given model year, considering the level of the 
standards and our goal to prevent market distortions, and we request 
comment on what an appropriate restriction should be. We also may set 
different credits transfer cap values per averaging set that vary 
across the various averaging sets. We request comment on the model 
years and credit volume limitations we should consider for such an 
allowance for PHEV, BEV, and FCEV generated CO2 credits. We 
also request comment on extending this flexibility with some 
restrictions to the PHEV, BEV, and FCEV generated CO2 
credits from chassis-certified Class 2b and Class 3 vehicles. More 
specifically, we request comment on allowing PHEV, BEV, and FCEV 
generated CO2 credits in the chassis-certified Class 2b and 
Class 3 vehicle category (under the part 86, subpart S ABT program for 
MYs 2027-2032) to be used in the HD Phase 3 light heavy-duty and medium 
heavy-duty vehicle averaging sets (under the part 1037 ABT program for 
MYs 2027-2032) in a single direction of movement (i.e., not into the 
heavy heavy-duty averaging set, and not allowing HD Phase 3 credits 
from light heavy-duty and medium heavy-duty averaging sets to be 
transferred into the chassis-certified Class 2b and Class 3 vehicle 
category), and similarly request comment on what appropriate 
restrictions to MYs and credit volume limitations should be included if 
adopted.
    We also request comment on considerations of a program similar to 
CARB's credit program included in their ACT rule. As briefly described 
in DRIA Chapter 1.3.3, CARB would apply vehicle class-specific ``weight 
class modifiers'' (i.e., credit multipliers) for credits generated by 
ZEVs and near zero-emission vehicles to further incentivize adoption 
electrification of the larger vehicle classes.\592\
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    \592\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Section 1963.2. Filed March 15, 
2021. Available at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf.
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B. Battery Durability Monitoring and Warranty Requirements

    This section describes our proposal to adopt battery durability 
monitoring requirements for BEVs and PHEVs and to clarify how warranty 
applies for several advanced technologies. Our proposal is motivated by 
three factors: BEV, PHEV, and FCEV are playing an increasing role in 
vehicle manufacturers' compliance strategies to control GHG emissions 
from HD vehicles; BEV, PHEV, and FCEV durability and reliability are 
important to achieving the GHG emissions reductions projected by this 
proposed program; and that GHG emissions credit calculations are based 
on mileage over a vehicle's full useful life.
1. Battery and Plug-In Hybrid Electric Vehicle Durability Monitoring 
Requirements
    EPA's HD vehicle GHG emission standards apply for the regulatory 
useful life of the HD vehicle, consistent with CAA section 202(a)(1) 
(``Such standards shall be applicable to such vehicles and engines for 
their useful life''). Accordingly, EPA has historically required 
manufacturers to demonstrate the durability of their emission control 
systems on vehicles, including under our CAA section 206 authority. 
Without durability demonstration requirements, EPA would not be able to 
assess whether vehicles originally manufactured in compliance with 
relevant emissions standards would remain compliant over the course of 
their useful life. Recognizing that BEVs, PHEVs, and FCEVs are playing 
an increasing role in manufacturers' compliance strategies, and that 
emission credit calculations are based on mileage over a vehicle's 
useful life, the same logic applies to BEV, PHEV, and FCEV

[[Page 26014]]

durability. Under 40 CFR part 1037, subpart H, credits are calculated 
by determining the family emission limit (FEL) each vehicle achieves 
beyond the standard and multiplying that by the production volume and a 
useful life mileage attributed to each vehicle subfamily.\593\ Having a 
useful life mileage figure for each vehicle subfamily is integral to 
calculating the credits attributable to that vehicle, whether those 
credits are used for calculating compliance through averaging, or for 
banking or trading. Compliance with standards through averaging depends 
on all vehicles in the regulatory subcategory, or averaging set, 
achieving their certified level of emission performance throughout 
their useful life. As explained in Section II and this Section III, EPA 
also anticipates most if not all manufacturers would include the 
averaging of credits generated by BEVs and FCEVs as part of their 
compliance strategies for the proposed standards, thus this is a 
particular concern given that the calculation of credits for averaging 
(as well as banking and trading) depend on the battery and emission 
performance being maintained for the full useful life of the vehicle. 
Thus, without durability requirements applicable to such vehicles 
guaranteeing certain performance over the entire useful life of the 
vehicles, EPA is mindful that there would not be a guarantee that a 
manufacturer's overall compliance with emission standards would 
continue throughout that useful life. Similarly, EPA is concerned that 
we would not have assurance that the proposed standards would achieve 
the emission reductions projected by this proposed program. Therefore, 
EPA is proposing new battery durability monitoring for HD BEVs and 
PHEVs as a first key step towards this end, beginning with MY 2027.
---------------------------------------------------------------------------

    \593\ The useful life values for the HD vehicle standards are 
located in 40 CFR 1037.105(e) and 1037.106(e).
---------------------------------------------------------------------------

    As implemented by light-duty vehicle manufacturers in current BEVs 
and PHEVs, lithium-ion battery technology has been shown to be 
effective and durable for use and we expect that this will also be the 
case for HD BEVs and PHEVs. It is also well known that the energy 
capacity of a battery will naturally degrade to some degree with time 
and usage, resulting in a reduction in driving range as the vehicle 
ages. The degree of this energy capacity and range reduction 
effectively becomes an issue of durability if it negatively affects how 
the vehicle can be used, or how many miles it is likely to be driven 
during its useful life.
    Vehicle and engine manufacturers are currently required to account 
for potential battery degradation in both hybrid and plug-in hybrid 
vehicles that could result in an increase in CO2 emissions 
(see, e.g., existing 40 CFR 1037.241(c) and 1036.241(c)).\594\ In 
addition, engine manufacturers are required to demonstrate compliance 
with criteria pollutant standards using fully aged emission control 
components that represent expected degradation during useful life (see, 
e.g., 40 CFR 1036.235(a)(2) and 1036.240). EPA is applying this well-
established approach to the durability of BEV and PHEV batteries by 
proposing to require battery durability monitoring.
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    \594\ As discussed in Section III.C.3.vi, we are proposing to 
remove 40 CFR 1037.241(b), which if finalized, 40 CFR 1037.241(c) 
will be moved to 40 CFR 1037.241(b).
---------------------------------------------------------------------------

    The proposed requirements are similar to the battery durability 
monitor regulation framework developed by the United Nations Economic 
Commission for Europe (UN ECE) and adopted in 2022 as Global Technical 
Regulation (GTR) No. 22. The proposed durability monitoring regulations 
would require manufacturers of BEVs and PHEVs to develop and implement 
an on-board state-of-certified-energy (SOCE) monitor that can be read 
by the vehicle user. We are not proposing durability monitoring 
requirements for FCEVs at this time because the technology is currently 
still emerging in heavy-duty vehicle applications and we are still 
learning what the appropriate metric might be for quantifying FCEV 
performance.
    The importance of battery durability in the context of zero-
emission and hybrid vehicles, such as BEVs and PHEVs, is well 
documented and has been cited by several authorities in recent years. 
In their 2021 report, the National Academies of Science (NAS) 
identified battery durability as an important issue with the rise of 
electrification. Among the findings outlined in that report, NAS noted 
that: ``battery capacity degradation is considered a barrier for market 
penetration of BEVs,'' and that ``[knowledge of] real-world battery 
lifetime could have implications on R&D priorities, warranty provision, 
consumer confidence and acceptance, and role of electrification in fuel 
economy policy.'' NAS also noted that ``life prediction guides battery 
sizing, warranty, and resale value [and repurposing and recycling]'', 
and discussed at length the complexities of state of health (SOH) 
estimation, life-cycle prediction, and testing for battery 
degradation.\595\
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    \595\ National Academies of Sciences, Engineering, and Medicine 
2021. ``Assessment of Technologies for Improving Light-Duty Vehicle 
Fuel Economy 2025-2035''. Washington, DC: The National Academies 
Press. https://doi.org/10.17226/26092, p. 5-113 to 5-115.
---------------------------------------------------------------------------

    Several rulemaking bodies have also recognized the importance of 
battery durability in a world with rapidly increasing numbers of zero-
emission vehicles. In 2015, the United Nations Economic Commission for 
Europe began studying the need for a GTR governing battery durability 
in light-duty vehicles. In 2021, it finalized United Nations GTR No. 
22, ``In-Vehicle Battery Durability for Electrified Vehicles,'' \596\ 
which provides a regulatory structure for contracting parties to set 
standards for battery durability in light-duty BEVs and PHEVs. In 2022, 
the United Nations Economic Commission for Europe began studying the 
need for a GTR governing battery durability in heavy-duty vehicles. EPA 
representatives chaired the informal working group that developed the 
GTR and worked closely with global regulatory agencies and industry 
partners to complete its development in a form that could be adopted in 
various regions of the world, including potentially the United States. 
The European Commission and other contracting parties have also 
recognized the importance of durability provisions and are working to 
adopt the GTR standards in their local regulatory structures. In 
addition, the California Air Resources Board, as part of the Zero-
Emission Powertrains (ZEP) Certification program, has also included 
battery durability and warranty requirements as part of a suite of 
customer assurance provisions designed to ensure that zero-emission 
vehicles maintain similar standards for usability, useful life, and 
maintenance as for ICE vehicles.\597\
---------------------------------------------------------------------------

    \596\ United Nations Economic Commission for Europe, Addendum 
22: United Nations Global Technical Regulation No. 22, United 
Nations Global Technical Regulation on In-vehicle Battery Durability 
for Electrified Vehicles, April 14, 2022. Available at: https://unece.org/sites/default/files/2022-04/ECE_TRANS_180a22e.pdf.
    \597\ California Air Resources Board. ``Attachment C: California 
Standards and Test Procedures for New 2021 and Subsequent Model 
Heavy-Duty Zero-Emissions Powertrains'', available at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/zepcert/froattc.pdf (last accessed September 20, 2021) (see Section D for 
details of CARB rated energy capacity test procedure requirements).
---------------------------------------------------------------------------

    EPA concurs with the emerging consensus that battery durability is 
an important issue. The ability of a zero-emission vehicle to achieve 
the expected emission reductions during its lifetime depends in part on 
the ability of the battery to maintain sufficient

[[Page 26015]]

driving range, capacity, power, and general operability for a period of 
use comparable to that expected of a comparable ICE vehicle. Durable 
and reliable electrified vehicles are therefore critical to ensuring 
that projected emissions reductions are achieved by this proposed 
program.
    Because vehicle manufacturers can use electrification as an 
emissions control technology to comply with EPA standards as well as 
generate credits for use in averaging, and also banking and trading, 
EPA believes that it is appropriate to set requirements to ensure that 
electrified vehicles certifying to EPA standards are durable and 
capable of providing the anticipated emissions reductions, including 
those that they are credited under our provisions. For example, in 
order for the environmental emission reductions that are credited to 
BEVs and PHEVs to be fully realized under this proposed rule's 
structure, it is important that their potential to achieve a similar 
mileage during their lifetime be comparable to that assumed for ICE 
vehicles in the same vehicle service class. In addition, under the EPA 
GHG program, BEVs and PHEVs generate credits that can be traded among 
manufacturers and used to offset debits generated by vehicles using 
other technologies that do not themselves meet the proposed standards. 
In either case, if credits generated by zero-emission vehicles are to 
offset debits created by other vehicles on an equivalent basis, it is 
thus important that they should be capable of achieving a similar 
mileage, and this depends, in part, on the life of the battery. 
Further, if BEVs and PHEVs were less durable than comparable ICE 
vehicles, this could result in increased use of ICE vehicles. In 
particular, and especially for vehicles with shorter driving ranges, 
loss of a large portion of the original driving range capability as the 
vehicle ages could reduce the ability for zero-emission miles to 
displace greater-than-zero-emission miles traveled, as well as 
undermine purchaser confidence in this emerging but highly effective 
technology.
    We proposed a specific durability testing requirement in the HD2027 
NPRM and received comment on that proposal, including comment stating 
that the requirements could result in increases in the battery capacity 
beyond what was needed to meet the job of the customer. Due to these 
concerns and because we are still evaluating the range of durability 
metrics that could be used for quantifying HD BEV performance, EPA is 
not proposing specific durability testing requirements in this rule. 
However, EPA is including in this proposal a requirement for a battery 
durability monitor that would be applicable to HD BEVs and PHEVs. The 
battery durability monitor proposal would require manufacturers to 
provide a customer-facing battery state-of-health (SOH) monitor for all 
heavy-duty BEVs and PHEVs. We are proposing a new 40 CFR 1037.115(f) 
that would require manufacturers to install a customer-accessible SOH 
monitor which estimates, monitors, and communicates the vehicle's state 
of certified energy (SOCE) as it is defined in GTR No. 22.\598\ 
Specifically, manufacturers would implement onboard algorithms to 
estimate the current state of health of the battery, in terms of the 
state of its usable battery energy (UBE) expressed as a percentage of 
the original UBE when the vehicle was new.
---------------------------------------------------------------------------

    \598\ We are proposing to incorporate by reference the UN 
Economic Commission for Europe document as described in Section 
XI.I.
---------------------------------------------------------------------------

    For HD PHEVs, we are proposing that manufacturers would use the 
existing powertrain test procedures defined in 40 CFR 1036.545 to 
determine UBE.\599\ The powertrain test procedures requires that PHEVs 
be tested in charge depleting and charge sustaining modes using a range 
of vehicle configurations. For the determination of UBE, we are 
proposing that the PHEV manufacturer would select the most 
representative vehicle configuration.
---------------------------------------------------------------------------

    \599\ We are proposing to move the existing powertrain procedure 
from its current location in 40 CFR 1037.550 to the heavy-duty 
highway engine provisions as a new 40 CFR 1036.545. See Section 
III.C.3 for more information.
---------------------------------------------------------------------------

    For HD BEVs, we are proposing that manufacturers develop their own 
test procedures for determining UBE. This is due to the range of HD BEV 
architectures, and the limited test facilities for conducting 
powertrain testing of BEVs with e-axles. With the SOCE being a relative 
measure of battery health and not absolute UBE, we believe that leaving 
the test procedure up to the manufacturer will still provide a 
meaningful measure of the health of the battery. We also believe that 
requiring the SOH to be customer-accessible will provide assurance that 
the SOH monitor is relatively accurate while also providing more time 
for EPA to work with manufacturers to develop a standardized test 
procedure for determining UBE for HD BEVs.
    We proposed a specified test procedure to determine UBE in the 
HD2027 NPRM and received comment on that proposal, including comment 
requesting changes to the proposed test procedure, which EPA considered 
in developing this proposal's approach. EPA requests comment both on 
this rule's proposed approach and on an alternative approach of EPA 
defining a test procedure to determine UBE, such as the test procedure 
EPA proposed in the HD2027 NPRM, CARB zero-emission powertrain 
certification, and the test procedures being considered by the UN ECE 
EVE IWG.\600\ Regarding our request for comment on the HD2027 NPRM test 
procedure, we note that one of the main concerns with the test 
procedure in submitted comments on the HD2027 NPRM was that commenters 
stated the powertrain test cell required for powertrains with e-axles 
were not widely available, and we believe there has been some 
indication that this is changing; we request comment on this issue. 
Regarding our request for comment on the test procedures being 
considered by the UN ECE EVE IWG, we note that some of these test 
procedures don't rely on chassis or powertrain dynamometers, like the 
charge-discharge test procedure, and request comment on this issue.
---------------------------------------------------------------------------

    \600\ Memorandum to Docket EPA-HQ-OAR-2022-0985: ``Draft Test 
Procedures for Determining UBE''. James Sanchez. February 1, 2023.
---------------------------------------------------------------------------

    Many of the organizations and authorities that have examined the 
issue of battery durability, including the UN Economic Commission for 
Europe, the European Commission, and the California Air Resources 
Board, have recognized that monitoring driving range as an indicator of 
battery durability performance (instead of or in addition to UBE) may 
be an attractive option because driving range is a metric that is more 
directly experienced and understood by the consumer. While we are not 
proposing to require that heavy-duty BEVs and PHEVs implement a state-
of-certified-range (SOCR) monitor, we are requesting comment on whether 
we should require the SOCR monitor defined in GTR No. 22.
2. Battery and Fuel Cell Electric Vehicle Component Warranty
    EPA is proposing new warranty requirements for BEV and FCEV 
batteries and associated emission-related electric powertrain 
components (e.g., fuel-cell stack, electric motors, and inverters) and 
is proposing to clarify how existing warranty requirements apply for 
PHEVs.\601\ The proposed warranty requirements build on existing 
emissions control warranty provisions by establishing specific new 
requirements tailored to the emission control-related role of the high-
voltage

[[Page 26016]]

battery and fuel-cell stack in durability and performance of BEVs and 
FCEVs.
---------------------------------------------------------------------------

    \601\ Note, EPA is not reopening the existing emission-related 
warranty periods for HD engines and vehicles in parts 1036 and 1037.
---------------------------------------------------------------------------

    As described in the previous section, the National Academies of 
Science (NAS) in their 2021 report \602\ identified battery warranty 
along with battery durability as an important issue with the rise of 
electrification. The proposed vehicle warranty requirements for battery 
and other emission-related electric powertrain components of HD BEVs 
and FCEVs would be similar to those that EPA has the authority to 
require and has historically applied to emission control-related 
components for HD vehicles, including HD ICE vehicles, under EPA's HD 
vehicle regulations, and would similarly implement and be under the 
authority of CAA section 207.\603\ EPA believes that this practice of 
ensuring a minimum level of warranty protection should be extended to 
the high-voltage battery and other emission-related electric powertrain 
components of HD BEV, PHEV, and FCEV for multiple reasons. Recognizing 
that BEVs, PHEVs, and FCEVs are playing an increasing role in 
manufacturers' compliance strategies, the high-voltage battery and the 
powertrain components that depend on it are emission control devices 
critical to the operation and emission performance of HD vehicles, as 
they play a critical role in reducing the vehicles' emissions and 
allowing BEVs and FCEVs to have zero tailpipe emissions. As explained 
in Section II and this Section III, EPA also anticipates most if not 
all manufacturers would include the averaging of credits generated by 
BEVs and FCEVs as part of their compliance strategies for the proposed 
standards, thus this is a particular concern given that the calculation 
of credits for averaging (as well as banking and trading) depend on the 
battery and emission performance being maintained for the full useful 
life of the vehicle. Additionally, warranty provisions are a strong 
complement to the proposed battery durability monitoring requirements. 
We believe a component under warranty is more likely to be properly 
maintained and repaired or replaced if it fails, which could help 
ensure that credits granted for BEV and FCEV production volumes 
represent real emission reductions achieved over the life of the 
vehicle. Finally, we expect manufacturers provide warranties at the 
existing 40 CFR 1037.120 levels for the BEVs they currently produce, 
and the proposed requirements to certify to offering those warranty 
periods and document them in the owner's manual would provide 
additional assurance for owners that all BEVs have the same minimum 
warranty period.\604\
---------------------------------------------------------------------------

    \602\ National Academies of Sciences, Engineering, and Medicine 
2021. ``Assessment of Technologies for Improving Light-Duty Vehicle 
Fuel Economy 2025-2035''. Washington, DC: The National Academies 
Press. https://doi.org/10.17226/26092.
    \603\ See Section I.D. of this preamble for further discussion 
of EPA's authority under CAA section 207.
    \604\ The Freightliner eCascadia includes a powertrain warranty 
of 5 yr/150K or 300K miles (depending on battery pack size). DDCTEC 
16046--eCascadia Spec Sheet_6.0.pdf.
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    For heavy-duty vehicles, EPA is proposing that manufacturers 
identify BEV and FCEV batteries and associated electric powertrain 
components as component(s) covered under emission-related warranty in 
the vehicle's application for certification. We propose those 
components would be covered by the existing regulations' emissions 
warranty periods \605\ of 5 years or 50,000 miles for Light HDV and 5 
years or 100,000 miles for Medium HDV and Heavy HDV (see proposed 
revisions to 40 CFR 1037.120).
---------------------------------------------------------------------------

    \605\ EPA promulgated the existing HD vehicle warranty periods 
in 40 CFR part 1037 under our CAA section 207 authority.
---------------------------------------------------------------------------

    We are not proposing new battery warranty requirements for PHEVs as 
``hybrid system components'' are covered under the existing regulations 
in 40 CFR part 1036 and 40 CFR part 1037. In the HD2027 rule, we 
finalized as proposed that when a manufacturer's certified 
configuration includes hybrid system components (e.g., batteries, 
electric motors, and inverters), those components are considered 
emission-related components, which would be covered under the warranty 
requirements (see, e.g., 88 FR 4363, January 24, 2023). We are 
proposing revisions to 40 CFR 1036.120(c) to clarify that the warranty 
requirements of 40 CFR part 1036 apply to hybrid system components for 
any hybrid manufacturers certifying to the part 1036 engine standards. 
In 40 CFR 1037.120(c), we are also proposing a clarifying revision to 
remove the sentence stating that the emission-related warranty does not 
need to cover components whose failure would not increase a vehicle's 
emissions of any regulated pollutant while extending the existing 
statement that warranty covers other emission-related components in a 
manufacturer's application for certification to specifically include 
any other components whose failure would increase a vehicle's 
CO2 emissions.

C. Additional Proposed Revisions to the Regulations

    In this subsection, we discuss proposed revisions to 40 CFR parts 
1036, 1037, 1065.
1. Updates for Cross-Sector Issues
    This section includes proposed updates that would make the same or 
similar changes in related portions of the CFR or across multiple 
standard-setting parts for individual industry sectors.
i. LLC Cycle Smoothing and Accessory Load
    EPA finalized a new LLC duty-cycle in the HD2027 rule that included 
a procedure for smoothing the nonidle nonmotoring points immediately 
before and after idle segments within the duty-cycle.\606\ It was 
brought to our attention that the smoothing procedure in 40 CFR 
1036.514(c)(3) allows smoothing based on the idle accessory torque but 
says nothing about how to address the contribution of curb idle 
transmission torque (CITT), while 40 CFR 1065.610(d)(3)(v) through 
(viii) requires smoothing based on CITT and says nothing about how to 
address idle accessory torque. This could create confusion and 
difficulties for common cases where CITT is required in addition to the 
40 CFR 1036.514 idle accessory torques. 40 CFR 1036.514(c)(3), as 
currently written, would only apply if the transmission was in neutral, 
because it only allows you to account for the accessory load and not 
CITT, which was not EPA's intent. To illustrate the concern, for 
example, a MHD engine could have an LLC idle accessory load of 23.5 
foot-pounds, which is 19 percent of a typical automatic transmission 
CITT of 124 foot-pounds. To resolve this potential issue, we are 
proposing to remove the smoothing instructions in 40 CFR 1036.514 and 
incorporate them into 40 CFR 1065.610.
---------------------------------------------------------------------------

    \606\ 88 FR 4296 (January 24, 2023).
---------------------------------------------------------------------------

    The original intent of the 40 CFR 1065.610 duty-cycle generation 
procedure was to avoid discontinuities in the reference torque values. 
It was written with the assumption that idle load in neutral was zero, 
meaning the vehicle or machine idle accessory load was zero. When we 
introduced the required LLC idle accessory load in 40 CFR 1036.514, we 
failed to realize that amendments would be needed to 40 CFR 
1065.610(d)(3) to clarify how to handle the accessory load in the 
denormalization process. The engine mapping section 40 CFR 1065.510 is 
another area of concern as it does not address the possibility of droop 
in the idle governor, which would result in different idle speeds when 
the transmission is in drive versus neutral. This results in an 
additional

[[Page 26017]]

complication as the required idle accessory torque will be different in 
drive versus neutral to keep the accessory power at the level specified 
in Table 1 to 40 CFR 1036.514(c)(4).
    40 CFR 1065.610(d)(4) is a related paragraph that allows a 
different deviation for an optional declared minimum torque that 
applies to variable- and constant-speed engines and both idle and 
nonidle nonmotoring points in the cycle. Its scope of application is 
wider than 40 CFR 1065.610(d)(3). 40 CFR 1065.610(d)(4) applies to all 
nonidle nonmotoring points in the cycle, not just the ones immediately 
preceding or following an idle segment and using it instead of (d)(3) 
would not get the intended constant idle accessory power loads or the 
intended smoothing.
    There is also an existing historical conflict between 40 CFR 
1065.510(f)(4) and 1065.610(d)(4). 40 CFR 1065.510(f)(4) requires that 
manufacturers declare non-zero idle, or minimum torques, but 40 CFR 
1065.610(d)(4), permissible deviations, make their use in cycle 
generation optional. This results in an inconsistency between the two 
sections as 40 CFR 1065.510(f)(4) requires these parameters to be 
declared, but 40 CFR 1065.610(d)(4) does not require them to be used.
    Additionally, there is a historical conflict in 40 CFR 
1065.610(d)(3)(v). This paragraph, as written, includes zero percent 
speed and, if the paragraph is executed in the order listed, it would 
include idle points that were changed to neutral in the previous step 
for neutral while stationary transmissions. This conflict would change 
the torque values of those idle-in-neutral points back to the warm-
idle-in-drive torque and the speed would be left unaltered at the idle-
in-neutral speed. This was clearly not the intent of this paragraph, 
yet we note that this conflict spans back all the way to when these 
procedures were located in 40 CFR 86.1333-90.
    The smoothing of idle points also raises the need for smoothing of 
the few occurances of non-idle points in the duty-cycles where the 
vehicle may be moving, the torque converter may not be stalled, and the 
warm-idle-in-drive torque may not be appropriate. This would result in 
the smoothing of consecutive points around nonidle nonmotoring points 
with normalized speed at or below zero percent and reference torque 
from zero to the warm-idle-in-drive torque value where the reference 
torque is set to the warm-idle-in-drive torque value.
    To address all of these concerns, we are proposing to make changes 
to 40 CFR 1065.510, 1065.512, and 1065.610. Note, other proposed 
changes to these subsections not specifically mentioned here are edits 
to fix citations to relocated or new paragraphs and to improve the 
clarity of the test procedures. The proposed changes to 40 CFR 1065.610 
include basing the smoothing of points preceding an idle segment and 
following an idle segment on the warm-idle-in-drive torque value (sum 
of CITT and idle accessory torque). Exceptions to this are for manual 
transmissions and for the first 24 seconds of initial idle segments for 
automatic transmissions. Here the warm-idle-in-neutral torque value 
(idle accessory torque) is used. We are proposing to include manual 
transmissions in the required deviations for reference torque 
determination for variable-speed engines in 40 CFR 1065.610(d)(3) for 
completeness. The proposed amendments to 40 CFR 1065.610(d)(3) include 
the option to skip these deviations for a manual transmission where 
optional declared idle torque and the optional declared power are not 
declared (idle torque is zero). This provides labs that have not yet 
implemented these required deviations the option to not implement them 
if they only need to run tests with manual transmissions with zero idle 
torque. We also proposed the addition of manual transmissions to 40 CFR 
1065.512(b)(2) where these required deviations in 40 CFR 1065.610 are 
cited.
    We are also proposing changes to 40 CFR 1065.510(b) and (f) to 
address the effect of droop in the idle governor and how to determine 
idle speed when idle torque is a function of idle speed (where a 
component is specified as power or CITT is specified as a function of 
speed and the idle speeds need to be determined for each setpoint of 
the idle governor). We are also proposing the addition of an option to 
declare the warm idle speed(s) equal to the idle speed setpoint for 
electronically governed variable-speed engines with an isochronous low-
speed governor. Recent updates to the mapping test procedure in 40 CFR 
1065.510 regarding running the map at the minimum user-adjustable idle 
speed setpoint and using the map for any test assumed that one could 
declare the warm idle speed(s) equal to the idle speed setpoint for 
electronically governed variable-speed engines.\607\ We are proposing 
changes to make it clear that this option is allowed, which would help 
simplify the mapping process.
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    \607\ 88 FR 4296 (January 24, 2023).
---------------------------------------------------------------------------

    To resolve the conflict between 40 CFR 1065.510(f)(4) and 
1065.610(d)(4), we are proposing to move the requirement to declare 
torques to 40 CFR 1065.510(f)(5), which would make it optional and 
consistent with 40 CFR 1065.610(d)(4).
    To resolve the conflict in 40 CFR 1065.610(c)(3)(v), which we are 
proposing to reorganize as 40 CFR 1065.610(c)(3)(vii), we are proposing 
to restrict the applicability of the paragraph from ``all points'' to 
``all nonidle nonmotoring points.'' To address the smoothing of 
consecutive nonidle nonmotoring points that immediately follow and 
precede any smoothed idle points we are proposing to change their 
reference torques to the warm-idle-in-drive torque value by adding a 
new 40 CFR 1065.610(c)(3)(xi).
    We are also proposing revisions to 40 CFR 1036.514 to reorganize 
and clarify the process for cycle denormalization of speed and torque 
where accessory load is included and to add more specific transmission 
shift points for greater than 200 seconds idle segments for LLC engine 
and hybrid powertrain testing. Shifting the transmission to neutral 
during very long idle segments is more representative of in-use 
operation than leaving it in drive, so we are proposing more specific 
shift points instead of a range to reduce lab-to-lab variability. The 
proposal would require setting the reference speed and torque values to 
the warm-idle-in-drive values for the first three seconds and the last 
three seconds of the idle segment for an engine test, requiring keeping 
the transmission in drive for the first 3 seconds of the idle segment, 
shifting the transmission from drive to park or neutral immediately 
after the third second in the idle segment, and shifting the 
transmission into drive again three seconds before the end of the idle 
segment.
ii. Calculating Greenhouse Gas Emission Rates
    We are proposing to revise 40 CFR 1036.550(b)(2) and 40 CFR 
1054.501(b)(7) to clarify that when determining the test fuel's carbon 
mass fraction, WC, the fuel properties that must be measured 
are [alpha] (hydrogen) and [beta] (oxygen). These paragraphs, as 
currently written, imply that you cannot use the default fuel 
properties in 40 CFR 1065.655 for [alpha], [beta], [gamma] (sulfur), 
and [delta] (nitrogen). The fuel property determination in 40 CFR 
1065.655(e) makes it clear that if you measure fuel properties and the 
default [gamma] and [delta] values for your fuel type are zero in Table 
2 to 40 CFR 1065.655, you do not need to measure those properties. The 
sulfur ([gamma]) and nitrogen ([delta]) content of these highly refined 
gasoline and diesel fuels are not enough to affect the WC 
determination

[[Page 26018]]

and the original intent was to not require their measurement. We are 
proposing this change to ensure there is no confusion on the 
requirement. We are also proposing to update 40 CFR 1036.550(b)(2) and 
40 CFR 1054.501(b)(7) so that they reference 40 CFR 1065.655(e), which 
includes the default fuel property table whose number had been 
previously changed and we did not make the corresponding update in 40 
CFR 1036.550(b)(2) and 40 CFR 1054.501(b)(7).
iii. ABT Reporting
    We are proposing to allow manufacturers to correct previously 
submitted vehicle and engine GHG ABT reports, where a mathematical or 
other error in the GEM-based or fleet calculations used for compliance 
was discovered after the 270-day final report submission deadline. In 
the Phase 1 program, EPA chose the 270-day deadline for submitting a 
final GHG ABT report to coincide with existing criteria pollutant 
report requirements that manufacturers follow for heavy-duty 
engines.\608\ The 270-day deadline was based on our interest in 
manufacturers maintaining good quality assurance/quality control (QA/
QC) processes in generating ABT reports. We continue to believe that 
aligning the ABT report deadlines for criteria and GHG pollutants can 
provide consistency within a manufacturer's certification and 
compliance processes, but further consideration of the inherent 
differences and complexities in how credits are calculated and 
accounted for in the two programs led us to consider a time window 
beyond 270 days for allowing corrections to the GHG report. Certifying 
an engine or vehicle fleet with attribute-based features (Phase 1) or 
GEM (Phase 2) involves a greater risk of error compared to EPA's engine 
or vehicle test-based programs for criteria pollutants, where direct 
measurement of criteria pollutant emissions at time of certification is 
well established. Whether an indirect, physics-based model for 
quantifying GHG emissions such as GEM, or a unique technology-, 
attribute-, or engine production volume-based credit accounting system, 
unintentional errors, if not detected prior to submitting the final GHG 
ABT report and not realized until the accounting process for the 
following model year was initiated, could negatively affect a 
manufacturer's credit balance. For example, the loss of these credits 
could result in a manufacturer purchasing credits or making unplanned 
investments in additional technologies to make up for the credits lost 
due to the report error.
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    \608\ See the HD GHG Phase 1 rule (76 FR 57284, September 15, 
2011).
---------------------------------------------------------------------------

    Under the proposed revisions to 40 CFR 1036.730(f) and 1037.730(f), 
EPA would consider requests to correct previously submitted MY 2021 or 
later ABT reports only when notified of the error within a time period 
of 24 months from the September 30 final report deadline. For requests 
to correct reports for MY 2020 or earlier, we are proposing an interim 
deadline of October 1, 2024 (see proposed new 40 CFR 1036.150(aa) and 
1037.150(y)). We believe that corrections to ABT reports, where 
justified, will have no impact on emissions compliance as the actual 
performance of a manufacturer's fleet was better than what was reported 
in error, and correcting the report simply adjusts the credit balance 
for the model year in question to the appropriate value, such that 
those credits can then be used in future model years.
    This proposed narrowly focused allowance for correcting accounting, 
typographical, or GEM-based errors after a manufacturer submits the 
270-day final report (see proposed revisions in 40 CFR 1037.730) is 
intended to address the disproportionate financial impact of an 
unintentional error in the complex modeling and accounting processes 
that manufacturers use to determine compliance and credit balances for 
a given model year. We are proposing a 10 percent discount to these 
credit corrections to the final report, which will reduce the value of 
the credits that are restored upon approval of the request. The 10 
percent discount is intended to balance the goal of encouraging 
accuracy in ABT reports and use of robust QA/QC processes against the 
considerations for allowing manufacturers the ability to correct 
unforeseen errors.
iv. Migration of 40 CFR 1037.550 to 40 CFR 1036.545
    We are proposing to migrate the powertrain test procedure in 40 CFR 
1037.550 to 40 CFR 1036.545. Over the course of the development of this 
test procedure, its use expanded to include certification of engines to 
the criteria pollutant standards in 40 CFR part 1036 (including test 
procedures in 40 CFR 1036.510, 1036.512, and 1036.514) and the 
procedure can be used in place of the engine GHG testing procedures (40 
CFR 1036.535 and 1036.540) for hybrid engines and hybrid powertrains. 
We are proposing to migrate the test procedure to 40 CFR 1036.545 as-
is, with the following exceptions. We are proposing to add a new figure 
that provides an overview of the steps involved in carrying out testing 
under this section. We are proposing to clarify that if the test setup 
has multiple locations where torque is measured and speed is 
controlled, the manufacturer would be required to sum the measured 
torque and validate that the speed control meets the requirements 
defined in the proposed 40 CFR 1036.545(m). Positive cycle work, 
W[cycle], would then be determined by integrating the sum of 
the power measured at each location in the proposed 40 CFR 
1036.545(o)(7). We are also proposing to clarify that manufacturers may 
test the powertrain with a chassis dynamometer as long as they measure 
speed and torque at the powertrain's output shaft or wheel hubs. We are 
also proposing to replace all references to 40 CFR 1037.550 throughout 
40 CFR part 1036 and part 1037 with new references to 40 CFR 1036.545. 
For test setups where speed and torque are measured at multiple 
locations, determine W[cycle] by integrating the sum of the power 
measured at each location.
v. Median Calculation for Test Fuel Properties in 40 CFR 1036.550
    40 CFR 1036.550 currently requires the use of the median value of 
measurements from multiple labs for the emission test fuel's carbon-
mass-specific net energy content and carbon mass fraction for 
manufacturers to determine the corrected CO2 emission rate 
using equation 40 CFR 1036.550-1. The current procedure does not 
provide a method for determining the median value. We are proposing to 
add a new calculation for the median value in the statistics 
calculation procedures of 40 CFR 1065.602 as a new paragraph (m). We 
also propose to reference the new paragraph (m) in 40 CFR 
1036.550(a)(1)(i) and (a)(2)(i) for carbon-mass-specific net energy 
content and carbon mass fraction, respectively. This proposed new 
calculation procedure would ensure that labs are using the same method 
to calculate the median value. This proposed calculation is a standard 
statistical method for determining median and it would require order 
ranking the data in increasing order from smallest value to largest.
    Determining the median from data sets containing an even number of 
data points would require dividing the number of data points by two to 
determine the rank of one of the data points whose value would be used 
to determine the median. This data point would then be added to the 
next highest ranked data point and the sum would be divided by two to 
determine the median.

[[Page 26019]]

    Determining the median from data sets containing an odd number of 
data points would be determined by adding one to the number of data 
points and dividing the sum by two to determine the rank of the data 
point whose value would be the median.
2. Updates to 40 CFR Part 1036 Heavy-Duty Highway Engine Provisions
i. Manufacturer Run Heavy Duty In-Use Testing
    We are proposing a clarification to 40 CFR 1036.405(d) regarding 
the starting point for the 18-month window manufacturers have to 
complete an in-use test order. Under the current provision, the clock 
for the 18-month window starts after EPA has received the 
manufacturer's proposed plan for recruiting, screening, and selecting 
vehicles. There is concern that manufacturers could delay testing by 
unnecessarily prolonging the selection process. To alleviate this 
concern and keep the testing timeline within the originally intended 
18-month window, we are proposing to start the clock on the 18-month 
window when EPA issues the order for the manufacturer to test a 
particular engine family.
    In the HD2027 final rule, we adopted a new 40 CFR 1036.420 that 
includes the pass criteria for individual engines tested under the 
manufacturer run in-use testing program. Table 1 to 40 CFR 1036.420 
contains the accuracy margins for each criteria pollutant. We are 
proposing to correct an inadvertent error in the final rule's 
amendatory text for the regulations that effects the accuracy margin 
for carbon monoxide (CO), which is listed in Table 1 as 0.025 g/hp-hr. 
The HD2027 preamble is clear that the CO accuracy margin that we 
finalized was intended to be 0.25 g/hp-hr and we are proposing to 
correct Table 1 to reflect the value in the preamble.\609\
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    \609\ See HD2027 final rule preamble (88 FR 4353, January 24, 
2023) (``PEMS measurement allowance values in 40 CFR 86.1912 are 
0.01 g/hp-hr for HC, 0.25 g/hp-hr for CO, 0.15 g/hp-hr for 
NOX, and 0.006 g/hp-hr for PM. We are maintaining the 
same values for HC, CO, and PM in this rulemaking.'').
---------------------------------------------------------------------------

ii. Low Load Cycle (LLC)--Cycle Statistics
    We are proposing to update 40 CFR 1036.514 to address the ability 
of gaseous fueled non-hybrid engines with single point fuel injection 
to pass cycle statistics to validate the LLC duty cycle. We referenced, 
in error in 40 CFR 1036.514(e), the alternate cycle statistics for 
gaseous fueled engines with single point fuel injection in the cycle 
average fuel map section in 40 CFR 1036.540(d)(3) instead of adding LLC 
specific cycle statistics in 40 CFR 1036.514(e). We are proposing the 
addition of a new Table 1 in 40 CFR 1036.514(b) to provide cycle 
statistics that are identical to those used by the California Air 
Resources Board for the LLC and to remove the reference to 40 CFR 
1036.540(d)(3) in 40 CFR 1036.514(e).
iii. Low Load Cycle (LLC)--Background Sampling
    We are proposing to remove the provision in 40 CFR 1036.514(d) that 
allows periodic background sampling into the bag over the course of 
multiple test intervals during the LLC because the allowance to do this 
is convered in 40 CFR 1065.140(b)(2). The LLC consists of a very long 
test interval and the intent of the provision was to address emission 
bag sampling systems that do not have enough dynamic range to sample 
background constantly over the entire duration of the LLC. 40 CFR 
1065.140(b)(2) affords many flexibilities regarding the measurement of 
background concentrations, including sampling over multiple test 
intervals as long as it does not affect your ability to demonstrate 
compliance with the applicable emission standards.
iv. U.S.-Directed Production Volume
    In the recent HD2027 rule, we amended the heavy-duty highway engine 
provision in 40 CFR 1036.205 and several other sections to replace 
``U.S.-directed production volume'' with the more general term 
``nationwide'' where we intended manufacturers report total nationwide 
production volumes, including production volumes that meet different 
state standards.
    In this rule, for the reasons explained in Section III.A.1, we are 
proposing a broader change to the definition of ``U.S.-directed 
production volume'' for vehicles in 40 CFR 1037.801 to include 
production volumes for vehicles certified to different standards. We 
are proposing to adopt the same updated definition of ``U.S.-directed 
production volume'' in 40 CFR 1036.801 to maintain consistency between 
the engine and vehicle regulations' definitions, and are proposing to 
reinstate the term ``U.S.-directed production volume'' where we 
currently use ``nationwide'' in 40 CFR part 1036 to avoid having two 
terms with the same meaning.\610\
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    \610\ See proposed revisions in 40 CFR 1036.205(v), 1036.250(a), 
1036.405(a), 1036.605(e), 1036.725(b), and 1036.730(b).
---------------------------------------------------------------------------

    Since certain existing part 1036 requirements use the existing term 
and definition to exclude production volumes certified to different 
state standards (i.e., the NOX ABT program for HD engines), 
we are proposing corresponding clarifying updates throughout 40 CFR 
part 1036 to ensure no change to those existing exclusions in tandem 
with the proposed change to the definition of the term ``U.S.-directed 
production volume.'' For example, we are also proposing to update 40 
CFR 1036.705(c) to establish this paragraph as the reference for 
specifying the engines that are excluded from the production volume 
used to calculate emission credits for HD highway engines, and we 
propose that a new 40 CFR 1036.705(c)(4) be the location where we 
exclude engines certified to different state emission standards for the 
HD engine program.\611\ The proposed changes also include replacing 
several instances of ``U.S.-directed production volume'' with a more 
general ``production volume'' where the text clearly is connected to 
ABT or a more specific reference to the production volume specified in 
40 CFR 1036.705(c).\612\
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    \611\ The proposed revision would also move the statement to 
keep records relating to those production volumes from its current 
location in 40 CFR 1036.705(c) to 40 CFR 1036.735 with the other ABT 
recordkeeping requirements.
    \612\ See proposed revisions in 40 CFR 1036.150(d) and (k), 
1036.725(b), and 1036.730(b).
---------------------------------------------------------------------------

v. Correction to NOX ABT FEL Cap
    We are proposing to amend 40 CFR 1036.104(c)(2) to remove paragraph 
(iii) which corresponds to a FEL cap of 70 mg/hp-hr for MY 2031 and 
later Heavy HDE that we proposed in HD2027 but did not intend to 
include in the final amendatory text. In the final rule for the HD2027 
rule, we did not intend to include in the final amendatory text 
paragraph (iii) alongside the final FEL cap of 50 mg/hp-hr for MY 2031 
and later which applies to all HD engine service classes including 
Heavy HDE in paragraph (ii) described by EPA in the preamble and 
supporting rule record. We are proposing to correct this error and 
remove paragraph (iii). This correction will not impact the stringency 
of the final NOX standards because even without correction 
paragraph (ii) controls.\613\
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    \613\ EPA is not reopening the final HD2027 standards or any 
other portion of that rule besides those specifically identified in 
this document as subject to new proposed revisions.
---------------------------------------------------------------------------

vi. Rated Power and Continuous Rated Power Coefficient of Variance in 
40 CFR 1036.520
    We are proposing to correct an error and include a revision to a 
provision we intended to include in HD2027, regarding determining power 
and vehicle speed values for powertrain

[[Page 26020]]

testing. In 40 CFR 1036.520, paragraphs (h) and (i) describe how to 
determine rated power and continuous rated power, respectively, from 
the 5 Hz data in paragraph (g) averaged from the 100 Hz data collected 
during the test. We inadvertently left out the coefficient of variance 
(COV) limits of 2 percent that are needed for making the rated and 
continuous rated power determinations in the HD2027 final 40 CFR 
1036.520(h) and (i), which were intended to be based on the COVs 
calculated in 40 CFR 1036.520(g) and we correctly included in the 
HD2027 final 40 CFR 1036.520(g). We are proposing to add the 2 percent 
COV limit into 40 CFR 1036.520(h) and (i). We are also proposing to 
correct a paragraph reference error in 40 CFR 1036.520(h). The 
paragraph references the data collected in paragraph (f)(2) of the 
section. The data collection takes place in paragraph (d)(2) of the 
section.
vii. Selection of Drive Axle Ratio and Tire Radius for Hybrid Engine 
and Hybrid Powertrain Testing
    We are proposing to combine and modify the drive axle ratio and 
tire radius selection paragraphs in 40 CFR 1036.510(b)(2)(vii) and 
(viii). When testing hybrid engines and hybrid powertrains a series of 
vehicle parameters must be selected. The paragraphs for selecting drive 
axle ratio and tire radius are separate from each other, however the 
selection of the drive axle ratio must be done in conjunction with the 
tire radius as not all tire sizes are offered with a given drive axle 
ratio. We are proposing to combine these paragraphs into one to 
eliminate any possible confusion on the selection of these two 
parameters.
    The maximum vehicle speed for SET testing of hybrid engines and 
powertrains is determined based on the vehicle parameters and maximum 
achievable speed for the configuration in 40 CFR 1036.510. This is not 
the case for the FTP vehicle speed which reaches a maximum of 60 miles 
per hour. It has been brought to our attention that there are some 
vehicle configurations that cannot achieve the FTP maximum speed of 60 
mile per hour. To resolve this, we are proposing changes to 40 CFR 
1036.510(b)(2)(vii) instructing the manufacturer to select a 
representative combination of drive axle ratio and tire size that 
ensure a vehicle speed of no less than 60 miles per hour. We are also 
proposing to include, as a reminder, that manufacturers may request 
approval for selected drive axle ratio and tire radius consistent with 
the provisions of 40 CFR 1036.210. We are also proposing to add a 
provision for manufacturers to follow the provisions of 40 CFR 
1066.425(b)(5) if the hybrid powertrain or hybrid engine is used 
exclusively in vehicles which are not capable of reaching 60 mi/hr. 
This would allow the manufacturer to seek approval of an alternate test 
cycle and cycle-validation criteria for powertrains where the 
representative tire radius and axle ratio do not allow the vehicle to 
achieve the maximum speeds of the specified test cycle.
viii. Determining Power and Vehicle Speed Values for Powertrain Testing
    We are proposing to revise 40 CFR 1036.520(d)(2) to address the 
possibility of clutch slip when performing the full load acceleration 
with maximum driver demand at 6.0 percent road grade where the initial 
vehicle speed is 0 mi/hr. The proposed revision would allow hybrid 
engines and hybrid powertrains to modify the road grade in the first 30 
seconds or increase the initial speed from 0 miles per hour to 5 miles 
per hour to mitigate clutch slip. This road grade alteration or change 
in initial speed should reduce the extreme force on the clutch when 
accelerating at 6.0 percent grade.
    We are proposing to revise 40 CFR 1036.520(d)(3) to address 
situations where the powertrain does not reach maximum power in the 
highest gear 30 seconds after the grade setpoint has reached 0.0 
percent. To address this we are proposing to replace the 30 second time 
limit with a speed change stability limit of 0.02 m/s\2\ which would 
trigger the end of the test.
ix. Request for Comment on Determining Vehicle Mass in 40 CFR 1036.510
    As engines and powertrains evolve with time, changes to vehicle 
mass may be needed to maintain equivalent cycle work between the 
powertrain and engine test procedures. We request comment on updating 
equation 40 CFR 1036.510-1 to better reflect the relationship of 
vehicle mass and rated power. With the increase in rated power of 
heavy-duty engines, at least one manufacturer has raised to EPA that 
there is some concern that equation 40 CFR 1036.510-1 might need 
updating to better reflect the relationship of vehicle mass and rated 
power. If you provide comment that the equation should be updated, we 
request that you provide data to justify the change and show that the 
change would provide comparable values of cycle work and power versus 
time, for both the engine and powertrain versions of the duty cycles. 
For the engine duty cycles (e.g., FTP and SET), the cycle work of the 
duty cycle is a function of the engine torque curve. For the powertrain 
duty cycles (e.g., vehicle FTP and vehicle SET), the cycle work of the 
duty cycle is a function of the rated power of the powertrain.
x. Test Procedure for Engines Recovering Kinetic Energy for Electric 
Heaters
    We are proposing a clarification in the existing definition for 
hybrid in 40 CFR 1036.801 to add a sentence stating that systems 
recovering kinetic energy to power an electric heater for the 
aftertreatment would not qualify as a hybrid engine or hybrid 
powertrain. Under the existing hybrid definition, systems that recover 
kinetic energy, such as regenerative braking, would be considered 
``hybrid components'' and manufacturers would be required to use the 
powertrain test procedures to account for the electric heater or use 
the engine test procedures and forfeit the emission reductions from 
heating the aftertreatment system. With the proposed clarification to 
the hybrid definition, engines that use regenerative braking only to 
power an electric heater for aftertreatment devices would not be 
considered hybrid engines and, therefore, would not be required to use 
the powertrain test procedures; instead, those engines could use the 
test procedures for engines without hybrid components.
    We are proposing to supplement the new definitions with direction 
for testing these systems in 40 CFR 1036.501. In a proposed new 40 CFR 
1036.501(g), we would clarify that an electric heater for 
aftertreatment can be installed and functioning when creating fuel maps 
using 40 CFR 1036.505(b), and measuring emissions over the duty cycles 
specified in 40 CFR 1036.510(b), 40 CFR 1036.512(b), and 40 CFR 
1036.514(b). This proposed allowance would be limited to hybrid engines 
where the system recovers less than 10 percent of the total positive 
work over each applicable transient cycle and the recovered energy is 
exclusively used to power an electric heater in the aftertreatment. 
Since the small amount of recovered energy is stored thermally and 
can't be used to move the vehicle, we believe that the engine test 
procedures are just as representative of real-world operation as the 
powertrain test procedures. We request comment on using a different 
limit than 10 percent of the total positive work over the transient 
cycle for this flexibility. The proposed limit of 10 percent is based 
on the amount of negative work versus positive work typical of 
conventional engines over the transient cycle. After evaluating a range 
of HDE, we have observed that the negative work from

[[Page 26021]]

the transient FTP cycle during engine motoring is less than 10 percent 
of the positive work of the transient FTP cycle.\614\ In the same 
paragraph (g), we also propose that manufacturers have the option to 
use the powertrain test procedures for these systems, which would not 
have the same restrictions we are proposing for the amount of recovered 
energy.
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    \614\ Memorandum to Docket EPA-HQ-OAR-2022-0985: ``Analysis of 
Motoring and Positive Cycle Work for Current Heavy-Duty Engines''. 
James Sanchez. April 4, 2023.
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xi. Updates to 40 CFR Part 1036 Definitions
    We propose new and updated definitions in 40 CFR 1036.801 in 
support of several proposed requirements in Section II or this Section 
III. We propose to add a reference to two new definitions proposed in 
40 CFR part 1065: Carbon-containing fuel and ``neat''. The proposed 
definition of carbon-containing fuel will help identify the applicable 
test procedures for engines using fuels that do not contain carbon and 
would not produce CO2. The proposed definition of ``neat'' 
would indicate that a fuel is not mixed or diluted with other fuels, 
which would help distinguish between fuels that contain no carbon, such 
as hydrogen, and fuels that that contain carbon through mixing, such as 
hydrogen where a diesel pilot is used for combustion. We also propose 
to update the definition for U.S.-directed production volume to be 
equivalent to nationwide production.
    We propose to consolidate the definitions of hybrid, hybrid engine, 
and hybrid powertrain into a single definition of ``hybrid'' with 
subparagraphs distinguishing hybrid engines and powertrains. The 
proposed definition of hybrid retains most of the existing definition, 
except that we propose to remove the unnecessary ``electrical'' 
qualifier from batteries and propose to add a statement relating to 
recovering energy to power an electric heater in the aftertreatment 
(see Section III.C.2.x). The revised definitions for hybrid engines and 
powertrains, which are proposed as subparagraphs under ``hybrid'', are 
more complementary of each other with less redundancy. As noted in 
Section III.C.2.x, we propose to update the definitions of hybrid 
engine and hybrid powertrain to exclude systems recovering kinetic 
energy for electric heaters.
    We propose several editorial revisions to definitions as well. We 
propose to update the definition of mild hybrid such that it is 
relating to a hybrid engine or hybrid powertrain. We propose to revise 
the existing definition of small manufacturer to clarify that the 
employee and revenue limits include the totals from all affiliated 
companies and added a reference to the definition of affiliated 
companies in 40 CFR 1068.30.
xii. Miscellaneous Corrections and Clarifications in 40 CFR Part 1036
    We are proposing to update 40 CFR 1036.150(j) to clarify that the 
alternate standards apply for model year 2023 and earlier loose 
engines, which is consistent with existing 40 CFR 86.1819-14(k)(8).
    We propose to update the provision describing how to determine 
deterioration factors for exhaust emission standards in 40 CFR 1036.245 
so it would also apply for hybrid powertrains.
xiii. Off-Cycle Test Procedure for Engines That Use Fuels Other Than 
Carbon-Containing Fuel
    We are proposing a new paragraph 40 CFR 1036.530(j) for engines 
that use fuels other than carbon-containing fuel. The off-cycle test 
procedures in 40 CFR 1036.530 use CO2 as a surrogate for 
engine power. This approach works for engines that are fueled with 
carbon-containing fuel, since power correlates to fuel mass rate and 
for carbon-containing fuels, fuel mass rate is proportional to the 
CO2 mass rate of the exhaust. For fuels other than carbon-
containing fuels, the fuel mass rate is not proportional to the 
CO2 mass rate of the exhaust. To address this issue, we are 
proposing, for fuels other than carbon-containing fuels, to use engine 
power directly instead of relying on CO2 mass rate to 
determine engine power. For field testing where engine torque and speed 
is not directly measured, engine broadcasted speed and torque can be 
used as described in 40 CFR 1065.915(d)(5).
xiv. Onboard Diagnostic and Inducement Amendments
    EPA is proposing to make changes to specific aspects of paragraphs 
within 40 CFR 1036.110 and 1036.111 to add clarifications and correct 
minor errors in the OBD and inducement provisions adopted in the HD2027 
final rule.\615\ Specifically, EPA is proposing the following:
---------------------------------------------------------------------------

    \615\ EPA is not reopening any aspect of our OBD and inducement 
provisions other than those proposed clarifications and corrections 
specifically identified in this section.
---------------------------------------------------------------------------

     40 CFR 1036.110(b)(6): Proposing to correct a reference to 
the CARB regulation to be consistent with our intent as described in 
the preamble of the final rule (see 88 FR 4372) to not require 
manufacturer self-testing and reporting requirements in 13 CCR 
1971.1(l)(4).
     40 CFR 1036.110(b)(9): Proposing to clarify that the list 
of data parameters readable by a generic scan tool is limited to 
components that are subject to existing OBD monitoring requirements 
(e.g., through comprehensive component requirements in 13 CCR 
1971.1(g)(3)). For example, if parking brake status was not included in 
an engine's OBD certificate, it would not be a required data parameter.
     40 CFR 1036.110(b)(11): Proposing to add a reference to 13 
CCR 1971.5. The final rule referenced 13 CCR 1971.1 to point to OBD 
testing deadlines; however, there are additional OBD testing deadlines 
specified in 1971.5.
     40 CFR 1036.110(c)(1) and 40 CFR 1036.125(h)(8)(iii): 
Proposing to correct terminology within these provisions by referring 
to inducements related to ``DEF level'' instead of ``DEF quantity,'' to 
make the intent clearer that the system must use the level of DEF in 
the DEF tank for purposes of evaluating the specified inducement 
triggering condition. We separately refer to the quantity of DEF 
injection for managing the functioning of the SCR catalyst, which is 
unrelated to the level of DEF in the DEF tank.
     40 CFR 1036.111: Proposing to edit for clarity, to 
eliminate confusion with onboard diagnostic terminology. More 
specifically, proposing edits to adjust inducement-related terminology 
to refer to ``inducement triggering conditions'' instead of ``fault 
conditions.'' Inducement algorithms are executed through OBD 
algorithms, but the inducement triggers are separate from OBD fault 
conditions related to the malfunction indicator light.
     40 CFR 1036.111(a)(2): Proposing to clarify how to 
determine the speed category when there is less than 30 hours of 
accumulated data. The regulation as adopted sets the inducement 
schedule based on average vehicle speed over the preceding 30 hours of 
non-idle operation. That instruction will cover most circumstances; 
however, there is no specific instruction for an inducement triggering 
condition that occurs before the vehicle accumulates 30 hours of non-
idle operation. As described in the final rule, we depend on 30 hours 
of non-idle operation to establish which inducement schedule is 
appropriate for a vehicle. We are also aware that a newly purchased 
vehicle would have

[[Page 26022]]

accumulated several hours of very low-speed operation before being 
placed into service. We are therefore proposing to specify that engines 
should not be designed to assess the speed category for inducement 
triggering conditions until the vehicle has accumulated 30 hours of 
non-idle operation. We are proposing that manufacturers should program 
engines with a setting categorizing them as high-speed vehicles until 
they accumulate 30 hours of data to avoid applying an inappropriate 
speed schedule.
     40 CFR 1036.111(d)(1), Table 2: Proposing to correct a 
typographical error for the middle set of columns that should read 
``Medium-speed'' instead of repeating ``Low-speed.'' The table was 
correctly published in the preamble to the final rule (see 88 FR 4378). 
We are proposing to add an inadvertently omitted notation in the table 
to identify the placement of a footnote to the table.
xv. Engine Data and Information To Support Vehicle Certification
    We are proposing to update 40 CFR 1036.505 to clarify that when 
certifying vehicles with GEM, for any fuel type not identified in Table 
1 of 40 CFR 1036.550, the manufacturer would identify the fuel type as 
diesel fuel for engines subject to compression-ignition standards, and 
would identify the fuel type as gasoline for engines subject to spark-
ignition standards. This proposed change to 40 CFR 1036.505, is 
intended to clarify what was originally intended for fuels that are not 
specified in Table 1 of 40 CFR 1036.550. This proposed clarification 
would address the potential situation where, if a fuel is input into 
GEM other than the fuel types identified in Table 1 of 40 CFR 1036.550, 
GEM will output an error.
3. Updates to 40 CFR Part 1037 Heavy-Duty Motor Vehicle Provisions
i. Standards for Qualifying Small Businesses
    As noted in Section II.I, we are proposing that qualifying small 
manufacturers would continue to be subject to the existing MY 2027 and 
later standards. We are proposing to revise 40 CFR 1037.150(c) to 
specify the standards that apply for qualifying small business vehicle 
manufacturers in light of this proposal to adopt new standards for 
those model years. Specifically, we are renumbering the current 
paragraphs to apply through MY 2026 and adding new paragraphs that 
would apply for MY 2027 and later, including three tables that show the 
small business CO2 emission standards for vocational 
vehicles, custom chassis vocational vehicles, and tractors. The 
proposed updates also include the proposed limitations on generating 
credits for averaging only (no banking, trading, or use of credit 
multipliers) unless the small manufacturer certifies to the Phase 3 
standards.
ii. Vehicles With Engines Using Fuels Other Than Carbon-Containing 
Fuels
    In the HD2027 final rule, we adopted revisions to 40 CFR 
1037.150(f) to include fuel cell electric vehicles, in addition to 
battery electric vehicles, in the provision that deems tailpipe 
emissions of regulated GHG pollutants as zero and does not require 
CO2-related emission testing. As discussed in Section 
II.D.1, hydrogen-fueled internal combustion engines are a newer 
technology under development and since hydrogen has no carbon, H2 ICEs 
fueled with neat hydrogen would produce zero HC, CO, and CO2 
engine-out emissions. Therefore, we are proposing to include vehicles 
using engines fueled with neat hydrogen in 40 CFR 1037.150(f) so that 
their CO2 tailpipe emissions are deemed to be zero and 
manufacturers are not required to perform any engine testing for 
CO2 emissions. This proposed revision would not change the 
requirements for H2 ICE engines, including those fueled with neat 
hydrogen, to meet the N2O GHG standards or the criteria 
pollutant emission standards in 40 CFR part 1036. We request comment on 
this proposed revision to include H2 ICE in 40 CFR 1037.150(f).
    Additionally, we are proposing to revise 40 CFR 1037.150(f) to 
replace ``electric vehicles'' with ``battery electric vehicles'', and 
``hydrogen fuel cell vehicles'' with ``fuel cell electric vehicles'', 
consistent with proposed revisions to those definitions (see Section 
III.C.3.xiii).
iii. ABT Calculations
    We are proposing clarifying revisions to the definitions of two 
variables of the emission credit calculation for ABT in 40 CFR 
1037.705. As noted in Section II.C, we propose to update the emission 
standard variable (variable ``Std'') to establish a common reference 
emission standard when calculating ABT emission credits for vocational 
vehicles with tailpipe CO2 emissions deemed to be zero 
(i.e., BEVs, FCEVs, and vehicles with engines fueled with pure 
hydrogen), which would be the CI Multi-Purpose vehicle regulatory 
subcategory standard for the applicable weight class. We also propose 
to revise the ``Volume'' variable to replace the term ``U.S.-directed 
production volume'' with a reference to the paragraph (c) where we are 
also proposing updates consistent with the proposed revision to the 
definition of U.S.-directed production volume. With the proposed 
revision to paragraph (c), we intend for 40 CFR 1037.705(c) to replace 
``U.S.-directed production volume'' as the primary reference for the 
appropriate production volume to apply with respect to the ABT program 
and propose to generally replace throughout part 1037.
iv. U.S.-Directed Production Volume
    The CAA requires that every HD engine and vehicle be covered by a 
certificate of conformity indicating compliance with the applicable EPA 
regulations.\616\ In the existing 40 CFR 1037.205, which describes 
requirements for the application for certification, we currently use 
the term U.S.-directed production volume and are now proposing that 
manufacturers should, instead, be reporting total nationwide production 
volumes that include any production volumes certified to different 
state standards.
---------------------------------------------------------------------------

    \616\ CAA sections 203 and 206, 42 U.S.C. 7522 and 7525.
---------------------------------------------------------------------------

    In the recent HD2027 rule, we amended the corresponding heavy-duty 
highway engine provision in 40 CFR 1036.205 to replace ``U.S.-directed 
production volume'' with the more general term ``nationwide'', noting 
that manufacturers were already reporting the intended total nationwide 
production, including production that meets different state standards. 
In this rule, for the reasons explained in Section III.A.1, we are 
proposing a broader change to the definition of ``U.S.-directed 
production volume'' and the proposed new definition would not require 
us to change the term used in 1037.205 to ensure manufacturers report 
nationwide production volumes.\617\ We are proposing revisions to the 
introductory paragraph of 40 CFR 1037.705(c), consistent with the 
proposed revisions to the corresponding HD engine provisions, to 
establish this paragraph as the reference for which engines are 
excluded from the production volume used to calculate emission credits 
for HD highway (see Section III.C.2.iv). Similarly, the proposed 
changes include replacing several instances of ``U.S.-directed 
production volume'' with a more general ``production volume'' where the

[[Page 26023]]

text clearly is connected to ABT or a more specific reference to the 
production volume specified in 40 CFR 1037.705(c).\618\
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    \617\ As noted in Section III.C.2.iv, we are proposing to adopt 
the same updated definition of ``U.S.-directed production volume'' 
in 40 CFR 1036.801, with additional corresponding proposed updates 
to not revise existing exclusions of production volumes certified to 
different standards (i.e., the NOX ABT program for HD 
engines).
    \618\ See proposed revisions in 40 CFR 1037.150(c) and 
1037.730(b).
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v. Revisions to Hybrid Powertrain Testing and Axle Efficiency Testing
    We are proposing to add a new figure to 40 CFR 1037.550 to give an 
overview on how to carry out hybrid powertrain testing in that section. 
We are proposing in the axle efficiency test in 40 CFR 1037.560(e)(2) 
to allow the use of an alternate lower gear oil temperature range on a 
test point by test point basis in addition to the current alternate 
that requires the use of the same lower temperature range for all test 
points within the test matrix. This would provide more representative 
test results as not all test points within a matrix for a given axle 
test will result in gear oil temperatures within the same range.
vi. Removal of Trailer Provisions
    As part of the HD GHG Phase 2 rulemaking, we set standards for 
certain types of trailers used in combination with tractors (see 81 FR 
73639, October 25, 2016). We are proposing to remove the regulatory 
provisions related to trailers in 40 CFR part 1037 to carry out a 
decision by the U.S. Court of Appeals for the D.C. Circuit, which 
vacated the portions of the HD GHG Phase 2 final rule that apply to 
trailers.\619\ The proposed revisions include removal of specific 
sections and paragraphs describing trailer provisions and related 
references throughout the part. Additionally, we are proposing new 
regulatory text for an existing test procedure that currently refers to 
a trailer test procedure. The existing 40 CFR 1037.527 describes a 
procedure for manufacturers to measure aerodynamic performance of their 
vocational vehicles by referring to the A to B testing methodology for 
trailers in 40 CFR 1037.525. We are proposing to copy the regulatory 
text describing A to B testing from the trailer procedure into 40 CFR 
1037.527 (such that it replaces the cross-referencing regulatory text).
---------------------------------------------------------------------------

    \619\ Truck Trailer Manufacturers Association v. EPA, 17 F.4th 
1198 (D.C. Cir. 2021).
---------------------------------------------------------------------------

vii. Removal of 40 CFR 1037.205(q)
    We are proposing to correct an inadvertent error and remove the 
existing 40 CFR 1037.205(q). This paragraph contains requirements we 
proposed in HD2027 but did not finalize and thus did not intend to 
include in the final rule's amendatory instructions, regarding 
information for battery electric vehicles and fuel cell electric 
vehicles to show they meet the standards of 40 CFR part 1037.
viii. Adding Full Cylinder Deactivation to 40 CFR 1037.520(j)(1)
    We are proposing to credit vehicles with engines that include full 
cylinder deactivation during coasting at 1.5 percent. We believe this 
is appropriate since the same 1.5 percent credit is currently provided 
for tractors and vocational vehicles with neutral coasting, and both 
technologies reduce CO2 emissions by reducing the engine 
braking during vehicle coasting.\620\ Cylinder deactivation can reduce 
engine braking by closing both the intake and exhaust valves when there 
is no operator demand to reduce the pumping losses of the engine when 
motoring. Because of this, only vehicles with engines where both 
exhaust and intake valves are closed when the vehicle is coasting would 
qualify for the 1.5 percent credit.
---------------------------------------------------------------------------

    \620\ See the HD GHG Phase 2 rule (81 FR 73598, October 25, 
2016), for more information on how 1.5 percent was determined for 
neutral coasting.
---------------------------------------------------------------------------

ix. Removal of Chassis Testing Option Under 40 CFR 1037.510 and 
Reference Update
    We are proposing to remove the chassis dynamometer testing option 
for testing over the duty cycles as described in 40 CFR 1037.510(a). 
The chassis dynamometer testing was available as an option for Phase 1 
testing in 40 CFR 1037.615. We are proposing to remove it to avoid 
confusion as the chassis dynamometer testing option is only allowed 
when performing off-cycle testing following 40 CFR 1037.610 and is not 
allowed for creating the cycle average fuel map for input into GEM. 
Note that manufacturers may continue to test vehicles on a chassis 
dynamometer to quantify off-cycle credits under 40 CFR 1037.610.
    We are also proposing to correct paragraph reference errors in 40 
CFR 1037.510(a)(2)(iii) and (iv). These paragraphs reference the warmup 
procedure in 40 CFR 1036.520(c)(1). The warmup procedure is actually 
located in 40 CFR 1036.520(d).
x. Utility Factor Clarification for Testing Engines With a Hybrid Power 
Takeoff Shaft
    We are proposing to clarify the variable description for the 
utility factor fraction UFRCD in 40 CFR 1037.540(f)(3)(ii). 
The current description references the use of an ``approved utility 
factor curve''. The original intent was to use the power take off 
utility factors that reside in Appendix E to 40 CFR part 1036 to 
generate a utility factor curve to determine UFRCD. We are 
proposing to clarify this by replacing ``approved utility factor 
curve'' with a reference to the utility factors in Appendix E.
xi. Heavy-Duty Vehicles at or Below 14,000 Pounds GVWR
    The standards proposed in this rule would apply for all heavy-duty 
vehicles above 14,000 pounds GVWR, except as noted in existing 40 CFR 
1037.150(l). We are not proposing changes to the option for 
manufacturers to voluntarily certify incomplete vehicles at or below 
14,000 pounds GVWR to 40 CFR part 1037 instead of certifying under 40 
CFR part 86, subpart S; the proposed standards in this rule would also 
apply for those incomplete heavy-duty vehicles. We propose to remove 40 
CFR 1037.104, which currently states that HD vehicles subject to 40 CR 
part 86, subpart S, are not subject to the 40 CFR 1037 standards; 
instead, we propose that manufacturers refer to 40 CFR 1037.5 for 
excluded vehicles.\621\
---------------------------------------------------------------------------

    \621\ This proposed change includes removing the reference to 40 
CFR 1037.104 in 40 CFR1037.1.
---------------------------------------------------------------------------

    In a parallel rulemaking to set new emission standards for light-
duty and medium-duty vehicles under 40 CFR part 86, subpart S, we 
intend to propose a requirement for those vehicles at or below 14,000 
pounds GVWR with a high tow rating to have installed engines that have 
been certified to the engine-based criteria emission standards in 40 
CFR part 1036. This would apply for both complete vehicles and 
incomplete vehicles with Gross Combined Weight Rating above 22,000 
pounds. Some of those vehicles would continue to meet GHG standards 
under 40 CFR 86.1819 instead of meeting the engine-based GHG standards 
in 40 CFR part 1036 and the vehicle-based GHG standards in 40 CFR part 
1037. In particular, under the parallel proposed rule, manufacturers of 
incomplete vehicles at or below 14,000 pounds GVWR with a high tow 
rating would continue to have the option of either meeting the 
greenhouse gas standards under 40 CFR parts 1036 and 1037, or instead 
meeting the greenhouse gas standards with chassis-based measurement 
procedures under 40 CFR part 86, subpart S.
xii. Updates to Optional Standards for Tractors at or Above 120,000 
Pounds
    In HD GHG Phase 2 and in a subsequent rulemaking, we adopted 
optional heavy Class 8 tractor CO2 emission standards for 
tractors with a GCWR above 120,000 pounds (see 40

[[Page 26024]]

CFR 1037.670).\622\ We did this because most manufacturers tend to rely 
on U.S. certificates as their evidence of conformity for products sold 
into Canada to reduce compliance burden. Therefore, in Phase 2 we 
adopted provisions that allow the manufacturers the option to meet 
standards that reflect the appropriate technology improvements, along 
with the powertrain requirements that go along with higher GCWR. While 
these heavy Class 8 tractor standards are optional for tractors sold 
into the U.S. market, Canada adopted these as mandatory requirements as 
part of their regulatory development and consultation process. We 
propose to sunset the optional standards after MY 2026.\623\
---------------------------------------------------------------------------

    \622\ 81 FR 73582 (October 25, 2016) and 86 FR 34338 (June 29, 
2021).
    \623\ This proposed sunset would remove the standards listed in 
the rightmost column of existing Table 1 of Sec.  1037.670; we note 
that the column is intended for model years 2027 and later 
standards, but is mistakenly labeled ``Model years 2026 and later''.
---------------------------------------------------------------------------

xiii. Updates to 40 CFR Part 1037 Definitions
    We are proposing several updates to the definitions in 40 CFR 
1037.801. As noted in Section III.C.3.vi, we are proposing to remove 
the trailer provisions, which include removing the following 
definitions: Box van, container chassis, flatbed trailer, standard 
tractor, and tank trailer. We also propose to revise several 
definitions to remove references to trailers or trailer-specific 
sections, including definitions for: Class, heavy-duty vehicle, low 
rolling resistance tire, manufacturer, model year, Phase 1, Phase 2, 
preliminary approval, small manufacturer, standard payload, tire 
rolling resistance, trailer, and vehicle.
    We also propose new and updated definitions in support of several 
proposed requirements in Section II or this Section III. We propose to 
replace the existing definition of ``electric vehicle'' with more 
specific definitions for the different vehicle technologies and energy 
sources that could be used to power these vehicles. Specifically, we 
propose new definitions for battery electric vehicle, fuel cell 
electric vehicle, and plug-in hybrid electric vehicle. We also propose 
to replace the existing definition of ``hybrid engine or hybrid 
powertrain'' with a definition of ``hybrid'' that refers to a revised 
definition in 40 CFR part 1036.\624\ We also propose to update U.S.-
directed production volume to be equivalent to nationwide production.
---------------------------------------------------------------------------

    \624\ See Section III.C.2.xii for a description of the updated 
definition of hyrid.
---------------------------------------------------------------------------

    We propose several editorial revisions to definitions as well. We 
propose to revise the definition of vehicle to remove the text of 
existing paragraph (2)(iii) and move the main phrase of that removed 
paragraph (i.e., ``when it is first sold as a vehicle'') to the 
description of ``complete vehicle'' to further clarify that aspect of 
the existing definition. We propose to revise the existing definition 
of small manufacturer, in addition to the proposed revisions removing 
reference to trailers, to clarify that the employee and revenue limits 
include the totals from all affiliated companies and added a reference 
to the definition of affiliated companies in 40 CFR 1068.30.
xiv. Miscellaneous Corrections and Clarifications in 40 CFR Part 1037
    We are proposing to revise several references to 40 CFR part 86 
revisions. Throughout 40 CFR part 1037, we are proposing to replace 
references to 40 CFR 86.1816 or 86.1819 with a more general reference 
to the standards of part 86, subpart S. We propose these revisions to 
reduce the need to update references to specific part 86 sections if 
new standards are added to a different section in a future rule. We are 
not proposing to revise any references to specific part 86 paragraphs 
(e.g., 40 CFR 86.1819-14(j)).
    We propose to move the duplicative statements in 40 CFR 1036.105(c) 
and 1037.106(c) regarding CH4 and N2O standards 
from their current locations to 40 CFR 1037.101(a)(2)(i) where we 
currently describe the standards that apply in part 1037. We also 
propose to update 40 CFR 1037.101(a)(2)(i) to more accurately state 
that only CO2 standards are described in 40 CFR 1037.105 and 
1037.106, by removing reference to CH4 and N2O in 
that sentence. We propose to update the section title for 40 CFR 
1037.102 to include the term ``Criteria'' and the list of components 
(i.e., NOX, HC, PM, and CO) covered by the section to be 
consistent with the naming convention used in 40 CFR part 1036.
4. Updates to 40 CFR Part 1065 Engine Testing Procedures
i. Engine Testing and Certification With Fuels Other Than Carbon-
Containing Fuels
    Alternative fuels and fuels other than carbon-containing fuels are 
part of the fuel pathway for sustainable biofuel, e-fuel, and clean 
hydrogen development under the U.S. National Blueprint for 
Transportation Decarbonization.\625\ This blueprint anticipates a mix 
of battery electric, sustainable fuel, and hydrogen use to achieve a 
net zero carbon emissions level by 2050 for the heavy-duty sector. EPA 
is proposing updates to 40 CFR part 1065 to facilitate certification of 
engines using fuels other than carbon-containing fuels for all sectors 
that use engine testing to show compliance with the standards. This 
includes a new definition of ``carbon-containing fuel'' in 40 CFR 
1065.1001, and the proposed addition of a new chemical balance 
procedure in section 40 CFR 1065.656 that would be used in place of the 
carbon-based chemical balance procedure in 40 CFR 1065.655 when an 
engine is certified for operation using fuels other than carbon-
containing fuels (e.g., hydrogen or ammonia).\626\ Since these fuels do 
not contain carbon, the current carbon-based chemical balance cannot be 
used as it is designed based on comparisons of the amount of carbon in 
the fuel to the amount measured post combustion in the exhaust. The 
chemical balance for fuels other than carbon-containing fuels looks at 
the amount of hydrogen in the fuel versus what is measured in the 
exhaust. The proposed amendments also facilitate certification of an 
engine on a mix of carbon-containing fuels and fuels other than carbon-
containing fuels.
---------------------------------------------------------------------------

    \625\ The U.S. National Blueprint for Transportation 
Decarbonization: A Joint Strategy to Transform Transportation. DOE/
EE-2674. January 2023. Available at: https://www.energy.gov/sites/default/files/2023-01/the-us-national-blueprint-for-transportation-decarbonization.pdf.
    \626\ We are also proposing a definition for ``carbon-containing 
fuel'' in 40 CFR 1036.801 that references the proposed new 40 CFR 
part 1065 definition.
---------------------------------------------------------------------------

    The proposed addition of the certification option for fuels other 
than carbon-containing fuels relies on inputs requiring hydrogen, 
ammonia, and water concentration measurement from the exhaust. 
Therefore, we are proposing the addition of new sections in 40 CFR part 
1065 and proposing revisions to some existing sections to support the 
procedure in 40 CFR 1065.656. We are proposing a new 40 CFR 1065.255 to 
provide specifications for hydrogen measurement devices, a new 40 CFR 
1065.257 to provide specifications for water measurement using a 
Fourier Transform Infrared (FTIR) analyzer, and a new 40 CFR 1065.277 
to provide specifications for ammonia measurement devices. These 
additions also require a proposed new 40 CFR 1065.357 to address 
CO2 interference when measuring water using an FTIR 
analyzer, a proposed new 40 CFR 1065.377 to address H2O 
interference and any other interference species as deemed by the 
instrument manufacturer or using good engineering judgment when 
measuring NH3 using an FTIR or laser infrared analyzers, and 
the

[[Page 26025]]

proposed addition of calibration gases for these new analyzer types to 
40 CFR 1065.750. We are also proposing to add drift check requirements 
to 40 CFR 1065.550(b) to address drift correction of the H2, 
O2, H2O, and NH3 measurements needed 
in the 40 CFR 1065.656 procedure. This also includes the proposed 
addition of drift check requirements in 40 CFR 1065.935(g)(5)(ii) for 
testing with PEMS. We are also proposing to add a new 40 CFR 
1065.750(a)(6) to address the uncertainty of the water concentrations 
generated to perform the linearity verification of the water FTIR 
analyzer in 40 CFR 1065.257. We are proposing two options to generate a 
humid gas stream. The first is via a heated bubbler where dry gas is 
passed through the bubbler at a controlled water temperature to 
generate a gas with the desired water content. The second is a device 
that injects heated liquid water into a gas stream. We are proposing 
linearity verification of the humidity generator once a year to an 
uncertainty of  3 percent; \627\ however, we are not 
proposing to require that the calibration of the humidity generator 
should be NIST traceable and request comment on whether that 
calibration should be NIST traceable. We are proposing a requirement 
for a leak check after the humidity generator is assembled, as these 
devices are typically disassembled and stored when not in use and 
subsequent assembly prior to use could lead to leaks in the system. We 
are proposing to include calculations to determine the uncertainty of 
the humidity generator from measurements of dewpoint and absolute 
pressure. We are proposing a new definition for ``carbon-containing 
fuel'' and ``lean-burn'' in 40 CFR 1065.1001 to further support the 
addition of the certification option for engines using fuels other than 
carbon-containing fuels. We request comment on these proposed changes 
and their ability to allow certification of engines using fuels other 
than carbon-containing fuels.
---------------------------------------------------------------------------

    \627\ The proposed verification schedule in 40 CFR 
1065.750(a)(6) says: ``Calibrate the humidity generator upon initial 
installation, within 370 days before verifying the H2O 
measurement of the FTIR, and after major maintenance.''.
---------------------------------------------------------------------------

    We also request comment on whether we should add specifications for 
alternative test fuels, like methanol, and fuels other than carbon-
containing fuels like hydrogen and ammonia, to 40 CFR part 1065, 
subpart H. Currently, 40 CFR 1065.701(c) allows the use of test fuels 
that we do not specify in 40 CFR part 1065, subpart H, with our 
approval. If a comment is submitted that fuel specifications should be 
included for these alternate test fuels, we request that the comment 
include specifications for the fuels the comment specifies should be 
included.
ii. Engine Speed Derate for Exhaust Flow Limitation
    We are proposing a change to 40 CFR 1065.512(b)(1) to address the 
appearance of three options for generating new reference duty-cycle 
points for the engine to follow. The option in the existing 40 CFR 
1065.512(b)(1)(i) isn't actually an option and instead gives direction 
on how to operate the dynamometer (torque control mode). Under our 
proposed revision, this sentence would be retained and moved into a new 
40 CFR 1065.512(b)(1)(i) that contains some existing text split off 
from the current 40 CFR 1065.512(b)(1). The two remaining options in 
the current 40 CFR 1065.512(b)(1)(ii) and (iii) would be redesignated 
as 40 CFR 1065.512(b)(1)(i)(A) and (B). The proposed restructuring of 
40 CFR 1065.512(b)(1) and its subparagraphs address the proposed edits 
described in the following paragraph.
    We are proposing a change to 40 CFR 1065.512(b)(1) to address cycle 
validation issues where an engine with power derate intended to limit 
exhaust mass flowrate might include controls that reduce engine speed 
under cold-start conditions, resulting in reduced exhaust flow that 
assists other aftertreatment thermal management technologies (e.g. 
electric heater). In this case, normalized speeds would generate 
reference speeds above this engine speed derate, which would adversely 
affect cycle validation. To address this, the proposed changes would 
provide two options. The first option is if the engine control module 
(ECM) broadcasts the engine derate speed that is below the denormalized 
speed, the broadcast speed would then be used as the reference speed 
for duty-cycle validation. The second option is if an ECM broadcast 
signal is not available, the engine would be operated over one or more 
practice cycles to determine the engine derate speed as a function of 
cycle time. Under this option, any cycle reference speed that is 
greater than the engine derate speed would be replaced with the engine 
derate speed.
iii. Accelerated Aftertreatment Aging
    We recently finalized a new accelerated aftertreatment aging 
procedure for use in deterioration factor determination in 40 CFR 
1065.1131 through 1065.1145. We request comment on the need for 
potential changes to the procedure based on experience that 
manufacturers and test labs have gained since the procedure was 
finalized.
iv. Nonmethane Cutter Water Interference Correction
    We recently finalized options and requirements for gaseous fueled 
engines to allow a correction for the effect of water on the nonmethane 
cutter (NMC) performance, as gaseous fueled engines produce much higher 
water content in the exhaust than gasoline or diesel fuels, impacting 
the final measured emission result.\628\ The correction is done by 
adjusting the methane and ethane response factors used for the Total 
Hydrocarbon (THC) Flame Ionization Detector (FID) and the combine 
methane response factor and penetration fraction and combined ethane 
response factor and penetration fraction of the NMC FID. These response 
factors and penetration fractions are then used to determine NMHC and 
methane concentrations based on the molar water concentration in the 
raw or diluted exhaust. EPA is aware that test labs that have attempted 
to implement this correction have reported that this new option is 
lacking clarity with respect to the implementation of these corrections 
from both a procedural and emission calculation perspective. Test labs 
and manufacturers have also requested the option to use the water 
correction for all fuels, not just gaseous fuels. Test labs and 
manufacturers have also stated that in their view, as written, 40 CFR 
1065.360(d)(12) indicates that the water correction for the methane 
response factor on the THC FID is required; we note that was not our 
intent and are thus proposing to clarify that provision.
---------------------------------------------------------------------------

    \628\ 86 FR 34543 (June 29, 2021).
---------------------------------------------------------------------------

    In addition to general edits that improve the consistency of 
terminology and the rearrangement of some paragraphs to improve the 
flow of the procedure, we are proposing the following changes to 40 CFR 
1065.360, 1065.365, and 1065.660 to address the concerns raised 
regarding implementation and use of the NMC performance corrections. In 
40 CFR 1065.360 and 1065.365, we are proposing to allow the optional 
use of the water correction for the applicable response factors and 
penetration fractions for engines operated on any fuel, as the use of 
the correction improves the quality of the emission measurement even 
though the effect is less pronounced for liquid fuels. In 40 CFR 
1065.360, we are proposing revisions to clarify that determination of 
the FID methane response factor as a

[[Page 26026]]

function of molar water concentration is optional for all fuels. In 40 
CFR 1065.365, we are proposing to remove the recommendation of a 
methane penetration fraction of greater than 0.85 for the NMC FID 
because the procedure will account for the effect of the penetration 
fraction regardless of the level of NMC methane penetration. We are 
also proposing a corresponding change in relation to another change 
proposed in this rule, such that the requirements for linearity 
performance of the humidity generator would meet the proposed 
uncertainty requirements in 40 CFR 1065.750(a)(6) that we are proposing 
to address the accuracy of humidity generators used in the calibration 
of the FTIRs used for water measurement. In 40 CFR 1065.660, we are 
proposing to modify equations 1065.660-2 and 1065.660-9 by adding the 
variable for the methane response factor and penetration fraction for 
the NMC FID back into the equations, which we previously removed for 
simplification because the value was set to a constant of one. This 
modification would have no effect on the outcome of the calculations in 
the event that the effect of water on the NMC performance is not being 
accounted for because the procedure directs that the methane response 
factor and penetration fraction for the NMC FID are set to one. In the 
event that the effect of water is being accounted for, these modified 
equations would make it easier to understand the requirements of the 
procedure.
v. ISO 8178 Exceptions in 40 CFR 1065.601
    40 CFR 1065.601(c)(1) allows the use of ISO 8178 mass-based 
emission calculations instead of the calculations specified in 40 CFR 
part 1065 subpart G with two exceptions. We are proposing to update the 
section reference to the exception in 40 CFR 1065.601(c)(1)(i) for 
NOX humidity and temperature correction from ISO 8178-1 
Section 14.4 to ISO 8178-4 Section 9.1.6 to address updates made to ISO 
8178 over the last 20 years that changed the location of this 
correction. We are also proposing to remove the exception for the use 
of the particulate correction factor for humidity in ISO 8178-1 Section 
15.1 because this correction factor no longer exists in ISO 8178.
vi. Work System Boundary in 40 CFR 1065.210
    Figure 1 in 40 CFR 1065.210 provides diagrams for the work inputs, 
outputs, and system boundaries for engines. We are proposing to update 
the diagram for liquid cooled engines in Figure 1 to paragraph (a) of 
40 CFR 1065.210 to include electric heaters that use work from an 
external power source. We are also proposing to update 40 CFR 
1065.210(a) to include an example of an engine exhaust electrical 
heater and direction on how to simulate the efficiency of the 
electrical generator, to account for the work of the electrical heater. 
We are proposing an efficiency of 67 percent, as this is the value used 
in 40 CFR 86.1869-12(b)(4)(xiii) as the baseline alternator efficiency 
when determining off-cycle improvements of high efficiency alternators. 
We request comment on the proposed value of 67 percent and request that 
commenters provide data if you comment that a value different than 67 
percent should be used.
IV. Proposed Program Costs
    In this section, we present the costs we estimate would be incurred 
by manufacturers and purchasers of HD vehicles impacted by the proposed 
standards. We also present the social costs of the proposed standards. 
Our analyses characterize the costs of the technology package described 
in section II.E of the preamble; however, as we note there, 
manufacturers may elect to comply using a different combination of HD 
vehicle and engine technologies than what we have identified. We break 
the costs into the following categories and subcategories:

    (1) Technology Package Costs, which are the sum of direct 
manufacturing costs (DMC) and indirect costs. This may also be 
called the ``package RPE.'' This includes:
    a. DMC, which include the costs of materials and labor to 
produce a product or piece of technology.
    b. Indirect costs, which include research and development (R&D), 
warranty, corporate operations (such as salaries, pensions, health 
care costs, dealer support, and marketing), and profits.\629\ We 
estimate indirect costs using retail price equivalent (RPE) markups.
---------------------------------------------------------------------------

    \629\ Technology costs represent costs that manufacturers are 
expected to attempt to recapture via new vehicle sales. As such, 
profits are included in the indirect cost calculation. Clearly, 
profits are not a ``cost'' of compliance--EPA is not imposing new 
regulations to force manufacturers to make a profit. However, 
profits are necessary for manufacturers in the heavy-duty industry, 
a competitive for-profit industry, to sustain their operations. As 
such, manufacturers are expected to make a profit on the compliant 
vehicles they sell, and we include those profits in estimating 
technology costs.
---------------------------------------------------------------------------

    (2) Manufacturer Costs, or ``manufacturer RPE,'' which is the 
package RPE less any applicable battery tax credits. This includes:
    a. Package RPE. Traditionally, the package RPE is the 
manufacturer RPE in EPA cost analyses.
    b. Battery tax credit from IRA section 13502, ``Advanced 
Manufacturing Production Credit,'' which serve to reduce 
manufacturer costs. The battery tax credit is described further in 
Sections I and II of this preamble and Chapters 1 and 2 of the DRIA.
    (3) Purchaser Costs, which are the sum of purchaser upfront 
vehicle costs and operating costs. This includes:
    a. Manufacturer RPE. In other words, the purchaser incurs the 
manufacturer's package costs less any applicable battery tax 
credits. We refer to this as the ``manufacturer RPE'' in relation to 
the manufacturer and, at times, the ``purchaser RPE'' in relation to 
the purchaser. These two terms are equivalent in this analysis.
    b. Vehicle tax credit from IRA section 13403, ``Qualified 
Commercial Clean Vehicles,'' which serve to reduce purchaser costs. 
The vehicle tax credit is described further in Sections I and II of 
this preamble and Chapters 1 and 2 of the DRIA.
    c. Electric Vehicle Supply Equipment (EVSE) costs, which are the 
costs associated with charging equipment. Our EVSE cost estimates 
include indirect costs so are sometimes referred to as ``EVSE RPE.''
    d. Purchaser upfront vehicle costs, which include the 
manufacturer (also referred to as purchaser) RPE plus EVSE costs 
less any applicable vehicle tax credits.
    e. Operating costs, which include fuel costs, electricity costs, 
costs for diesel exhaust fluid (DEF), and maintenance and repair 
costs.
    (4) Social Costs, which are the sum of package RPE, EVSE RPE, 
and operating costs and computed on at a fleet level on an annual 
basis. This includes:
    a. Package RPE which excludes applicable tax credits.
    b. EVSE RPE.
    c. Operating costs which include pre-tax fuel costs, DEF costs 
and maintenance and repair costs.
    d. Note that fuel taxes and battery and vehicle tax credits are 
not included in the social costs. Taxes and tax credits are 
transfers as opposed to social costs.

    We describe these costs and present our cost estimates in the text 
that follows. All costs are presented in 2021 dollars, unless noted 
otherwise. We used the MOVES scenarios discussed in DRIA Chapter 4, the 
reference and proposed cases,\630\ to compute technology costs and 
operating costs as well as social costs on an annual basis. Our costs 
and tax credits estimated on a per vehicle basis do not change between 
the reference and proposal cases, but the estimated vehicle populations 
that would be ICE vehicles, BEVs or FCEVs do change between the 
reference and proposal cases. We expect an increase in BEV and FCEV 
sales and a decrease in ICE vehicle sales in the proposal compared to 
the reference case and these changes in vehicle populations are the 
determining factor

[[Page 26027]]

for total cost differences between the reference and proposal cases.
---------------------------------------------------------------------------

    \630\ As discussed in DRIA Chapter 4.2.2, the reference case is 
a no-action scenario that represents emissions in the U.S. without 
the proposed rulemaking and the proposed case represents emissions 
in the U.S. with the proposed GHG standards.
---------------------------------------------------------------------------

    But first we discuss the relevant IRA tax credits and how we have 
considered them in our estimates. Note that the analysis that follows 
sometimes presents undiscounted costs and sometimes presents discounted 
costs. We discount future costs and benefits to properly characterize 
their value in the present or, as directed by the Office of Management 
and Budget in Advisory Circular A-4, in the year costs and benefits 
begin. Also in Circular A-4, OMB directs use of both 3 and 7 percent 
discount rates as we have done with some exceptions.\631\ We request 
comment, including data, on all aspects of the cost analysis. In 
particular, we request comment on our assessment of the IRA tax credits 
(see Sections IV.C.2 and IV.D.2) and operating costs (see Section 
IV.D.5). We also request comment, including data, on alternative 
approaches to estimating cost that may help inform our cost estimates 
for the final rulemaking.
---------------------------------------------------------------------------

    \631\ See Advisory Circular A-4, Office of Management and 
Budget, September 17, 2003.
---------------------------------------------------------------------------

A. IRA Tax Credits

    Our cost analysis quantitatively includes consideration of two IRA 
tax credits, specifically the battery tax credit and the vehicle tax 
credit discussed in Sections I.C.2 and II.E.4 of the preamble and 
Chapters 1.3.2, 2.4.3, and 3.1 of the DRIA. We note that a detailed 
discussion of how these tax credits were considered in our 
consideration of costs in our technology packages may be found in 
Section II.E of the preamble and Chapter 2.4.3 of the DRIA. The battery 
tax credits are expected to reduce manufacturer costs, and in turn 
purchaser costs, as discussed in Section IV.C The vehicle tax credits 
are expected to reduce purchaser costs, as discussed in Section IV.D.2. 
For the cost analysis discussed in this Section IV, both the battery 
tax credit and vehicle tax credit were estimated for MYs 2027 through 
2032 and then aggregated for each MOVES source type and regulatory 
class.
    We request comment on our assessment of the impact of the IRA tax 
credits.

B. Technology Package Costs

    Technology package costs include estimated technology costs 
associated with compliance with the proposed MY 2027 and later 
CO2 emission standards (see Chapter 3 of the DRIA). 
Individual technology piece costs are presented in Chapter 2 and 3 of 
the DRIA. In general, for the first MY of each proposed emission 
standard, the per vehicle individual technology piece costs consist of 
the DMC estimated for each vehicle in the model year of the proposed 
standards and are used as a starting point in estimating both the 
technology package costs and total incremental costs. Following each 
year of when costs are first incurred, we have applied a learning 
effect to represent the cost reductions expected to occur via the 
``learning by doing'' phenomenon.\632\ The ``learning by doing'' 
phenomenon is the process by which doing something over and over 
results in learning how to do that thing more efficiently which, in 
turn, leads to reduced resource usage, i.e., cost savings. This 
provides a year-over-year cost for each technology as applied to new 
vehicle production, which is then used to calculate total technology 
package costs of the proposed standards.
---------------------------------------------------------------------------

    \632\ ``Cost Reduction through Learning in Manufacturing 
Industries and in the Manufacture of Mobile Sources, Final Report 
and Peer Review Report,'' EPA-420-R-16-018, November 2016.
---------------------------------------------------------------------------

    This technology package cost calculation approach presumes that the 
expected technologies would be purchased by the vehicle original 
equipment manufacturers (OEMs) from their suppliers. So, while the DMC 
estimates for the OEM in Section IV.B.1 include the indirect costs and 
profits incurred by the supplier, the indirect cost markups we apply in 
Section IV.B.2 cover the indirect costs incurred by OEMs to incorporate 
the new technologies into their vehicles and profit margins for the OEM 
typical of the heavy-duty vehicle industry. To address these OEM 
indirect costs, we then applied industry standard ``retail price 
equivalent'' (RPE) markup factors to the DMC to estimate indirect costs 
associated with the new technology. These factors represent an average 
price, or retail price equivalent (RPE), for products assuming all 
products recapture costs in the same way. We recognize that this is 
rarely the case since manufacturers typically price certain products 
higher than average and others lower than average (i.e., they cross-
subsidize). For that reason, the RPE should not be considered a price 
but instead should be considered more like the average cross-subsidy 
needed to recapture both costs and profits to support ongoing business 
operations. Both the learning effects applied to direct costs and the 
application of markup factors to estimate indirect costs are consistent 
with the cost estimation approaches used in EPA's past HD GHG 
regulatory programs.\633\ The sum of the DMC and indirect costs 
represents our estimate of technology ``package costs'' or ``package 
RPE'' per vehicle year-over-year. These per vehicle technology package 
costs are multiplied by estimated sales for the proposed and reference 
scenarios. Then the total technology package-related costs for 
manufacturers (total package costs or total package RPE) associated 
with the proposed HD vehicle CO2 standards is the difference 
between the proposed and reference scenarios.
---------------------------------------------------------------------------

    \633\ See the 2011 heavy-duty greenhouse gas rule (76 FR 57106, 
September 15, 2011); the 2016 heavy-duty greenhouse gas rule (81 FR 
73478, October 25, 2016).
---------------------------------------------------------------------------

1. Direct Manufacturing Costs
    To produce a unit of output, manufacturers incur direct and 
indirect manufacturing costs. DMC include cost of materials and labor 
costs. Indirect manufacturing costs are discussed in the following 
section, IV.A.2. The DMCs presented here include the incremental 
technology piece costs associated with compliance with the proposed 
standards as compared to the technology piece costs associated with the 
comparable baseline vehicle.\634\ We based the proposed standards on 
technology packages that include both ICE vehicle and ZEV technologies. 
In our analysis, the ICE vehicles include a suite of technologies that 
represent a vehicle that meets the existing MY 2027 Phase 2 
CO2 emission standards. Therefore, our direct manufacturing 
costs for the ICE vehicles are considered to be $0 because we did not 
add additional CO2-reducing technologies to the ICE vehicles 
beyond those in the baseline vehicle. The DMC of the BEVs or FCEVs are 
the technology piece costs of replacing an ICE powertrain with a BEV or 
FCEV powertrain for a comparable vehicle.
---------------------------------------------------------------------------

    \634\ Baseline vehicles are ICE vehicles meeting the Phase 2 
standards discussed in DRIA chapter 2.2.2 and the Low NOX 
standards discussed in DRIA chapter 2.3.2.
---------------------------------------------------------------------------

    Throughout this discussion, when we refer to reference case costs 
we are referring to our cost estimate of the no-action case (impacts 
absent this proposed rule) which include costs associated with 
replacing a comparable ICE powertrain with a BEV or FCEV powertrain for 
ZEV adoption rates in the reference case.
    We have estimated the DMC by starting with the cost of the baseline 
vehicle, removing the cost of the ICE powertrain, and adding the cost 
of a BEV or FCEV powertrain, as presented in Chapter 2 and 3 of the 
DRIA. In other words, net incremental costs reflect adding the total 
costs of components added to the powertrain to make it a BEV or FCEV, 
as well as removing the

[[Page 26028]]

total costs of components removed from a comparable ICE vehicle to make 
it a BEV or FCEV.
    Chapter 4 of the DRIA contains a description of the MOVES vehicle 
source types and regulatory classes. In short, we estimate costs in 
MOVES for vehicle source types that have both regulatory class 
populations and associated emission inventories. Also, throughout this 
section, LHD refers to light heavy-duty vehicles, MHD refers to medium 
heavy-duty vehicles, and HHD refers to heavy heavy-duty vehicles.
    The direct costs are then adjusted to account for learning effects 
on BEV, FCEV and ICE vehicle powertrains on an annual basis going 
forward beginning with the first year of the analysis, e.g. MY 2027, 
for the proposed and reference scenarios. Overall, we anticipate the 
number of ICE powertrains (including engines and transmissions) 
manufactured each year will decrease as more ZEVs enter the market. 
This scenario may lead to an increase in component costs for ICE 
powertrains. On the other hand, with the inclusion of new hardware 
costs projected to meet the HD2027 emission standards, we would expect 
learning effects would reduce the incremental cost of these 
technologies. Chapter 3 of the DRIA includes a detailed description of 
the approach used to apply learning effects in this analysis and we 
request data and information to refine our learning effects. The 
resultant DMC per vehicle and how those costs decrease over time on a 
fleet level are presented in Section IV.E.1 of this preamble. We 
request comment on this approach, including methods for accounting for 
the projected future ICE costs.
2. Indirect Manufacturing Costs
    Indirect manufacturing costs are all the costs associated with 
producing the unit of output that are not direct manufacturing costs--
for example, they may be related to research and development (R&D), 
warranty, corporate operations (such as salaries, pensions, health care 
costs, dealer support, and marketing) and profits. An example of a R&D 
cost for this proposal includes the engineering resources required to 
develop a battery state of health monitor as described in Section 
III.B.1. An example of a warranty cost is the future cost covered by 
the manufacturer to repair defective BEV or FCEV components and meet 
the warranty requirements proposed in Section III.B.2. Indirect costs 
are generally recovered by allocating a share of the indirect costs to 
each unit of goods sold. Although direct costs can be allocated to each 
unit of goods sold, it is more challenging to account for indirect 
costs allocated to a unit of goods sold. To ensure that regulatory 
analyses capture the changes in indirect costs, markup factors (which 
relate total indirect costs to total direct costs) have been developed 
and used by EPA and other stakeholders. These factors are often 
referred to as retail price equivalent (RPE) multipliers and are 
typically applied to direct costs to estimate indirect costs. RPE 
multipliers provide, at an aggregate level, the proportionate share of 
revenues relative shares of revenue where:

Revenue = Direct Costs + Indirect Costs
Revenue/Direct Costs = 1 + Indirect Costs/Direct Costs = RPE 
multiplier
Resulting in:
Indirect Costs = Direct Costs x (RPE-1)

    If the relationship between revenues and direct costs (i.e., RPE 
multiplier) can be shown to equal an average value over time, then an 
estimate of direct costs can be multiplied by that average value to 
estimate revenues, or total costs. Further, that difference between 
estimated revenues, or total costs, and estimated direct costs can be 
taken as the indirect costs. Cost analysts and regulatory agencies have 
frequently used these multipliers to predict the resultant impact on 
costs associated with manufacturers' responses to regulatory 
requirements and we are using that approach in this analysis.
    The proposed cost analysis estimates indirect costs by applying the 
RPE markup factor used in past EPA rulemakings (such as those setting 
GHG standards for heavy-duty vehicles and engines).\635\ The markup 
factors are based on company filings with the Securities and Exchange 
Commission for several engine and engine/vehicle manufacturers in the 
heavy-duty industry.\636\ The RPE factors for the HD vehicle industry 
as a whole are shown in Table IV-1. Also shown in Table IV-1 are the 
RPE factors for light-duty vehicle manufacturers.\637\
---------------------------------------------------------------------------

    \635\ 76 FR 57106; 81 FR 73478.
    \636\ Heavy Duty Truck Retail Price Equivalent and Indirect Cost 
Multipliers, Draft Report, July 2010.
    \637\ Rogozhin,A., et al., Using indirect cost multipliers to 
estimate the total cost of adding new technology in the automobile 
industry. International Journal of Production Economics (2009), 
doi:10.1016/j.ijpe.2009.11.031.
    \638\ Note that the report used the term ``HD Truck'' while EPA 
generally uses the term ``HD vehicle;'' they are equivalent when 
referring to this report.

Table IV-1--Retail Price Equivalent Factors in the Heavy-Duty and Light-
                             Duty Industries
------------------------------------------------------------------------
                                             HD truck       LD vehicle
            Cost contributor              industry \638\     industry
------------------------------------------------------------------------
Direct manufacturing cost...............            1.00            1.00
Warranty................................            0.03            0.03
R&D.....................................            0.05            0.05
Other (admin, retirement, health, etc.).            0.29            0.36
Profit (cost of capital)................            0.05            0.06
RPE.....................................            1.42            1.50
------------------------------------------------------------------------

    For this analysis, EPA based indirect cost estimates for diesel and 
compressed natural gas (CNG) regulatory classes on the HD Truck 
Industry RPE value shown in Table IV-1. We are using an RPE of 1.42 to 
compute the indirect costs associated with the replacement of a diesel-
fueled or CNG-fueled powertrain with a BEV or FCEV powertrain. For this 
analysis, EPA based indirect cost estimates for gasoline regulatory 
classes on the LD Vehicle RPE value shown in Table IV-1. We are using 
an RPE of 1.5 to compute the indirect costs associated with the 
replacement of a gasoline-fueled powertrain with a BEV or FCEV 
powertrain. The heavy-duty vehicle industry is becoming more vertically 
integrated and the direct and indirect manufacturing costs we are 
analyzing are those that reflect the technology packages costs OEMs 
would try to recover at the end purchaser, or retail, level. For that 
reason, we believe the two respective vehicle industry RPE values 
represent the most appropriate factors for this analysis. We request 
data

[[Page 26029]]

to inform RPE factors for the heavy-duty industry.
3. Vehicle Technology Package RPE
    Table IV-2 presents the total fleet-wide incremental technology 
costs estimated for the proposal relative to the reference case for the 
projected adoption of ZEVs in our technology package relative to the 
reference case on an annual basis. As previously explained in this 
section, the costs shown in Table IV-2 reflect marginal direct and 
indirect manufacturing costs of the technology package for the proposed 
CO2 standards as compared to the baseline vehicle.
    It is important to note that these are costs and not prices. We do 
not attempt to estimate how manufacturers would price their products in 
the technology package costs. Manufacturers may pass costs along to 
purchasers via price increases that reflect actual incremental costs to 
manufacture a ZEV when compared to a comparable ICE vehicle. However, 
manufacturers may also price products higher or lower than what would 
be necessary to account for the incremental cost difference. For 
instance, a manufacturer may price certain products higher than 
necessary and price others lower with the higher-priced products 
effectively subsidizing the lower-priced products. This pricing 
strategy may be true in any market and is not limited to the heavy-duty 
vehicle industry. It may be used for a variety of reasons, not solely 
as a response to regulatory programs.

 Table IV-2--Total Fleet-Wide Incremental Technology Costs for ZEVs, for
   the Proposed Option Relative to the Reference Case Millions of 2021
                               Dollars \a\
------------------------------------------------------------------------
                                                              Vehicle
                      Calendar year                         package RPE
------------------------------------------------------------------------
2027....................................................          $2,000
2028....................................................           1,800
2029....................................................           1,700
2030....................................................           2,000
2031....................................................           2,300
2032....................................................           2,000
2033....................................................           1,500
2034....................................................           1,300
2035....................................................           1,000
2036....................................................             750
2037....................................................             620
2038....................................................             410
2039....................................................             220
2040....................................................             140
2041....................................................             -40
2042....................................................            -200
2043....................................................            -360
2044....................................................            -410
2045....................................................            -550
2046....................................................            -690
2047....................................................            -820
2048....................................................            -850
2049....................................................            -970
2050....................................................          -1,100
2051....................................................          -1,100
2052....................................................          -1,200
2053....................................................          -1,300
2054....................................................          -1,400
2055....................................................          -1,500
PV, 3%..................................................           9,000
PV, 7%..................................................          10,000
------------------------------------------------------------------------
\a\ Values rounded to two significant digits; negative values denote
  lower costs, i.e., savings in expenditures.

C. Manufacturer Costs

1. Relationship to Technology Package RPE
    The manufacturer costs in EPA's past HD GHG rulemaking cost 
analyses on an average-per-vehicle basis was only the average-per-
vehicle technology package RPE described in Section II.F.5.i. However, 
in the cost analysis for this proposal, we are also taking into account 
the IRA battery tax credit in our estimates of manufacturer costs (also 
referred to in this section as manufacturer's RPE), as we expect the 
battery tax credit to reduce manufacturer costs, and in turn purchaser 
costs.
2. Battery Tax Credit
    Table IV-3 shows the annual estimated fleet-wide battery tax 
credits from IRA section 13502, ``Advanced Manufacturing Production 
Credit,'' for the proposal relative to the reference case in 2021 
dollars. These estimates were based on the detailed discussion in DRIA 
Chapter 2 of how we considered battery tax credits. Both BEVs and FCEVs 
include a battery in the powertrain system that may meet the IRA 
battery tax credit requirements if the applicable criteria are met. The 
battery tax credits begin to phase down starting in CY 2030 and expire 
after CY 2032.

   Table IV-3--Battery Tax Credit in Millions of 2021 Dollars for the
           Proposed Option Relative to the Reference Case \a\
------------------------------------------------------------------------
                                                            Battery tax
                      Calendar year                           credits
------------------------------------------------------------------------
2027....................................................            $340
2028....................................................             560
2029....................................................             880
2030....................................................             890
2031....................................................             650
2032....................................................             380
2033 and later..........................................               0
PV, 3%..................................................           3,300
PV, 7%..................................................           2,900
------------------------------------------------------------------------
\a\ Values rounded to two significant digits.

3. Manufacturer RPE
    The manufacturer RPE for BEVs is calculated by subtracting the 
battery tax credit in Table IV-3 from the corresponding technology 
package RPE from Table IV-2 and the resultant manufacturer RPE is shown 
in Table IV-4. Table IV-4 reflects learning effects on vehicle package 
RPE and battery tax credits from CY 2027 through 2055. The sum of the 
vehicle package RPE and battery tax credits for each year is shown in 
the manufacturer RPE column. The difference in manufacturer RPE between 
the proposal and reference case is presented in Table IV-4.

Table IV-4--Total Vehicle Package RPE, Battery Tax Credits, and Manufacturer RPE (including Battery Tax Credits)
 for the Proposed Option Relative to the Reference Case, All Regulatory Classes and All Fuels, Millions of 2021
                                                   Dollars \a\
----------------------------------------------------------------------------------------------------------------
                                                                      Vehicle       Battery tax    Manufacturer
                          Calendar year                             package RPE       credits           RPE
----------------------------------------------------------------------------------------------------------------
2027............................................................          $2,000           -$340          $1,600
2028............................................................           1,800            -560           1,200
2029............................................................           1,700            -880             820
2030............................................................           2,000            -890           1,100

[[Page 26030]]

 
2031............................................................           2,300            -650           1,700
2032............................................................           2,000            -380           1,700
2033............................................................           1,500               0           1,500
2034............................................................           1,300               0           1,300
2035............................................................           1,000               0           1,000
2036............................................................             750               0             750
2037............................................................             620               0             620
2038............................................................             410               0             410
2039............................................................             220               0             220
2040............................................................             140               0             140
2041............................................................             -40               0             -40
2042............................................................            -200               0            -200
2043............................................................            -360               0            -360
2044............................................................            -410               0            -410
2045............................................................            -550               0            -550
2046............................................................            -690               0            -690
2047............................................................            -820               0            -820
2048............................................................            -850               0            -850
2049............................................................            -970               0            -970
2050............................................................          -1,100               0          -1,100
2051............................................................          -1,100               0          -1,100
2052............................................................          -1,200               0          -1,200
2053............................................................          -1,300               0          -1,300
2054............................................................          -1,400               0          -1,400
2055............................................................          -1,500               0          -1,500
PV, 3%..........................................................           9,000          -3,300           5,700
PV, 7%..........................................................          10,000          -2,900           7,100
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to two significant digits; negative values denote lower costs, i.e., savings in expenditures.

D. Purchaser Costs

1. Purchaser RPE
    The purchaser RPE is the estimated upfront vehicle cost paid by the 
purchaser prior to considering the IRA vehicle tax credits. Note, as 
explained in Section IV.C, we do consider the IRA battery tax credit in 
estimating the manufacturer RPE, which in this analysis we then 
consider to be equivalent to the purchaser RPE because we assume full 
pass-through of the IRA battery tax credit from the manufacturer to the 
purchaser. In other words, in this analysis, the manufacturer RPE and 
purchaser RPE are equivalent terms. The purchaser RPEs reflect the same 
values as the corresponding manufacturer RPEs presented in Section 
IV.C.3.
2. Vehicle Purchase Tax Credit
    Table IV-5 shows the annual estimated vehicle tax credit for BEV 
and FCEV vehicles from IRA section 13403, ``Qualified Commercial Clean 
Vehicles,'' for the proposal relative to the reference case, in 2021 
dollars. These estimates were based on the detailed discussion in DRIA 
Chapter 2 of how we considered vehicle tax credits. The vehicle tax 
credits carry through to MY 2032 with the value diminishing over time 
as vehicle costs decrease due to the learning effect as shown in DRIA 
Chapter 2. Beginning in CY 2033, the tax credit program expires.

Table IV-5--Vehicle Tax Credit in Millions 2021 Dollars for the Proposed
                Option Relative to the Reference Case \a\
------------------------------------------------------------------------
                      Calendar year                         Tax credit
------------------------------------------------------------------------
2027....................................................            $810
2028....................................................             670
2029....................................................             630
2030....................................................           1,100
2031....................................................           1,600
2032....................................................           1,900
2033 and later..........................................               0
PV, 3%..................................................           5,900
PV, 7%..................................................           5,000
------------------------------------------------------------------------
\a\ Values rounded to two significant digits.

3. Electric Vehicle Supply Equipment Costs
    EVSE and associated costs are described in Chapter 2.6 of the DRIA. 
EVSE is needed for charging of BEVs and is not needed for FCEVs.\639\ 
The EVSE cost estimates are assumed to include both direct and indirect 
costs and are sometimes referred to in this proposal as EVSE RPE costs. 
For these EVSE cost estimates, we assume that up to two vehicles can 
share one DCFC port if there is sufficient dwell time for both vehicles 
to meet their daily charging needs.\640\ While fleet owners may also 
choose to share Level 2 chargers across vehicles, we are conservatively 
assigning one Level 2 charger per vehicle. As discussed in the DRIA, we 
assume that EVSE costs are incurred by purchasers, i.e. heavy-duty 
vehicle purchasers/owners. Some purchasers may be eligible for a 
Federal tax credit for charging equipment.\641\ See DRIA

[[Page 26031]]

Chapter 1.3.2 for a discussion of this tax credit and DRIA Chapter 
2.6.5.2 for a description of how we considered it in our cost analysis. 
We analyzed EVSE costs in 2021 dollars on a fleet-wide basis for this 
analysis. The annual costs associated with EVSE in the proposal 
relative to the reference case are shown in Table IV-6.
---------------------------------------------------------------------------

    \639\ As discussed in DRIA Chapter 2.5, rather than focusing on 
depot hydrogen fueling infrastructure costs that would be incurred 
upfront, we included FCEV infrastructure costs in our per-kilogram 
retail price of hydrogen. Retail price of hydrogen is the total 
price of hydrogen when it becomes available to the end user, 
including the costs of production, distribution, storage, and 
dispensing at a fueling station. This approach is consistent with 
the method we use in HD TRUCS for comparable ICE vehicles, where the 
equivalent diesel fuel costs are included in the diesel fuel price 
instead of accounting for the costs of fuel stations separately.
    \640\ We note that for some of the vehicle types we evaluated, 
more than two vehicles could share a DCFC port and still meet their 
daily electricity consumption needs. However, we are choosing to 
limit DCFC sharing to two vehicles per EVSE port pending market 
developments and more robust dwell time estimates.
    \641\ IRA Section 13404, ``Alternative Fuel Refueling Property 
Credit,'' modifies an existing Federal tax credit available for 
alternative fuel refueling property, including EV charging 
equipment, and extends the tax credit through 2032. Beginning in 
2023, this provision provides a tax credit of up to 30 percent of 
the cost of the qualified alternative fuel refueling property (e.g. 
HD BEV charger), up to 100,000, when located in low-income or non-
urban area census tracts and certain other other requirements are 
met.
---------------------------------------------------------------------------

    We request comment on our estimated EVSE costs as well as our 
proposal to add EVSE costs to each vehicle's purchaser RPE costs in 
estimating purchaser costs.

Table IV-6--EVSE Costs for the Proposed Option Relative to the Reference
                     Case, Millions 2021 Dollars \a\
------------------------------------------------------------------------
                      Calendar year                         EVSE costs
------------------------------------------------------------------------
2027....................................................          $1,300
2028....................................................           1,600
2029....................................................           1,900
2030....................................................           2,000
2031....................................................           2,200
2032....................................................           2,600
2033....................................................           2,600
2034....................................................           2,600
2035....................................................           2,500
2036....................................................           2,500
2037....................................................           2,500
2038....................................................           2,500
2039....................................................           2,600
2040....................................................           2,600
2041....................................................           2,600
2042....................................................           2,600
2043....................................................           2,700
2044....................................................           2,700
2045....................................................           2,700
2046....................................................           2,700
2047....................................................           2,700
2048....................................................           2,700
2049....................................................           2,800
2050....................................................           2,800
2051....................................................           2,800
2052....................................................           2,900
2053....................................................           2,900
2054....................................................           2,900
2055....................................................           2,900
PV, 3%..................................................          47,000
PV, 7%..................................................          29,000
------------------------------------------------------------------------
\a\ Values rounded to two significant digits.

4. Purchaser Upfront Vehicle Costs
    The expected upfront incremental costs to the purchaser include the 
purchaser RPE discussed in Section IV.D.1 less the vehicle tax credit 
discussed in Section IV.D.2 plus the EVSE RPE in IV.D.3. Table IV-7 
shows the estimated incremental upfront purchaser costs for BEVs and 
FCEVs by calendar year for the proposed option relative to the 
reference case. Note that EVSE costs are associated with BEVs only; 
FCEVs do not have any associated EVSE costs.

  Table IV-7--Incremental Purchaser Upfront Costs for the Proposed Option Relative to the Reference Case for in
                                            Millions 2021 Dollars \a\
----------------------------------------------------------------------------------------------------------------
                                                                      Vehicle
                  Calendar year                    Purchaser RPE   purchase tax     EVSE costs     Total upfront
                                                                      credit                      purchaser cost
----------------------------------------------------------------------------------------------------------------
2027............................................          $1,600           -$810          $1,300          $2,200
2028............................................           1,200            -670           1,600           2,100
2029............................................             820            -630           1,900           2,100
2030............................................           1,100          -1,100           2,000           2,100
2031............................................           1,700          -1,600           2,200           2,300
2032............................................           1,700          -1,900           2,600           2,400
2033............................................           1,500               0           2,600           4,100
2034............................................           1,300               0           2,600           3,800
2035............................................           1,000               0           2,500           3,500
2036............................................             750               0           2,500           3,200
2037............................................             620               0           2,500           3,100
2038............................................             410               0           2,500           3,000
2039............................................             220               0           2,600           2,800
2040............................................             140               0           2,600           2,700
2041............................................             -40               0           2,600           2,600
2042............................................            -200               0           2,600           2,400
2043............................................            -360               0           2,700           2,300
2044............................................            -410               0           2,700           2,300
2045............................................            -550               0           2,700           2,100
2046............................................            -690               0           2,700           2,000
2047............................................            -820               0           2,700           1,900
2048............................................            -850               0           2,700           1,900
2049............................................            -970               0           2,800           1,800
2050............................................          -1,100               0           2,800           1,700
2051............................................          -1,100               0           2,800           1,700
2052............................................          -1,200               0           2,900           1,700
2053............................................          -1,300               0           2,900           1,600
2054............................................          -1,400               0           2,900           1,500
2055............................................          -1,500               0           2,900           1,400
PV, 3%..........................................           5,700          -5,900          47,000          47,000
PV, 7%..........................................           7,100          -5,000          29,000          31,000
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to two significant digits; negative values denote lower costs, i.e., savings in expenditures.

[[Page 26032]]

5. Operating Costs
    We have estimated three types of operating costs associated with 
the proposed HD Phase 3 CO2 emission standards and our 
potential projected technology pathway to comply with those proposed 
standards that includes BEV or FCEV powertrains. These three types of 
operating costs include decreased fuel costs of BEVs compared to 
comparable ICE vehicles, avoided diesel exhaust fluid (DEF) consumption 
by BEVs and FCEVs compared to comparable diesel-fueled ICE vehicles, 
and reduced maintenance and repair costs of BEVs and FCEVs as compared 
to comparable ICE vehicles. To estimate each of these costs, the 
results of MOVES runs, as discussed in DRIA Chapter 4, were used to 
estimate costs associated with fuel consumption, DEF consumption, and 
VMT. We have estimated the net effect on fuel costs, DEF costs, and 
maintenance and repair costs. We describe our approach in this Section 
IV.D.5.
    Additional details on our methodology and estimates of operating 
costs per mile impacts are included in DRIA Chapter 3.4. Chapter 4 of 
the DRIA contains a description of the MOVES vehicle source types and 
regulatory classes. In short, we estimate costs in MOVES for vehicle 
source types that have both regulatory class populations and associated 
emission inventories. Also, throughout this section, LHD refers to 
light heavy-duty vehicles, MHD refers to medium heavy-duty vehicles, 
and HHD refers to heavy heavy-duty vehicles.
i. Costs Associated With Fuel Usage
    To determine the total costs associated with fuel usage for MY 2027 
vehicles, the fuel usage for each MOVES source type and regulatory 
class was multiplied by the fuel price from the AEO 2022 reference case 
for diesel, gasoline, and CNG prices over the first 28 years of the 
lifetime of the vehicle.\642\ Fuel costs per gallon and kWh are 
discussed in DRIA Chapter 2. We used retail fuel prices since we expect 
that retail fuel prices are the prices paid by owners of these ICE 
vehicles. For electric vehicle costs, the electricity price from the 
AEO 2022 reference case for commercial electricity end-use prices in 
cents per kWh was multiplied by the fuel usage in kWh.\643\ For 
hydrogen vehicle fuel costs, a value of $6.10/kg starting in 2027 and 
linearly decreasing to $4/kg in 2030 and held constant until 2055, as 
discussed in DRIA Chapter 2.5.3.1, was multiplied by fuel usage in kg. 
To calculate the average cost per mile of fuel usage for each scenario, 
MOVES source type and regulatory class, the fuel cost was divided by 
the VMT for each of the MY 2027 vehicles over the 28-year period. The 
estimates of fuel cost per mile for MY 2027 vehicles under the proposal 
are shown in Table IV-8 with 3 percent discounting and Table IV-9 with 
7 percent discounting. Values shown as a dash (``-''), in Table IV-8 
and Table IV-9 represent cases where a given MOVES source type and 
regulatory class did not use a specific fuel type for MY 2027 
vehicles.\644\
---------------------------------------------------------------------------

    \642\ Reference Case Projection Tables, U.S. Energy Information 
Administration. Annual Energy Outlook 2022.
    \643\ U.S. Energy Information Administration. Annual Energy 
Outlook 2022.
    \644\ For example, there were no vehicles in our MOVES runs for 
the transit bus source type in the LHD45 regulatory class that where 
diesel-fueled, so the value in the table is represented as a dash 
(``-'').

  Table IV-8--Retail Fuel Cost Per Mile for MY 2027 Vehicles During the First 28 Years for Each MOVES Source Type and Regulatory Class by Fuel Type \a\
                                                      [Cents/Mile in 2021 dollars, 3% discounting]
--------------------------------------------------------------------------------------------------------------------------------------------------------
             MOVES source type                    Regulatory class            Diesel         Gasoline       Electricity         CNG          Hydrogen
--------------------------------------------------------------------------------------------------------------------------------------------------------
Other Buses...............................  LHD45.......................               -            37.2            23.9               -               -
                                            MHD67.......................            31.3               -            29.5               -               -
                                            HHD8........................            32.4               -            30.6            40.1               -
Transit Bus...............................  LHD45.......................               -            37.1            14.7               -               -
                                            MHD67.......................            31.5               -            18.0               -               -
                                            Urban Bus...................            32.8               -            18.4            40.1               -
School Bus................................  LHD45.......................               -            27.5            10.1               -               -
                                            MHD67.......................            24.4            30.4            13.1               -               -
                                            HHD8........................            25.7               -            13.8            32.5               -
Refuse Truck..............................  MHD67.......................            33.9            43.0            22.2               -               -
                                            HHD8........................            35.3               -            23.2            44.1               -
Single Unit Short-haul Truck..............  LHD45.......................            16.7            25.7             9.0               -               -
                                            MHD67.......................            25.3            32.5            13.7               -               -
                                            HHD8........................            30.4               -            16.4            38.5               -
Single Unit Long-haul Truck...............  LHD45.......................            15.7            24.4            14.9               -            23.2
                                            MHD67.......................            23.7            30.4            22.6               -            35.1
                                            HHD8........................            28.5               -            27.1            36.4            42.2
Combination Short-haul Truck..............  MHD67.......................            34.5               -            24.8               -               -
                                            HHD8........................            36.0               -            25.9            42.9               -
Combination Long-haul Truck...............  MHD67.......................            33.0               -               -               -            47.6
                                            HHD8........................            33.6               -               -            39.4            48.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Values rounded to the nearest tenth of a cent; dashes (``-'') represent cases where there are no vehicles powered by that specific fuel type in our
  MOVES runs for each specific source type and regulatory class of MY 2027 vehicles.

[[Page 26033]]

  Table IV-9--Retail Fuel Cost Per Mile for Model Year 2027 Vehicles During the First 28 Years for Each MOVES Source Type and Regulatory Class by Fuel
                                                                        Type \a\
                                                      [Cents/mile in 2021 dollars, 7% discounting]
--------------------------------------------------------------------------------------------------------------------------------------------------------
             MOVES source type                    Regulatory class            Diesel         Gasoline       Electricity         CNG          Hydrogen
--------------------------------------------------------------------------------------------------------------------------------------------------------
Other Buses...............................  LHD45.......................               -            26.3            16.9               -               -
                                            MHD67.......................            22.1               -            20.9               -               -
                                            HHD8........................            22.9               -            21.7            28.3               -
Transit Bus...............................  LHD45.......................               -            26.5            10.6               -               -
                                            MHD67.......................            22.6               -            12.9               -               -
                                            Urban Bus...................            23.5               -            13.2            28.6               -
School Bus................................  LHD45.......................               -            19.4             7.2               -               -
                                            MHD67.......................            17.3            21.4             9.3               -               -
                                            HHD8........................            18.2               -             9.8            22.9               -
Refuse Truck..............................  MHD67.......................            24.9            31.4            16.3               -               -
                                            HHD8........................            25.9               -            17.0            32.2               -
Single Unit Short-haul Truck..............  LHD45.......................            12.8            19.6             6.9               -               -
                                            MHD67.......................            19.4            24.8            10.5               -               -
                                            HHD8........................            23.3               -            12.6            29.3               -
Single Unit Long-haul Truck...............  LHD45.......................            12.2            18.9            11.6               -            18.3
                                            MHD67.......................            18.4            23.6            17.5               -            27.8
                                            HHD8........................            22.1               -            21.0            28.2            33.3
Combination Short-haul Truck..............  MHD67.......................            27.0               -            19.4               -               -
                                            HHD8........................            28.2               -            20.2            33.5               -
Combination Long-haul Truck...............  MHD67.......................            24.8               -               -               -            36.4
                                            HHD8........................            25.3               -               -            29.6            37.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Values rounded to the nearest tenth of a cent; dashes (``-'') represent cases where there are no vehicles powered by that specific fuel type in our
  MOVES runs for each specific source type and regulatory class of MY 2027 vehicles.

ii. Costs Associated With Diesel Exhaust Fluid
    DEF consumption costs in heavy-duty vehicles were estimated in the 
HD2027 final rule.\645\ We are applying the same methodology in this 
analysis to estimate the total costs of DEF under the proposed HD Phase 
3 CO2 standards. An example of total cost estimates of DEF 
for MY 2027 vehicles is provided in Table IV-10 and Table IV-11 for 3 
percent and 7 percent discounting, respectively. To determine the total 
costs associated with DEF usage for MY 2027 vehicles, the DEF usage for 
each MOVES source type and regulatory class was multiplied by the DEF 
price over the first 28 years of the lifetime of the vehicle.\646\ To 
calculate the average cost of DEF per mile for each MOVES Source Type 
and regulatory class, the total DEF cost was divided by the total VMT 
for each of the MY 2027 vehicles over the 28-year period. The DEF cost 
was computed for the reference case and proposed standard. The 
estimates on DEF cost per mile for the reference and proposed cases are 
shown in Table IV-10 for 3 percent discounting and Table IV-11 for 7 
percent discounting. Several source types and regulatory classes 
contain no diesel-fueled ICE vehicles and therefore no DEF consumption 
costs. These cases are represented as zeros in Table IV-10 and Table 
IV-11. Table IV-10 and Table IV-11 show a reduction or no change in DEF 
costs per mile, which is to be expected due to an increased number of 
BEVs and FCEVs modeled for the proposed case compared to the reference 
case.
---------------------------------------------------------------------------

    \645\ 88 FR 4296, January 24, 2023.
    \646\ This analysis uses the DEF prices presented in the NCP 
Technical Support Document (see ``Nonconformance Penalties for On-
highway Heavy-duty Diesel Engines: Technical Support Document,'' 
EPA-420-R-12-014) with growth beyond 2042 projected at the same 1.3 
percent rate as noted in the NCP TSD. Note that the DEF prices used 
update the NCP TSD's 2011 prices to 2021 dollars.

Table IV-10--DEF Cost Per Mile for Model Year 2027 Vehicles During the First 28 Years for Each MOVES Source Type
                                 and Regulatory Class Across All Fuel Types \a\
                                  [Cents/Mile in 2021 dollars, 3% discounting]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Proposal
           MOVES source type                Regulatory class          Cost in         Cost in       change from
                                                                     reference       proposal        reference
----------------------------------------------------------------------------------------------------------------
Other Buses...........................  LHD45...................            0.00            0.00            0.00
                                        MHD67...................            1.89            1.61           -0.29
                                        HHD8....................            1.72            1.72            0.00
Transit Bus...........................  LHD45...................            0.00            0.00            0.00
                                        MHD67...................            1.90            1.85           -0.05
                                        Urban Bus...............            1.74            1.74            0.00
School Bus............................  LHD45...................            0.00            0.00            0.00
                                        MHD67...................            1.37            0.96           -0.40
                                        HHD8....................            1.32            1.11           -0.20
Refuse Truck..........................  MHD67...................            2.03            2.03            0.00
                                        HHD8....................            1.86            1.58           -0.28
 Single Unit Short-haul Truck.........  LHD45...................            0.52            0.44           -0.08
                                        MHD67...................            1.24            1.07           -0.18
                                        HHD8....................            1.70            1.40           -0.30

[[Page 26034]]

 
Single Unit Long-haul Truck...........  LHD45...................            0.48            0.41           -0.07
                                        MHD67...................            1.16            1.05           -0.12
                                        HHD8....................            1.59            1.43           -0.16
Combination Short-haul Truck..........  MHD67...................            2.08            1.92           -0.16
                                        HHD8....................            2.17            1.98           -0.18
Combination Long-haul Truck...........  MHD67...................            2.00            2.00            0.00
                                        HHD8....................            2.04            2.04            0.00
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to the nearest hundredth of a cent; Negative values denote lower costs, i.e., savings in
  expenditures.

Table IV-11--DEF Cost Per Mile for Model Year 2027 Vehicles During the First 28 Years for Each MOVES Source Type
                                 and Regulatory Class Across All Fuel Types \a\
                                  [Cents/mile in 2021 dollars, 7% discounting]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Proposal
           MOVES source type                Regulatory class          Cost in         Cost in       change from
                                                                     reference       proposal        reference
----------------------------------------------------------------------------------------------------------------
Other Buses...........................  LHD45...................            0.00            0.00            0.00
                                        MHD67...................            1.32            1.12           -0.20
                                        HHD8....................            1.20            1.20            0.00
Transit Bus...........................  LHD45...................            0.00            0.00            0.00
                                        MHD67...................            1.34            1.31           -0.04
                                        Urban Bus...............            1.23            1.23            0.00
School Bus............................  LHD45...................            0.00            0.00            0.00
                                        MHD67...................            0.95            0.67           -0.28
                                        HHD8....................            0.92            0.78           -0.14
Refuse Truck..........................  MHD67...................            1.47            1.47            0.00
                                        HHD8....................            1.35            1.15           -0.20
Single Unit Short-haul Truck..........  LHD45...................            0.39            0.33           -0.06
                                        MHD67...................            0.94            0.81           -0.13
                                        HHD8....................            1.29            1.06           -0.23
Single Unit Long-haul Truck...........  LHD45...................            0.37            0.32           -0.06
                                        MHD67...................            0.90            0.81           -0.09
                                        HHD8....................            1.22            1.10           -0.12
Combination Short-haul Truck..........  MHD67...................            1.62            1.49           -0.12
                                        HHD8....................            1.68            1.54           -0.14
Combination Long-haul Truck...........  MHD67...................            1.50            1.50            0.00
                                        HHD8....................            1.52            1.52            0.00
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to the nearest hundredth of a cent; negative values denote lower costs, i.e., savings in
  expenditures.

iii. Costs Associated With Maintenance and Repair
    We assessed the estimated maintenance and repair costs of HD BEVs 
and FCEVs and compared these estimates with estimated maintenance and 
repair costs for comparable HD ICE vehicles. The results of our 
analysis show that maintenance and repair costs associated with HD BEVs 
and FCEVs are estimated to be lower than maintenance and repair costs 
associated with comparable ICE vehicles. The methodology for how we 
calculated maintenance and repair costs were estimated is discussed in 
Chapter 2 and 3 of the DRIA.
    For the estimate of maintenance and repair costs for diesel-fueled 
ICE vehicles, we relied on the research compiled by Burnham et al., 
2021, in Chapter 3.5.5 of ``Comprehensive Total Cost of Ownership 
Quantification for Vehicles with Different Size Classes and 
Powertrains'' and used equations found in the BEAN 
model.647 648 Burnham et al. used data from Utilimarc and 
ATRI to estimate maintenance and repair costs per mile for multiple 
heavy-duty vehicle categories over time. We selected the box truck 
curve to represent vocational vehicles and short-haul tractors, and the 
semi-tractor curve to represent long-haul tractors. We assumed that 
gasoline and CNG vehicles had the same maintenance and repair costs 
curves as diesel vehicles.
---------------------------------------------------------------------------

    \647\ Burnham, A., Gohlke, D., Rush, L., Stephens, T., Zhou, Y., 
Delucchi, M.A., Birky, A., Hunter, C., Lin, Z., Ou, S., Xie, F., 
Proctor, C., Wiryadinata, S., Liu, N., Boloor, M. ``Comprehensive 
Total Cost of Ownership Quantification for Vehicles with Different 
Size Classes and Powertrains''. Argonne National Laboratory. Chapter 
3.5.5. April 1, 2021. Available at https://publications.anl.gov/anlpubs/2021/05/167399.pdf.
    \648\ Argonne National Lab, Vehicle & Mobility Systems Group, 
BEAN, found at: https://vms.taps.anl.gov/tools/bean/ (accessed 
August 2022).
---------------------------------------------------------------------------

    For BEVs and FCEVs, as discussed in Chapter 2 of the DRIA, the per-
mile rate of brake wear is expected to be lower when compared to 
comparable ICE vehicles. Several literature sources propose multiplying 
diesel vehicle maintenance costs by a factor to estimate BEV and FCEV 
maintenance costs. We followed this approach and used a factor of 0.71 
for BEVs and 0.75 for FCEV, based on the research in Wang et al., 
2022.\649\ Details of the

[[Page 26035]]

maintenance and repair on a cost per mile basis are discussed in 
Chapter 3 of the DRIA.
---------------------------------------------------------------------------

    \649\ Wang, G., Miller, M., and Fulton, L.'' Estimating 
Maintenance and Repair Costs for Battery Electric and Fuel Cell 
Heavy Duty Trucks, 2022. Available online: https://escholarship.org/content/qt36c08395/qt36c08395_noSplash_589098e470b036b3010eae00f3b7b618.pdf?t=r6zwjb.
---------------------------------------------------------------------------

    The impacts of maintenance and repairs for MY 2027 vehicles in each 
MOVES source type associated with the reference and proposed cases are 
shown in Table IV-12 and Table IV-13 for 3- and 7-percent discount 
rates, respectively. The proposed case shows either no change \650\ or 
reductions in maintenance and repair costs when compared to the 
reference case.
---------------------------------------------------------------------------

    \650\ There are no changes to vehicle populations for MY 2027 
between the proposal and reference cases for the MOVES source type 
Combination Long-haul Truck, which is why the maintenance and repair 
cost per mile shows no change between the proposal and reference 
case.

  Table IV-12--Maintenance and Repair per Mile for Model Year 2027 Vehicles During the First 28 Years for Each
                                  MOVES Source Type, for all Vehicle Types \a\
                                  [Cents/mile in 2021 dollars, 3% discounting]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Proposal
                        MOVES source type                             Cost in         Cost in       change from
                                                                     reference       proposal        reference
----------------------------------------------------------------------------------------------------------------
Other Buses.....................................................            80.0            74.8            -5.2
Transit Bus.....................................................            78.4            75.6            -2.8
School Bus......................................................            80.1            73.9            -6.2
Refuse Truck....................................................            75.4            72.8            -2.6
Single Unit Short-haul Truck....................................            69.2            66.2            -3.1
Single Unit Long-haul Truck.....................................            67.0            64.4            -2.5
Combination Short-haul Truck....................................            66.1            64.6            -1.6
Combination Long-haul Truck.....................................            25.9            25.9             0.0
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to the nearest tenth of a cent; negative values denote lower costs, i.e., savings in
  expenditures.

  Table IV-13--Maintenance and Repair per Mile for Model Year 2027 Vehicles During the First 28 Years for Each
                                  MOVES Source Type, for all Vehicle Types \a\
                                  [Cents/mile in 2021 dollars, 7% discounting]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Proposal
                        MOVES source type                             Cost in         Cost in       change from
                                                                     reference       proposal        reference
----------------------------------------------------------------------------------------------------------------
Other Buses.....................................................            48.8            45.6            -3.2
Transit Bus.....................................................            48.5            46.8            -1.7
School Bus......................................................            48.8            45.0            -3.8
Refuse Truck....................................................            48.8            47.1            -1.7
Single Unit Short-haul Truck....................................            47.5            45.4            -2.1
Single Unit Long-haul Truck.....................................            46.8            45.1            -1.8
Combination Short-haul Truck....................................            47.1            46.0            -1.1
Combination Long-haul Truck.....................................            17.5            17.5             0.0
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to the nearest tenth of a cent; negative values denote lower costs, i.e., savings in
  expenditures.

6. Payback
    A payback period is the point in time at which savings from reduced 
operating expenses surpass increased upfront costs, typically estimated 
in years. The payback period for a new vehicle purchase is an important 
metric for many HD vehicle purchasers. In general, there is greater 
willingness to pay for new technology if that new technology ``pays 
back'' within an acceptable period of time. A payback period is 
calculated in DRIA Chapter 2.8.2 using HD TRUCS for specific use cases. 
Briefly, the incremental upfront costs for ZEV vehicles are estimated 
in contrast to comparable ICE vehicles. In these incremental upfront 
purchaser costs for ZEVs, IRA battery and vehicle tax credits were 
taken into consideration. Then the expected operating costs differences 
between ZEV and ICE vehicles are computed over time on an annual basis. 
When the operating costs savings offset the incremental upfront 
differences between ZEV and ICE vehicles, a breakeven point is met. The 
amount of time from purchase to the breakeven point is defined as the 
payback period. Payback periods are computed for specific vehicle types 
in DRIA Chapter 2.8.2. See preamble Section II.E.6 for further 
discussion on payback for the technology packages for the proposed 
standards. The calculations do not represent specific vehicle classes 
or specific use cases. However, the payback periods do provide a 
general sense, on average, of payback periods at a national level.

E. Social Costs

    To compute the social costs of the proposal, we added the estimated 
total vehicle technology package RPE from Section IV.B.3, total 
operating costs from Section IV.D.5, and total EVSE RPE from Section 
IV.D.3. We note that the fuel costs in this subsection's social cost 
analysis are estimated pre-tax rather than what the purchaser would pay 
(i.e., the retail fuel price). All of the costs are computed for the 
MOVES reference and proposed cases and cost impacts are presented as 
the difference between the proposed and reference case. Additionally, 
neither the battery tax credit nor the vehicle tax credit is included 
in the social costs analysis discussed in this subsection.
1. Total Vehicle Technology Package RPE
    Table IV-14 reflects learning effects on DMC and indirect costs 
from 2027 through 2055. The sum of the DMC and indirect manufacturing 
cost for each year is shown in the ``Total Technology

[[Page 26036]]

Package Costs'' column and reflects the difference in total cost 
between the proposed and reference case in the specific calendar year.

Table IV-14--Total Technology Cost Impacts of the Proposed Option Relative to the Reference Case, All Regulatory
                               Classes and All Fuels, Millions of 2021 Dollars \a\
----------------------------------------------------------------------------------------------------------------
                                                                      Direct                           Total
                         Calendar year                            manufacturing   Indirect costs    technology
                                                                      costs                        package costs
----------------------------------------------------------------------------------------------------------------
2027...........................................................           $1,400            $590          $2,000
2028...........................................................            1,200             520           1,800
2029...........................................................            1,200             500           1,700
2030...........................................................            1,400             590           2,000
2031...........................................................            1,600             680           2,300
2032...........................................................            1,400             600           2,000
2033...........................................................            1,100             440           1,500
2034...........................................................              900             380           1,300
2035...........................................................              710             300           1,000
2036...........................................................              530             220             750
2037...........................................................              440             180             620
2038...........................................................              290             120             410
2039...........................................................              160              66             220
2040...........................................................               95              40             140
2041...........................................................              -29             -12             -40
2042...........................................................             -140             -60            -200
2043...........................................................             -250            -110            -360
2044...........................................................             -290            -120            -410
2045...........................................................             -390            -160            -550
2046...........................................................             -490            -200            -690
2047...........................................................             -580            -240            -820
2048...........................................................             -600            -250            -850
2049...........................................................             -680            -290            -970
2050...........................................................             -760            -320          -1,100
2051...........................................................             -770            -320          -1,100
2052...........................................................             -850            -360          -1,200
2053...........................................................             -930            -390          -1,300
2054...........................................................           -1,000            -420          -1,400
2055...........................................................           -1,100            -450          -1,500
PV, 3%.........................................................            6,300           2,700           9,000
PV, 7%.........................................................            7,100           3,000          10,000
----------------------------------------------------------------------------------------------------------------
\a\ Values show 2 significant digits; negative values denote lower costs, i.e., savings in expenditures.

2. Total EVSE RPE
    Building on the analysis presented in Section IV.D.3 that discusses 
EVSE RPE cost per vehicle, the annual EVSE RPE was estimated by 
multiplying EVSE RPE on a per vehicle basis by the modeled number of 
BEV sales in MOVES. Table IV-15 shows the undiscounted annual EVSE RPE 
cost for the proposal relative to the reference case. The number of 
EVSE are expected to increase over time for the proposal relative to 
the reference case. This is due to the expected increase in BEVs 
requiring EVSE. Thus, the proposal shows increased EVSE cost over time.

Table IV-15--Total EVSE RPE Cost Impacts of the Proposed Option Relative
to the Reference Case, All Regulatory Classes and All Fuels, Millions of
                            2021 Dollars \a\
------------------------------------------------------------------------
                                                          Total EVSE RPE
                      Calendar year                        cost impacts
------------------------------------------------------------------------
2027....................................................          $1,300
2028....................................................           1,600
2029....................................................           1,900
2030....................................................           2,000
2031....................................................           2,200
2032....................................................           2,600
2033....................................................           2,600
2034....................................................           2,600
2035....................................................           2,500
2036....................................................           2,500
2037....................................................           2,500
2038....................................................           2,500
2039....................................................           2,600
2040....................................................           2,600
2041....................................................           2,600
2042....................................................           2,600
2043....................................................           2,700
2044....................................................           2,700
2045....................................................           2,700
2046....................................................           2,700
2047....................................................           2,700
2048....................................................           2,700
2049....................................................           2,800
2050....................................................           2,800
2051....................................................           2,800
2052....................................................           2,900
2053....................................................           2,900
2054....................................................           2,900
2055....................................................           2,900
PV, 3%..................................................          47,000
PV, 7%..................................................          29,000
------------------------------------------------------------------------

3. Total Operating Costs
    Annual fuel costs across the national fleet for each fuel type were 
computed for the proposal and reference cases by multiplying the amount 
of fuel

[[Page 26037]]

consumed for each vehicle modeled in MOVES by the cost of each fuel 
type. Table IV-16 shows the undiscounted annual fuel savings for the 
proposal relative to the reference case for each fuel type. Using 
projected fuel prices from AEO and the estimated hydrogen prices as 
discussed in Section IV.D.5.i, the total, national fleet-wide cost of 
electricity and hydrogen consumption increase over time while the costs 
for diesel, gasoline, and CNG consumption decrease over time, as shown 
on an annual basis in Table IV-17. This is due to the expected increase 
in BEVs and FCEVs resulting in fewer diesel, gasoline, and CNG vehicles 
in the proposed case compared to the reference case. The net effect of 
the proposal shows increased operating cost savings over time.

            Table IV-16--Annual Undiscounted Pre-Tax Fuel Costs for the Proposal Relative to the Reference Case, Millions of 2021 Dollars \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Calendar year                           Diesel         Gasoline           CNG         Electricity      Hydrogen           Sum
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027....................................................           -$370           -$160             -$4            $390              $0           -$150
2028....................................................            -810            -360              -8             840               0            -340
2029....................................................          -1,300            -590             -12           1,400               0            -580
2030....................................................          -2,300            -870             -24           1,900             520            -710
2031....................................................          -3,800          -1,200             -39           2,500           1,700            -710
2032....................................................          -5,600          -1,600             -59           3,200           3,300            -710
2033....................................................          -7,400          -2,100             -78           3,900           4,900            -680
2034....................................................          -9,100          -2,500             -97           4,600           6,500            -630
2035....................................................         -11,000          -2,900            -120           5,200           8,100            -610
2036....................................................         -12,000          -3,300            -130           5,700           9,600            -640
2037....................................................         -14,000          -3,800            -150           6,200          11,000            -710
2038....................................................         -15,000          -4,200            -170           6,600          12,000            -810
2039....................................................         -17,000          -4,600            -190           7,100          14,000            -780
2040....................................................         -18,000          -5,000            -220           7,500          15,000            -940
2041....................................................         -19,000          -5,400            -240           7,800          16,000          -1,100
2042....................................................         -20,000          -5,800            -260           8,200          17,000          -1,100
2043....................................................         -21,000          -6,200            -290           8,500          18,000          -1,400
2044....................................................         -22,000          -6,600            -320           8,700          19,000          -1,900
2045....................................................         -23,000          -7,000            -350           8,900          19,000          -2,200
2046....................................................         -24,000          -7,400            -380           9,200          20,000          -2,600
2047....................................................         -24,000          -7,800            -410           9,300          20,000          -2,800
2048....................................................         -25,000          -8,000            -440           9,500          21,000          -2,900
2049....................................................         -25,000          -8,400            -480           9,700          21,000          -3,000
2050....................................................         -25,000          -8,700            -520           9,800          21,000          -3,200
2051....................................................         -26,000          -9,100            -570          10,000          22,000          -3,400
2052....................................................         -26,000          -9,400            -610          10,000          22,000          -3,600
2053....................................................         -26,000          -9,700            -670          10,000          22,000          -3,800
2054....................................................         -26,000         -10,000            -720          10,000          23,000          -4,000
2055....................................................         -26,000         -10,000            -780          10,000          23,000          -4,300
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Values rounded to two significant digits; negative values denote lower costs, i.e., savings in expenditures.

    Annual DEF costs for diesel vehicles were computed for the proposal 
and reference cases by multiplying the modeled amount of DEF consumed 
by the cost DEF. Table IV-17 shows the annual savings associated with 
less DEF consumption in the proposal relative to the reference case; 
note that non-diesel vehicles are shown for completeness with no 
savings since those vehicles do not consume DEF.

  Table IV-17--Annual Undiscounted DEF Costs for the Proposal Relative to the Reference Case, Millions of 2021
                                                   Dollars \a\
----------------------------------------------------------------------------------------------------------------
                                                                                  Gasoline, CNG,
                                                                                     electric,
                          Calendar year                               Diesel         hydrogen           Sum
                                                                                     vehicles
----------------------------------------------------------------------------------------------------------------
2027............................................................            -$27              $0            -$27
2028............................................................             -58               0             -58
2029............................................................             -97               0             -97
2030............................................................            -160               0            -160
2031............................................................            -270               0            -270
2032............................................................            -410               0            -410
2033............................................................            -540               0            -540
2034............................................................            -680               0            -680
2035............................................................            -810               0            -810
2036............................................................            -930               0            -930
2037............................................................          -1,100               0          -1,100
2038............................................................          -1,200               0          -1,200
2039............................................................          -1,300               0          -1,300
2040............................................................          -1,400               0          -1,400
2041............................................................          -1,500               0          -1,500

[[Page 26038]]

 
2042............................................................          -1,600               0          -1,600
2043............................................................          -1,700               0          -1,700
2044............................................................          -1,700               0          -1,700
2045............................................................          -1,800               0          -1,800
2046............................................................          -1,900               0          -1,900
2047............................................................          -1,900               0          -1,900
2048............................................................          -2,000               0          -2,000
2049............................................................          -2,000               0          -2,000
2050............................................................          -2,100               0          -2,100
2051............................................................          -2,100               0          -2,100
2052............................................................          -2,200               0          -2,200
2053............................................................          -2,200               0          -2,200
2054............................................................          -2,300               0          -2,300
2055............................................................          -2,300               0          -2,300
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to two significant digits; negative values denote lower costs, i.e., savings in expenditures.

    Annual maintenance and repair costs were computed on an annual 
basis for all vehicles modeled in MOVES based on the total annual VMT, 
vehicle type and vehicle age as discussed in Section 5 and DRIA Chapter 
2 and 3. Table IV-18 presents the maintenance and repair costs 
associated with the proposal. The maintenance and repair costs are 
attributable to changes in new BEV, FCEV, and ICE vehicle sales and 
populations. EPA has not projected any changes to the maintenance and 
repair costs on a per mile basis for each vehicle powertrain type 
between the proposal and reference case, but as more HD ZEVs enter the 
HD fleet, the total maintenance and repair costs for the fleet of those 
vehicles correspondingly increases. The opposite is true for diesel, 
gasoline, and CNG vehicles as there become fewer of these vehicles in 
the fleet such that the total maintenance and repair costs for the 
fleet of those vehicles decreases as more HD ZEVs enter the HD fleet.

        Table IV-18--Annual Undiscounted Maintenance & Repair Costs for the Proposal Relative to the Reference Case, Millions of 2021 Dollars \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      Calendar year                           Diesel         Gasoline           CNG         Electricity      Hydrogen           Sum
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027....................................................           -$370           -$150             -$3            $380              $0           -$150
2028....................................................            -940            -400              -7             950               0            -390
2029....................................................          -1,700            -740             -12           1,800               0            -720
2030....................................................          -2,900          -1,200             -22           2,800             140          -1,200
2031....................................................          -4,700          -1,800             -36           4,100             530          -1,900
2032....................................................          -7,000          -2,600             -56           5,700           1,100          -2,700
2033....................................................          -9,600          -3,400             -78           7,500           1,900          -3,700
2034....................................................         -12,000          -4,400            -100           9,500           2,700          -4,800
2035....................................................         -15,000          -5,500            -130          11,000           3,700          -5,900
2036....................................................         -19,000          -6,700            -160          14,000           4,800          -7,100
2037....................................................         -22,000          -7,900            -190          16,000           5,800          -8,400
2038....................................................         -25,000          -9,100            -220          18,000           6,900          -9,600
2039....................................................         -28,000         -10,000            -260          20,000           8,100         -11,000
2040....................................................         -31,000         -12,000            -300          22,000           9,200         -12,000
2041....................................................         -34,000         -13,000            -330          24,000          10,000         -13,000
2042....................................................         -37,000         -14,000            -380          26,000          11,000         -14,000
2043....................................................         -39,000         -15,000            -420          27,000          12,000         -15,000
2044....................................................         -41,000         -17,000            -460          29,000          13,000         -16,000
2045....................................................         -43,000         -18,000            -510          31,000          14,000         -17,000
2046....................................................         -45,000         -19,000            -560          32,000          15,000         -18,000
2047....................................................         -47,000         -20,000            -620          34,000          15,000         -19,000
2048....................................................         -48,000         -21,000            -670          35,000          16,000         -19,000
2049....................................................         -49,000         -22,000            -740          36,000          16,000         -20,000
2050....................................................         -51,000         -24,000            -800          38,000          17,000         -21,000
2051....................................................         -52,000         -25,000            -880          39,000          17,000         -22,000
2052....................................................         -53,000         -26,000            -960          40,000          17,000         -22,000
2053....................................................         -54,000         -27,000          -1,000          42,000          18,000         -23,000
2054....................................................         -55,000         -28,000          -1,100          43,000          18,000         -24,000
2055....................................................         -56,000         -30,000          -1,200          44,000          19,000         -24,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Values rounded to two significant digits; negative values denote lower costs, i.e., savings in expenditures.

[[Page 26039]]

4. Total Social Costs
    Adding together the cost elements outlined in Sections IV.E.1, 
IV.E.2, and IV.E.30, we estimated the total social costs associated 
with the proposed CO2 standards; these total social costs 
associated with the proposal relative to the reference case are shown 
in Table IV-19. Table IV-19 presents costs in 2021 dollars in 
undiscounted annual values along with net present values at both 3- and 
7-percent discount rates with values discounted to the 2027 calendar 
year. Additionally, neither the battery tax credit nor the vehicle tax 
credit is included in the social costs analysis discussed in this 
subsection.
    As shown in Table IV-19, starting in 2033, our analysis 
demonstrates that total program costs under the proposal scenario are 
lower than the total program costs under the reference case without the 
standard.

 Table IV-19--Total Technology Package, Operating Cost, and EVSE Cost Impacts of the Proposed Option Relative to
             the Reference Case, All Regulatory Classes and All Fuels, Millions of 2021 Dollars \a\
----------------------------------------------------------------------------------------------------------------
                                                       Total           Total
                  Calendar year                     technology       operating      Total EVSE          Sum
                                                   package costs       costs           costs
----------------------------------------------------------------------------------------------------------------
2027............................................          $2,000           -$330          $1,300          $3,000
2028............................................           1,800            -790           1,600           2,500
2029............................................           1,700          -1,400           1,900           2,200
2030............................................           2,000          -2,100           2,000           1,900
2031............................................           2,300          -2,800           2,200           1,700
2032............................................           2,000          -3,800           2,600             860
2033............................................           1,500          -4,900           2,600            -820
2034............................................           1,300          -6,100           2,600          -2,200
2035............................................           1,000          -7,400           2,500          -3,800
2036............................................             750          -8,700           2,500          -5,500
2037............................................             620         -10,000           2,500          -7,000
2038............................................             410         -12,000           2,500          -8,700
2039............................................             220         -13,000           2,600         -10,000
2040............................................             140         -14,000           2,600         -12,000
2041............................................             -40         -16,000           2,600         -13,000
2042............................................            -200         -17,000           2,600         -15,000
2043............................................            -360         -18,000           2,700         -16,000
2044............................................            -410         -20,000           2,700         -18,000
2045............................................            -550         -21,000           2,700         -19,000
2046............................................            -690         -22,000           2,700         -20,000
2047............................................            -820         -23,000           2,700         -22,000
2048............................................            -850         -24,000           2,700         -22,000
2049............................................            -970         -25,000           2,800         -23,000
2050............................................          -1,100         -26,000           2,800         -24,000
2051............................................          -1,100         -27,000           2,800         -25,000
2052............................................          -1,200         -28,000           2,900         -26,000
2053............................................          -1,300         -29,000           2,900         -27,000
2054............................................          -1,400         -30,000           2,900         -28,000
2055............................................          -1,500         -31,000           2,900         -29,000
PV, 3%..........................................           9,000        -250,000          47,000        -190,000
PV, 7%..........................................          10,000        -120,000          29,000         -85,000
Annualized, 3%..................................             470         -13,000           2,500         -10,000
Annualized, 7%..................................             820         -10,000           2,300          -6,900
----------------------------------------------------------------------------------------------------------------
\a\ Values rounded to two significant digits; negative values denote lower costs, i.e., savings in expenditures.

V. Estimated Emission Impacts From the Proposed Program

    We expect the proposed CO2 standards would result in 
downstream emission reductions of GHGs from heavy-duty vehicles. 
Downstream emissions processes are those that come directly from a 
vehicle, such as tailpipe exhaust, crankcase exhaust, evaporative 
emissions, and refueling emissions. While we are not proposing 
standards to address criteria pollutants or air toxics, we expect the 
proposed standards would also result in reductions of downstream 
emissions of both criteria pollutants and air toxics. We expect these 
anticipated emission reductions would be achieved through increased 
adoption of heavy-duty battery electric vehicles (BEVs) and fuel cell 
electric vehicles (FCEVs) and by additional improvements to ICE 
vehicles. The emissions modeling that we present in this section 
characterizes the emissions impacts of the technology package described 
in Section II of the preamble. As we note there, manufacturers may 
elect to comply using a different combination of HD vehicle and engine 
technologies than we modeled.
    To estimate the downstream emission reductions from the proposed 
standards, we used an updated version of EPA's Motor Vehicle Emission 
Simulator (MOVES) model, MOVES3.R3. This version already included the 
impacts of the HD GHG Phase 2 program, and also includes several 
changes related specifically to heavy-duty vehicle emissions (e.g., 
updates to incorporate the HD2027 final rule) and activity (e.g., 
updates to vehicle population and miles traveled) as well as new 
capabilities to model heavy-duty vehicles with electric 
powertrains.\651\ These model updates are summarized in Chapter 4.2 of 
the DRIA and described in detail in the technical reports that are 
available in the docket for this proposed rulemaking.
---------------------------------------------------------------------------

    \651\ Memo to Docket. ``EPA's Motor Vehicle Emission Simulator 
(MOVES) model, MOVES3.R3.'' Docket EPA-HQ-OAR-2022-0985.
---------------------------------------------------------------------------

    With the increased adoption of heavy-duty BEVs and FCEVs (together 
referred to as ZEVs), we expect the proposed standards to impact 
upstream emissions of GHGs and other pollutants. Upstream emissions 
sources are those that occur

[[Page 26040]]

before tailpipe emissions from vehicles, such as from electricity 
generation for charging BEVs, the production of hydrogen used to fuel 
FCEVs, and emissions generated during petroleum-based fuel production 
and distribution. We estimated the impacts of the proposed standards on 
emissions from electricity generation units (EGUs). We also estimated 
the impacts on refinery emissions of non-GHGs for calendar year 
2055.\652\ We did not estimate the impacts on emissions related to 
crude production or extraction or the transportation of crude or 
refined fuels.
---------------------------------------------------------------------------

    \652\ As discussed in Chapter 4.3.3.3 of the DRIA, our 
methodology for estimating refinery emissions is limited to one 
analysis year (2055) and only certain non-GHG pollutants 
(NOX, PM2.5, VOC, and SO2).
---------------------------------------------------------------------------

    To estimate upstream EGU emission impacts from the proposed 
standards, we used the Integrated Planning Model (IPM). IPM is a linear 
programming model that accounts for variables and information such as 
energy demand, planned EGU retirements, and planned rules to forecast 
EGU-level energy production and configurations. The IPM runs we 
performed to estimate EGU emissions were based on preliminary reference 
and control scenarios, and the IPM run for the control scenario did not 
account for the IRA. Therefore, we developed a methodology, using 
output of three IPM runs, to estimate the increase in EGU emissions 
from the proposal and alternative, adjusted for the IRA. The first 
represents the EGU inventory absent both the proposal and the Inflation 
Reduction Act (IRA),\653\ the second represents the inventory absent 
the proposal but includes the IRA,\654\ and the third includes impacts 
from a preliminary version of the proposal we developed earlier in the 
regulatory development process but not the IRA. Together, they help us 
estimate the impact of the proposed standards on EGU emissions, 
accounting for the IRA. More details on IPM and the specific version 
used in this proposal can be found in the Chapter 4.3.3 of the DRIA.
---------------------------------------------------------------------------

    \653\ All inputs, outputs, and full documentation of EPA's IPM 
v6 Summer 2022 Reference Case and the associated NEEDS version is 
available on the power sector modeling website (https://www.epa.gov/power-sector-modeling/documentation-pre-ira-2022-reference-case).
    \654\ We expect IRA incentives, particularly sections 45X, 45Y, 
and 48E of the Internal Revenue Code (i.e., Title 26) added by 
sections 13502 (Advanced Manufacturing Production Credit), 13701 
(Clean Electricity Production Credit), and 13702 (Clean Electricity 
Investment Credit), respectively, to contribute significantly to 
increases in renewables in the future power generation mix.
---------------------------------------------------------------------------

    To estimate upstream refinery impacts from the proposed standards, 
we adjusted an existing refinery inventory that included 
PM2.5, NOX, SO2 and VOC emissions for 
the year 2055. The adjustment factors are based on liquid fuel demand 
projections for the reference, proposal, and alternative cases. In this 
analysis, we assumed refinery activity decreases with decreased demand 
for liquid fuel from heavy-duty vehicles. More details on the refinery 
impacts estimated for this proposal can be found in Chapters 4.3.3 and 
4.6 of the DRIA.

A. Model Inputs

1. MOVES Inputs
    In the analysis to support this proposal, we evaluated the proposed 
standards relative to a reference case using MOVES. MOVES defines 
vehicles using a combination of source type and regulatory class, where 
source type roughly defines a vehicle's vocation or usage pattern, and 
regulatory class defines a vehicle's weight class. Table V-1 defines 
MOVES medium- and heavy-duty source types.

                Table V-1--MOVES Source Type Definitions
------------------------------------------------------------------------
               sourceTypeID                    Source type description
------------------------------------------------------------------------
31........................................  Passenger Truck.
32........................................  Light Commercial Truck.
41........................................  Other Bus.
42........................................  Transit Bus.
43........................................  School Bus.
51........................................  Refuse Truck.
52........................................  Single Unit Short-haul
                                             Truck.
53........................................  Single Unit Long-haul Truck.
54........................................  Motor Home.
61........................................  Combination Short-haul
                                             Truck.
62........................................  Combination Long-haul Truck.
------------------------------------------------------------------------

    In modeling the heavy-duty ZEV populations in the reference case, a 
scenario that represents the United States without the proposed 
rulemaking, we considered several different factors related to 
purchaser acceptance of new technologies as discussed in DRIA Chapter 
2, along with three factors described in Section I.C. First, the market 
has evolved such that early HD ZEV models are in use today for some 
applications and HD ZEVs are expected to expand to many more 
applications, as discussed in Section II.D and DRIA Chapters 1.5 and 2. 
Additionally, manufacturers have announced plans to rapidly increase 
their investments in ZEV technologies over the next decade. Second, the 
IRA and the BIL provide many monetary incentives for the production and 
purchase of ZEVs in the heavy-duty market, as well as incentives for 
electric vehicle charging infrastructure. Third, there have been 
multiple actions by states to accelerate the adoption of heavy-duty 
ZEVs, such as (1) a multi-state Memorandum of Understanding for the 
support of heavy-duty ZEV adoption; \655\ and (2) the State of 
California's ACT program, which has also been adopted by other states 
and includes a manufacturer requirement for zero-emission truck 
sales.656 657
---------------------------------------------------------------------------

    \655\ NESCAUM MOU, available at https://www.nescaum.org/documents/mhdv-zev-mou-20220329.pdf.
    \656\ EPA granted the ACT rule waiver requested by California 
under CAA section 209(b) on March 30, 2023. When we developed the 
reference case, the ACT had been adopted by five states under CAA 
section 177: Oregon, Washington, New York, New Jersey, and 
Massachusetts. Oregon and Washington adopted ACT as-is, whereas New 
York, New Jersey, and Massachusetts adopted ACT on a one-year delay.
    \657\ In December 2022, Vermont also adopted ACT under CAA 
section 177 effective beginning with MY 2026. Due to the timing of 
Vermont's adoption of ACT relative to the timing of the analysis 
conducted for this proposal, Vermont's adoption of ACT is not 
included in the analysis for our proposal; however, Vermont's 
adoption of ACT provides additional support for the ZEV levels in 
our reference case. See https://dec.vermont.gov/sites/dec/files/aqc/laws-regs/documents/Chapter_40_LEV_ZEV_rule_adoped.pdf.
---------------------------------------------------------------------------

    We also reviewed the literature to evaluate future HD ZEV 
projections from others. We found that the literature had varied 
projections for HD ZEV adoption absent this proposed rulemaking. For 
instance, the International Council for Clean Transportation (ICCT) 
conducted an analysis in early 2022, before IRA, and projected a 
variety of scenarios. They specifically projected eight percent HD ZEV 
sales in 2030 when only considering current policies and 11 percent in 
2030 when considering the multi-state MOUs.\658\ The National Renewable 
Energy Laboratory (NREL) conducted an analysis in early 2022, also 
prior to the IRA, that projected 42 percent HD ZEV sales by 2030 and 98 
percent sales by 2040, along with 100 percent of bus sales being ZEVs 
by 2030.\659\ The NREL analysis assumed economics alone drive adoption 
(i.e., total cost of ownership), and therefore they did not consider 
non-financial factors such ZEV product research and development 
timelines, ZEV manufacturing time lines, the availability of ZEV 
models, manufacturing or infrastructure constraints, driver 
preferences, and

[[Page 26041]]

other factors. ACT Research also conducted an analysis prior to IRA and 
projected HD ZEV sales of 24 pecent in 2024, 26 percent in 2030, and 34 
percent in 2031.\660\ EDF and ERM conducted a follow-up analysis of 
their HD ZEV sales projections after the IRA passed in 2022.\661\ They 
project several scenarios which range between 11 and 42 percent HD ZEV 
sales in 2029 when including long-haul tractors. The EDF/ERM analysis 
found that IRA will help accelerate ZEV adoption due to the purchasing 
incentives, which drives HD ZEVs to reach cost parity at least five 
years sooner than without the IRA incentives. The ACT Research, ICCT, 
and EDF/ERM projections, similar to the 2022 NREL study, also did not 
consider several important real-world factors which would in general be 
expected to slow down or reduce ZEV sales.
---------------------------------------------------------------------------

    \658\ Buysee, Claire, et al. ``Racing to Zero: The Ambition We 
Need for Zero-Emission Heavy-Duty Vehicles in the United States.'' 
April 2022. Available online: https://theicct.org/racing-to-zero-hdv-us-apr22/ ICCT.
    \659\ Ledna, Catherine, et al. ``Decarbonizing Medium- & Heavy-
Duty On-Road Vehicles: Zero-Emission Vehicles Cost Analysis.'' March 
2022. Slide 25. Available online: https://www.nrel.gov/docs/fy22osti/82081.pdf.
    \660\ Lockridge, Deborah. ``ACT: Third of Class 4-8 Vehicles to 
be Battery-Electric in 10 Years.'' June 2021. Available online: 
https://www.truckinginfo.com/10144947/act-third-of-class-4-8-vehicles-to-be-battery-electric-in-10-years.
    \661\ Robo, Ellen and Dave Seamonds. Technical Memo to 
Environmental Defense Fund: Investment Reduction Act Supplemental 
Assessment: Analysis of Alternative Medium- and Heavy-Duty Zero-
Emission Vehicle Business-As-Usual Scenarios. ERM. August 19, 2022. 
Page 9. Available online: https://www.erm.com/contentassets/154d08e0d0674752925cd82c66b3e2b1/edf-zev-baseline-technical-memo-addendum.pdf.
---------------------------------------------------------------------------

    To estimate the adoption of HD ZEVs in the reference case for this 
proposal, we analyzed a national level of ZEV sales based on volumes 
expected from the ACT rule in California and other states that have 
adopted ACT.662 663 We used those volumes as the numeric 
basis for the number of ZEVs in the MY 2024 and later timeframe. EPA 
granted the ACT rule waiver requested by California under CAA section 
209(b) on March 30, 2023, and we expect the market, at a national 
level, had already been responding to the ACT requirements, in addition 
to the market forces discussed earlier. It is, therefore, reasonable to 
use the ZEV sales volume that could be expected from ACT in the 
reference case as an overall projection for where the national ZEV 
sales volumes may be in the absence of this EPA action. Table V-2 shows 
the national adoption of heavy-duty ZEVs we modeled in the reference 
case. Additional details regarding the modeling of the reference case 
can be found in Chapter 4.3 of the DRIA.
---------------------------------------------------------------------------

    \662\ California Air Resources Board, Final Regulation Order--
Advanced Clean Trucks Regulation. Filed March 15, 2021. Available 
at: https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fro2.pdf. Final Advanced Clean Truck Amendments, Oregon 
adopted ACT on 11/17/2021: https://www.oregon.gov/deq/rulemaking/Pages/ctr2021.aspx. Washington adopted ACT on 11/29/2021: https://ecology.wa.gov/Regulations-Permits/Laws-rules-rulemaking/Rulemaking/WAC-173-423-400. New York adopted ACT on 12/29/2021: https://www.dec.ny.gov/regulations/26402.html. New Jersey adopted ACT on 12/
20/2021: https://www.nj.gov/dep/rules/adoptions.html. Massachusetts 
adopted ACT on 12/30/2021: https://www.mass.gov/regulations/310-CMR-700-air-pollution-control#proposed-amendments-public-comment.
    \663\ In December 2022, Vermont also adopted ACT under CAA 
section 177 effective beginning with MY 2026. Due to the timing of 
Vermont's adoption of ACT relative to the timing of the analysis 
conducted for this proposal, Vermont's adoption of ACT is not 
included in the analysis for our proposal; however, Vermont's 
adoption of ACT provides additional support for the ZEV levels in 
our reference case. See https://dec.vermont.gov/sites/dec/files/aqc/laws-regs/documents/Chapter_40_LEV_ZEV_rule_adopted.pdf.

    Table V-2--National Heavy-Duty ZEV Adoption in the Reference Case
------------------------------------------------------------------------
                                             Class 4-8
                                            vocational       Class 7-8
                                           vehicle group  tractors group
               Model year                   \a\ source     source types
                                            types 41-54       61, 62
                                             (percent)       (percent)
------------------------------------------------------------------------
2024....................................             1.1             0.3
2025....................................             2.0             0.7
2026....................................             2.4             1.0
2027....................................             3.4             1.4
2028....................................             5.1             1.9
2029....................................             7.1             2.5
2030....................................             9.1             3.0
2031....................................            10.5             3.5
2032....................................            11.4             4.1
2033....................................            12.4             4.3
2034....................................            13.4             4.3
2035....................................            14.4             4.3
2036 and beyond.........................            14.8             4.3
------------------------------------------------------------------------
\a\ The ACT program includes ZEV adoption rates for a Class 2b-3
  Vocational Vehicle Group, which we also included in our reference case
  modeling. However, we did not model the proposal as increasing ZEV
  adoption in this vehicle category so they are not presented here.
  Class 2b-3 Vocational Vehicle Group ZEV adoption rates can be found in
  Appendix 4A of the DRIA.

    We note that our reference case projection of ZEV adoption in this 
proposal is conservative when compared to the studies from NREL, ICCT, 
ACT Research, and EDF/ERM. Therefore, we may be projecting emission 
reductions due to the proposed standards that are greater than could be 
expected using a reference case that reflects higher levels of ZEV 
adoption in the HD market absent our rule. At the same time, our use of 
this reference case would also be conservative in terms of costs of 
compliance, which would be overestimated if the market would acheive 
higher levels of ZEV adoption in the absence of our proposed standards. 
We may revisit our reference case in the final rule analysis. For 
example, given that EPA granted the California Air Resources Board's 
request for a waiver for the ACT Regulation on March 30, 2023, which 
was not in a time frame for EPA to consider for this proposal an 
alternative approach for the reference case, we may make revisions for 
the final rule to explicitly reflect the waiver decision. In addition, 
while the approach we have used to quantify the national ZEV volumes in 
the reference case considers the impacts of the IRA and the BIL, it 
does not explicitly model them. Therefore, we invite stakeholders to 
comment and provide additional information on our approach to modeling 
the reference case. Commenters may also provide input on other data or 
modeling approaches that EPA should consider when estimating the 
reference case in the final rulemaking, including but not limited to 
the reports summarized in this section. We invite stakeholders to 
comment and provide additional information on our approach to modeling 
the reference case. Commenters may also provide input on other data or 
modeling approaches that EPA should consider when estimating the 
reference case in the final rulemaking, including but not limited to 
the reports summarized in this section.
    For the purposes of the modeling analysis, we assume the proposed 
CO2 emission standards would be met by technology packages 
that reflect both ICE vehicles and an increased level of ZEV adoption. 
The technology packages we are using for the ICE vehicles are built 
into the MOVES versions we are using for the analysis. Future HD ZEV 
populations in MOVES for the proposal and alternative scenarios were 
estimated using HD TRUCS based on the technology assessment for BEVs 
and FCEVs discussed in DRIA Chapter 2. Table V-3 shows the ZEV adoption 
rates by vehicle type used in modeling the control case for the 
proposal in MOVES. ZEV adoption rates for the alternative are discussed 
in Section IX. Further discussion of the ZEV adoption rates we modeled 
can be found in DRIA Chapter 4.3.

[[Page 26042]]

            Table V-3--HD ZEV Adoption Rates in the Control Case Used To Model the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                                                    Vocational      Short-haul       Long-haul
                                                                   source types      tractors       tractors a
                           Model year                                  41-54      source type 61  source Type 62
                                                                     (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
MY 2027.........................................................              20              10             0.3
MY 2028.........................................................              25              12             0.7
MY 2029.........................................................              30              15             1.0
MY 2030.........................................................              35              20              10
MY 2031.........................................................              40              30              20
MY 2032 and later...............................................              50              35              25
----------------------------------------------------------------------------------------------------------------
\a\ For sleeper cab tractors, which are represented by long-haul tractors (source type 62) in MOVES, we are not
  proposing revisions to MY 2027 standards or new standards for MYs 2028 or 2029. ZEV adoption for this source
  type in these model years was set to be equal to the reference case.

2. IPM Inputs
    We used IPM to estimate the EGU emissions associated with the 
additional energy demand from increased HD ZEV adoption. We do not have 
IPM output from runs directly corresponding to the reference case and 
proposal, so we approximated the EGU emission impacts of the proposal 
based on IPM runs that did not specifically model that scenario. The 
details of this methodology, including its simplifying assumptions and 
limitations, can be found in Chapter 4.3.3 of the draft RIA.
    To account for the upstream emissions from the production of 
hydrogen used to fuel FCEVs, we made a simplifying assumption that all 
hydrogen used for FCEVs is produced via grid electrolysis of water and 
can therefore be entirely represented as additional demand to EGUs and 
modeled using IPM.\664\ We developed a scaling factor to account for 
the amount of hydrogen that would need to be produced to meet the FCEV 
energy demand calculated by MOVES. More details on the derivation of 
the scaling factors can be found in Chapter 4.3 of the draft RIA. We 
invite stakeholders to comment and provide additional information on 
our approach to modeling the emissions impact of hydrogen production. 
Commenters may also provide input on other data or modeling approaches 
that EPA should consider when estimating emissions from hydrogen 
production in the final rulemaking.
---------------------------------------------------------------------------

    \664\ Hydrogen in the U.S. today is primarily produced via steam 
methane reforming (SMR) largely as part of petroleum refining and 
ammonia production. Given the BIL and the IRA provisions that 
meaningfully incentivize reducing the emissions and carbon intensity 
of hydrogen production, as well as new transportation and other 
demand drivers and potential future regulation, it is anticipated 
there will be a shift in how hydrogen is produced. Considering this 
and because electrolysis is a key mature technology for hydrogen 
production, our analysis includes the simplifying assumption that 
increased levels of hydrogen to fuel FCEVs will be produced using 
grid electrolysis. We recognize that the relative emissions impact 
of hydrogen production via SMR versus grid electrolysis depends on 
how electricity is produced, which varies significantly by region 
across the country. We also recognize that electrolysis powered by 
electricity from the grid on average in the U.S. may overestimate 
the upstream emissions impacts that are attributable to HD FCEVs in 
our analysis. See DRIA Chapter 4.3.3 for additional discussion.
---------------------------------------------------------------------------

B. Estimated Emission Impacts From the Proposed Standards

    This NPRM includes proposed CO2 emission standards for 
MYs 2027 through 2032. Because we anticipate an increase in the use of 
heavy-duty ZEVs to meet the proposed emission standards, and ZEVs do 
not produce any tailpipe emissions, we expect downstream GHG emissions 
reductions as well as reductions in emissions of criteria pollutants 
and air toxics. As described in Section V.A, we modeled the proposed 
standards in MOVES3.R3 by increasing the adoption of heavy-duty BEVs 
and FCEVs relative to the reference case, which means the primary 
driving factor behind the projected emission reductions is the 
displacement of ICE vehicles with ZEVs. The downstream emissions are 
presented in Section V.B.1.
    We also expect the increased adoption of HD ZEVs to increase 
emissions from EGUs and decrease emissions from refineries. Section 
V.B.2 presents these upstream emissions impacts, Section V.B.3 presents 
the net emission impacts of the proposed standards, and the downstream 
and upstream impacts of the alternative are discussed in Section IX.
    Because all our modeling is done for a full national domain, all 
emissions impacts cover the full national inventory. Emissions impacts 
in other domains, such as particular regions or localities in the 
United States, are likely to differ from the impacts presented here.
1. Estimated Impacts on Downstream Emissions
    Our estimates of the downstream emission reductions of GHGs that 
would result from the proposed standards, relative to the reference 
case emission inventory without the proposed standards, are presented 
in Table V-4 for calendar years 2035, 2045, and 2055. Total GHG 
emissions, or CO2 equivalent (CO2e), are 
calculated by summing all GHG emissions multiplied by their 100-year 
Global Warming Potentials (GWP).\665\
---------------------------------------------------------------------------

    \665\ The GWP values used by MOVES are values used in the 2007 
IPCC Fourth Assessment Report (AR4). The Intergovernmental Panel on 
Climate Change, Climate Change 2007: Impacts, Adaptation and 
Vulnerability. https://www.ipcc.ch/site/assets/uploads/2018/03/ar4_wg2_full_report.pdf.

         Table V-4--Annual Downstream Heavy-Duty GHG Emission Reductions From the Proposed Standards in Calendar Years (CY) 2035, 2045, and 2055
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                CY 2035 reductions              CY 2045 reductions              CY 2055 reductions
                                                         -----------------------------------------------------------------------------------------------
                Pollutant                  100-year GWP   Million metric                  Million metric                  Million metric
                                                               tons           Percent          tons           Percent          tons           Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Carbon Dioxide (CO2)....................               1              51              13             102              26             125              30

[[Page 26043]]

 
Methane (CH4)...........................              25           0.004               8           0.015              24           0.032              31
Nitrous Oxide (N2O).....................             298           0.007              12           0.013              24           0.015              28
CO2 Equivalent (CO2e)...................  ..............              53              13             106              26             130              30
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In 2055, we estimate that the proposal would reduce downstream 
emissions of CO2 by 30 percent, methane by 31 percent, and 
nitrous oxide by 28 percent, resulting in a reduction of 30 percent for 
total CO2 equivalent emissions. Table V-4 also shows that 
most of the GHG emission reductions would be from CO2, which 
would represent approximately 96 percent of all heavy-duty GHG emission 
reductions from the proposed standards.
    The warming impacts of GHGs are cumulative. Table V-5 presents the 
cumulative GHG reductions that would result from the proposed standards 
in 2055, in billion metric tons (BMT).

   Table V-5--Cumulative 2027-2055 Downstream Heavy-Duty GHG Emission
                 Reductions From the Proposed Standards
------------------------------------------------------------------------
                                           Reduction in       Percent
                Pollutant                       BMT          reduction
------------------------------------------------------------------------
Carbon Dioxide (CO2)....................             2.2              18
Methane (CH4)...........................         0.00035              17
Nitrous Oxide (N2O).....................         0.00028              17
CO2 Equivalent (CO2e)...................             2.3              18
------------------------------------------------------------------------

    Cumulative emission reductions increase over time from 2027 through 
2055, as more HD ZEVs meeting the proposed standards enter the fleet. 
This is discussed in more detail in Chapter 4.4.3 of the draft RIA.
    We expect the proposed CO2 emission standards will lead 
to an increase in HD ZEVs, which will result in reductions of non-GHG 
pollutants. Table V-6 presents our estimates of the downstream emission 
reductions of criteria pollutants and air toxics from heavy-duty 
vehicles that would result from the proposed standards in calendar 
years 2035, 2045, and 2055.

    Table V-6--Annual Downstream Heavy-Duty Emission Reductions From the Proposed Standards in Calendar Years (CY) 2035, 2045, and 2055 for Criteria
                                                                Pollutants and Air Toxics
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                CY 2035 reductions              CY 2045 reductions              CY 2055 reductions
                        Pollutant                        -----------------------------------------------------------------------------------------------
                                                             U.S. Tons        Percent        U.S. Tons        Percent        U.S. Tons        Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nitrogen Oxides (NOX)...................................          16,232               4          56,191              21          70,838              28
Primary Exhaust PM2.5...................................             271               6             690              30             967              39
Volatile Organic Compounds (VOC)........................           6,016              11          14,219              28          20,775              37
Sulfur Dioxide (SO2)....................................             204              13             414              27             518              31
Carbon Monoxide (CO)....................................          98,889              11         244,649              28         349,704              35
1,3-Butadiene...........................................              19              22              48              46              68              51
Acetaldehyde............................................             123              11             298              30             454              35
Benzene.................................................             109              17             281              41             410              49
Formaldehyde............................................              83               8             217              27             361              33
Naphthalenea............................................               6              10              16              38              21              45
Ethylbenzene............................................              70              11             175              30             266              41
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Naphthalene includes both gas and particle phase emissions.

    In 2055, we estimate the proposal would reduce heavy-duty vehicle 
emissions of NOX by 28 percent, PM2.5 by 39 
percent, VOC by 37 percent, and SO2 by 31 percent. 
Reductions in air toxics range from 33 percent for formaldehyde to 51 
percent for 1,3-butadiene.
    Chapter 4.4 of the draft RIA contains more details on downstream 
emission reductions by vehicle type, fuel type, and emission process, 
as well as year-over-year impacts from 2027 through 2055.
2. Estimated Impacts on Upstream Emissions
    Our estimates of the additional CO2 emissions from EGUs 
due to the proposed standards, relative to the reference case, are 
presented in Table V-7 for calendar years 2035, 2045, and 2055, in 
million metric tons (MMT).

[[Page 26044]]

   Table V-7--Annual CO2 Emission Increases From EGUs From the Proposed Standards in Calendar Years (CY) 2035,
                                                 2045, and 2055
----------------------------------------------------------------------------------------------------------------
                                                                         Additional EGU emissions (mmt)
                          Pollutant                           --------------------------------------------------
                                                                   CY 2035          CY 2045          CY 2055
----------------------------------------------------------------------------------------------------------------
Carbon Dioxide (CO2).........................................              20               16               11
----------------------------------------------------------------------------------------------------------------

    In 2055, we estimate the proposal would increase EGU emissions of 
CO2 by 11 million metric tons, compared to 20 million metric 
tons in 2035. The EGU impacts decrease over time because of changes in 
the projected power generation mix as electricity generation uses less 
fossil fuels. This is discussed in more detail in Chapter 4.5 of the 
DRIA. In total, we estimate the proposal will lead, cumulatively, to 
0.4 BMT of additional CO2 emissions from EGUs from 2027 to 
2055.
    Table V-8 shows the estimated impact of the proposed standards on 
EGU emissions for some criteria pollutants.

 Table V-8--Annual Criteria Pollutant Emission Increases From EGUs From the Proposed Standards in Calendar Years
                                           (CYs) 2035, 2045, and 2055
----------------------------------------------------------------------------------------------------------------
                                                                       Additional EGU emissions (U.S. tons)
                            Pollutant                            -----------------------------------------------
                                                                      CY 2035         CY 2045         CY 2055
----------------------------------------------------------------------------------------------------------------
Nitrogen Oxides (NOX)...........................................           2,821           2,226             787
Primary PM2.5...................................................           1,216           1,043             751
Volatile Organic Compounds (VOC)................................             629             772             754
Sulfur Dioxide (SO2)............................................           9,937           2,552             912
----------------------------------------------------------------------------------------------------------------

    Chapter 4.5 of the DRIA contains more detail and discussion of the 
impacts of the proposed CO2 emission standards on EGU 
emissions, including year-over-year impacts from 2027 through 2055.
    In addition to EGU emissions impacts, we also estimated impacts on 
select criteria pollutant emissions from refineries for calendar year 
2055. This analysis assumes that the reduction in demand for liquid 
fuels would lead to reduced activity and emissions at refineries. The 
results are presented in Table V-9. Additional detail on the refinery 
analysis is available in Chapters 4.3.3 and 4.5 of the DRIA.

 Table V-9--Criteria Pollutant Emission Reductions From Refineries From
                     the Proposed Standards in 2055
------------------------------------------------------------------------
                                                              CY 2055
                                                             refinery
                        Pollutant                            emission
                                                            reductions
                                                            (U.S. tons)
------------------------------------------------------------------------
NOX.....................................................           1,785
PM2.5...................................................             436
VOC.....................................................           1,227
SO2.....................................................             642
------------------------------------------------------------------------

3. Estimated Impacts on Combined Downstream and Upstream Emissions
    While we present a net emissions impact of the proposed 
CO2 emission standards, it is important to note that some 
upstream emission sources are not included in the analysis. Although we 
expect the proposed CO2 standards to reduce demand for 
refined fuels, we did not quantify emissions changes associated with 
producing or extracting crude or transporting crude or refined fuels. 
Also, because our analysis of refinery emissions only included select 
criteria pollutants, refinery emission impacts are not included in GHG 
emission impacts. Therefore, this analysis likely underestimates the 
net emissions reductions that may result from the proposal. As 
discussed in Section II.G, EPA considered these net impacts as 
supportive of the proposed standards.
    Table V-10 shows a summary of our modeled downstream, upstream, and 
net CO2 emission impacts of the proposed standards relative 
to the reference case (i.e., the emissions inventory without the 
proposed standards), in million metric tons, for calendar years 2035, 
2045, and 2055.

        Table V-10--Annual Net Impacts \a\ on CO2 Emissions From the Proposed CO2 Emission Standards in Calendar Years (CYs) 2035, 2045, and 2055
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       CY 2035 impacts (MMT)              CY 2045 impacts (MMT)              CY 2055 impacts (MMT)
                   Pollutant                    --------------------------------------------------------------------------------------------------------
                                                   Downstream       EGU      Net      Downstream       EGU      Net      Downstream       EGU      Net
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2............................................            -51        20      -31            -102        16      -86            -125        11     -114
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

    In 2055, we estimate the proposal would result in a net decrease of 
114 million metric tons in CO2 emissions. The net decreases 
become larger between 2035 and 2055 as the HD fleet turns over and the 
power grid uses less fossil fuels.
    The warming impacts of GHGs are cumulative. In Table V-11, we 
present the cumulative net CO2 emissions impact that we 
expect would result from

[[Page 26045]]

the proposed standards, accounting for downstream emission reductions 
and EGU emission increases. Overall, we estimate the proposal would 
result in a net reduction of 1.8 billion metric tons of CO2 
emissions from 2027 to 2055.

   Table V-11--Cumulative 2027-2055 Net CO2 Emission Impacts \a\ (in BMT) Reflecting the Proposed CO2 Emission
                                                    Standards
----------------------------------------------------------------------------------------------------------------
                          Pollutant                               Downstream          EGU              Net
----------------------------------------------------------------------------------------------------------------
Carbon Dioxide (CO2).........................................            -2.2              0.4             -1.8
----------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

    Table V-12 contains a summary of the modeled net impacts of the 
proposed CO2 emission standards on criteria pollutant 
emissions considering downstream and EGUs, relative to the reference 
case (i.e., without the proposed standards), for calendar years 2035 
and 2045. Table V-13 contains a similar summary for calendar year 2055 
that includes estimates of net impacts of refinery, EGU, and downstream 
emissions.

    Table V-12--Annual Net Impacts \a\ on Criteria Pollutant Emissions From the Proposed CO2 Emission Standards in Calendar Years (CYs) 2035 and 2045
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    CY 2035 impacts (U.S. tons)                     CY 2045 impacts (U.S. tons)
                        Pollutant                        -----------------------------------------------------------------------------------------------
                                                            Downstream          EGU             Net         Downstream          EGU             Net
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOX.....................................................         -16,232           2,821         -13,411         -56,191           2,226         -53,966
PM2.5...................................................            -271           1,216             945            -690           1,043             352
VOC.....................................................          -6,016             629          -5,387         -14,219             772         -13,447
SO2.....................................................            -204           9,937           9,732            -414           2,552           2,138
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

 Table V-13--Net Impacts \a\ on Criteria Pollutant Emissions From the Proposed CO2 Emission Standards in CY 2055
----------------------------------------------------------------------------------------------------------------
                                                                    CY 2055 impacts (U.S. tons)
                    Pollutant                    ---------------------------------------------------------------
                                                    Downstream          EGU          Refinery           Net
----------------------------------------------------------------------------------------------------------------
NOX.............................................         -70,838             787          -1,785         -71,836
PM2.5...........................................            -967             751            -436            -652
VOC.............................................         -20,775             754          -1,227         -21,248
SO2.............................................            -518             912            -642            -248
----------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

    By 2055, when considering downstream, EGU, and refinery emissions, 
we estimate a net decrease in emissions from all pollutants that we 
modeled for all emissions sources (i.e., NOX, 
PM2.5, VOC, and SO2). In earlier years, when 
considering only downstream and EGU emissions, we estimate net 
decreases of NOX and VOC emissions, but net increases of 
PM2.5 and SO2 emissions. These increases become 
smaller over time.
    Overall, we estimate that the proposal will lead to net reductions 
in emissions of most pollutants because downstream emission reductions 
tend to outpace EGU emission increases. We estimate that reductions 
will start small and increase from 2027 through 2055. It is possible 
there are increases in emissions of PM2.5 and SO2 
in the nearer term as the electricity generation mix still relies on a 
relatively higher proportion of fossil fuels. While we do not have 
refinery emission impacts estimated for all calendar years, it is 
possible that refinery emission reductions combined with downstream 
emission reductions also outpace EGU emission increases. In 2055, for 
example, we estimate that refinery and downstream emission reductions 
exceed EGU emission increases of SO2.

VI. Climate, Health, Air Quality, Environmental Justice, and Economic 
Impacts

    In this section, we discuss the impacts of the NPRM on climate 
change, health and environmental effects, environmental justice, and 
oil and electricity consumption. We also discuss our approaches to 
analyzing the impact of this proposal on the heavy-duty vehicle market 
and employment.

A. Climate Change Impacts

    Extensive information on climate change impacts is available in the 
scientific assessments that are briefly described in this section, as 
well as in the technical and scientific information supporting them. 
One of those documents is the EPA's 2009 Endangerment and Cause or 
Contribute Findings for GHGs Under section 202(a) of the CAA (74 FR 
66496; December 15, 2009).\666\ In the 2009 Endangerment Findings, the 
Administrator found under section 202(a) of the CAA that elevated 
atmospheric concentrations of six key well-mixed GHGs--CO2, 
CH4, N2O, hydrofluorocarbons (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; December 15, 
2009), and the science and observed changes have confirmed and 
strengthened the understanding and concerns regarding the climate risks 
considered in the Finding. The 2009 Endangerment Findings, together 
with

[[Page 26046]]

the extensive scientific and technical evidence in the supporting 
record, documented that climate change caused by human emissions of 
GHGs threatens the public health of the U.S. population.
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    \666\ In describing these 2009 Findings in this proposal, the 
EPA is neither reopening nor revisiting them.
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    The most recent information demonstrates that the climate is 
continuing to change in response to the human-induced buildup of GHGs 
in the atmosphere. Recent scientific assessments show that atmospheric 
concentrations of GHGs have risen to a level that has no precedent in 
human history and that they continue to climb, primarily because of 
both historic and current anthropogenic emissions, and that these 
elevated concentrations endanger our health by affecting our food and 
water sources, the air we breathe, the weather we experience, and our 
interactions with the natural and built environments.
    Global average temperature has increased by about 1.1 degrees 
Celsius ([deg]C) (2.0 degrees Fahrenheit ([deg]F)) in the 2011-2020 
decade relative to 1850-1900.\667\ The IPCC determined with medium 
confidence that this past decade was warmer than any multi-century 
period in at least the past 100,000 years.\668\ Global average sea 
level has risen by about 8 inches (about 21 centimeters (cm)) from 1901 
to 2018, with the rate from 2006 to 2018 (0.15 inches/year or 3.7 
millimeters (mm)/year) almost twice the rate over the 1971 to 2006 
period, and three times the rate of the 1901 to 2018 period.\669\ The 
rate of sea level rise during the 20th Century was higher than in any 
other century in at least the last 2,800 years.\670\ The CO2 
being absorbed by the ocean has resulted in changes in ocean chemistry 
due to acidification of a magnitude not seen in 65 million years,\671\ 
putting many marine species--particularly calcifying species--at risk. 
Human-induced climate change has led to heatwaves and heavy 
precipitation becoming more frequent and more intense, along with 
increases in agricultural and ecological droughts \672\ in many 
regions.\673\ The NCA4 found that it is very likely (greater than 90 
percent likelihood) that by mid-century, the Arctic Ocean will be 
almost entirely free of sea ice by late summer for the first time in 
about 2 million years.\674\ Coral reefs will be at risk for almost 
complete (99 percent) losses with 1[thinsp][deg]C (1.8[thinsp][deg]F) 
of additional warming from today (2[thinsp][deg]C or 3.6[thinsp][deg]F 
since preindustrial). At this temperature, between 8 and 18 percent of 
animal, plant, and insect species could lose over half of the 
geographic area with suitable climate for their survival, and 7 to 10 
percent of rangeland livestock would be projected to be lost.\675\ The 
IPCC similarly found that climate change has caused substantial damages 
and increasingly irreversible losses in terrestrial, freshwater, and 
coastal and open ocean marine ecosystems.\676\
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    \667\ IPCC, 2021: Summary for Policymakers. In: Climate Change 
2021: The Physical Science Basis. Contribution of Working Group I to 
the Sixth Assessment Report of the Intergovernmental Panel on 
Climate Change [Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. 
Connors, C. Pe[acute]an, S. Berger, N. Caud, Y. Chen, L. Goldfarb, 
M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. 
Maycock, T. Waterfield, O. Yelek[ccedil]i, R. Yu and B. Zhou 
(eds.)]. Cambridge University Press.
    \668\ Ibid.
    \669\ Ibid.
    \670\ USGCRP, 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.
    \671\ IPCC, 2018: Global Warming of 1.5 [deg]C. An IPCC Special 
Report on the impacts of global warming of 1.5 [deg]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. Portner, D. 
Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. 
Pe[acute]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.)].
    \672\ These are drought measures based on soil moisture.
    \673\ IPCC, 2021.
    \674\ USGCRP, 2021.
    \675\ IPCC, 2018.
    \676\ IPCC, 2022: Summary for Policymakers [H.-O. P[ouml]rtner, 
D.C. Roberts, E.S. Poloczanska, K. Mintenbeck, M. Tignor, A. 
Alegr[iacute]a, M. Craig, S. Langsdorf, S. L[ouml]schke, V. 
M[ouml]ller, A. Okem (eds.)]. In: Climate Change 2022: Impacts, 
Adaptation and Vulnerability. Contribution of Working Group II to 
the Sixth Assessment Report of the Intergovernmental Panel on 
Climate Change [H.-O. P[ouml]rtner, D.C. Roberts, M. Tignor, E.S. 
Poloczanska, K. Mintenbeck, A. Alegr[iacute]a, M. Craig, S. 
Langsdorf, S. L[ouml]schke, V. M[ouml]ller, A. Okem, B. Rama 
(eds.)]. Cambridge University Press, Cambridge, UK and New York, NY, 
USA, pp. 3-33, doi:10.1017/9781009325844.001.
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    Scientific assessments also demonstrate that even modest additional 
amounts of warming may lead to a climate different from anything humans 
have ever experienced. Every additional increment of temperature comes 
with consequences. For example, the half-degree of warming from 1.5 to 
2[thinsp][deg]C (0.9[thinsp][deg]F of warming from 2.7[thinsp][deg]F to 
3.6[thinsp][deg]F) above preindustrial temperatures is projected on a 
global scale to expose 420 million more people to frequent extreme 
heatwaves, and 62 million more people to frequent exceptional heatwaves 
(where heatwaves are defined based on a heat wave magnitude index which 
takes into account duration and intensity--using this index, the 2003 
French heat wave that led to almost 15,000 deaths would be classified 
as an ``extreme heatwave'' and the 2010 Russian heatwave which led to 
thousands of deaths and extensive wildfires would be classified as 
``exceptional''). Every additional degree will intensify extreme 
precipitation events by about 7 percent. The peak winds of the most 
intense tropical cyclones (hurricanes) are projected to increase with 
warming. In addition to a higher intensity, the IPCC found that 
precipitation and frequency of rapid intensification of these storms 
has already increased, while the movement speed has decreased, and 
elevated sea levels have increased coastal flooding, all of which make 
these tropical cyclones more damaging.\677\
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    \677\ IPCC, 2021.
---------------------------------------------------------------------------

    The NCA4 recognized that climate change can increase risks to 
national security, both through direct impacts on military 
infrastructure, but also by affecting factors such as food and water 
availability that can exacerbate conflict outside U.S. borders. 
Droughts, floods, storm surges, wildfires, and other extreme events 
stress nations and people through loss of life, displacement of 
populations, and impacts on livelihoods.\678\ Risks to food security 
would increase from ``medium'' to ``high'' for several lower income 
regions in the Sahel, southern Africa, the Mediterranean, central 
Europe, and the Amazon. In addition to food security issues, this 
temperature increase would have implications for human health in terms 
of increasing ozone pollution, heatwaves, and vector-borne diseases 
(for example, expanding the range of the mosquitoes which carry dengue 
fever, chikungunya, yellow fever, and the Zika virus; or the ticks that 
carry Lyme disease or Rocky Mountain Spotted Fever).\679\
---------------------------------------------------------------------------

    \678\ USGCRP, 2018.
    \679\ IPCC, 2018.
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    The NCA4 also evaluated a number of impacts specific to the United 
States. Severe drought and outbreaks of insects like the mountain pine 
beetle have killed hundreds of millions of trees in the western United 
States. Wildfires have burned more than 3.7 million acres in 14 of the 
17 years between 2000 and 2016, and Federal wildfire suppression costs 
were about a billion dollars annually.\680\ The National Interagency 
Fire Center has documented U.S. wildfires since 1983; the 10 years with 
the largest acreage burned have all occurred since 2004.\681\ Wildfire 
smoke degrades air quality, increasing health

[[Page 26047]]

risks. More frequent and severe wildfires due to climate change would 
further diminish air quality, increase incidences of respiratory 
illness, impair visibility, and disrupt outdoor activities, sometimes 
thousands of miles from the location of the fire.\682\
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    \680\ USGCRP, 2018.
    \681\ NIFC (National Interagency Fire Center). 2022. Total 
wildland fires and acres (1983-2020). Accessed November 2022. 
https://www.nifc.gov/sites/default/files/document-media/TotalFires.pdf.
    \682\ USGCRP, 2018.
---------------------------------------------------------------------------

    While GHGs collectively are not the only factor that controls 
climate, it is illustrative that 3 million years ago (the last time 
CO2 concentrations were this high) Greenland was not yet 
completely covered by ice and still supported forests, while 23 million 
years ago (the last time concentrations were above 450 ppm) the West 
Antarctic ice sheet was not yet developed, indicating the possibility 
that high GHG concentrations could lead to a world that looks very 
different from today and from the conditions in which human 
civilization has developed. If the Greenland and Antarctic ice sheets 
were to melt substantially, sea levels would rise dramatically--the 
IPCC estimated that during the next 2,000 years, sea level will rise by 
7 to 10 feet even if warming is limited to 1.5[thinsp][deg]C 
(2.7[thinsp][deg]F), from 7 to 20 feet if limited to 2[thinsp][deg]C 
(3.6[thinsp][deg]F), and by 60 to 70 feet if warming is allowed to 
reach 5[thinsp][deg]C (9[thinsp][deg]F) above preindustrial 
levels.\683\ For context, almost all of the city of Miami is less than 
25 feet above sea level, and the NCA4 stated that 13 million Americans 
would be at risk of migration due to 6 feet of sea level rise. 
Meanwhile, sea level rise has amplified coastal flooding and erosion 
impacts, requiring the installation of costly pump stations, flooding 
streets, and increasing storm surge damages. Tens of billions of 
dollars of U.S. real estate could be below sea level by 2050 under some 
scenarios. Increased frequency and duration of drought will reduce 
agricultural productivity in some regions, accelerate depletion of 
water supplies for irrigation, and expand the distribution and 
incidence of pests and diseases for crops and livestock.
---------------------------------------------------------------------------

    \683\ IPCC, 2021.
---------------------------------------------------------------------------

    Transportation is the largest U.S. source of GHG emissions, 
representing 27 percent of total GHG emissions. Within the 
transportation sector, heavy-duty vehicles are the second largest 
contributor to GHG emissions and are responsible for 25 percent of GHG 
emissions in the sector. The reduction in GHG emissions from the 
standards in this proposal, quantified in Section V of this preamble, 
would contribute toward the goal of holding the increase in the global 
average temperature to well below 2 [deg]C above pre-industrial levels, 
and subsequently reduce the probability of severe climate change-
related impacts including heat waves, drought, sea level rise, extreme 
climate and weather events, coastal flooding, and wildfires.\684\ 
Section VI.D.1 of this preamble discusses impacts of GHG emissions on 
individuals living in socially and economically vulnerable communities. 
While EPA did not conduct modeling to specifically quantify changes in 
climate impacts resulting from this rule in terms of avoided 
temperature change or sea-level rise, we did quantify climate benefits 
by monetizing the emission reductions through the application of the 
social cost of greenhouse gases (SC-GHGs), as described in Section 
VII.A of this preamble.
---------------------------------------------------------------------------

    \684\ Paris Agreement FCCC/CP/2015/10/Add.1 https://unfccc.int/documents/9097.
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B. Health and Environmental Effects Associated With Exposure to Non-GHG 
Pollutants

    The non-GHG emissions that would be impacted by the proposed rule 
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.
1. Background on Criteria and Air Toxics Pollutants Impacted by This 
Proposal
i. Particulate Matter
    Particulate matter (PM) is a complex mixture of solid particles and 
liquid droplets distributed among numerous atmospheric gases which 
interact with solid and liquid phases. Particles in the atmosphere 
range in size from less than 0.01 to more than 10 micrometers 
([micro]m) in diameter.\685\ Atmospheric particles can be grouped into 
several classes according to their aerodynamic diameter and physical 
sizes. Generally, the three broad classes of particles include 
ultrafine particles (UFPs, generally considered as particles with a 
diameter less than or equal to 0.1 [micro]m [typically based on 
physical size, thermal diffusivity, or electrical mobility]), ``fine'' 
particles (PM2.5; particles with a nominal mean aerodynamic 
diameter less than or equal to 2.5 [micro]m), and ``thoracic'' 
particles (PM10; particles with a nominal mean aerodynamic 
diameter less than or equal to 10 [micro]m). Particles that fall within 
the size range between PM2.5 and PM10, are 
referred to as ``thoracic coarse particles'' (PM10-2.5, 
particles with a nominal mean aerodynamic diameter greater than 2.5 
[micro]m and less than or equal to 10 [micro]m). EPA currently has 
NAAQS for PM2.5 and PM10.\686\
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    \685\ U.S. EPA. Policy Assessment (PA) for the Review of the 
National Ambient Air Quality Standards for Particulate Matter (Final 
Report, 2020). U.S. Environmental Protection Agency, Washington, DC, 
EPA/452/R-20/002, 2020.
    \686\ Regulatory definitions of PM size fractions, and 
information on reference and equivalent methods for measuring PM in 
ambient air, are provided in 40 CFR parts 50, 53, and 58. With 
regard to NAAQS which provide protection against health and welfare 
effects, the 24-hour PM10 standard provides protection 
against effects associated with short-term exposure to thoracic 
coarse particles (i.e., PM10-2.5).
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    Most particles are found in the lower troposphere, where they can 
have residence times ranging from a few hours to weeks. Particles are 
removed from the atmosphere by wet deposition, such as when they are 
carried by rain or snow, or by dry deposition, when particles settle 
out of suspension due to gravity. Atmospheric lifetimes are generally 
longest for PM2.5, which often remains in the atmosphere for 
days to weeks before being removed by wet or dry deposition.\687\ In 
contrast, atmospheric lifetimes for UFP and PM10-2.5 are 
shorter. Within hours, UFP can undergo coagulation and condensation 
that lead to formation of larger particles in the accumulation mode or 
can be removed from the atmosphere by evaporation, deposition, or 
reactions with other atmospheric components. PM10-2.5 are 
also generally removed from the atmosphere within hours, through wet or 
dry deposition.\688\
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    \687\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019. Table 2-
1.
    \688\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019. Table 2-
1.
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    Particulate matter consists of both primary and secondary 
particles. Primary particles are emitted directly from sources, such as 
combustion-related activities (e.g., industrial activities, motor 
vehicle operation, biomass burning), while secondary particles are 
formed through atmospheric chemical reactions of gaseous precursors 
(e.g., sulfur oxides (SOX), nitrogen oxides (NOX) 
and volatile organic compounds (VOCs)).
ii. Ozone
    Ground-level ozone pollution forms in areas with high 
concentrations of ambient NOX and VOCs when solar radiation 
is strong. Major U.S. sources of NOX are highway and nonroad 
motor vehicles, engines, power plants and other industrial sources, 
with natural sources, such as soil, vegetation, and lightning, serving 
as smaller sources.

[[Page 26048]]

Vegetation is the dominant source of VOCs in the United States. 
Volatile consumer and commercial products, such as propellants and 
solvents, highway and nonroad vehicles, engines, fires, and industrial 
sources also contribute to the atmospheric burden of VOCs at ground-
level.
    The processes underlying ozone formation, transport, and 
accumulation are complex. Ground-level ozone is produced and destroyed 
by an interwoven network of free radical reactions involving the 
hydroxyl radical (OH), NO, NO2, and complex reaction 
intermediates derived from VOCs. Many of these reactions are sensitive 
to temperature and available sunlight. High ozone events most often 
occur when ambient temperatures and sunlight intensities remain high 
for several days under stagnant conditions. Ozone and its precursors 
can also be transported hundreds of miles downwind, which can lead to 
elevated ozone levels in areas with otherwise low VOC or NOX 
emissions. As an air mass moves and is exposed to changing ambient 
concentrations of NOX and VOCs, the ozone photochemical 
regime (relative sensitivity of ozone formation to NOX and 
VOC emissions) can change.
    When ambient VOC concentrations are high, comparatively small 
amounts of NOX catalyze rapid ozone formation. Without 
available NOX, ground-level ozone production is severely 
limited, and VOC reductions would have little impact on ozone 
concentrations. Photochemistry under these conditions is said to be 
``NOX-limited.'' When NOX levels are sufficiently 
high, faster NO2 oxidation consumes more radicals, dampening 
ozone production. Under these ``VOC-limited'' conditions (also referred 
to as '' NOX-saturated'' conditions), VOC reductions are 
effective in reducing ozone, and NOX can react directly with 
ozone, resulting in suppressed ozone concentrations near NOX 
emission sources. Under these NOX-saturated conditions, 
NOX reductions can increase local ozone under certain 
circumstances, but overall ozone production (considering downwind 
formation) decreases and, even in VOC-limited areas, NOX 
reductions are not expected to increase ozone levels if the 
NOX reductions are sufficiently large--large enough for 
photochemistry to become NOX-limited.
iii. Nitrogen Oxides
    Oxides of nitrogen (NOX) refers to nitric oxide (NO) and 
nitrogen dioxide (NO2). Most NO2 is formed in the 
air through the oxidation of nitric oxide (NO) emitted when fuel is 
burned at a high temperature. NOX is a major contributor to 
secondary PM2.5 formation, and NOX along with 
VOCs are the two major precursors of ozone.
iv. Sulfur Oxides
    Sulfur dioxide (SO2), a member of the sulfur oxide 
(SOX) family of gases, is formed from burning fuels 
containing sulfur (e.g., coal or oil), extracting gasoline from oil, or 
extracting metals from ore. SO2 and its gas phase oxidation 
products can dissolve in water droplets and further oxidize to form 
sulfuric acid which reacts with ammonia to form sulfates, which are 
important components of ambient PM.
v. Carbon Monoxide
    Carbon monoxide (CO) is a colorless, odorless gas emitted from 
combustion processes. Nationally, particularly in urban areas, the 
majority of CO emissions to ambient air come from mobile sources.\689\
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    \689\ U.S. EPA, (2010). Integrated Science Assessment for Carbon 
Monoxide (Final Report). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-09/019F, 2010. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686. See Section 2.1.
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vi. Diesel Exhaust
    Diesel exhaust is a complex mixture composed of particulate matter, 
carbon dioxide, oxygen, nitrogen, water vapor, carbon monoxide, 
nitrogen compounds, sulfur compounds and numerous low-molecular-weight 
hydrocarbons. A number of these gaseous hydrocarbon components are 
individually known to be toxic, including aldehydes, benzene and 1,3-
butadiene. The diesel particulate matter present in diesel exhaust 
consists mostly of fine particles (less than 2.5 [micro]m), of which a 
significant fraction is ultrafine particles (less than 0.1 [micro]m). 
These particles have a large surface area which makes them an excellent 
medium for adsorbing organics, and their small size makes them highly 
respirable. Many of the organic compounds present in the gases and on 
the particles, such as polycyclic organic matter, are individually 
known to have mutagenic and carcinogenic properties.
    Diesel exhaust varies significantly in chemical composition and 
particle sizes between different engine types (heavy-duty, light-duty), 
engine operating conditions (idle, acceleration, deceleration), and 
fuel formulations (high/low sulfur fuel). Also, there are emissions 
differences between on-road and nonroad engines because the nonroad 
engines are generally of older technology. After being emitted in the 
engine exhaust, diesel exhaust undergoes dilution as well as chemical 
and physical changes in the atmosphere. The lifetimes of the components 
present in diesel exhaust range from seconds to days.
vii. Air Toxics
    The most recent available data indicate that millions of Americans 
live in areas where air toxics pose potential health 
concerns.690 691 The levels of air toxics to which people 
are exposed vary depending on where people live and work and the kinds 
of activities in which they engage, as discussed in detail in EPA's 
2007 Mobile Source Air Toxics Rule.\692\ According to EPA's Air Toxics 
Screening Assessment (AirToxScreen) for 2018, mobile sources were 
responsible for 40 percent of outdoor anthropogenic toxic emissions and 
were the largest contributor to national average cancer and noncancer 
risk from directly emitted pollutants.693 694 Mobile sources 
are also significant contributors to precursor emissions which react to 
form air toxics.\695\ Formaldehyde is the largest contributor to cancer 
risk of all 71 pollutants quantitatively assessed in the 2018 
AirToxScreen. Mobile sources were responsible for 26 percent of primary 
anthropogenic emissions of this pollutant in 2018 and are significant 
contributors to formaldehyde precursor emissions. Benzene is also a 
large contributor to cancer risk, and mobile sources account for about 
60 percent of average exposure to ambient concentrations.
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    \690\ Air toxics are pollutants known to cause or suspected of 
causing cancer or other serious health effects. Air toxics are also 
known as toxic air pollutants or hazardous air pollutants. https://www.epa.gov/AirToxScreen/airtoxscreen-glossary-terms#air-toxics.
    \691\ U.S. EPA (2022) Technical Support Document EPA Air Toxics 
Screening Assessment. 2017AirToxScreen TSD. https://www.epa.gov/system/files/documents/2022-03/airtoxscreen_2017tsd.pdf.
    \692\ U.S. Environmental Protection Agency (2007). Control of 
Hazardous Air Pollutants from Mobile Sources; Final Rule. 72 FR 
8434, February 26, 2007.
    \693\ U.S. EPA. (2022) 2018 Air Toxics Screening Assessment. 
https://www.epa.gov/AirToxScreen/2018-airtoxscreen-assessment-results.
    \694\ AirToxScreen also includes estimates of risk attributable 
to background concentrations, which includes contributions from 
long-range transport, persistent air toxics, and natural sources; as 
well as secondary concentrations, where toxics are formed via 
secondary formation. Mobile sources substantially contribute to 
long-range transport and secondarily formed air toxics.
    \695\ Rich Cook, Sharon Phillips, Madeleine Strum, Alison Eyth & 
James Thurman (2020): Contribution of mobile sources to secondary 
formation of carbonyl compounds, Journal of the Air & Waste 
Management Association, DOI: 10.1080/10962247.2020.1813839.

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[[Page 26049]]

2. Health Effects Associated With Exposure to Non-GHG Pollutants
    Emissions sources impacted by this proposal emit pollutants that 
contribute to ambient concentrations of non-GHG pollutants. This 
section of the preamble discusses the health effects associated with 
exposure to these pollutants.
    Additionally, because children have increased vulnerability and 
susceptibility for adverse health effects related to air pollution 
exposures, EPA's findings regarding adverse effects for children 
related to exposure to pollutants that are impacted by this rule are 
noted in this section. The increased vulnerability and susceptibility 
of children to air pollution exposures may arise because infants and 
children generally breathe more relative to their size than adults, and 
consequently they may be exposed to relatively higher amounts of air 
pollution.\696\ Children also tend to breathe through their mouths more 
than adults, and their nasal passages are less effective at removing 
pollutants, which leads to greater lung deposition of some pollutants 
such as PM.697 698 Furthermore, air pollutants may pose 
health risks specific to children because children's bodies are still 
developing.\699\ For example, during periods of rapid growth such as 
fetal development, infancy and puberty, their developing systems and 
organs may be more easily harmed.700 701 EPA produces the 
report titled ``America's Children and the Environment,'' which 
presents national trends on air pollution and other contaminants and 
environmental health of children.\702\
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    \696\ EPA (2009) Metabolically-derived ventilation rates: A 
revised approach based upon oxygen consumption rates. Washington, 
DC: Office of Research and Development. EPA/600/R-06/129F. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=202543.
    \697\ U.S. EPA Integrated Science Assessment for Particulate 
Matter (Final Report, 2019). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-19/188, 2019. Chapter 4 ``Overall 
Conclusions'' p. 4-1.
    \698\ Foos, B.; Marty, M.; Schwartz, J.; Bennet, W.; Moya, J.; 
Jarabek, A.M.; Salmon, A.G. (2008) Focusing on children's inhalation 
dosimetry and health effects for risk assessment: An introduction. J 
Toxicol Environ Health 71A: 149-165.
    \699\ Children's environmental health includes conception, 
infancy, early childhood and through adolescence until 21 years of 
age as described in the EPA Memorandum: Issuance of EPA's 2021 
Policy on Children's Health. October 5, 2021. Available at https://www.epa.gov/system/files/documents/2021-10/2021-policy-on-childrens-health.pdf.
    \700\ EPA (2006) A Framework for Assessing Health Risks of 
Environmental Exposures to Children. EPA, Washington, DC, EPA/600/R-
05/093F, 2006.
    \701\ U.S. Environmental Protection Agency. (2005). Supplemental 
guidance for assessing susceptibility from early-life exposure to 
carcinogens. Washington, DC: Risk Assessment Forum. EPA/630/R-03/
003F. https://www3.epa.gov/airtoxics/childrens_supplement_final.pdf.
    \702\ U.S. EPA. America's Children and the Environment. 
Available at: https://www.epa.gov/americaschildrenenvironment.
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i. Particulate Matter
    Scientific evidence spanning animal toxicological, controlled human 
exposure, and epidemiologic studies shows that exposure to ambient PM 
is associated with a broad range of health effects. These health 
effects are discussed in detail in the Integrated Science Assessment 
for Particulate Matter, which was finalized in December 2019 (2019 PM 
ISA), with a more targeted evaluation of studies published since the 
literature cutoff date of the 2019 PM ISA in the Supplement to the 
Integrated Science Assessment for PM (Supplement).703 704 
The PM ISA characterizes the causal nature of relationships between PM 
exposure and broad health categories (e.g., cardiovascular effects, 
respiratory effects, etc.) using a weight-of-evidence approach.\705\ 
Within this characterization, the PM ISA summarizes the health effects 
evidence for short-term (i.e., hours up to one month) and long-term 
(i.e., one month to years) exposures to PM2.5, 
PM10-2.5, and ultrafine particles and 
concludes that exposures to ambient PM2.5 are associated 
with a number of adverse health effects. The discussion in this Section 
VI.B.2.i highlights the PM ISA's conclusions and summarizes additional 
information from the Supplement where appropriate, pertaining to the 
health effects evidence for both short- and long-term PM exposures. 
Further discussion of PM-related health effects can also be found in 
the 2022 Policy Assessment for the review of the PM NAAQS.\706\
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    \703\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \704\ U.S. EPA. Supplement to the 2019 Integrated Science 
Assessment for Particulate Matter (Final Report, 2022). U.S. 
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028, 
2022.
    \705\ The causal framework draws upon the assessment and 
integration of evidence from across scientific disciplines, spanning 
atmospheric chemistry, exposure, dosimetry and health effects 
studies (i.e., epidemiologic, controlled human exposure, and animal 
toxicological studies), and assess the related uncertainties and 
limitations that ultimately influence our understanding of the 
evidence. This framework employs a five-level hierarchy that 
classifies the overall weight-of-evidence with respect to the causal 
nature of relationships between criteria pollutant exposures and 
health and welfare effects using the following categorizations: 
causal relationship; likely to be causal relationship; suggestive 
of, but not sufficient to infer, a causal relationship; inadequate 
to infer the presence or absence of a causal relationship; and not 
likely to be a causal relationship (U.S. EPA. (2019). Integrated 
Science Assessment for Particulate Matter (Final Report). U.S. 
Environmental Protection Agency, Washington, DC, EPA/600/R-19/188, 
Section P. 3.2.3).
    \706\ U.S. EPA. Policy Assessment (PA) for the Reconsideration 
of the National Ambient Air Quality Standards for Particulate Matter 
(Final Report, 2022). U.S. Environmental Protection Agency, 
Washington, DC, EPA-452/R-22-004, 2022.
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    EPA has concluded that recent evidence in combination with evidence 
evaluated in the 2009 PM ISA supports a ``causal relationship'' between 
both long- and short-term exposures to PM2.5 and premature 
mortality and cardiovascular effects and a ``likely to be causal 
relationship'' between long- and short-term PM2.5 exposures 
and respiratory effects.\707\ Additionally, recent experimental and 
epidemiologic studies provide evidence supporting a ``likely to be 
causal relationship'' between long-term PM2.5 exposure and 
nervous system effects and between long-term PM2.5 exposure 
and cancer. Because of remaining uncertainties and limitations in the 
evidence base, EPA determined a ``suggestive of, but not sufficient to 
infer, a causal relationship'' for long-term PM2.5 exposure 
and reproductive and developmental effects (i.e., male/female 
reproduction and fertility; pregnancy and birth outcomes), long- and 
short-term exposures and metabolic effects, and short-term exposure and 
nervous system effects.
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    \707\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F.
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    As discussed extensively in the 2019 PM ISA and the Supplement, 
recent studies continue to support a ``causal relationship'' between 
short- and long-term PM2.5 exposures and 
mortality.708 709 For short-term PM2.5 exposure, 
multi-city studies, in combination with single- and multi-city studies 
evaluated in the 2009 PM ISA, provide evidence of consistent, positive 
associations across studies conducted in different geographic 
locations, populations with different demographic characteristics, and 
studies using different exposure assignment techniques. Additionally, 
the consistent and coherent evidence across scientific disciplines for 
cardiovascular morbidity, particularly ischemic events and heart 
failure, and to a lesser degree for respiratory morbidity, including 
exacerbations of chronic obstructive pulmonary disease (COPD) and 
asthma,

[[Page 26050]]

provide biological plausibility for cause-specific mortality and 
ultimately total mortality. Recent epidemiologic studies evaluated in 
the Supplement, including studies that employed alternative methods for 
confounder control, provide additional support to the evidence base 
that contributed to the 2019 PM ISA conclusion for short-term 
PM2.5 exposure and mortality.
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    \708\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \709\ U.S. EPA. Supplement to the 2019 Integrated Science 
Assessment for Particulate Matter (Final Report, 2022). U.S. 
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028, 
2022.
---------------------------------------------------------------------------

    The 2019 PM ISA concluded a ``causal relationship'' between long-
term PM2.5 exposure and mortality. In addition to reanalyses 
and extensions of the American Cancer Society (ACS) and Harvard Six 
Cities (HSC) cohorts, multiple new cohort studies conducted in the 
United States and Canada consisting of people employed in a specific 
job (e.g., teacher, nurse), and that apply different exposure 
assignment techniques, provide evidence of positive associations 
between long-term PM2.5 exposure and mortality. Biological 
plausibility for mortality due to long-term PM2.5 exposure 
is provided by the coherence of effects across scientific disciplines 
for cardiovascular morbidity, particularly for coronary heart disease, 
stroke, and atherosclerosis, and for respiratory morbidity, 
particularly for the development of COPD. Additionally, recent studies 
provide evidence indicating that as long-term PM2.5 
concentrations decrease there is an increase in life expectancy. Recent 
cohort studies evaluated in the Supplement, as well as epidemiologic 
studies that conducted accountability analyses or employed alternative 
methods for confounder controls, support and extend the evidence base 
that contributed to the 2019 PM ISA conclusion for long-term 
PM2.5 exposure and mortality.
    A large body of studies examining both short- and long-term 
PM2.5 exposure and cardiovascular effects builds on the 
evidence base evaluated in the 2009 PM ISA. The strongest evidence for 
cardiovascular effects in response to short-term PM2.5 
exposures is for ischemic heart disease and heart failure. The evidence 
for short-term PM2.5 exposure and cardiovascular effects is 
coherent across scientific disciplines and supports a continuum of 
effects ranging from subtle changes in indicators of cardiovascular 
health to serious clinical events, such as increased emergency 
department visits and hospital admissions due to cardiovascular disease 
and cardiovascular mortality. For long-term PM2.5 exposure, 
there is strong and consistent epidemiologic evidence of a relationship 
with cardiovascular mortality. This evidence is supported by 
epidemiologic and animal toxicological studies demonstrating a range of 
cardiovascular effects including coronary heart disease, stroke, 
impaired heart function, and subclinical markers (e.g., coronary artery 
calcification, atherosclerotic plaque progression), which collectively 
provide coherence and biological plausibility. Recent epidemiologic 
studies evaluated in the Supplement, as well as studies that conducted 
accountability analyses or employed alternative methods for confounder 
control, support and extend the evidence base that contributed to the 
2019 PM ISA conclusion for both short- and long-term PM2.5 
exposure and cardiovascular effects.
    Studies evaluated in the 2019 PM ISA continue to provide evidence 
of a ``likely to be causal relationship'' between both short- and long-
term PM2.5 exposure and respiratory effects. Epidemiologic 
studies provide consistent evidence of a relationship between short-
term PM2.5 exposure and asthma exacerbation in children and 
COPD exacerbation in adults as indicated by increases in emergency 
department visits and hospital admissions, which is supported by animal 
toxicological studies indicating worsening allergic airways disease and 
subclinical effects related to COPD. Epidemiologic studies also provide 
evidence of a relationship between short-term PM2.5 exposure 
and respiratory mortality. However, there is inconsistent evidence of 
respiratory effects, specifically lung function declines and pulmonary 
inflammation, in controlled human exposure studies. With respect to 
long term PM2.5 exposure, epidemiologic studies conducted in 
the United States and abroad provide evidence of a relationship with 
respiratory effects, including consistent changes in lung function and 
lung function growth rate, increased asthma incidence, asthma 
prevalence, and wheeze in children; acceleration of lung function 
decline in adults; and respiratory mortality. The epidemiologic 
evidence is supported by animal toxicological studies, which provide 
coherence and biological plausibility for a range of effects including 
impaired lung development, decrements in lung function growth, and 
asthma development.
    Since the 2009 PM ISA, a growing body of scientific evidence 
examined the relationship between long-term PM2.5 exposure 
and nervous system effects, resulting for the first time in a causality 
determination for this health effects category of a ``likely to be 
causal relationship.'' The strongest evidence for effects on the 
nervous system comes from epidemiologic studies that consistently 
report cognitive decrements and reductions in brain volume in adults. 
The effects observed in epidemiologic studies in adults are supported 
by animal toxicological studies demonstrating effects on the brain of 
adult animals including inflammation, morphologic changes, and 
neurodegeneration of specific regions of the brain. There is more 
limited evidence for neurodevelopmental effects in children, with some 
studies reporting positive associations with autism spectrum disorder 
and others providing limited evidence of an association with cognitive 
function. While there is some evidence from animal toxicological 
studies indicating effects on the brain (i.e., inflammatory and 
morphological changes) to support a biologically plausible pathway for 
neurodevelopmental effects, epidemiologic studies are limited due to 
their lack of control for potential confounding by copollutants, the 
small number of studies conducted, and uncertainty regarding critical 
exposure windows.
    Building off the decades of research demonstrating mutagenicity, 
DNA damage, and other endpoints related to genotoxicity due to whole PM 
exposures, recent experimental and epidemiologic studies focusing 
specifically on PM2.5 provide evidence of a relationship 
between long-term PM2.5 exposure and cancer. Epidemiologic 
studies examining long-term PM2.5 exposure and lung cancer 
incidence and mortality provide evidence of generally positive 
associations in cohort studies spanning different populations, 
locations, and exposure assignment techniques. Additionally, there is 
evidence of positive associations with lung cancer incidence and 
mortality in analyses limited to never smokers. The epidemiologic 
evidence is supported by both experimental and epidemiologic evidence 
of genotoxicity, epigenetic effects, carcinogenic potential, and that 
PM2.5 exhibits several characteristics of carcinogens, which 
collectively provides biological plausibility for cancer development 
and resulted in the conclusion of a ``likely to be causal 
relationship.''
    For the additional health effects categories evaluated for 
PM2.5 in the 2019 PM ISA, experimental and epidemiologic 
studies provide limited and/or inconsistent evidence of a relationship 
with PM2.5 exposure. As a result, the 2019 PM ISA concluded 
that the evidence is ``suggestive of, but not sufficient to infer a 
causal relationship''

[[Page 26051]]

for short-term PM2.5 exposure and metabolic effects and 
nervous system effects and for long-term PM2.5 exposures and 
metabolic effects as well as reproductive and developmental effects.
    In addition to evaluating the health effects attributed to short- 
and long-term exposure to PM2.5, the 2019 PM ISA also 
conducted an extensive evaluation as to whether specific components or 
sources of PM2.5 are more strongly related with health 
effects than PM2.5 mass. An evaluation of those studies 
resulted in the 2019 PM ISA concluding that ``many PM2.5 
components and sources are associated with many health effects, and the 
evidence does not indicate that any one source or component is 
consistently more strongly related to health effects than 
PM2.5 mass.'' \710\
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    \710\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
---------------------------------------------------------------------------

    For both PM10-2.5 and UFPs, for all health effects 
categories evaluated, the 2019 PM ISA concluded that the evidence was 
``suggestive of, but not sufficient to infer, a causal relationship'' 
or ``inadequate to determine the presence or absence of a causal 
relationship.'' For PM10-2.5, although a Federal Reference 
Method (FRM) was instituted in 2011 to measure PM10-2.5 
concentrations nationally, the causality determinations reflect that 
the same uncertainty identified in the 2009 PM ISA with respect to the 
method used to estimate PM10-2.5 concentrations in 
epidemiologic studies persists. Specifically, across epidemiologic 
studies, different approaches are used to estimate PM10-2.5 
concentrations (e.g., direct measurement of PM10-2.5, 
difference between PM10 and PM2.5 
concentrations), and it remains unclear how well correlated 
PM10-2.5 concentrations are both spatially and temporally 
across the different methods used.
    For UFPs, which have often been defined as particles less than 0.1 
[micro]m, the uncertainty in the evidence for the health effect 
categories evaluated across experimental and epidemiologic studies 
reflects the inconsistency in the exposure metric used (i.e., particle 
number concentration, surface area concentration, mass concentration) 
as well as the size fractions examined. In epidemiologic studies the 
size fraction examined can vary depending on the monitor used and 
exposure metric, with some studies examining number count over the 
entire particle size range, while experimental studies that use a 
particle concentrator often examine particles up to 0.3 [micro]m. 
Additionally, due to the lack of a monitoring network, there is limited 
information on the spatial and temporal variability of UFPs within the 
United States, as well as population exposures to UFPs, which adds 
uncertainty to epidemiologic study results.
    The 2019 PM ISA cites extensive evidence indicating that ``both the 
general population as well as specific populations and life stages are 
at risk for PM2.5-related health effects.'' \711\ For 
example, in support of its ``causal'' and ``likely to be causal'' 
determinations, the ISA cites substantial evidence for (1) PM-related 
mortality and cardiovascular effects in older adults; (2) PM-related 
cardiovascular effects in people with pre-existing cardiovascular 
disease; (3) PM-related respiratory effects in people with pre-existing 
respiratory disease, particularly asthma exacerbations in children; and 
(4) PM-related impairments in lung function growth and asthma 
development in children. The ISA additionally notes that stratified 
analyses (i.e., analyses that directly compare PM-related health 
effects across groups) provide strong evidence for racial and ethnic 
differences in PM2.5 exposures and in the risk of 
PM2.5-related health effects, specifically within Hispanic 
and non-Hispanic Black populations, with some evidence of increased 
risk for populations of low socioeconomic status. Recent studies 
evaluated in the Supplement support the conclusion of the 2019 PM ISA 
with respect to disparities in both PM2.5 exposure and 
health risk by race and ethnicity and provide additional support for 
disparities for populations of lower socioeconomic status.\712\ 
Additionally, evidence spanning epidemiologic studies that conducted 
stratified analyses, experimental studies focusing on animal models of 
disease or individuals with pre-existing disease, dosimetry studies, as 
well as studies focusing on differential exposure suggest that 
populations with pre-existing cardiovascular or respiratory disease, 
populations that are overweight or obese, populations that have 
particular genetic variants, and current/former smokers could be at 
increased risk for adverse PM2.5-related health effects. The 
2022 Policy Assessment for the review of the PM NAAQS also highlights 
that factors that may contribute to increased risk of PM2.5-
related health effects include lifestage (children and older adults), 
pre-existing diseases (cardiovascular disease and respiratory disease), 
race/ethnicity, and socioeconomic status.\713\
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    \711\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \712\ U.S. EPA. Supplement to the 2019 Integrated Science 
Assessment for Particulate Matter (Final Report, 2022). U.S. 
Environmental Protection Agency, Washington, DC, EPA/635/R-22/028, 
2022.
    \713\ U.S. EPA. Policy Assessment (PA) for the Reconsideration 
of the National Ambient Air Quality Standards for Particulate Matter 
(Final Report, 2022). U.S. Environmental Protection Agency, 
Washington, DC, EPA-452/R-22-004, 2022, p. 3-53.
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ii. Ozone
    This section provides a summary of the health effects associated 
with exposure to ambient concentrations of ozone.\714\ The information 
in this section is based on the information and conclusions in the 
April 2020 Integrated Science Assessment for Ozone (Ozone ISA).\715\ 
The Ozone ISA concludes that human exposures to ambient concentrations 
of ozone are associated with a number of adverse health effects and 
characterizes the weight of evidence for these health effects.\716\ The 
discussion in this Section VI.B.2.ii highlights the Ozone ISA's 
conclusions pertaining to health effects associated with both short-
term and long-term periods of exposure to ozone.
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    \714\ Human exposure to ozone varies over time due to changes in 
ambient ozone concentration and because people move between 
locations which have notably different ozone concentrations. Also, 
the amount of ozone delivered to the lung is influenced not only by 
the ambient concentrations but also by the breathing route and rate.
    \715\ U.S. EPA. 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.
    \716\ The ISA evaluates evidence and draws conclusions on the 
causal relationship between relevant pollutant exposures and health 
effects, assigning one of five ``weight of evidence'' 
determinations: causal relationship, likely to be a causal 
relationship, suggestive of a causal relationship, inadequate to 
infer a causal relationship, and not likely to be a causal 
relationship. For more information on these levels of evidence, 
please refer to Table II in the Preamble of the ISA.
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    For short-term exposure to ozone, the Ozone ISA concludes that 
respiratory effects, including lung function decrements, pulmonary 
inflammation, exacerbation of asthma, respiratory-related hospital 
admissions, and mortality, are causally associated with ozone exposure. 
It also concludes that metabolic effects, including metabolic syndrome 
(i.e., changes in insulin or glucose levels, cholesterol levels, 
obesity and blood pressure) and complications due to diabetes are 
likely to be causally associated with short-term exposure to ozone and 
that evidence is suggestive of a causal relationship between 
cardiovascular effects, central nervous system effects

[[Page 26052]]

and total mortality and short-term exposure to ozone.
    For long-term exposure to ozone, the Ozone ISA concludes that 
respiratory effects, including new onset asthma, pulmonary inflammation 
and injury, are likely to be causally related with ozone exposure. The 
Ozone ISA characterizes the evidence as suggestive of a causal 
relationship for associations between long-term ozone exposure and 
cardiovascular effects, metabolic effects, reproductive and 
developmental effects, central nervous system effects and total 
mortality. The evidence is inadequate to infer a causal relationship 
between chronic ozone exposure and increased risk of cancer.
    Finally, interindividual variation in human responses to ozone 
exposure can result in some groups being at increased risk for 
detrimental effects in response to exposure. In addition, some groups 
are at increased risk of exposure due to their activities, such as 
outdoor workers and children. The Ozone ISA identified several groups 
that are at increased risk for ozone-related health effects. These 
groups are people with asthma, children and older adults, individuals 
with reduced intake of certain nutrients (i.e., Vitamins C and E), 
outdoor workers, and individuals having certain genetic variants 
related to oxidative metabolism or inflammation. Ozone exposure during 
childhood can have lasting effects through adulthood. Such effects 
include altered function of the respiratory and immune systems. 
Children absorb higher doses (normalized to lung surface area) of 
ambient ozone, compared to adults, due to their increased time spent 
outdoors, higher ventilation rates relative to body size, and a 
tendency to breathe a greater fraction of air through the mouth. 
Children also have a higher asthma prevalence compared to adults. 
Recent epidemiologic studies provide generally consistent evidence that 
long-term ozone exposure is associated with the development of asthma 
in children. Studies comparing age groups reported higher magnitude 
associations for short-term ozone exposure and respiratory hospital 
admissions and emergency room visits among children than among adults. 
Panel studies also provide support for experimental studies with 
consistent associations between short-term ozone exposure and lung 
function and pulmonary inflammation in healthy children. Additional 
children's vulnerability and susceptibility factors are listed in 
Section XI.G of the Preamble.
iii. Nitrogen Oxides
    The most recent review of the health effects of oxides of nitrogen 
completed by EPA can be found in the 2016 Integrated Science Assessment 
for Oxides of Nitrogen--Health Criteria (Oxides of Nitrogen ISA).\717\ 
The primary source of NO2 is motor vehicle emissions, and 
ambient NO2 concentrations tend to be highly correlated with 
other traffic-related pollutants. Thus, a key issue in characterizing 
the causality of NO2-health effect relationships consists of 
evaluating the extent to which studies supported an effect of 
NO2 that is independent of other traffic-related pollutants. 
EPA concluded that the findings for asthma exacerbation integrated from 
epidemiologic and controlled human exposure studies provided evidence 
that is sufficient to infer a causal relationship between respiratory 
effects and short-term NO2 exposure. The strongest evidence 
supporting an independent effect of NO2 exposure comes from 
controlled human exposure studies demonstrating increased airway 
responsiveness in individuals with asthma following ambient-relevant 
NO2 exposures. The coherence of this evidence with 
epidemiologic findings for asthma hospital admissions and ED visits as 
well as lung function decrements and increased pulmonary inflammation 
in children with asthma describe a plausible pathway by which 
NO2 exposure can cause an asthma exacerbation. The 2016 ISA 
for Oxides of Nitrogen also concluded that there is likely to be a 
causal relationship between long-term NO2 exposure and 
respiratory effects. This conclusion is based on new epidemiologic 
evidence for associations of NO2 with asthma development in 
children combined with biological plausibility from experimental 
studies.
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    \717\ U.S. EPA. Integrated Science Assessment for Oxides of 
Nitrogen--Health Criteria (2016 Final Report). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-15/068, 2016.
---------------------------------------------------------------------------

    In evaluating a broader range of health effects, the 2016 ISA for 
Oxides of Nitrogen concluded that evidence is ``suggestive of, but not 
sufficient to infer, a causal relationship'' between short-term 
NO2 exposure and cardiovascular effects and mortality and 
between long-term NO2 exposure and cardiovascular effects 
and diabetes, birth outcomes, and cancer. In addition, the scientific 
evidence is inadequate (insufficient consistency of epidemiologic and 
toxicological evidence) to infer a causal relationship for long-term 
NO2 exposure with fertility, reproduction, and pregnancy, as 
well as with postnatal development. A key uncertainty in understanding 
the relationship between these non-respiratory health effects and 
short- or long-term exposure to NO2 is co-pollutant 
confounding, particularly by other roadway pollutants. The available 
evidence for non-respiratory health effects does not adequately address 
whether NO2 has an independent effect or whether it 
primarily represents effects related to other or a mixture of traffic-
related pollutants.
    The 2016 ISA for Oxides of Nitrogen concluded that people with 
asthma, children, and older adults are at increased risk for 
NO2-related health effects. In these groups and lifestages, 
NO2 is consistently related to larger effects on outcomes 
related to asthma exacerbation, for which there is confidence in the 
relationship with NO2 exposure.
iv. Sulfur Oxides
    This section provides an overview of the health effects associated 
with SO2. Additional information on the health effects of 
SO2 can be found in the 2017 Integrated Science Assessment 
for Sulfur Oxides--Health Criteria (SOX ISA).\718\ Following 
an extensive evaluation of health evidence from animal toxicological, 
controlled human exposure, and epidemiologic studies, the EPA has 
concluded that there is a causal relationship between respiratory 
health effects and short-term exposure to SO2. The immediate 
effect of SO2 on the respiratory system in humans is 
bronchoconstriction. People with asthma are more sensitive to the 
effects of SO2, likely resulting from preexisting 
inflammation associated with this disease. In addition to those with 
asthma (both children and adults), there is suggestive evidence that 
all children and older adults may be at increased risk of 
SO2-related health effects. In free-breathing laboratory 
studies involving controlled human exposures to SO2, 
respiratory effects have consistently been observed following 5-10 min 
exposures at SO2 concentrations >=400 ppb in people with 
asthma engaged in moderate to heavy levels of exercise, with 
respiratory effects occurring at concentrations as low as 200 ppb in 
some individuals with asthma. A clear concentration-response 
relationship has been demonstrated in these studies following exposures 
to SO2 at concentrations between 200 and 1000

[[Page 26053]]

ppb, both in terms of increasing severity of respiratory symptoms and 
decrements in lung function, as well as the percentage of individuals 
with asthma adversely affected. Epidemiologic studies have reported 
positive associations between short-term ambient SO2 
concentrations and hospital admissions and emergency department visits 
for asthma and for all respiratory causes, particularly among children 
and older adults (>=65 years). The studies provide supportive evidence 
for the causal relationship.
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    \718\ U.S. EPA. Integrated Science Assessment (ISA) for Sulfur 
Oxides--Health Criteria (Final Report, Dec 2017). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-17/451, 2017.
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    For long-term SO2 exposure and respiratory effects, the 
EPA has concluded that the evidence is suggestive of a causal 
relationship. This conclusion is based on new epidemiologic evidence 
for positive associations between long-term SO2 exposure and 
increases in asthma incidence among children, together with animal 
toxicological evidence that provides a pathophysiologic basis for the 
development of asthma. However, uncertainty remains regarding the 
influence of other pollutants on the observed associations with 
SO2 because these epidemiologic studies have not examined 
the potential for co-pollutant confounding.
    Consistent associations between short-term exposure to 
SO2 and mortality have been observed in epidemiologic 
studies, with larger effect estimates reported for respiratory 
mortality than for cardiovascular mortality. While this finding is 
consistent with the demonstrated effects of SO2 on 
respiratory morbidity, uncertainty remains with respect to the 
interpretation of these observed mortality associations due to 
potential confounding by various copollutants. Therefore, the EPA has 
concluded that the overall evidence is suggestive of a causal 
relationship between short-term exposure to SO2 and 
mortality.
v. Carbon Monoxide
    Information on the health effects of carbon monoxide (CO) can be 
found in the January 2010 Integrated Science Assessment for Carbon 
Monoxide (CO ISA).\719\ The CO ISA presents conclusions regarding the 
presence of causal relationships between CO exposure and categories of 
adverse health effects.\720\ This section provides a summary of the 
health effects associated with exposure to ambient concentrations of 
CO, along with the CO ISA conclusions.\721\
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    \719\ U.S. EPA, (2010). Integrated Science Assessment for Carbon 
Monoxide (Final Report). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-09/019F, 2010.
    \720\ The ISA evaluates the health evidence associated with 
different health effects, assigning one of five ``weight of 
evidence'' determinations: causal relationship, likely to be a 
causal relationship, suggestive of a causal relationship, inadequate 
to infer a causal relationship, and not likely to be a causal 
relationship. For definitions of these levels of evidence, please 
refer to Section 1.6 of the ISA.
    \721\ Personal exposure includes contributions from many 
sources, and in many different environments. Total personal exposure 
to CO includes both ambient and non-ambient components; and both 
components may contribute to adverse health effects.
---------------------------------------------------------------------------

    Controlled human exposure studies of subjects with coronary artery 
disease show a decrease in the time to onset of exercise-induced angina 
(chest pain) and electrocardiogram changes following CO exposure. In 
addition, epidemiologic studies observed associations between short-
term CO exposure and cardiovascular morbidity, particularly increased 
emergency room visits and hospital admissions for coronary heart 
disease (including ischemic heart disease, myocardial infarction, and 
angina). Some epidemiologic evidence is also available for increased 
hospital admissions and emergency room visits for congestive heart 
failure and cardiovascular disease as a whole. The CO ISA concludes 
that a causal relationship is likely to exist between short-term 
exposures to CO and cardiovascular morbidity. It also concludes that 
available data are inadequate to conclude that a causal relationship 
exists between long-term exposures to CO and cardiovascular morbidity.
    Animal studies show various neurological effects with in-utero CO 
exposure. Controlled human exposure studies report central nervous 
system and behavioral effects following low-level CO exposures, 
although the findings have not been consistent across all studies. The 
CO ISA concludes that the evidence is suggestive of a causal 
relationship with both short- and long-term exposure to CO and central 
nervous system effects.
    A number of studies cited in the CO ISA have evaluated the role of 
CO exposure in birth outcomes such as preterm birth or cardiac birth 
defects. There is limited epidemiologic evidence of a CO-induced effect 
on preterm births and birth defects, with weak evidence for a decrease 
in birth weight. Animal toxicological studies have found perinatal CO 
exposure to affect birth weight, as well as other developmental 
outcomes. The CO ISA concludes that the evidence is suggestive of a 
causal relationship between long-term exposures to CO and developmental 
effects and birth outcomes.
    Epidemiologic studies provide evidence of associations between 
short-term CO concentrations and respiratory morbidity such as changes 
in pulmonary function, respiratory symptoms, and hospital admissions. A 
limited number of epidemiologic studies considered copollutants such as 
ozone, SO2, and PM in two-pollutant models and found that CO 
risk estimates were generally robust, although this limited evidence 
makes it difficult to disentangle effects attributed to CO itself from 
those of the larger complex air pollution mixture. Controlled human 
exposure studies have not extensively evaluated the effect of CO on 
respiratory morbidity. Animal studies at levels of 50-100 ppm CO show 
preliminary evidence of altered pulmonary vascular remodeling and 
oxidative injury. The CO ISA concludes that the evidence is suggestive 
of a causal relationship between short-term CO exposure and respiratory 
morbidity, and inadequate to conclude that a causal relationship exists 
between long-term exposure and respiratory morbidity.
    Finally, the CO ISA concludes that the epidemiologic evidence is 
suggestive of a causal relationship between short-term concentrations 
of CO and mortality. Epidemiologic evidence suggests an association 
exists between short-term exposure to CO and mortality, but limited 
evidence is available to evaluate cause-specific mortality outcomes 
associated with CO exposure. In addition, the attenuation of CO risk 
estimates which was often observed in co-pollutant models contributes 
to the uncertainty as to whether CO is acting alone or as an indicator 
for other combustion-related pollutants. The CO ISA also concludes that 
there is not likely to be a causal relationship between relevant long-
term exposures to CO and mortality.
vi. Diesel Exhaust
    In EPA's 2002 Diesel Health Assessment Document (Diesel HAD), 
exposure to diesel exhaust was classified as likely to be carcinogenic 
to humans by inhalation from environmental exposures, in accordance 
with the revised draft 1996/1999 EPA cancer 
guidelines.722 723 A number of

[[Page 26054]]

other agencies (National Institute for Occupational Safety and Health, 
the International Agency for Research on Cancer, the World Health 
Organization, California EPA, and the U.S. Department of Health and 
Human Services) made similar hazard classifications prior to 2002. EPA 
also concluded in the 2002 Diesel HAD that it was not possible to 
calculate a cancer unit risk for diesel exhaust due to limitations in 
the exposure data for the occupational groups or the absence of a dose-
response relationship.
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    \722\ U.S. EPA. (1999). Guidelines for Carcinogen Risk 
Assessment. Review Draft. NCEA-F-0644, July. Washington, DC: U.S. 
EPA. Retrieved on March 19, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=54932.
    \723\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of research and 
Development, Washington DC. Retrieved on March 17, 2009 from http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060. pp. 1-1 1-2.
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    In the absence of a cancer unit risk, the Diesel HAD sought to 
provide additional insight into the significance of the diesel exhaust 
cancer hazard by estimating possible ranges of risk that might be 
present in the population. An exploratory analysis was used to 
characterize a range of possible lung cancer risk. The outcome was that 
environmental risks of cancer from long-term diesel exhaust exposures 
could plausibly range from as low as 10-5 to as high as 
10-3. Because of uncertainties, the analysis acknowledged 
that the risks could be lower than 10-5, and a zero risk 
from diesel exhaust exposure could not be ruled out.
    Noncancer health effects of acute and chronic exposure to diesel 
exhaust emissions are also of concern to EPA. EPA derived a diesel 
exhaust reference concentration (RfC) from consideration of four well-
conducted chronic rat inhalation studies showing adverse pulmonary 
effects. The RfC is 5 [micro]g/m\3\ for diesel exhaust measured as 
diesel particulate matter. This RfC does not consider allergenic 
effects such as those associated with asthma or immunologic or the 
potential for cardiac effects. There was emerging evidence in 2002, 
discussed in the Diesel HAD, that exposure to diesel exhaust can 
exacerbate these effects, but the exposure-response data were lacking 
at that time to derive an RfC based on these then-emerging 
considerations. The Diesel HAD states, ``With [diesel particulate 
matter] being a ubiquitous component of ambient PM, there is an 
uncertainty about the adequacy of the existing [diesel exhaust] 
noncancer database to identify all of the pertinent [diesel exhaust]-
caused noncancer health hazards.'' The Diesel HAD also notes ``that 
acute exposure to [diesel exhaust] has been associated with irritation 
of the eye, nose, and throat, respiratory symptoms (cough and phlegm), 
and neurophysiological symptoms such as headache, lightheadedness, 
nausea, vomiting, and numbness or tingling of the extremities.'' The 
Diesel HAD notes that the cancer and noncancer hazard conclusions 
applied to the general use of diesel engines then on the market and as 
cleaner engines replace a substantial number of existing ones, the 
applicability of the conclusions would need to be reevaluated.
    It is important to note that the Diesel HAD also briefly summarizes 
health effects associated with ambient PM and discusses EPA's then-
annual PM2.5 NAAQS of 15 [micro]g/m\3\.\724\ There is a 
large and extensive body of human data showing a wide spectrum of 
adverse health effects associated with exposure to ambient PM, of which 
diesel exhaust is an important component. The PM2.5 NAAQS is 
designed to provide protection from the noncancer health effects and 
premature mortality attributed to exposure to PM2.5. The 
contribution of diesel PM to total ambient PM varies in different 
regions of the country and, also, within a region, from one area to 
another. The contribution can be high in near-roadway environments, for 
example, or in other locations where diesel engine use is concentrated.
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    \724\ See Section VI.B.i for discussion of the current 
PM2.5 NAAQS standard, and https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm.
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    Since 2002, several new studies have been published which continue 
to report increased lung cancer risk associated with occupational 
exposure to diesel exhaust from older engines. Of particular note since 
2011 are three new epidemiology studies that have examined lung cancer 
in occupational populations, including truck drivers, underground 
nonmetal miners, and other diesel motor-related occupations. These 
studies reported increased risk of lung cancer related to exposure to 
diesel exhaust, with evidence of positive exposure-response 
relationships to varying degrees.725 726 727 These newer 
studies (along with others that have appeared in the scientific 
literature) add to the evidence EPA evaluated in the 2002 Diesel HAD 
and further reinforce the concern that diesel exhaust exposure likely 
poses a lung cancer hazard. The findings from these newer studies do 
not necessarily apply to newer technology diesel engines (i.e., heavy-
duty highway engines from 2007 and later model years) since the newer 
engines have large reductions in the emission constituents compared to 
older technology diesel engines.
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    \725\ Garshick, Eric, Francine Laden, Jaime E. Hart, Mary E. 
Davis, Ellen A. Eisen, and Thomas J. Smith. 2012. Lung cancer and 
elemental carbon exposure in trucking industry workers. 
Environmental Health Perspectives 120(9): 1301-1306.
    \726\ Silverman, D.T., Samanic, C.M., Lubin, J.H., Blair, A.E., 
Stewart, P.A., Vermeulen, R., & Attfield, M.D. (2012). The diesel 
exhaust in miners study: a nested case-control study of lung cancer 
and diesel exhaust. Journal of the National Cancer Institute.
    \727\ Olsson, Ann C., et al. ``Exposure to diesel motor exhaust 
and lung cancer risk in a pooled analysis from case-control studies 
in Europe and Canada.'' American journal of respiratory and critical 
care medicine 183.7 (2011): 941-948.
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    In light of the growing body of scientific literature evaluating 
the health effects of exposure to diesel exhaust, in June 2012 the 
World Health Organization's International Agency for Research on Cancer 
(IARC), a recognized international authority on the carcinogenic 
potential of chemicals and other agents, evaluated the full range of 
cancer-related health effects data for diesel engine exhaust. IARC 
concluded that diesel exhaust should be regarded as ``carcinogenic to 
humans.'' \728\ This designation was an update from its 1988 evaluation 
that considered the evidence to be indicative of a ``probable human 
carcinogen.''
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    \728\ IARC [International Agency for Research on Cancer]. 
(2013). Diesel and gasoline engine exhausts and some nitroarenes. 
IARC Monographs Volume 105. Online at http://monographs.iarc.fr/ENG/Monographs/vol105/index.php.
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vii. Air Toxics
    Heavy-duty engine emissions contribute to ambient levels of air 
toxics that are known or suspected human or animal carcinogens or that 
have noncancer health effects. These compounds include, but are not 
limited to, acetaldehyde, acrolein, benzene, 1,3-butadiene, 
ethylbenzene, formaldehyde, and naphthalene, which were all identified 
as national or regional health effects drivers or contributors in the 
2018 AirToxScreen Assessment.729 730
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    \729\ U.S. EPA (2022) Technical Support Document EPA Air Toxics 
Screening Assessment. 2017AirToxScreen TSD. https://www.epa.gov/system/files/documents/2022-03/airtoxscreen_2017tsd.pdf.
    \730\ U.S. EPA (2022) 2018 AirToxScreen Risk Drivers. https://www.epa.gov/AirToxScreen/airtoxscreen-risk-drivers.
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a. Acetaldehyde
    Acetaldehyde is classified in EPA's IRIS database as a probable 
human carcinogen, based on nasal tumors in rats, and is considered 
toxic by the inhalation, oral, and intravenous routes.\731\ The 
inhalation unit risk estimate (URE) in IRIS for acetaldehyde is 2.2 x 
10-6 per [micro]g/m3.\732\

[[Page 26055]]

Acetaldehyde is reasonably anticipated to be a human carcinogen by the 
NTP in the 14th Report on Carcinogens and is classified as possibly 
carcinogenic to humans (Group 2B) by the IARC.733 734
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    \731\ U.S. EPA (1991). Integrated Risk Information System File 
of Acetaldehyde. Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
electronically at https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
    \732\ U.S. EPA (1991). Integrated Risk Information System File 
of Acetaldehyde. This material is available electronically at 
https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
    \733\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
    \734\ International Agency for Research on Cancer (IARC). 
(1999). Re-evaluation of some organic chemicals, hydrazine, and 
hydrogen peroxide. IARC Monographs on the Evaluation of Carcinogenic 
Risk of Chemical to Humans, Vol 71. Lyon, France.
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    The primary noncancer effects of exposure to acetaldehyde vapors 
include irritation of the eyes, skin, and respiratory tract.\735\ In 
short-term (4 week) rat studies, degeneration of olfactory epithelium 
was observed at various concentration levels of acetaldehyde 
exposure.736 737 Data from these studies were used by EPA to 
develop an inhalation reference concentration of 9 [micro]g/m\3\. Some 
asthmatics have been shown to be a sensitive subpopulation to 
decrements in functional expiratory volume (FEV1 test) and 
bronchoconstriction upon acetaldehyde inhalation.\738\ Children, 
especially those with diagnosed asthma, may be more likely to show 
impaired pulmonary function and symptoms of asthma than are adults 
following exposure to acetaldehyde.\739\
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    \735\ U.S. EPA (1991). Integrated Risk Information System File 
of Acetaldehyde. This material is available electronically at 
https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=290.
    \736\ U.S. EPA. (2003). Integrated Risk Information System File 
of Acrolein. Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
electronically at https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=364.
    \737\ Appleman, L.M., R.A. Woutersen, and V.J. Feron. (1982). 
Inhalation toxicity of acetaldehyde in rats. I. Acute and subacute 
studies. Toxicology. 23: 293-297.
    \738\ Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and Matsuda, 
T. (1993). Aerosolized acetaldehyde induces histamine-mediated 
bronchoconstriction in asthmatics. Am. Rev. Respir.Dis.148(4 Pt 1): 
940-943.
    \739\ California OEHHA, 2014. TSD for Noncancer RELs: Appendix 
D. Individual, Acute, 8-Hour, and Chronic Reference Exposure Level 
Summaries. December 2008 (updated July 2014). https://oehha.ca.gov/media/downloads/crnr/appendixd1final.pdf.
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b. Acrolein
    EPA most recently evaluated the toxicological and health effects 
literature related to acrolein in 2003 and concluded that the human 
carcinogenic potential of acrolein could not be determined because the 
available data were inadequate. No information was available on the 
carcinogenic effects of acrolein in humans, and the animal data 
provided inadequate evidence of carcinogenicity.\740\ In 2021, the IARC 
classified acrolein as probably carcinogenic to humans.\741\
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    \740\ U.S. EPA. (2003). Integrated Risk Information System File 
of Acrolein. Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
at https://iris.epa.gov/ChemicalLanding/&substance_nmbr=364.
    \741\ International Agency for Research on Cancer (IARC). 
(2021). Monographs on the Identification of Carcinogenic Hazards to 
humans, Volume 128. Acrolein, Crotonaldehyde, and Arecoline, World 
Health Organization, Lyon, France.
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    Lesions to the lungs and upper respiratory tract of rats, rabbits, 
and hamsters have been observed after subchronic exposure to 
acrolein.\742\ The agency has developed an RfC for acrolein of 0.02 
[micro]g/m3 and an RfD of 0.5 [micro]g/kg-day.\743\
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    \742\ U.S. EPA. (2003). Integrated Risk Information System File 
of Acrolein. Office of Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
at http://www.epa.gov/iris/subst/0364.htm.
    \743\ U.S. EPA. (2003). Integrated Risk Information System File 
of Acrolein. Office of Research and Development, National Center for 
Environmental Assessment, Washington, DC. This material is available 
at https://iris.epa.gov/ChemicalLanding/&substance_nmbr=364.
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    Acrolein is extremely acrid and irritating to humans when inhaled, 
with acute exposure resulting in upper respiratory tract irritation, 
mucus hypersecretion and congestion. The intense irritancy of this 
carbonyl has been demonstrated during controlled tests in human 
subjects, who suffer intolerable eye and nasal mucosal sensory 
reactions within minutes of exposure.\744\ These data and additional 
studies regarding acute effects of human exposure to acrolein are 
summarized in EPA's 2003 IRIS Human Health Assessment for 
acrolein.\745\ Studies in humans indicate that levels as low as 0.09 
ppm (0.21 mg/m3) for five minutes may elicit subjective 
complaints of eye irritation with increasing concentrations leading to 
more extensive eye, nose and respiratory symptoms. Acute exposures in 
animal studies report bronchial hyper-responsiveness. Based on animal 
data (more pronounced respiratory irritancy in mice with allergic 
airway disease in comparison to non-diseased mice \746\) and 
demonstration of similar effects in humans (e.g., reduction in 
respiratory rate), individuals with compromised respiratory function 
(e.g., emphysema, asthma) are expected to be at increased risk of 
developing adverse responses to strong respiratory irritants such as 
acrolein. EPA does not currently have an acute reference concentration 
for acrolein. The available health effect reference values for acrolein 
have been summarized by EPA and include an ATSDR MRL for acute exposure 
to acrolein of 7 [micro]g/m3 for 1-14 days exposure and 
Reference Exposure Level (REL) values from the California Office of 
Environmental Health Hazard Assessment (OEHHA) for one-hour and 8-hour 
exposures of 2.5 [micro]g/m3 and 0.7 [micro]g/m3, 
respectively.\747\
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    \744\ U.S. EPA. (2003). Toxicological review of acrolein in 
support of summary information on Integrated Risk Information System 
(IRIS) National Center for Environmental Assessment, Washington, DC. 
EPA/635/R-03/003. p. 10. Available online at: https://iris.epa.gov/static/pdfs/0364tr.pdf.
    \745\ U.S. EPA. (2003). Toxicological review of acrolein in 
support of summary information on Integrated Risk Information System 
(IRIS) National Center for Environmental Assessment, Washington, DC. 
EPA/635/R-03/003. Available online at: https://iris.epa.gov/static/pdfs/0364tr.pdf.
    \746\ Morris JB, Symanowicz PT, Olsen JE, et al. (2003). 
Immediate sensory nerve-mediated respiratory responses to irritants 
in healthy and allergic airway-diseased mice. J Appl Physiol 
94(4):1563-1571.
    \747\ U.S. EPA. (2009). Graphical Arrays of Chemical-Specific 
Health Effect Reference Values for Inhalation Exposures (Final 
Report). U.S. Environmental Protection Agency, Washington, DC, EPA/
600/R-09/061, 2009. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=211003.
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c. Benzene
    EPA's Integrated Risk Information System (IRIS) database lists 
benzene as a known human carcinogen (causing leukemia) by all routes of 
exposure and concludes that exposure is associated with additional 
health effects, including genetic changes in both humans and animals 
and increased proliferation of bone marrow cells in 
mice.748 749 750 EPA states in its IRIS database that data 
indicate a causal relationship between benzene exposure and acute 
lymphocytic leukemia and suggest a relationship between benzene 
exposure and chronic non-lymphocytic leukemia and chronic lymphocytic 
leukemia. EPA's IRIS documentation for benzene also lists a range of 
2.2 x 10-6 to 7.8 x 10-6 per [micro]g/
m3 as the unit risk estimate (URE) for 
benzene.751 752 The

[[Page 26056]]

International Agency for Research on Cancer (IARC) has determined that 
benzene is a human carcinogen, and the U.S. Department of Health and 
Human Services (DHHS) has characterized benzene as a known human 
carcinogen.753 754
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    \748\ U.S. EPA. (2000). Integrated Risk Information System File 
for Benzene. This material is available electronically at: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=276.
    \749\ International Agency for Research on Cancer. (1982). IARC 
monographs on the evaluation of carcinogenic risk of chemicals to 
humans, Volume 29, Some industrial chemicals and dyestuffs, 
International Agency for Research on Cancer, World Health 
Organization, Lyon, France 1982.
    \750\ Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.; Henry, 
V.A. (1992). Synergistic action of the benzene metabolite 
hydroquinone on myelopoietic stimulating activity of granulocyte/
macrophage colony-stimulating factor in vitro, Proc. Natl. Acad. 
Sci. 89:3691-3695.
    \751\ A unit risk estimate is defined as the increase in the 
lifetime risk of cancer of an individual who is exposed for a 
lifetime to 1 [micro]g/m3 benzene in air.
    \752\ U.S. EPA. (2000). Integrated Risk Information System File 
for Benzene. This material is available electronically at: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=276.
    \753\ International Agency for Research on Cancer (IARC, 2018. 
Monographs on the evaluation of carcinogenic risks to humans, volume 
120. World Health Organization--Lyon, France. http://publications.iarc.fr/Book-And-Report-Series/Iarc-Monographs-On-The-Identification-Of-Carcinogenic-Hazards-To-Humans/Benzene-2018.
    \754\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
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    A number of adverse noncancer health effects, including blood 
disorders such as preleukemia and aplastic anemia, have also been 
associated with long-term exposure to benzene.755 756 The 
most sensitive noncancer effect observed in humans, based on current 
data, is the depression of the absolute lymphocyte count in 
blood.757 758 EPA's inhalation reference concentration (RfC) 
for benzene is 30 [micro]g/m3. The RfC is based on 
suppressed absolute lymphocyte counts seen in humans under occupational 
exposure conditions. In addition, studies sponsored by the Health 
Effects Institute (HEI) provide evidence that biochemical responses 
occur at lower levels of benzene exposure than previously 
known.759 760 761 762 EPA's IRIS program has not yet 
evaluated these new data. EPA does not currently have an acute 
reference concentration for benzene. The Agency for Toxic Substances 
and Disease Registry (ATSDR) Minimal Risk Level (MRL) for acute 
inhalation exposure to benzene is 29 [micro]g/m3 for 1-14 
days exposure.763 764
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    \755\ Aksoy, M. (1989). Hematotoxicity and carcinogenicity of 
benzene. Environ. Health Perspect. 82: 193-197. EPA-HQ-OAR-2011-
0135.
    \756\ Goldstein, B.D. (1988). Benzene toxicity. Occupational 
medicine. State of the Art Reviews. 3: 541-554.
    \757\ Rothman, N., G.L. Li, M. Dosemeci, W.E. Bechtold, G.E. 
Marti, Y.Z. Wang, M. Linet, L.Q. Xi, W. Lu, M.T. Smith, N. Titenko-
Holland, L.P. Zhang, W. Blot, S.N. Yin, and R.B. Hayes. (1996). 
Hematotoxicity among Chinese workers heavily exposed to benzene. Am. 
J. Ind. Med. 29: 236-246.
    \758\ U.S. EPA (2002). Toxicological Review of Benzene 
(Noncancer Effects). Environmental Protection Agency, Integrated 
Risk Information System (IRIS), Research and Development, National 
Center for Environmental Assessment, Washington DC. This material is 
available electronically at https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0276tr.pdf.
    \759\ Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.; Cohen, B.; 
Melikian, A.; Eastmond, D.; Rappaport, S.; Li, H.; Rupa, D.; 
Suramaya, R.; Songnian, W.; Huifant, Y.; Meng, M.; Winnik, M.; Kwok, 
E.; Li, Y.; Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003). HEI Report 
115, Validation & Evaluation of Biomarkers in Workers Exposed to 
Benzene in China.
    \760\ Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. Cohen, et 
al. (2002). Hematological changes among Chinese workers with a broad 
range of benzene exposures. Am. J. Industr. Med. 42: 275-285.
    \761\ Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. 
(2004). Hematotoxically in Workers Exposed to Low Levels of Benzene. 
Science 306: 1774-1776.
    \762\ Turtletaub, K.W. and Mani, C. (2003). Benzene metabolism 
in rodents at doses relevant to human exposure from Urban Air. 
Research Reports Health Effect Inst. Report No.113.
    \763\ U.S. Agency for Toxic Substances and Disease Registry 
(ATSDR). (2007). Toxicological profile for benzene. Atlanta, GA: 
U.S. Department of Health and Human Services, Public Health Service. 
http://www.atsdr.cdc.gov/ToxProfiles/tp3.pdf.
    \764\ A minimal risk level (MRL) is defined as an estimate of 
the daily human exposure to a hazardous substance that is likely to 
be without appreciable risk of adverse noncancer health effects over 
a specified duration of exposure.
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    There is limited information from two studies regarding an 
increased risk of adverse effects to children whose parents have been 
occupationally exposed to benzene.765 766 Data from animal 
studies have shown benzene exposures result in damage to the 
hematopoietic (blood cell formation) system during 
development.767 768 769 Also, key changes related to the 
development of childhood leukemia occur in the developing fetus.\770\ 
Several studies have reported that genetic changes related to eventual 
leukemia development occur before birth. For example, there is one 
study of genetic changes in twins who developed T cell leukemia at nine 
years of age.\771\
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    \765\ Corti, M; Snyder, CA. (1996) Influences of gender, 
development, pregnancy and ethanol consumption on the hematotoxicity 
of inhaled 10 ppm benzene. Arch Toxicol 70:209-217.
    \766\ McKinney P.A.; Alexander, F.E.; Cartwright, R.A.; et al. 
(1991) Parental occupations of children with leukemia in west 
Cumbria, north Humberside, and Gateshead. Br Med J 302:681-686.
    \767\ Keller, KA; Snyder, CA. (1986) Mice exposed in utero to 
low concentrations of benzene exhibit enduring changes in their 
colony forming hematopoietic cells. Toxicology 42:171-181.
    \768\ Keller, KA; Snyder, CA. (1988) Mice exposed in utero to 20 
ppm benzene exhibit altered numbers of recognizable hematopoietic 
cells up to seven weeks after exposure. Fundam Appl Toxicol 10:224-
232.
    \769\ Corti, M; Snyder, CA. (1996) Influences of gender, 
development, pregnancy and ethanol consumption on the hematotoxicity 
of inhaled 10 ppm benzene. Arch Toxicol 70:209-217.
    \770\ U.S. EPA. (2002). Toxicological Review of Benzene 
(Noncancer Effects). National Center for Environmental Assessment, 
Washington, DC. Report No. EPA/635/R-02/001F. https://cfpub.epa.gov/ncea/iris/iris_documents/documents/toxreviews/0276tr.pdf.
    \771\ Ford, AM; Pombo-de-Oliveira, MS; McCarthy, KP; MacLean, 
JM; Carrico, KC; Vincent, RF; Greaves, M. (1997) Monoclonal origin 
of concordant T-cell malignancy in identical twins. Blood 89:281-
285.
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d. 1,3-Butadiene
    EPA has characterized 1,3-butadiene as carcinogenic to humans by 
inhalation.772 773 The IARC has determined that 1,3-
butadiene is a human carcinogen, and the U.S. DHHS has characterized 
1,3-butadiene as a known human carcinogen.774 775 776 777 
There are numerous studies consistently demonstrating that 1,3-
butadiene is metabolized into genotoxic metabolites by experimental 
animals and humans. The specific mechanisms of 1,3-butadiene-induced 
carcinogenesis are unknown; however, the scientific evidence strongly 
suggests that the carcinogenic effects are mediated by genotoxic 
metabolites. Animal data suggest that females may be more sensitive 
than males for cancer effects associated with 1,3-butadiene exposure; 
there are insufficient data in humans from which to draw conclusions 
about sensitive subpopulations. The URE for 1,3-butadiene is 3 x 
10-5 per [micro]g/m3.\778\ 1,3-butadiene also 
causes a variety of reproductive and developmental effects in mice; no 
human data on these effects are available. The most sensitive effect 
was ovarian atrophy observed in a lifetime bioassay of female 
mice.\779\ Based on this critical effect and the benchmark 
concentration methodology, an RfC for chronic health effects was

[[Page 26057]]

calculated at 0.9 ppb (approximately 2 [micro]g/m3).
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    \772\ U.S. EPA. (2002). Health Assessment of 1,3-Butadiene. 
Office of Research and Development, National Center for 
Environmental Assessment, Washington Office, Washington, DC. Report 
No. EPA600-P-98-001F. This document is available electronically at 
https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=54499.
    \773\ U.S. EPA. (2002) ``Full IRIS Summary for 1,3-butadiene 
(CASRN 106-99-0)'' Environmental Protection Agency, Integrated Risk 
Information System (IRIS), Research and Development, National Center 
for Environmental Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=139.
    \774\ International Agency for Research on Cancer (IARC). 
(1999). Monographs on the evaluation of carcinogenic risk of 
chemicals to humans, Volume 71, Re-evaluation of some organic 
chemicals, hydrazine and hydrogen peroxide, World Health 
Organization, Lyon, France.
    \775\ International Agency for Research on Cancer (IARC). 
(2008). Monographs on the evaluation of carcinogenic risk of 
chemicals to humans, 1,3-Butadiene, Ethylene Oxide and Vinyl Halides 
(Vinyl Fluoride, Vinyl Chloride and Vinyl Bromide) Volume 97, World 
Health Organization, Lyon, France.
    \776\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
    \777\ International Agency for Research on Cancer (IARC). 
(2012). Monographs on the evaluation of carcinogenic risk of 
chemicals to humans, Volume 100F chemical agents and related 
occupations, World Health Organization, Lyon, France.
    \778\ U.S. EPA. (2002). ``Full IRIS Summary for 1,3-butadiene 
(CASRN 106-99-0)'' Environmental Protection Agency, Integrated Risk 
Information System (IRIS), Research and Development, National Center 
for Environmental Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=139.
    \779\ Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996). 
Subchronic toxicity of 4-vinylcyclohexene in rats and mice by 
inhalation. Fundam. Appl. Toxicol. 32:1-10.
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e. Ethylbenzene
    EPA's inhalation RfC for ethylbenzene is 1 mg/m3. This conclusion 
on a weight of evidence determination and RfC is contained in the 1991 
IRIS file for ethylbenzene.\780\ The RfC is based on developmental 
effects. A study in rabbits found reductions in live rabbit kits per 
litter at 1000 ppm. In addition, a study on rats found an increased 
incidence of supernumerary and rudimentary ribs at 1000 ppm and 
elevated incidence of extra ribs at 100 ppm. In 1988, EPA concluded 
that data were inadequate to give a weight of evidence characterization 
for carcinogenic effects. EPA released an IRIS Assessment Plan for 
Ethylbenzene in 2017,\781\ and EPA will be releasing the Systematic 
Review Protocol for ethylbenzene in 2023.\782\
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    \780\ U.S. EPA. (1991). Integrated Risk Information System File 
for Ethylbenzene. This material is available electronically at: 
https://iris.epa.gov/ChemicalLanding/&substance_nmbr=51.
    \781\ U.S. EPA (2017). IRIS Assessment Plan for Ethylbenzene. 
EPA/635/R-17/332. This document is available electronically at: 
https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=337468.
    \782\ U.S. EPA (2022). IRIS Program Outlook. June, 2022. This 
material is available electronically at: https://www.epa.gov/system/files/documents/2022-06/IRIS%20Program%20Outlook_June22.pdf.
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    California EPA completed a cancer risk assessment for ethylbenzene 
in 2007 and developed an inhalation unit risk estimate of 2.5 x 
10-6.\783\ This value was based on incidence of kidney 
cancer in male rats. California EPA also developed a chronic inhalation 
noncancer reference exposure level (REL) of 2000 [micro]g/
m3, based on nephrotoxicity and body weight reduction in 
rats, liver cellular alterations, necrosis in mice, and hyperplasia of 
the pituitary gland in mice.\784\
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    \783\ California OEHHA, 2007. Adoption of a Unit Risk Value for 
Ethylbenzene. This material is available electronically at: https://oehha.ca.gov/air/report-hot-spots/adoption-unit-risk-value-ethylbenzene.
    \784\ California OEHHA, 2008. Technical Supporting Document for 
Noncancer RELs, Appendix D3. This material is available 
electronically at: https://oehha.ca.gov/media/downloads/crnr/appendixd3final.pdf.
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    ATSDR developed a chronic inhalation Minimal Risk Level (MRL) for 
ethylbenzene of 0.06 ppm based on renal effects and an acute MRL of 5 
ppm based on auditory effects.
f. Formaldehyde
    In 1991, EPA concluded that formaldehyde is a Class B1 probable 
human carcinogen based on limited evidence in humans and sufficient 
evidence in animals.\785\ An inhalation URE for cancer and a reference 
dose for oral noncancer effects were developed by EPA and posted on the 
IRIS database. Since that time, the NTP and IARC have concluded that 
formaldehyde is a known human carcinogen.786 787 788
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    \785\ EPA. Integrated Risk Information System. Formaldehyde 
(CASRN 50-00-0) https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=419.
    \786\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
    \787\ IARC Monographs on the Evaluation of Carcinogenic Risks to 
Humans Volume 88 (2006): Formaldehyde, 2-Butoxyethanol and 1-tert-
Butoxypropan-2-ol.
    \788\ IARC Monographs on the Evaluation of Carcinogenic Risks to 
Humans Volume 100F (2012): Formaldehyde.
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    The conclusions by IARC and NTP reflect the results of 
epidemiologic research published since 1991 in combination with 
previous animal, human and mechanistic evidence. Research conducted by 
the National Cancer Institute reported an increased risk of 
nasopharyngeal cancer and specific lymphohematopoietic malignancies 
among workers exposed to formaldehyde.789 790 791 A National 
Institute of Occupational Safety and Health study of garment workers 
also reported increased risk of death due to leukemia among workers 
exposed to formaldehyde.\792\ Extended follow-up of a cohort of British 
chemical workers did not report evidence of an increase in 
nasopharyngeal or lymphohematopoietic cancers, but a continuing 
statistically significant excess in lung cancers was reported.\793\ 
Finally, a study of embalmers reported formaldehyde exposures to be 
associated with an increased risk of myeloid leukemia but not brain 
cancer.\794\
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    \789\ Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; 
Blair, A. 2003. Mortality from lymphohematopoetic malignancies among 
workers in formaldehyde industries. Journal of the National Cancer 
Institute 95: 1615-1623.
    \790\ Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Hayes, R. B.; 
Blair, A. 2004. Mortality from solid cancers among workers in 
formaldehyde industries. American Journal of Epidemiology 159: 1117-
1130.
    \791\ Beane Freeman, L. E.; Blair, A.; Lubin, J. H.; Stewart, P. 
A.; Hayes, R. B.; Hoover, R. N.; Hauptmann, M. 2009. Mortality from 
lymphohematopoietic malignancies among workers in formaldehyde 
industries: The National Cancer Institute cohort. J. National Cancer 
Inst. 101: 751-761.
    \792\ Pinkerton, L. E. 2004. Mortality among a cohort of garment 
workers exposed to formaldehyde: an update. Occup. Environ. Med. 61: 
193-200.
    \793\ Coggon, D, EC Harris, J Poole, KT Palmer. 2003. Extended 
follow-up of a cohort of British chemical workers exposed to 
formaldehyde. J National Cancer Inst. 95:1608-1615.
    \794\ Hauptmann, M.; Stewart P. A.; Lubin J. H.; Beane Freeman, 
L. E.; Hornung, R. W.; Herrick, R. F.; Hoover, R. N.; Fraumeni, J. 
F.; Hayes, R. B. 2009. Mortality from lymphohematopoietic 
malignancies and brain cancer among embalmers exposed to 
formaldehyde. Journal of the National Cancer Institute 101:1696-
1708.
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    Health effects of formaldehyde in addition to cancer were reviewed 
by the Agency for Toxics Substances and Disease Registry in 1999, 
supplemented in 2010, and by the World Health 
Organization.795 796 797 These organizations reviewed the 
scientific literature concerning health effects linked to formaldehyde 
exposure to evaluate hazards and dose response relationships and 
defined exposure concentrations for minimal risk levels (MRLs). The 
health endpoints reviewed included sensory irritation of eyes and 
respiratory tract, reduced pulmonary function, nasal histopathology, 
and immune system effects. In addition, research on reproductive and 
developmental effects and neurological effects was discussed along with 
several studies that suggest that formaldehyde may increase the risk of 
asthma--particularly in the young.
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    \795\ ATSDR. 1999. Toxicological Profile for Formaldehyde, U.S. 
Department of Health and Human Services (HHS), July 1999.
    \796\ ATSDR. 2010. Addendum to the Toxicological Profile for 
Formaldehyde. U.S. Department of Health and Human Services (HHS), 
October 2010.
    \797\ IPCS. 2002. Concise International Chemical Assessment 
Document 40. Formaldehyde. World Health Organization.
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    In June 2010, EPA released a draft Toxicological Review of 
Formaldehyde--Inhalation Assessment through the IRIS program for peer 
review by the National Research Council (NRC) and public comment.\798\ 
That draft assessment reviewed more recent research from animal and 
human studies on cancer and other health effects. The NRC released 
their review report in April 2011.\799\ EPA's draft assessment, which 
addresses NRC recommendations, was suspended in 2018.\800\ The draft 
assessment was unsuspended in March 2021, and an external review draft 
was released in

[[Page 26058]]

April 2022.\801\ This draft assessment is now undergoing review by the 
National Academy of Sciences.\802\
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    \798\ EPA (U.S. Environmental Protection Agency). 2010. 
Toxicological Review of Formaldehyde (CAS No. 50-00-0)--Inhalation 
Assessment: In Support of Summary Information on the Integrated Risk 
Information System (IRIS). External Review Draft. EPA/635/R-10/002A. 
U.S. Environmental Protection Agency, Washington DC [online]. 
Available: http://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=223614.
    \799\ NRC (National Research Council). 2011. Review of the 
Environmental Protection Agency's Draft IRIS Assessment of 
Formaldehyde. Washington DC: National Academies Press. http://books.nap.edu/openbook.php?record_id=13142.
    \800\ U.S. EPA (2018). See https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=419.
    \801\ U.S. EPA. IRIS Toxicological Review of Formaldehyde-
Inhalation (Interagency Science Consultation Draft, 2021). U.S. 
Environmental Protection Agency, Washington, DC, EPA/635/R-21/286, 
2021.
    \802\ For additional information, see: https://www.nationalacademies.org/our-work/review-of-epas-2021-draft-formaldehyde-assessment.
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g. Naphthalene
    Naphthalene is found in small quantities in gasoline and diesel 
fuels. Naphthalene emissions have been measured in larger quantities in 
both gasoline and diesel exhaust compared with evaporative emissions 
from mobile sources, indicating it is primarily a product of 
combustion.
    Acute (short-term) exposure of humans to naphthalene by inhalation, 
ingestion, or dermal contact is associated with hemolytic anemia and 
damage to the liver and the nervous system.\803\ Chronic (long term) 
exposure of workers and rodents to naphthalene has been reported to 
cause cataracts and retinal damage.\804\ Children, especially neonates, 
appear to be more susceptible to acute naphthalene poisoning based on 
the number of reports of lethal cases in children and infants 
(hypothesized to be due to immature naphthalene detoxification 
pathways).\805\ EPA released an external review draft of a reassessment 
of the inhalation carcinogenicity of naphthalene based on a number of 
recent animal carcinogenicity studies.\806\ The draft reassessment 
completed external peer review.\807\ Based on external peer review 
comments received, EPA is developing a revised draft assessment that 
considers inhalation and oral routes of exposure, as well as cancer and 
noncancer effects.\808\ The external review draft does not represent 
official agency opinion and was released solely for the purposes of 
external peer review and public comment. The NTP listed naphthalene as 
``reasonably anticipated to be a human carcinogen'' in 2004 on the 
basis of bioassays reporting clear evidence of carcinogenicity in rats 
and some evidence of carcinogenicity in mice.\809\ California EPA has 
released a new risk assessment for naphthalene, and the IARC has 
reevaluated naphthalene and re-classified it as Group 2B: possibly 
carcinogenic to humans.\810\
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    \803\ U.S. EPA. 1998. Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \804\ U.S. EPA. 1998. Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \805\ U.S. EPA. (1998). Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \806\ U.S. EPA. (1998). Toxicological Review of Naphthalene 
(Reassessment of the Inhalation Cancer Risk), Environmental 
Protection Agency, Integrated Risk Information System, Research and 
Development, National Center for Environmental Assessment, 
Washington, DC. This material is available electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \807\ Oak Ridge Institute for Science and Education. (2004). 
External Peer Review for the IRIS Reassessment of the Inhalation 
Carcinogenicity of Naphthalene. August 2004. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=84403.
    \808\ U.S. EPA. (2018) See: https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=436.
    \809\ NTP (National Toxicology Program). 2016. Report on 
Carcinogens, Fourteenth Edition.; Research Triangle Park, NC: U.S. 
Department of Health and Human Services, Public Health Service. 
https://ntp.niehs.nih.gov/go/roc14.
    \810\ International Agency for Research on Cancer (IARC). 
(2002). Monographs on the Evaluation of the Carcinogenic Risk of 
Chemicals for Humans. Vol. 82. Lyon, France.
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    Naphthalene also causes a number of non-cancer effects in animals 
following chronic and less-than-chronic exposure, including abnormal 
cell changes and growth in respiratory and nasal tissues.\811\ The 
current EPA IRIS assessment includes noncancer data on hyperplasia and 
metaplasia in nasal tissue that form the basis of the inhalation RfC of 
3 [micro]g/m3.\812\ The ATSDR MRL for acute and intermediate duration 
oral exposure to naphthalene is 0.6 mg/kg/day based on maternal 
toxicity in a developmental toxicology study in rats.\813\ ATSDR also 
derived an ad hoc reference value of 6 x 10-2 mg/m3 for acute (<=24-
hour) inhalation exposure to naphthalene in a Letter Health 
Consultation dated March 24, 2014 to address a potential exposure 
concern in Illinois.\814\ The ATSDR acute inhalation reference value 
was based on a qualitative identification of an exposure level 
interpreted not to cause pulmonary lesions in mice. More recently, EPA 
developed acute RfCs for 1-, 8-, and 24-hour exposure scenarios; the 
<=24-hour reference value is 2 x 10x2 mg/m3.\815\ EPA's acute RfCs are 
based on a systematic review of the literature, benchmark dose modeling 
of naphthalene-induced nasal lesions in rats, and application of a PBPK 
(physiologically based pharmacokinetic) model.
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    \811\ U. S. EPA. (1998). Toxicological Review of Naphthalene, 
Environmental Protection Agency, Integrated Risk Information System, 
Research and Development, National Center for Environmental 
Assessment, Washington, DC. This material is available 
electronically at https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \812\ U.S. EPA. (1998). Toxicological Review of Naphthalene. 
Environmental Protection Agency, Integrated Risk Information System 
(IRIS), Research and Development, National Center for Environmental 
Assessment, Washington, DC https://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=56434.
    \813\ ATSDR. Toxicological Profile for Naphthalene, 1-
Methylnaphthalene, and 2-Methylnaphthalene (2005). https://www.atsdr.cdc.gov/ToxProfiles/tp67-p.pdf.
    \814\ ATSDR. Letter Health Consultation, Radiac Abrasives, Inc., 
Chicago, Illinois (2014). https://www.atsdr.cdc.gov/HAC/pha/RadiacAbrasives/Radiac%20Abrasives,%20Inc.%20_%20LHC%20(Final)%20_%2003-24-
2014%20(2)_508.pdf.
    \815\ U. S. EPA. Derivation of an acute reference concentration 
for inhalation exposure to naphthalene. Report No. EPA/600/R-21/292. 
https://cfpub.epa.gov/ncea/risk/recordisplay.cfm?deid=355035.
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viii. Exposure and Health Effects Associated With Traffic
    Locations in close proximity to major roadways generally have 
elevated concentrations of many air pollutants emitted from motor 
vehicles. Hundreds of studies have been published in peer-reviewed 
journals, concluding that concentrations of CO, CO2, NO, 
NO2, benzene, aldehydes, particulate matter, black carbon, 
and many other compounds are elevated in ambient air within 
approximately 300-600 meters (about 1,000-2,000 feet) of major 
roadways. The highest concentrations of most pollutants emitted 
directly by motor vehicles are found at locations within 50 meters 
(about 165 feet) of the edge of a roadway's traffic lanes.
    A large-scale review of air quality measurements in the vicinity of 
major roadways between 1978 and 2008 concluded that the pollutants with 
the steepest concentration gradients in vicinities of roadways were CO, 
ultrafine particles, metals, elemental carbon (EC), NO, NOX, 
and several VOCs.\816\ These pollutants showed a large reduction in 
concentrations within 100 meters downwind of the roadway. Pollutants 
that showed more gradual reductions with distance from roadways 
included benzene, NO2, PM2.5, and PM10. In 
reviewing the literature, Karner et al., (2010) reported that results 
varied based on the method of statistical analysis used to determine 
the gradient

[[Page 26059]]

in pollutant concentration. More recent studies continue to show 
significant concentration gradients of traffic-related air pollution 
around major roads.817 818 819 820 821; 
822 823 824 There is evidence that EPA's regulations for 
vehicles have lowered the near-road concentrations and gradients.\825\ 
Starting in 2010, EPA required through the NAAQS process that air 
quality monitors be placed near high-traffic roadways for determining 
concentrations of CO, NO2, and PM2.5 (in addition to those 
existing monitors located in neighborhoods and other locations farther 
away from pollution sources). The monitoring data for NO2 indicate that 
in urban areas, monitors near roadways often report the highest 
concentrations of NO2.\826\ More recent studies of traffic-related air 
pollutants continue to report sharp gradients around roadways, 
particularly within several hundred meters.827 828
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    \816\ Karner, A.A.; Eisinger, D.S.; Niemeier, D.A. (2010). Near-
roadway air quality: synthesizing the findings from real-world data. 
Environ Sci Technol 44: 5334-5344.
    \817\ McDonald, B.C.; McBride, Z.C.; Martin, E.W.; Harley, R.A. 
(2014) High-resolution mapping of motor vehicle carbon dioxide 
emissions. J. Geophys. Res.Atmos.,119, 5283-5298, doi:10.1002/
2013JD021219.
    \818\ Kimbrough, S.; Baldauf, R.W.; Hagler, G.S.W.; Shores, 
R.C.; Mitchell, W.; Whitaker, D.A.; Croghan, C.W.; Vallero, D.A. 
(2013) Long-term continuous measurement of near-road air pollution 
in Las Vegas: seasonal variability in traffic emissions impact on 
air quality. Air Qual Atmos Health 6: 295-305. DOI 10.1007/s11869-
012-0171-x.
    \819\ Kimbrough, S.; Palma, T.; Baldauf, R.W. (2014) Analysis of 
mobile source air toxics (MSATs)--Near-road VOC and carbonyl 
concentrations. Journal of the Air &Waste Management Association, 
64:3, 349-359, DOI: 10.1080/10962247.2013.863814.
    \820\ Kimbrough, S.; Owen, R.C.; Snyder, M.; Richmond-Bryant, J. 
(2017) NO to NO2 Conversion Rate Analysis and 
Implications for Dispersion Model Chemistry Methods using Las Vegas, 
Nevada Near-Road Field Measurements. Atmos Environ 165: 23-24.
    \821\ Hilker, N.; Wang, J.W.; Jong, C-H.; Healy, R.M.; Sofowote, 
U.; Debosz, J.; Su, Y.; Noble, M.; Munoz, A.; Doerkson, G.; White, 
L.; Audette, C.; Herod, D.; Brook, J.R.; Evans, G.J. (2019) Traffic-
related air pollution near roadways: discerning local impacts from 
background. Atmos. Meas. Tech., 12, 5247-5261. https://doi.org/10.5194/amt-12-5247-2019.
    \822\ Grivas, G.; Stavroulas, I.; Liakakou, E.; Kaskaoutis, 
D.G.; Bougiatioti, A.; Paraskevopoulou, D.; Gerasopoulos, E.; 
Mihalopoulos, N. (2019) Measuring the spatial variability of black 
carbon in Athens during wintertime. Air Quality, Atmosphere & Health 
(2019) 12:1405-1417. https://doi.org/10.1007/s11869-019-00756-y.
    \823\ Apte, J.S.; Messier, K.P.; Gani, S.; Brauer, M.; 
Kirchstetter, T.W.; Lunden, M.M.; Marshall, J.D.; Portier, C.J.; 
Vermeulen, R.C.H.; Hamburg, S.P. (2017) High-Resolution Air 
Pollution Mapping with Google Street View Cars: Exploiting Big Data. 
Environ Sci Technol 51: 6999-7008. https://doi.org/10.1021/acs.est.7b00891.
    \824\ Dabek-Zlotorzynska, E.; Celo, V.; Ding, L.; Herod, D.; 
Jeong, C-H.; Evans, G.; Hilker, N. (2019) Characteristics and 
sources of PM2.5 and reactive gases near roadways in two 
metropolitan areas in Canada. Atmos Environ 218: 116980. https://doi.org/10.1016/j.atmosenv.2019.116980.
    \825\ Sarnat, J.A.; Russell, A.; Liang, D.; Moutinho, J.L; 
Golan, R.; Weber, R.; Gao, D.; Sarnat, S.; Chang, H.H.; Greenwald, 
R.; Yu, T. (2018) Developing Multipollutant Exposure Indicators of 
Traffic Pollution: The Dorm Room Inhalation to Vehicle Emissions 
(DRIVE) Study. Health Effects Institute Research Report Number 196. 
[Online at: https://www.healtheffects.org/publication/developing-multipollutant-exposure-indicators-traffic-pollution-dorm-room-inhalation].
    \826\ Gantt, B; Owen, R.C.; Watkins, N. (2021) Characterizing 
nitrogen oxides and fine particulate matter near major highways in 
the United States using the National Near-road Monitoring Network. 
Environ Sci Technol 55: 2831-2838. [Online at https://doi.org/10.1021/acs.est.0c05851].
    \827\ Apte, J.S.; Messier, K.P.; Gani, S.; Brauer, M.; 
Kirchstetter, T.W.; Lunden, M.M.; Marshall, J.D.; Portier, C.J.; 
Vermeulen, R.C.H.; Hamburg, S.P. (2017) High-Resolution Air 
Pollution Mapping with Google Street View Cars: Exploiting Big Data. 
Environ Sci Technol 51: 6999-7008. https://doi.org/10.1021/acs.est.7b00891.
    \828\ Gu, P.; Li, H.Z.; Ye, Q.; et al. (2018) Intercity 
variability of particulate matter is driven by carbonaceous sources 
and correlated with land-use variables. Environ Sci Technol 52: 52: 
11545-11554. [Online at http://dx.doi.org/10.1021/acs.est.8b03833].
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    For pollutants with relatively high background concentrations 
relative to near-road concentrations, detecting concentration gradients 
can be difficult. For example, many carbonyls have high background 
concentrations as a result of photochemical breakdown of precursors 
from many different organic compounds. However, several studies have 
measured carbonyls in multiple weather conditions and found higher 
concentrations of many carbonyls downwind of 
roadways.829 830 These findings suggest a substantial 
roadway source of these carbonyls.
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    \829\ Liu, W.; Zhang, J.; Kwon, J.l; et l. (2006). 
Concentrations and source characteristics of airborne carbonyl 
compounds measured outside urban residences. J Air Waste Manage 
Assoc 56: 1196-1204.
    \830\ Cahill, T.M.; Charles, M.J.; Seaman, V.Y. (2010). 
Development and application of a sensitive method to determine 
concentrations of acrolein and other carbonyls in ambient air. 
Health Effects Institute Research Report 149. Available at https://www.healtheffects.org/system/files/Cahill149.pdf.
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    In the past 30 years, many studies have been published with results 
reporting that populations who live, work, or go to school near high-
traffic roadways experience higher rates of numerous adverse health 
effects, compared to populations far away from major roads.\831\ In 
addition, numerous studies have found adverse health effects associated 
with spending time in traffic, such as commuting or walking along high-
traffic roadways, including studies among 
children.832 833 834 835 The health outcomes with the 
strongest evidence linking them with traffic-associated air pollutants 
are respiratory effects, particularly in asthmatic children, and 
cardiovascular effects.
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    \831\ In the widely used PubMed database of health publications, 
between January 1, 1990 and December 31, 2021, 1,979 publications 
contained the keywords ``traffic, pollution, epidemiology,'' with 
approximately half the studies published after 2015.
    \832\ Laden, F.; Hart, J.E.; Smith, T.J.; Davis, M.E.; Garshick, 
E. (2007) Cause-specific mortality in the unionized U.S. trucking 
industry. Environmental Health Perspect 115:1192-1196.
    \833\ Peters, A.; von Klot, S.; Heier, M.; Trentinaglia, I.; 
H[ouml]rmann, A.; Wichmann, H.E.; L[ouml]wel, H. (2004) Exposure to 
traffic and the onset of myocardial infarction. New England J Med 
351: 1721-1730.
    \834\ Zanobetti, A.; Stone, P.H.; Spelzer, F.E.; Schwartz, J.D.; 
Coull, B.A.; Suh, H.H.; Nearling, B.D.; Mittleman, M.A.; Verrier, 
R.L.; Gold, D.R. (2009) T-wave alternans, air pollution and traffic 
in high-risk subjects. Am J Cardiol 104: 665-670.
    \835\ Adar, S.; Adamkiewicz, G.; Gold, D.R.; Schwartz, J.; 
Coull, B.A.; Suh, H. (2007) Ambient and microenvironmental particles 
and exhaled nitric oxide before and after a group bus trip. Environ 
Health Perspect 115: 507-512.
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    Numerous reviews of this body of health literature have been 
published. In a 2022 final report, an expert panel of the Health 
Effects Institute (HEI) employed a systematic review focusing on 
selected health endpoints related to exposure to traffic-related air 
pollution.\836\ The HEI panel concluded that there was a high level of 
confidence in evidence between long-term exposure to traffic-related 
air pollution and health effects in adults, including all-cause, 
circulatory, and ischemic heart disease mortality.\837\ The panel also 
found that there is a moderate-to-high level of confidence in evidence 
of associations with asthma onset and acute respiratory infections in 
children and lung cancer and asthma onset in adults. This report 
follows on an earlier expert review published by HEI in 2010, where it 
found strongest evidence for asthma-related traffic impacts. Other 
literature reviews have been published with conclusions generally 
similar to the HEI panels'.838 839 840 841 Additionally, in

[[Page 26060]]

2014, researchers from the U.S. Centers for Disease Control and 
Prevention (CDC) published a systematic review and meta-analysis of 
studies evaluating the risk of childhood leukemia associated with 
traffic exposure and reported positive associations between 
``postnatal'' proximity to traffic and leukemia risks, but no such 
association for ``prenatal'' exposures.\842\ The U.S. Department of 
Health and Human Services' National Toxicology Program published a 
monograph including a systematic review of traffic-related air 
pollution and its impacts on hypertensive disorders of pregnancy. The 
National Toxicology Program concluded that exposure to traffic-related 
air pollution is ``presumed to be a hazard to pregnant women'' for 
developing hypertensive disorders of pregnancy.\843\
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    \836\ HEI Panel on the Health Effects of Long-Term Exposure to 
Traffic-Related Air Pollution (2022) Systematic review and meta-
analysis of selected health effects of long-term exposure to 
traffic-related air pollution. Health Effects Institute Special 
Report 23. [Online at https://www.healtheffects.org/publication/systematic-review-and-meta-analysis-selected-health-effects-long-term-exposure-traffic] This more recent review focused on health 
outcomes related to birth effects, respiratory effects, 
cardiometabolic effects, and mortality.
    \837\ Boogaard, H.; Patton. A.P.; Atkinson, R.W.; Brook, J.R.; 
Chang, H.H.; Crouse, D.L.; Fussell, J.C.; Hoek, G.; Hoffman, B.; 
Kappeler, R.; Kutlar Joss, M.; Ondras, M.; Sagiv, S.K.; Somoli, E.; 
Shaikh, R.; Szpiro, A.A.; Van Vliet E.D.S.; Vinneau, D.; Weuve, J.; 
Lurmann, F.W.; Forastiere, F. (2022) Long-term exposure to traffic-
related air pollution and selected health outcomes: a systematic 
review and meta-analysis. Environ Intl 164: 107262. [Online at 
https://doi.org/10.1016/j.envint.2022.107262].
    \838\ Boothe, V.L.; Shendell, D.G. (2008). Potential health 
effects associated with residential proximity to freeways and 
primary roads: review of scientific literature, 1999-2006. J Environ 
Health 70: 33-41.
    \839\ Salam, M.T.; Islam, T.; Gilliland, F.D. (2008). Recent 
evidence for adverse effects of residential proximity to traffic 
sources on asthma. Curr Opin Pulm Med 14: 3-8.
    \840\ Sun, X.; Zhang, S.; Ma, X. (2014) No association between 
traffic density and risk of childhood leukemia: a meta-analysis. 
Asia Pac J Cancer Prev 15: 5229-5232.
    \841\ Raaschou-Nielsen, O.; Reynolds, P. (2006). Air pollution 
and childhood cancer: a review of the epidemiological literature. 
Int J Cancer 118: 2920-9.
    \842\ Boothe, VL.; Boehmer, T.K.; Wendel, A.M.; Yip, F.Y. (2014) 
Residential traffic exposure and childhood leukemia: a systematic 
review and meta-analysis. Am J Prev Med 46: 413-422.
    \843\ National Toxicology Program (2019) NTP Monograph on the 
Systematic Review of Traffic-related Air Pollution and Hypertensive 
Disorders of Pregnancy. NTP Monograph 7. https://ntp.niehs.nih.gov/ntp/ohat/trap/mgraph/trap_final_508.pdf.
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    Health outcomes with few publications suggest the possibility of 
other effects still lacking sufficient evidence to draw definitive 
conclusions. Among these outcomes with a small number of positive 
studies are neurological impacts (e.g., autism and reduced cognitive 
function) and reproductive outcomes (e.g., preterm birth, low birth 
weight).844 845 846 847 848
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    \844\ Volk, H.E.; Hertz-Picciotto, I.; Delwiche, L.; et al. 
(2011). Residential proximity to freeways and autism in the CHARGE 
study. Environ Health Perspect 119: 873-877.
    \845\ Franco-Suglia, S.; Gryparis, A.; Wright, R.O.; et al. 
(2007). Association of black carbon with cognition among children in 
a prospective birth cohort study. Am J Epidemiol. https://doi.org/10.1093/aje/kwm308.
    \846\ Power, M.C.; Weisskopf, M.G.; Alexeef, SE; et al. (2011). 
Traffic-related air pollution and cognitive function in a cohort of 
older men. Environ Health Perspect 2011: 682-687.
    \847\ Wu, J.; Wilhelm, M.; Chung, J.; et al. (2011). Comparing 
exposure assessment methods for traffic-related air pollution in and 
adverse pregnancy outcome study. Environ Res 111: 685-6692.
    \848\ Stenson, C.; Wheeler, A.J.; Carver, A.; et al. (2021) The 
impact of traffic-related air pollution on child and adolescent 
academic performance: a systematic review. Environ Intl 155: 106696 
[Online at https://doi.org/10.1016/j.envint.2021.106696].
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    In addition to health outcomes, particularly cardiopulmonary 
effects, conclusions of numerous studies suggest mechanisms by which 
traffic-related air pollution affects health. For example, numerous 
studies indicate that near-roadway exposures may increase systemic 
inflammation, affecting organ systems, including blood vessels and 
lungs.849 850 851 852 Additionally, long-term exposures in 
near-road environments have been associated with inflammation-
associated conditions, such as atherosclerosis and 
asthma.853 854 855
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    \849\ Riediker, M. (2007). Cardiovascular effects of fine 
particulate matter components in highway patrol officers. Inhal 
Toxicol 19: 99-105. doi: 10.1080/08958370701495238.
    \850\ Alexeef, SE; Coull, B.A.; Gryparis, A.; et al. (2011). 
Medium-term exposure to traffic-related air pollution and markers of 
inflammation and endothelial function. Environ Health Perspect 119: 
481-486. doi:10.1289/ehp.1002560.
    \851\ Eckel. S.P.; Berhane, K.; Salam, M.T.; et al. (2011). 
Residential Traffic-related pollution exposure and exhaled nitric 
oxide in the Children's Health Study. Environ Health Perspect. 
doi:10.1289/ehp.1103516.
    \852\ Zhang, J.; McCreanor, J.E.; Cullinan, P.; et al. (2009). 
Health effects of real-world exposure diesel exhaust in persons with 
asthma. Res Rep Health Effects Inst 138. [Online at http://www.healtheffects.org].
    \853\ Adar, S.D.; Klein, R.; Klein, E.K.; et al. (2010). Air 
pollution and the microvasculature: a cross-sectional assessment of 
in vivo retinal images in the population-based Multi-Ethnic Study of 
Atherosclerosis. PLoS Med 7(11): E1000372. https://doi.org/10.1371/journal.pmed.1000372.
    \854\ Kan, H.; Heiss, G.; Rose, K.M.; et al. (2008). Prospective 
analysis of traffic exposure as a risk factor for incident coronary 
heart disease: The Atherosclerosis Risk in Communities (ARIC) study. 
Environ Health Perspect 116: 1463-1468. https://doi.org/10.1289/ehp.11290.
    \855\ McConnell, R.; Islam, T.; Shankardass, K.; et al. (2010). 
Childhood incident asthma and traffic-related air pollution at home 
and school. Environ Health Perspect 1021-1026.
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    Several studies suggest that some factors may increase 
susceptibility to the effects of traffic-associated air pollution. 
Several studies have found stronger respiratory associations in 
children experiencing chronic social stress, such as in violent 
neighborhoods or in homes with high family 
stress.856 857 858
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    \856\ Islam, T.; Urban, R.; Gauderman, W.J.; et al. (2011). 
Parental stress increases the detrimental effect of traffic exposure 
on children's lung function. Am J Respir Crit Care Med.
    \857\ Clougherty, J.E.; Levy, J.I.; Kubzansky, L.D.; et al. 
(2007). Synergistic effects of traffic-related air pollution and 
exposure to violence on urban asthma etiology. Environ Health 
Perspect 115: 1140-1146.
    \858\ Chen, E.; Schrier, H.M.; Strunk, R.C.; et al. (2008). 
Chronic traffic-related air pollution and stress interact to predict 
biologic and clinical outcomes in asthma. Environ Health Perspect 
116: 970-5.
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    The risks associated with residence, workplace, or schools near 
major roads are of potentially high public health significance due to 
the large population in such locations. Every two years from 1997 to 
2009 and in 2011, the U.S. Census Bureau's American Housing Survey 
(AHS) conducted a survey that includes whether housing units are within 
300 feet of an ``airport, railroad, or highway with four or more 
lanes.'' \859\ The 2013 AHS was the last AHS that included that 
question. The 2013 survey reports that 17.3 million housing units, or 
13 percent of all housing units in the United States, were in such 
areas. Assuming that populations and housing units are in the same 
locations, this corresponds to a population of more than 41 million 
U.S. residents in close proximity to high-traffic roadways or other 
transportation sources. According to the Central Intelligence Agency's 
World Factbook, based on data collected between 2012-2014, the United 
States had 6,586,610 km of roadways, 293,564 km of railways, and 13,513 
airports. As such, highways represent the overwhelming majority of 
transportation facilities described by this factor in the AHS.
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    \859\ The variable was known as ``ETRANS'' in the questions 
about the neighborhood.
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    EPA also conducted a study to estimate the number of people living 
near truck freight routes in the United States.\860\ Based on a 
population analysis using the U.S. Department of Transportation's 
(USDOT) Freight Analysis Framework 4 (FAF4) and population data from 
the 2010 decennial census, an estimated 72 million people live within 
200 meters (about 650 feet) of these freight routes.861 862  
In addition, as described in Section VI.D.2, relative to the rest of 
the population, people of color and those with lower incomes are more 
likely to live near FAF4 truck routes. They are also more likely to 
live in metropolitan areas. The EPA's Exposure Factor Handbook also 
indicates that, on average, Americans spend more than an hour traveling 
each day, bringing nearly all residents into a high-exposure 
microenvironment for part of the day.

[[Page 26061]]

863 864  While near-roadway studies focus on residents near 
roads or others spending considerable time near major roads, the 
duration of commuting results in another important contributor to 
overall exposure to traffic-related air pollution. Studies of health 
that address time spent in transit have found evidence of elevated risk 
of cardiac impacts. 865 866 867  Studies have also found 
that school bus emissions can increase student exposures to diesel-
related air pollutants, and that programs that reduce school bus 
emissions may improve health and reduce school absenteeism. 
868 869 870 871
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    \860\ U.S. EPA (2021). Estimation of Population Size and 
Demographic Characteristics among People Living Near Truck Routes in 
the Conterminous United States. Memorandum to the Docket.
    \861\ FAF4 is a model from the USDOT's Bureau of Transportation 
Statistics (BTS) and Federal Highway Administration (FHWA), which 
provides data associated with freight movement in the U.S. It 
includes data from the 2012 Commodity Flow Survey (CFS), the Census 
Bureau on international trade, as well as data associated with 
construction, agriculture, utilities, warehouses, and other 
industries. FAF4 estimates the modal choices for moving goods by 
trucks, trains, boats, and other types of freight modes. It includes 
traffic assignments, including truck flows on a network of truck 
routes. https://ops.fhwa.dot.gov/freight/freight_analysis/faf/.
    \862\ The same analysis estimated the population living within 
100 meters of a FAF4 truck route is 41 million.
    \863\ EPA. (2011) Exposure Factors Handbook: 2011 Edition. 
Chapter 16. Online at https://www.epa.gov/expobox/about-exposure-factors-handbook.
    \864\ It is not yet possible to estimate the long-term impact of 
growth in telework associated with the COVID-19 pandemic on travel 
behavior. There were notable changes during the pandemic. For 
example, according to the 2021 American Time Use Survey, a greater 
fraction of workers did at least part of their work at home (38%) as 
compared with the 2019 survey (24%). [Online at https://www.bls.gov/news.release/atus.nr0.htm.]
    \865\ Riediker, M.; Cascio, W.E.; Griggs, T.R.; et al. (2004) 
Particulate matter exposure in cars is associated with 
cardiovascular effects in healthy young men. Am J Respir Crit Care 
Med 169. [Online at https://doi.org/10.1164/rccm.200310-1463OC.]
    \866\ Peters, A.; von Klot, S.; Heier, M.; et al. (2004) 
Exposure to traffic and the onset of myocardial infarction. New Engl 
J Med 1721-1730. [Online at https://doi.org/10.1056/NEJMoa040203.]
    \867\ Adar, S.D.; Gold, D.R.; Coull, B.A.; (2007) Focused 
exposure to airborne traffic particles and heart rate variability in 
the elderly. Epidemiology 18: 95-103 [Online at 351: https://doi.org/10.1097/01.ede.0000249409.81050.46.]
    \868\ Sabin, L.; Behrentz, E.; Winer, A.M.; et al. 
Characterizing the range of children's air pollutant exposure during 
school bus commutes. J Expo Anal Environ Epidemiol 15: 377-387. 
[Online at https://doi.org/10.1038/sj.jea.7500414.]
    \869\ Li, C.; N, Q.; Ryan, P.H.; School bus pollution and 
changes in the air quality at schools: a case study. J Environ Monit 
11: 1037-1042. [https://doi.org/10.1039/b819458k.]
    \870\ Austin, W.; Heutel, G.; Kreisman, D. (2019) School bus 
emissions, student health and academic performance. Econ Edu Rev 70: 
108-12.
    \871\ Adar, S.D.; D.Souza, J.; Sheppard, L.; et al. (2015) 
Adopting clean fuels and technologies on school buses. Pollution and 
health impacts in children. Am J Respir Crit Care Med 191. [Online 
at http://doi.org/10.1164/rccm.201410-1924OC.]
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    As described in Section VI.D.2, we estimate that about 10 million 
students attend schools within 200 meters of major roads. Research into 
the impact of traffic-related air pollution on school performance is 
tentative. A review of this literature found some evidence that 
children exposed to higher levels of traffic-related air pollution show 
poorer academic performance than those exposed to lower levels of 
traffic-related air pollution.872 873 However, this evidence 
was judged to be weak due to limitations in the assessment methods.
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    \872\ Stenson, C.; Wheeler, A.J.; Carver, A.; et al. (2021) The 
impact of traffic-related air pollution on child and adolescent 
academic performance: a systematic review. Environ Intl 155: 106696. 
[Online at https://doi.org/10.1016/j.envint.2021.106696.]
    \873\ Gartland, N; Aljofi, H.E.; Dienes, K.; Munford, L.A.; 
Theakston, A.L.; van Tongeren, M. (2022) The effects of traffic air 
pollution in and around schools on executive function and academic 
performance in children: a rapid review. Int J Environ Res Public 
Health 10: 749. [Online at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8776123.]
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3. Welfare Effects Associated With Exposure to Non-GHG Pollutants
    This section discusses the environmental effects associated with 
non-GHG pollutants affected by this rule, specifically particulate 
matter, ozone, NOX, SOX, and air toxics.
i. Visibility
    Visibility can be defined as the degree to which the atmosphere is 
transparent to visible light.\874\ Visibility impairment is caused by 
light scattering and absorption by suspended particles and gases. It is 
dominated by contributions from suspended particles except under 
pristine conditions. Visibility is important because it has direct 
significance to people's enjoyment of daily activities in all parts of 
the country. Individuals value good visibility for the well-being it 
provides them directly, where they live and work, and in places where 
they enjoy recreational opportunities. Visibility is also highly valued 
in significant natural areas, such as national parks and wilderness 
areas, and special emphasis is given to protecting visibility in these 
areas. For more information on visibility see the final 2019 p.m. 
ISA.\875\
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    \874\ National Research Council, (1993). Protecting Visibility 
in National Parks and Wilderness Areas. National Academy of Sciences 
Committee on Haze in National Parks and Wilderness Areas. National 
Academy Press, Washington, DC. This book can be viewed on the 
National Academy Press website at https://www.nap.edu/catalog/2097/protecting-visibility-in-national-parks-and-wilderness-areas.
    \875\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
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    EPA is working to address visibility impairment. Reductions in air 
pollution from implementation of various programs associated with the 
Clean Air Act Amendments of 1990 provisions have resulted in 
substantial improvements in visibility and will continue to do so in 
the future. Nationally, because trends in haze are closely associated 
with trends in particulate sulfate and nitrate due to the relationship 
between their concentration and light extinction, visibility trends 
have improved as emissions of SO2 and NOX have 
decreased over time due to air pollution regulations such as the Acid 
Rain Program.\876\ However, in the western part of the country, changes 
in total light extinction were smaller, and the contribution of 
particulate organic matter to atmospheric light extinction was 
increasing due to increasing wildfire emissions.\877\
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    \876\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \877\ Hand, JL; Prenni, AJ; Copeland, S; Schichtel, BA; Malm, 
WC. (2020). Thirty years of the Clean Air Act Amendments: Impacts on 
haze in remote regions of the United States (1990-2018). Atmos 
Environ 243: 117865.
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    In the Clean Air Act Amendments of 1977, Congress recognized 
visibility's value to society by establishing a national goal to 
protect national parks and wilderness areas from visibility impairment 
caused by manmade pollution.\878\ In 1999, EPA finalized the regional 
haze program to protect the visibility in Mandatory Class I Federal 
areas.\879\ There are 156 national parks, forests and wilderness areas 
categorized as Mandatory Class I Federal areas.\880\ These areas are 
defined in CAA section 162 as those national parks exceeding 6,000 
acres, wilderness areas and memorial parks exceeding 5,000 acres, and 
all international parks which were in existence on August 7, 1977.
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    \878\ See CAA Section 169(a).
    \879\ 64 FR 35714, July 1, 1999.
    \880\ 62 FR 38680-38681, July 18, 1997.
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    EPA has also concluded that PM2.5 causes adverse effects 
on visibility in other areas that are not targeted by the Regional Haze 
Rule, such as urban areas, depending on PM2.5 concentrations 
and other factors such as dry chemical composition and relative 
humidity (i.e., an indicator of the water composition of the 
particles). The secondary (welfare-based) PM NAAQS provide protection 
against visibility effects. In recent PM NAAQS reviews, EPA evaluated a 
target level of protection for visibility impairment that is expected 
to be met through attainment of the existing secondary PM 
standards.\881\
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    \881\ On June 10, 2021, EPA announced that it will reconsider 
the decision to retain the PM NAAQS. https://www.epa.gov/pm-pollution/national-ambient-air-quality-standards-naaqs-pm.
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ii. Ozone Effects on Ecosystems
    The welfare effects of ozone include effects on ecosystems, which 
can be observed across a variety of scales, i.e., subcellular, 
cellular, leaf, whole plant, population and ecosystem. Ozone effects 
that begin at small spatial scales, such as the leaf of an individual 
plant, when they occur at sufficient magnitudes (or to a sufficient 
degree) can result in effects being propagated

[[Page 26062]]

along a continuum to higher and higher levels of biological 
organization. For example, effects at the individual plant level, such 
as altered rates of leaf gas exchange, growth and reproduction, can, 
when widespread, result in broad changes in ecosystems, such as 
productivity, carbon storage, water cycling, nutrient cycling, and 
community composition.
    Ozone can produce both acute and chronic injury in sensitive plant 
species depending on the concentration level and the duration of the 
exposure.\882\ In those sensitive species,\883\ effects from repeated 
exposure to ozone throughout the growing season of the plant can tend 
to accumulate, so even relatively low concentrations experienced for a 
longer duration have the potential to create chronic stress on 
vegetation.884 885 Ozone damage to sensitive plant species 
includes impaired photosynthesis and visible injury to leaves. The 
impairment of photosynthesis, the process by which the plant makes 
carbohydrates (its source of energy and food), can lead to reduced crop 
yields, timber production, and plant productivity and growth. Impaired 
photosynthesis can also lead to a reduction in root growth and 
carbohydrate storage below ground, resulting in other, more subtle 
plant and ecosystems impacts.\886\ These latter impacts include 
increased susceptibility of plants to insect attack, disease, harsh 
weather, interspecies competition and overall decreased plant vigor. 
The adverse effects of ozone on areas with sensitive species could 
potentially lead to species shifts and loss from the affected 
ecosystems,\887\ resulting in a loss or reduction in associated 
ecosystem goods and services. Additionally, visible ozone injury to 
leaves can result in a loss of aesthetic value in areas of special 
scenic significance like national parks and wilderness areas and 
reduced use of sensitive ornamentals in landscaping.\888\ In addition 
to ozone effects on vegetation, newer evidence suggests that ozone 
affects interactions between plants and insects by altering chemical 
signals (e.g., floral scents) that plants use to communicate to other 
community members, such as attraction of pollinators.
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    \882\ 73 FR 16486, March 27, 2008.
    \883\ 73 FR 16491, March 27, 2008. Only a small percentage of 
all the plant species growing within the U.S. (over 43,000 species 
have been catalogued in the USDA PLANTS database) have been studied 
with respect to ozone sensitivity.
    \884\ U.S. EPA. 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.
    \885\ The concentration at which ozone levels overwhelm a 
plant's ability to detoxify or compensate for oxidant exposure 
varies. Thus, whether a plant is classified as sensitive or tolerant 
depends in part on the exposure levels being considered.
    \886\ 73 FR 16492, March 27, 2008.
    \887\ 73 FR 16493-16494, March 27, 2008. Ozone impacts could be 
occurring in areas where plant species sensitive to ozone have not 
yet been studied or identified.
    \888\ 73 FR 16490-16497, March 27, 2008.
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    The Ozone ISA presents more detailed information on how ozone 
affects vegetation and ecosystems.\889\ The Ozone ISA reports causal 
and likely causal relationships between ozone exposure and a number of 
welfare effects and characterizes the weight of evidence for different 
effects associated with ozone.\890\ The ISA concludes that visible 
foliar injury effects on vegetation, reduced vegetation growth, reduced 
plant reproduction, reduced productivity in terrestrial ecosystems, 
reduced yield and quality of agricultural crops, alteration of below-
ground biogeochemical cycles, and altered terrestrial community 
composition are causally associated with exposure to ozone. It also 
concludes that increased tree mortality, altered herbivore growth and 
reproduction, altered plant-insect signaling, reduced carbon 
sequestration in terrestrial ecosystems, and alteration of terrestrial 
ecosystem water cycling are likely to be causally associated with 
exposure to ozone.
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    \889\ U.S. EPA. 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.
    \890\ The Ozone ISA evaluates the evidence associated with 
different ozone related health and welfare effects, assigning one of 
five ``weight of evidence'' determinations: causal relationship, 
likely to be a causal relationship, suggestive of a causal 
relationship, inadequate to infer a causal relationship, and not 
likely to be a causal relationship. For more information on these 
levels of evidence, please refer to Table II of the ISA.
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iii. Deposition
    The Integrated Science Assessment for Oxides of Nitrogen, Oxides of 
Sulfur, and Particulate Matter--Ecological Criteria documents the 
ecological effects of the deposition of these criteria air 
pollutants.\891\ It is clear from the body of evidence that oxides of 
nitrogen, oxides of sulfur, and particulate matter contribute to total 
nitrogen (N) and sulfur (S) deposition. In turn, N and S deposition 
cause either nutrient enrichment or acidification depending on the 
sensitivity of the landscape or the species in question. Both 
enrichment and acidification are characterized by an alteration of the 
biogeochemistry and the physiology of organisms, resulting in harmful 
declines in biodiversity in terrestrial, freshwater, wetland, and 
estuarine ecosystems in the U.S. Decreases in biodiversity mean that 
some species become relatively less abundant and may be locally 
extirpated. In addition to the loss of unique living species, the 
decline in total biodiversity can be harmful because biodiversity is an 
important determinant of the stability of ecosystems and their ability 
to provide socially valuable ecosystem services.
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    \891\ U.S. EPA. Integrated Science Assessment (ISA) for Oxides 
of Nitrogen, Oxides of Sulfur and Particulate Matter Ecological 
Criteria (Final Report). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-20/278, 2020.
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    Terrestrial, wetland, freshwater, and estuarine ecosystems in the 
United States are affected by N enrichment/eutrophication caused by N 
deposition. These effects have been consistently documented across the 
United States for hundreds of species. In aquatic systems increased 
nitrogen can alter species assemblages and cause eutrophication. In 
terrestrial systems nitrogen loading can lead to loss of nitrogen-
sensitive lichen species, decreased biodiversity of grasslands, meadows 
and other sensitive habitats, and increased potential for invasive 
species.
    The sensitivity of terrestrial and aquatic ecosystems to 
acidification from nitrogen and sulfur deposition is predominantly 
governed by geology. Prolonged exposure to excess nitrogen and sulfur 
deposition in sensitive areas acidifies lakes, rivers, and soils. 
Increased acidity in surface waters creates inhospitable conditions for 
biota and affects the abundance and biodiversity of fishes, zooplankton 
and macroinvertebrates and ecosystem function. Over time, acidifying 
deposition also removes essential nutrients from forest soils, 
depleting the capacity of soils to neutralize future acid loadings and 
negatively affecting forest sustainability. Major effects in forests 
include a decline in sensitive tree species, such as red spruce (Picea 
rubens) and sugar maple (Acer saccharum).
    Building materials including metals, stones, cements, and paints 
undergo natural weathering processes from exposure to environmental 
elements (e.g., wind, moisture, temperature fluctuations, sunlight, 
etc.). Pollution can worsen and accelerate these effects. Deposition of 
PM is associated with both physical damage (materials damage effects) 
and impaired aesthetic qualities (soiling effects). Wet and dry 
deposition of PM can physically affect materials, adding to the effects 
of natural weathering processes, by potentially promoting or 
accelerating the corrosion of metals, by degrading paints and by 
deteriorating building materials such as

[[Page 26063]]

stone, concrete and marble.\892\ The effects of PM are exacerbated by 
the presence of acidic gases and can be additive or synergistic due to 
the complex mixture of pollutants in the air and surface 
characteristics of the material. Acidic deposition has been shown to 
have an effect on materials including zinc/galvanized steel and other 
metal, carbonate stone (as monuments and building facings), and surface 
coatings (paints).\893\ The effects on historic buildings and outdoor 
works of art are of particular concern because of the uniqueness and 
irreplaceability of many of these objects. In addition to aesthetic and 
functional effects on metals, stone and glass, altered energy 
efficiency of photovoltaic panels by PM deposition is also becoming an 
important consideration for impacts of air pollutants on materials.
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    \892\ U.S. EPA. Integrated Science Assessment (ISA) for 
Particulate Matter (Final Report, 2019). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-19/188, 2019.
    \893\ Irving, P.M., e.d. 1991. Acid Deposition: State of Science 
and Technology, Volume III, Terrestrial, Materials, Health, and 
Visibility Effects, The U.S. National Acid Precipitation Assessment 
Program, Chapter 24, page 24-76.
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iv. Welfare Effects Associated With Air Toxics
    Emissions from producing, transporting, and combusting fuel 
contribute to ambient levels of pollutants that contribute to adverse 
effects on vegetation. VOCs, some of which are considered air toxics, 
have long been suspected to play a role in vegetation damage.\894\ In 
laboratory experiments, a wide range of tolerance to VOCs has been 
observed.\895\ Decreases in harvested seed pod weight have been 
reported for the more sensitive plants, and some studies have reported 
effects on seed germination, flowering, and fruit ripening. Effects of 
individual VOCs or their role in conjunction with other stressors 
(e.g., acidification, drought, temperature extremes) have not been well 
studied. In a recent study of a mixture of VOCs including ethanol and 
toluene on herbaceous plants, significant effects on seed production, 
leaf water content, and photosynthetic efficiency were reported for 
some plant species.\896\
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    \894\ U.S. EPA. (1991). Effects of organic chemicals in the 
atmosphere on terrestrial plants. EPA/600/3-91/001.
    \895\ Cape JN, ID Leith, J Binnie, J Content, M Donkin, M 
Skewes, DN Price AR Brown, AD Sharpe. (2003). Effects of VOCs on 
herbaceous plants in an open-top chamber experiment. Environ. 
Pollut. 124:341-343.
    \896\ Cape JN, ID Leith, J Binnie, J Content, M Donkin, M 
Skewes, DN Price AR Brown, AD Sharpe. (2003). Effects of VOCs on 
herbaceous plants in an open-top chamber experiment. Environ. 
Pollut. 124:341-343.
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    Research suggests an adverse impact of vehicle exhaust on plants, 
which has in some cases been attributed to aromatic compounds and in 
other cases to NOX.897 898 899 The impacts of 
VOCs on plant reproduction may have long-term implications for 
biodiversity and survival of native species near major roadways. Most 
of the studies of the impacts of VOCs on vegetation have focused on 
short-term exposure, and few studies have focused on long-term effects 
of VOCs on vegetation and the potential for metabolites of these 
compounds to affect herbivores or insects.
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    \897\ Viskari E-L. (2000). Epicuticular wax of Norway spruce 
needles as indicator of traffic pollutant deposition. Water, Air, 
and Soil Pollut. 121:327-337.
    \898\ Ugrekhelidze D, F Korte, G Kvesitadze. (1997). Uptake and 
transformation of benzene and toluene by plant leaves. Ecotox. 
Environ. Safety 37:24-29.
    \899\ Kammerbauer H, H Selinger, R Rommelt, A Ziegler-Jons, D 
Knoppik, B Hock. (1987). Toxic components of motor vehicle emissions 
for the spruce Picea abies. Environ. Pollut. 48:235-243.
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C. Air Quality Impacts of Non-GHG Pollutants

    Section V of the preamble presents projections of the changes in 
criteria pollutant and air toxics emissions due to the proposed 
standards. However, the atmospheric chemistry related to ambient 
concentrations of PM2.5, ozone and air toxics is very 
complex, and evaluating air quality impacts of this proposed rule based 
solely on emissions changes is difficult. 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. Because of the length of 
time needed to prepare the necessary emissions inventories, in addition 
to the processing time associated with the modeling itself, we do not 
have air quality modeling results available for this proposed rule.

D. Environmental Justice

    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.\900\ When assessing the potential for 
disproportionately high and adverse health or environmental impacts of 
regulatory actions on populations with potential EJ concerns, the EPA 
strives to answer three broad questions: (1) Is there evidence of 
potential environmental justice (EJ) concerns in the baseline (the 
state of the world absent the regulatory action)? Assessing the 
baseline will allow the 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.
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    \900\ ``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).
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    In this section, we discuss the EJ impacts of the proposed 
CO2 emission standards from the anticipated reduction of 
GHGs (Section VI.D.1). EPA did not consider any potential 
disproportionate impacts of vehicle emissions in selecting the proposed 
CO2 emission standards, but we view mitigation of 
disproportionate impacts of vehicle GHG emissions as one element of 
protecting public health consistent with CAA section 202. We also 
discuss potential additional EJ impacts from the non-GHG (criteria 
pollutants and air toxics) emissions changes we estimate would result 
from compliance with the proposed CO2 emission standards 
(Section VI.D.2). EPA requests comment on the EJ impact analysis 
presented in this proposal.
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

[[Page 26064]]

how climate change threatens the health and welfare of the U.S. 
population. As part of that consideration, she also considered risks to 
people of color and low-income 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 life stages, 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 Indigenous or other 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), 901 902 the 
Intergovernmental Panel on Climate Change IPCC), 
903 904 905 906 and the National Academies of Science, 
Engineering, and Medicine 907 908 add more evidence that 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, 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 \909\ found with high confidence that 
vulnerabilities are place- and time-specific, life stages 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. The GHG emission reductions from this proposal 
would contribute to efforts to reduce the probability of severe impacts 
related to climate change.
---------------------------------------------------------------------------

    \901\ USGCRP, 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.
    \902\ USGCRP, 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.
    \903\ Oppenheimer, 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.
    \904\ Porter, 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.
    \905\ Smith, K.R., A.Woodward, D. Campbell-Lendrum, 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.
    \906\ IPCC, 2018: Global Warming of 1.5[deg]C.An IPCC Special 
Report on the impacts of global warming of 1.5[deg]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. P[ouml]rtner, 
D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. 
P[eacute]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.
    \907\ National Research Council. 2011. America's Climate 
Choices. Washington, DC: The National Academies Press. https://doi.org/10.17226/12781.
    \908\ National Academies of Sciences, Engineering, and Medicine. 
2017. Communities in Action: Pathways to Health Equity. Washington, 
DC: The National Academies Press. https://doi.org/10.17226/24624.
    \909\ USGCRP, 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.
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i. Effects on Specific Populations of Concern
    Individuals living in socially and economically vulnerable 
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 life stages, 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 (NCA4), ``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.'' \910\ 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.
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    \910\ Ebi, 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.
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    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 less-affluent 
residential areas. Outdoor workers, such as construction or utility 
crews and agricultural laborers, who frequently are comprised of 
already at-risk groups, are exposed to poor air quality and extreme 
temperatures without relief. Furthermore, people in communities with EJ 
concerns face greater housing, clean water, and food 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

[[Page 26065]]

health or homeowner insurance. Finally, resiliency and adaptation are 
more difficult for economically vulnerable 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 self-advocate for resources that 
would otherwise aid in building resilience and hazard reduction and 
mitigation.
    The assessment literature cited in EPA's 2009 and 2016 Endangerment 
and Cause or Contribute 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.\911\ 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 NCA4 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 low-income households, especially those with 
children, if climate change reduces food availability and increases 
prices, leading to food insecurity within households.
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    \911\ 74 FR 66496, December 15, 2009; 81 FR 54422, August 15, 
2016.
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    The Impacts of Climate Change on Human Health \912\ 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.
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    \912\ USGCRP, 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.
---------------------------------------------------------------------------

    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.\913\ 
The NCA4 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.\914\ In addition, there can 
institutional barriers to their management of water, land, and other 
natural resources that could impede adaptive measures.
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    \913\ Porter et al., 2014: Food security and food production 
systems.
    \914\ Jantarasami, L.C., R. Novak, R. Delgado, E. Marino, S. 
McNeeley, C. Narducci, J. Raymond-Yakoubian, L. Singletary, and K. 
Powys Whyte, 2018: Tribes and Indigenous Peoples. 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. 572-603. doi: 10.7930/NCA4.2018.CH15.
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    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 Fifth Assessment Report also highlighted several 
impacts specific to Alaskan Indigenous Peoples. 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 will lead to a loss of 
cultural heritage for Alaska's Indigenous people. In terms of food 
security, the NCA4 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.
    In addition, the U.S. Pacific Islands and the indigenous 
communities that live there are also uniquely vulnerable to the effects 
of climate change due to their remote location and geographic 
isolation. They rely on the land, ocean, and natural resources for 
their livelihoods, but they face challenges in obtaining energy and 
food supplies that need to be shipped in at high costs. As a result, 
they face higher energy costs than the rest of the nation and depend on 
imported fossil fuels for electricity generation and diesel. These 
challenges exacerbate the climate impacts that the Pacific Islands are 
experiencing. NCA4 notes that Indigenous peoples of the Pacific are 
threatened by rising sea levels, diminishing freshwater availability, 
and negative effects to ecosystem services that threaten these 
individuals' health and well-being.
2. Non-GHG Impacts
    In Section V.B., in addition to GHG emissions impacts, we also 
discuss potential additional impacts to emissions of non-GHGs (i.e., 
criteria and air toxic pollutants) that we estimate would result from 
compliance with the proposed GHG emission standards. This section 
VI.D.2 describes evidence that communities with EJ concerns are 
disproportionately impacted by the non-GHG emissions affected by this 
rule.

[[Page 26066]]

Numerous studies have found that environmental hazards such as air 
pollution are more prevalent in areas where people of color and low-
income populations represent a higher fraction of the population 
compared with the general population.915 916 917 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.\918\ In addition, compared to non-Hispanic Whites, some other 
racial groups experience greater levels of health problems during some 
life stages. For example, in 2018-2020, about 12 percent of non-
Hispanic Black; 9 percent of non-Hispanic American Indian/Alaska 
Native; and 7 percent of Hispanic children were estimated to currently 
have asthma, compared with 6 percent of non-Hispanic White 
children.\919\ Nationally, on average, non-Hispanic Black and Non-
Hispanic American Indian or Alaska Native people also have lower than 
average life expectancy based on 2019 data, the latest year for which 
CDC estimates are available.\920\
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    \915\ Rowangould, 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.
    \916\ Marshall, 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.
    \917\ Marshall, J.D. (2008) 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.
    \918\ C. 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).
    \919\ http://www.cdc.gov/asthma/most_recent_data.htm.
    \920\ Arias, E. Xu, J. (2022) United States Life Tables, 2019. 
National Vital Statistics Report, Volume 70, Number 19. [Online at 
https://www.cdc.gov/nchs/data/nvsr/nvsr70/nvsr70-19.pdf].
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    We discuss near-roadway issues in Section VI.D.2.i and upstream 
sources in Section VI.D.2.ii.
i. Near-Roadway Analysis
    As described in Section VI.B of this preamble, concentrations of 
many air pollutants are elevated near high-traffic roadways. We 
recently conducted an analysis of the populations within the CONUS 
living in close proximity to truck freight routes as identified in 
USDOT's FAF4.\921\ FAF4 is a model from the USDOT's Bureau of 
Transportation Statistics (BTS) and Federal Highway Administration 
(FHWA), which provides data associated with freight movement in the 
United States \922\ Relative to the rest of the population, people 
living near FAF4 truck routes are more likely to be people of color and 
have lower incomes than the general population. People living near FAF4 
truck routes are also more likely to live in metropolitan areas. Even 
controlling for region of the country, county characteristics, 
population density, and household structure, race, ethnicity, and 
income are significant determinants of whether someone lives near a 
FAF4 truck route.
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    \921\ U.S. EPA (2021). Estimation of Population Size and 
Demographic Characteristics among People Living Near Truck Routes in 
the Conterminous United States. Memorandum to the Docket.
    \922\ FAF4 includes data from the 2012 Commodity Flow Survey 
(CFS), the Census Bureau on international trade, as well as data 
associated with construction, agriculture, utilities, warehouses, 
and other industries. FAF4 estimates the modal choices for moving 
goods by trucks, trains, boats, and other types of freight modes. It 
includes traffic assignments, including truck flows on a network of 
truck routes. https://ops.fhwa.dot.gov/freight/freight_analysis/faf/
.
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    We additionally analyzed other national databases that allowed us 
to evaluate whether homes and schools were located near a major road 
and whether disparities in exposure may be occurring in these 
environments. Until 2009, the U.S. Census Bureau's American Housing 
Survey (AHS) included descriptive statistics of over 70,000 housing 
units across the nation and asked about transportation infrastructure 
near respondents' homes every two years.923 924 We also 
analyzed the U.S. Department of Education's Common Core of Data, which 
includes enrollment and location information for schools across the 
United States.\925\
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    \923\ U.S. Department of Housing and Urban Development, & U.S. 
Census Bureau. (n.d.). Age of other residential buildings within 300 
feet. In American Housing Survey for the United States: 2009 (pp. A-
1). Retrieved from https://www.census.gov/programs-surveys/ahs/data/2009/ahs-2009-summary-tables0/h150-09.html.
    \924\ The 2013 AHS again included the ``etrans'' question about 
highways, airports, and railroads within half a block of the housing 
unit but has not maintained the question since then.
    \925\ http://nces.ed.gov/ccd/.
---------------------------------------------------------------------------

    In analyzing the 2009 AHS, we focused on whether a housing unit was 
located within 300 feet of a ``4-or-more lane highway, railroad, or 
airport'' (this distance was used in the AHS analysis).\926\ We 
analyzed whether there were differences between households in such 
locations compared with those in locations farther from these 
transportation facilities.\927\ We included other variables, such as 
land use category, region of country, and housing type. We found that 
homes with a non-White householder were 22-34 percent more likely to be 
located within 300 feet of these large transportation facilities than 
homes with White householders. Homes with a Hispanic householder were 
17-33 percent more likely to be located within 300 feet of these large 
transportation facilities than homes with non-Hispanic householders. 
Households near large transportation facilities were, on average, lower 
in income and educational attainment and more likely to be a rental 
property and located in an urban area compared with households more 
distant from transportation facilities.
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    \926\ This variable primarily represents roadway proximity. 
According to the Central Intelligence Agency's World Factbook, in 
2010, the United States had 6,506,204 km of roadways, 224,792 km of 
railways, and 15,079 airports. Highways thus represent the 
overwhelming majority of transportation facilities described by this 
factor in the AHS.
    \927\ Bailey, C. (2011) Demographic and Social Patterns in 
Housing Units Near Large Highways and other Transportation Sources. 
Memorandum to docket.
---------------------------------------------------------------------------

    In examining schools near major roadways, we used the Common Core 
of Data (CCD) from the U.S. Department of Education, which includes 
information on all public elementary and secondary schools and school 
districts nationwide.\928\ To determine school proximities to major 
roadways, we used a geographic information system (GIS) to map each 
school and roadways based on the U.S. Census's TIGER roadway file.\929\ 
We estimated that about 10 million students attend schools within 200 
meters of major roads, about 20 percent of the total number of public 
school students in the United States.\930\ About 800,000 students 
attend public schools within 200 meters of primary roads, or about 2 
percent of the total. We found that students of color were 
overrepresented at schools within 200 meters of primary roadways, and 
schools within 200 meters of primary roadways had a disproportionate 
population of students eligible for free or reduced-price lunches.\931\ 
Black

[[Page 26067]]

students represent 22 percent of students at schools located within 200 
meters of a primary road, compared to 17 percent of students in all 
U.S. schools. Hispanic students represent 30 percent of students at 
schools located within 200 meters of a primary road, compared to 22 
percent of students in all U.S. schools.
---------------------------------------------------------------------------

    \928\ http://nces.ed.gov/ccd/.
    \929\ Pedde, M.; Bailey, C. (2011) Identification of Schools 
within 200 Meters of U.S. Primary and Secondary Roads. Memorandum to 
the docket.
    \930\ Here, ``major roads'' refer to those TIGER classifies as 
either ``Primary'' or ``Secondary.'' The Census Bureau describes 
primary roads as ``generally divided limited-access highways within 
the Federal interstate system or under state management.'' Secondary 
roads are ``main arteries, usually in the U.S. highway, state 
highway, or county highway system.''
    \931\ For this analysis we analyzed a 200-meter distance based 
on the understanding that roadways generally influence air quality 
within a few hundred meters from the vicinity of heavily traveled 
roadways or along corridors with significant trucking traffic. See 
U.S. EPA, 2014. Near Roadway Air Pollution and Health: Frequently 
Asked Questions. EPA-420-F-14-044.
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    We also reviewed existing scholarly literature examining the 
potential for disproportionate exposure among people of color and 
people with low socioeconomic status (SES). Numerous studies evaluating 
the demographics and socioeconomic status of populations or schools 
near roadways have found that they include a greater percentage of 
residents of color, as well as lower SES populations (as indicated by 
variables such as median household income). Locations in these studies 
include Los Angeles, CA; Seattle, WA; Wayne County, MI; Orange County, 
FL; and the State of California, and 
nationally.932 933 934 935 936 937 938 Such disparities may 
be due to multiple factors.939 940 941 942 943
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    \932\ Marshall, J.D. (2008) Environmental inequality: air 
pollution exposures in California's South Coast Air Basin. Atmos 
Environ 42: 5499-5503. doi:10.1016/j.atmosenv.2008.02.00.
    \933\ Su, J.G.; Larson, T.; Gould, T.; Cohen, M.; Buzzelli, M. 
(2010) Transboundary air pollution and environmental justice: 
Vancouver and Seattle compared. GeoJournal 57: 595-608. doi:10.1007/
s10708-009-9269-6.
    \934\ Chakraborty, J.; Zandbergen, P.A. (2007) Children at risk: 
measuring racial/ethnic disparities in potential exposure to air 
pollution at school and home. J Epidemiol Community Health 61: 1074-
1079. doi:10.1136/jech.2006.054130.
    \935\ Green, R.S.; Smorodinsky, S.; Kim, J.J.; McLaughlin, R.; 
Ostro, B. (20042004) Proximity of California public schools to busy 
roads. Environ Health Perspect 112: 61-66. doi:10.1289/ehp.6566.
    \936\ Wu, Y; Batterman, S.A. (2006) Proximity of schools in 
Detroit, Michigan to automobile and truck traffic. J Exposure Sci & 
Environ Epidemiol. doi:10.1038/sj.jes.7500484.
    \937\ Su, J.G.; Jerrett, M.; de Nazelle, A.; Wolch, J. (2011) 
Does exposure to air pollution in urban parks have socioeconomic, 
racial, or ethnic gradients? Environ Res 111: 319-328.
    \938\ Jones, M.R.; Diez-Roux, A.; Hajat, A.; et al. (2014) Race/
ethnicity, residential segregation, and exposure to ambient air 
pollution: The Multi-Ethnic Study of Atherosclerosis (MESA). Am J 
Public Health 104: 2130-2137. [Online at: https://doi.org/10.2105/AJPH.2014.302135.].
    \939\ Depro, B.; Timmins, C. (2008) Mobility and environmental 
equity: do housing choices determine exposure to air pollution? Duke 
University Working Paper.
    \940\ Rothstein, R. The Color of Law: A Forgotten History of How 
Our Government Segregated America. New York: Liveright, 2018.
    \941\ Lane, H.J.; Morello-Frosch, R.; Marshall, J.D.; Apte, J.S. 
(2022) Historical redlining is associated with present-day air 
pollution disparities in US Cities. Environ Sci & Technol Letters 9: 
345-350. DOI: [Online at: https://doi.org/10.1021/acs.estlett.1c01012].
    \942\ Ware, L. (2021) Plessy's legacy: the government's role in 
the development and perpetuation of segregated neighborhoods. RSF: 
The Russel Sage Foundation Journal of the Social Sciences, 7:92-109. 
DOI: DOI: 10.7758/RSF.2021.7.1.06.
    \943\ Archer, D.N. (2020) ``White Men's Roads through Black 
Men's Homes'': advancing racial equity through highway 
reconstruction. Vanderbilt Law Rev 73: 1259.
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    Additionally, people with low SES often live in neighborhoods with 
multiple stressors and health risk factors, including reduced health 
insurance coverage rates, higher smoking and drug use rates, limited 
access to fresh food, visible neighborhood violence, and elevated rates 
of obesity and some diseases such as asthma, diabetes, and ischemic 
heart disease. Although questions remain, several studies find stronger 
associations between air pollution and health in locations with such 
chronic neighborhood stress, suggesting that populations in these areas 
may be more susceptible to the effects of air 
pollution.944 945 946 947
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    \944\ Clougherty, J.E.; Kubzansky, L.D. (2009) A framework for 
examining social stress and susceptibility to air pollution in 
respiratory health. Environ Health Perspect 117: 1351-1358. 
Doi:10.1289/ehp.0900612.
    \945\ Clougherty, J.E.; Levy, J.I.; Kubzansky, L.D.; Ryan, P.B.; 
Franco Suglia, S.; Jacobson Canner, M.; Wright, R.J. (2007) 
Synergistic effects of traffic-related air pollution and exposure to 
violence on urban asthma etiology. Environ Health Perspect 115: 
1140-1146. doi:10.1289/ehp.9863.
    \946\ Finkelstein, M.M.; Jerrett, M.; DeLuca, P.; Finkelstein, 
N.; Verma, D.K.; Chapman, K.; Sears, M.R. (2003) Relation between 
income, air pollution and mortality: a cohort study. Canadian Med 
Assn J 169: 397-402.
    \947\ Shankardass, K.; McConnell, R.; Jerrett, M.; Milam, J.; 
Richardson, J.; Berhane, K. (2009) Parental stress increases the 
effect of traffic-related air pollution on childhood asthma 
incidence. Proc Natl Acad Sci 106: 12406-12411. doi:10.1073/
pnas.0812910106.
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    Several publications report nationwide analyses that compare the 
demographic patterns of people who do or do not live near major 
roadways.948 949 950 951 952 953 Three of these studies 
found that people living near major roadways are more likely to be 
people of color or of low SES.954 955 956 They also found 
that the outcomes of their analyses varied between regions within the 
United States. However, only one such study looked at whether such 
conclusions were confounded by living in a location with higher 
population density and how demographics differ between locations 
nationwide.\957\ In general, it found that higher density areas have 
higher proportions of low-income residents and people of color. In 
other publications assessing a city, county, or state, the results are 
similar.958 959
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    \948\ Rowangould, G.M. (2013) A census of the U.S. near-roadway 
population: public health and environmental justice considerations. 
Transportation Research Part D; 59-67.
    \949\ Tian, 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.
    \950\ CDC (2013) Residential proximity to major highways--United 
States, 2010. Morbidity and Mortality Weekly Report 62(3): 46-50.
    \951\ Clark, L.P.; Millet, D.B., Marshall, J.D. (2017) Changes 
in transportation-related air pollution exposures by race-ethnicity 
and socioeconomic status: outdoor nitrogen dioxide in the United 
States in 2000 and 2010. Environ Health Perspect https://doi.org/10.1289/EHP959.
    \952\ Mikati, I.; Benson, A.F.; Luben, T.J.; Sacks, J.D.; 
Richmond-Bryant, J. (2018) Disparities in distribution of 
particulate matter emission sources by race and poverty status. Am J 
Pub Health https://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2017.304297?journalCode=ajph.
    \953\ Alotaibi, R.; Bechle, M.; Marshall, J.D.; Ramani, T.; 
Zietsman, J.; Nieuwenhuijsen, M.J.; Khreis, H. (2019) Traffic 
related air pollution and the burden of childhood asthma in the 
continuous United States in 2000 and 2010. Environ International 
127: 858-867. https://www.sciencedirect.com/science/article/pii/S0160412018325388.
    \954\ Tian, 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.
    \955\ Rowangould, G.M. (2013) A census of the U.S. near-roadway 
population: public health and environmental justice considerations. 
Transportation Research Part D; 59-67.
    \956\ CDC (2013) Residential proximity to major highways--United 
States, 2010. Morbidity and Mortality Weekly Report 62(3): 46-50.
    \957\ Rowangould, G.M. (2013) A census of the U.S. near-roadway 
population: public health and environmental justice considerations. 
Transportation Research Part D; 59-67.
    \958\ Pratt, G.C.; Vadali, M.L.; Kvale, D.L.; Ellickson, K.M. 
(2015) Traffic, air pollution, minority, and socio-economic status: 
addressing inequities in exposure and risk. Int J Environ Res Public 
Health 12: 5355-5372. http://dx.doi.org/10.3390/ijerph120505355.
    \959\ Sohrabi, S.; Zietsman, J.; Khreis, H. (2020) Burden of 
disease assessment of ambient air pollution and premature mortality 
in urban areas: the role of socioeconomic status and transportation. 
Int J Env Res Public Health doi:10.3390/ijerph17041166.
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    Two recent studies provide strong evidence that reducing emissions 
from heavy-duty vehicles is extremely likely to reduce the disparity in 
exposures to traffic-related air pollutants, both using NO2 
observations from the recently launched TROPospheric Ozone Monitoring 
Instrument (TROPOMI) satellite sensor as a measure of air quality, 
which provides the highest-resolution observations heretofore 
unavailable from any satellite.\960\
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    \960\ TROPospheric Ozone Monitoring Instrument (TROPOMI) is part 
of the Copernicus Sentinel-5 Precursor satellite.
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    One study evaluated NO2 concentrations during the COVID-
19 lockdowns in 2020 and compared them to NO2 concentrations 
from the same dates in 2019.\961\ That study found that

[[Page 26068]]

average NO2 concentrations were highest in areas with the 
lowest percentage of white populations, and that the areas with the 
greatest percentages of non-white or Hispanic populations experienced 
the greatest declines in NO2 concentrations during the 
lockdown. These NO2 reductions were associated with the 
density of highways in the local area.
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    \961\ Kerr, G.H.; Goldberg, D.L.; Anenberg, S.C. (2021) COVID-19 
pandemic reveals persistent disparities in nitrogen dioxide 
pollution. PNAS 118. [Online at https://doi.org/10.1073/pnas.2022409118].
---------------------------------------------------------------------------

    In the second study, NO2 measured from 2018-2020 was 
averaged by racial groups and income levels in 52 large U.S. 
cities.\962\ Using census tract-level NO2, the study 
reported average population-weighted NO2 levels to be 28 
percent higher for low-income non-White people compared with high-
income white people. The study also used weekday-weekend differences 
and bottom-up emission estimates to estimate that diesel traffic is the 
dominant source of NO2 disparities in the studied cities.
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    \962\ Demetillo, M.A.; Harkins, C.; McDonald, B.C.; et al. 
(2021) Space-based observational constraints on NO2 air 
pollution inequality from diesel traffic in major US cities. Geophys 
Res Lett 48, e2021GL094333. [Online at https://doi.org/10.1029/2021GL094333].
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    Overall, there is substantial evidence that people who live or 
attend school near major roadways are more likely to be of a non-White 
race, Hispanic, and/or have a low SES. We expect communities near roads 
will benefit from the reduced tailpipe emissions of PM, NOX, 
SO2, VOC, CO, and mobile source air toxics from heavy-duty 
vehicles in this proposal. EPA is considering how to better estimate 
the near-roadway air quality impacts of its regulatory actions and how 
those impacts are distributed across populations.
ii. Upstream Source Impacts
    As described in Section V.B.2, we expect some non-GHG emissions 
reductions from sources related to refining petroleum fuels and 
increases in emissions from EGUs, both of which would lead to changes 
in exposure for people living in communities near these facilities. The 
EGU emissions increases become smaller over time because of changes in 
the projected power generation mix as electricity generation uses less 
fossil fuels; in 2055, the reductions in vehicle and refinery-related 
emissions of NOX, VOC, PM2.5, and SO2 
are larger than the EGU-related increases. Analyses of communities in 
close proximity to EGUs have found that a higher percentage of 
communities of color and low-income communities live near these sources 
when compared to national averages.\963\ Analysis of populations near 
refineries also indicates there may be potential disparities in 
pollution-related health risk from that source.\964\
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    \963\ See 80 FR 64662, 64915-64916 (October 23, 2015).
    \964\ U.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.
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E. Economic Impacts

1. Impacts on Vehicle Sales, Fleet Turnover, Mode Shift, Class Shift 
and Domestic Production
    In this section, we qualitatively discuss the impacts the proposed 
regulation may have on HD vehicle sales, including pre-buy and low-buy 
decisions, effects on decisions regarding the mode of transportation 
used to move goods, possible shifting of purchases between HD vehicle 
classes, and possible effects on domestic production of HD vehicles. 
Pre-buy occurs when a purchaser pulls ahead a planned future purchase 
to make the purchase prior to the implementation of an EPA regulation 
in anticipation that a future vehicle may have a higher upfront cost, a 
higher operational cost, or have reduced reliability due to the new 
regulation. Low-buy occurs when a vehicle that would have been 
purchased after the implementation of a regulation is either not 
purchased at all, or the purchase is delayed due to the regulation. 
Low-buy may occur directly as a function of pre-buy (where a vehicle 
was instead purchased prior to implementation of the new regulation), 
or due to a vehicle purchaser delaying the purchase of a vehicle due to 
cost or uncertainty. Pre- and low-buy are short-term effects, with 
research indicating that effects are seen for one year or less before 
and after a regulation in implemented.\965\ Pre-buy and low-buy impact 
fleet turnover, which can result in a level of emission reduction 
attributable to the new emission standards that is different from the 
level of emission reduction EPA estimated would be achieved by the new 
regulation.
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    \965\ See the EPA report ``Analysis of Heavy-Duty Vehicle Sales 
Impacts Due to New Regulation'' at https://cfpub.epa.gov/si/si_public_pra_view.cfm?dirEntryID=349838&Lab=OTAQ for a literature 
review and EPA analysis of pre-buy and low-buy due to HD 
regulations.
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    Additional possible, though unlikely, effects of this proposed 
regulation include mode shift, class shift and effects on domestic 
production. Mode shift would occur if goods that would normally be 
shipped by HD vehicle are instead shipped by another method (e.g., 
rail, boat, air) as a result of this action. Class shift occurs when a 
vehicle purchaser decides to purchase a different class of vehicle than 
originally intended due to the new regulation. For example, a purchaser 
may buy a Class 8 vehicle instead of the Class 7 vehicle they may have 
purchased in the absence of a regulation. Domestic production could be 
affected if the regulation creates incentives for manufacturers to 
shift between domestic and foreign production.
i. Vehicle Sales and Fleet Turnover
    The proposed emission standards may lead to a change in the timing 
of planned vehicle purchases, phenomena known as ``pre-buy'' and ``low-
buy.'' Pre-buy occurs when purchasers of HD vehicles pull their planned 
future vehicle purchase forward to the months before a regulation is 
implemented compared to when they otherwise would have purchased a new 
vehicle in the absence of the regulation. Pre-buy may occur due to 
expected cost increases of post-regulation vehicles, or in order to 
avoid perceived cost, quality, or other changes associated with new 
emission standards. Another reason pre-buy might occur is due to 
purchaser beliefs about the availability of their vehicle type of 
choice in the post-regulation market. For example, if purchasers think 
that they might not be able to get the HD ICE vehicle they want after 
the proposed regulation is promulgated, they may pre-buy an ICE 
vehicle. Pre-buy, to the extent it might occur, could be mitigated in 
multiple ways, including by reducing the higher upfront cost of post-
regulation vehicles, by purchasers considering the lower operational 
costs of post-regulation vehicles when making their purchase decision, 
or through the phasing in of the proposed standards. With respect to 
possible purchaser anxiety over being unable to purchase an ICE vehicle 
after promulgation of the proposed regulation, we expect that the 
federal vehicle and battery tax credits in the IRA, as well as 
purchasers' consideration of the lower operational costs of ZEVs, would 
mitigate possible pre-buy by reducing the perceived purchase price or 
lifetime operational costs difference of a new, post-rule ZEV compared 
to a new pre- or post-rule ICE vehicle. Additionally, pre-buy may be 
mitigated by educating purchasers on benefits of ZEV ownership (for 
example, reduced operational costs) or on charging and hydrogen 
refueling infrastructure technology and

[[Page 26069]]

availability.\966\ Our proposed standards will increase purchaser 
exposure to ZEVs, as well as incentivize manufacturers and dealers to 
educate HD vehicle purchasers on ZEVs, including the benefits of ZEVs, 
accelerating the reduction of purchaser risk aversion. In addition, we 
expect recent congessional actions to support ZEV infrastructure and 
supply chain, including the CHIPS Act, BIL and IRA, will reduce 
uncertainty related to infrastructure.\967\ We note that the proposed 
standards do not mandate the use of a specific technology, and EPA 
anticipates that a compliant fleet under the proposed standards would 
include a diverse range of technologies, including ICE and ZEV 
technologies. The phasing-in of the proposed standards, which do not 
eliminate any specific technology from the market, would allow ample 
time for purchasers to make decisions about their vehicle of choice.
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    \966\ For more information on purchaser acceptance of HD ZEVs, 
see DRIA Chapter 6.2. For more information on the charging and 
hydrogen refueling infrastructure analysis in this proposed rule, 
see DRIA Chapter 2.6.
    \967\ The CHIPS Act is the Creating Helpful Incentives to 
Produce Semiconductors and Science Act and was signed into lay on 
August 9, 2022. It is designed to strengthen supply chains, domestic 
manufacturing and national security. More information on how all of 
these Acts are expected to support opportunities for growth along 
the supply chain can be found in the January 2023 White House 
publication ``Building a Clean Energy Economy: A Guidebook to the 
Inflation Reduction Act's Investments in Clean Energy and Climate 
Action.'' found online at https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf.
---------------------------------------------------------------------------

    In addition to pre-buy, there is the possibility of ``low-buy'' 
occurring in response to new regulation. In a low-buy scenario, sales 
of HD vehicles would decrease in the months after a regulation becomes 
effective, compared to what would have happened in the absence of a 
regulation, due to purchasers either pre-buying or delaying a planned 
purchase. Low-buy may be directly attributable to pre-buy, where 
purchases originally planned for the months following the effective 
date of new emission standards are instead purchased in the months 
preceding the effective date of the new emission standards. Low-buy may 
also be attributable to purchasers delaying the planned purchase of a 
new vehicle due to the new emission standards, and may occur for 
reasons such as increased costs or uncertainty about the new vehicles. 
If pre-buy is smaller than low-buy, to the extent both might occur, 
this would lead to a slower fleet turnover, at least in the short 
term.\968\ In this scenario, older HD vehicles would remain in use 
longer than they would have in the absence of the new emission 
standards. This would lead to lower emission reductions than we 
estimate would be achieved as a result of the proposed emission 
standards. Conversely, if pre-buy is larger than low-buy, short-term 
fleet turnover would increase; fleets would, on average, be comprised 
of newer model year vehicles. Though these new vehicles are expected to 
have lower emissions than the vehicles they are replacing, and emission 
reductions would be expected to be larger than under a scenario where 
low-buy exceeds pre-buy, emission reductions would still be lower than 
we estimated would be achieved as a result of the proposed emission 
standards. Under a situation where low-buy matches pre-buy, we would 
also expect lower emission reductions than estimated, and emission 
reductions would likely be somewhere between the two relative pre-buy/
low-buy scenarios discussed in the previous paragraph. We expect low-
buy, to the extent that it might occur, to be mitigated under the same 
circumstances described in this section for pre-buy.
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    \968\ Fleet turnover refers to the pace at which new vehicles 
are purchased and older vehicles are retired. A slower fleet 
turnover means older vehicles are kept on the road longer, and the 
fleet is older on average. A faster fleet turnover means that the 
fleet is younger, on average.
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    Analysis of previously promulgated EPA HD emission standards 
indicates that where pre-buy or low-buy has been seen, the magnitude of 
these phenomena has been small.\969\ Recent analysis conducted by EPA 
of pre-buy and low-buy indicates that pre-buy and low-buy effects 
typically occur for up to one year before or one year after a 
regulation becomes effective, if pre-buy or low-buy occur at all.\970\ 
EPA contracted with ERG to complete a literature review of research 
estimating HD vehicle sales impacts resulting from HD regulations, and 
to conduct original research to estimate the existence and magnitude of 
pre-buy and low-buy sales impacts of previous EPA HD regulations.\971\ 
The resulting analysis examined the effect of four HD regulations 
(those that became effective in 2004, 2007, 2010 and 2014) on the sales 
of Class 6, 7 and 8 vehicles over the twelve months before and after 
each standard. For the purposes of this discussion, we will call these 
the 2004 rule, 2007 rule, 2010 rule and 2014 rule. The 2004, 2007 and 
2010 rules focused on reducing criteria pollutant emissions from HD 
vehicles and engines, and the 2014 rule (the HD GHG Phase 1 rule 
promulgated in 2014) focused on reducing GHG emissions from HD vehicles 
and engines.\972\ The ERG report found little evidence of pre-buy or 
low-buy sales impacts on Class 6 and 7 vehicles for any of the rules. 
For Class 8 vehicles, evidence of pre-buy was found for up to eight 
months before promulgation of the 2010 rule, as well as for up to one 
month prior to promulgation of the 2014 rule. Evidence of low-buy was 
found after promulgation of the 2002 (up to six months), 2007 (up to 12 
months) and 2010 rules (up to five months). The results of the ERG 
report also suggest that the range of possible results include a lower 
bound of zero, or no pre-buy or low-buy due to EPA rules.
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    \969\ For example, Lam and Bausell (YEAR), Rittenhouse and 
Zaragoza-Watkins (YEAR), and an unpublished report by Harrison and 
LeBel (2008). For EPA's summary on these studies, see the EPA peer 
review cited in the footnote below, or the recently published EPA 
Heavy-Duty 2027 rule at Docket ID EPA-HQ-2019-0555.
    \970\ ``Analysis of Heavy-Duty Vehicle Sales Impacts Due to New 
Regulation.'' At https://cfpub.epa.gov/si/si_public_pra_view.cfm?dirEntryID=349838&Lab=OTAQ.
    \971\ ``Analysis of Heavy-Duty Vehicle Sales Impacts Due to New 
Regulation.'' At https://cfpub.epa.gov/si/si_public_pra_view.cfm?dirEntryID=349838&Lab=OTAQ.
    \972\ The 2004 rule, `Final Rule for Control of Emission of Air 
Pollution From Highway Heavy-Duty Engines', was finalized in 1997. 
The 2007 and 2010 rules were finalized as phase-ins in the `Final 
Rule for Control of Emissions of Air Pollution from 2004 and Later 
Model Year Heavy-Duty Highway Engines and Vehicles; Revision of 
Light-Duty On-Board Diagnostics Requirements' in 2000. The 2014 GHG 
rule, `Final Rule for Phase 1 Greenhouse House Emissions Standards 
and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and 
Vehicles,' was finalized in 2011. These rules can be found on the 
EPA website https://www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-emissions-commercial-trucks-and-buses-heavy.
---------------------------------------------------------------------------

    While it is instructive that the ERG report found little to no pre-
buy or low-buy effects due to our HD rules, EPA does not believe the 
approach to estimate a change in the sales of HD vehicles before and 
after the promulgation of a rule due to the cost of that rule (as was 
done in the ERG report) should be used to estimate sales effects from 
this proposed rule for three main reasons.\973\ First, as outlined in 
the previous paragraph, most of the statistically significant sales 
effects in the ERG report were estimated using data from criteria 
pollutant rules (the 2002, 2004 and 2007 rules), which are not 
appropriate for use in estimating effects from HD GHG rules. This is 
because differences in how costs are incurred and benefits are accrued 
as a result of HD vehicle criteria pollutant regulations versus HD GHG 
regulations

[[Page 26070]]

may lead to differences in how HD vehicle buyers react to a particular 
regulation. For example, the 2014 rule \974\ led to reductions in GHG 
emissions and had lower associated technology costs compared to the 
criteria pollutant rules, and compliance with the GHG regulation was 
associated with fuel savings. We also expect fuel savings effects in 
this proposal, as described in Section IV. Second, the pre-buy and low-
buy sales effects were estimated as a function of the average change in 
cost of a HD vehicle for each vehicle class due to the specific rule 
under consideration (for example, the 2007 rule or 2014 rule). However, 
unlike criteria pollutant rules, there were multiple pathways to 
compliance with 2014 rule, and therefore uncertainty in the price 
change due to the rule, which led to uncertainty in the results 
estimated using these price changes. Third, the approach outlined in 
the ERG report was estimated only using HD ICE vehicle data (i.e., cost 
of compliance due to adding technology to a HD ICE engine). The 
research and methodology in the ERG report did not include any data 
from the production, sale, or purchase of HD ZEVs. For these reasons, 
we are not using the method in the ERG report to estimate sales effects 
due to this rule. We request comment on data or methods to estimate the 
possible effects of this regulation on the sale of HD ICE vehicles and 
HD ZEV sales, including potential impacts associated with pre-buy and 
low-buy.
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    \973\ See the RIA for the HD 2027 rule for an example of how we 
might estimate potential impacts of a HD regulation on vehicle 
sales, including pre-buy and low-buy using the approach introduced 
in the ERG report. 87 FR 17590. March 28, 2022.
    \974\ `Final Rule for Phase 1 Greenhouse House Emissions 
Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty 
Engines and Vehicles' can be found at https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-phase-1-greenhouse-gas-emissions-standards.
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    This proposed rulemaking would be expected to lead to reductions in 
emissions across the HD vehicle fleet (Section V of this preamble), 
though such reductions are expected to happen gradually as the HD fleet 
turns over. This is because the fraction of the total HD vehicle fleet 
that is new ZEVs would initially be a small portion of the entire HD 
market. As more HD ZEVs are sold, and as older HD ICE vehicles are 
retired, greater emission reductions are expected to occur. The 
emission reductions attributable to each HD segment that would be 
affected by this proposed rule would depend on many factors, including 
the individual increase in ZEV adoption in each market segment over 
time, as well as relative usage, measured in VMT, for a HD ZEV when 
compared to a similar HD ICE vehicle. For example, if ZEV uptake occurs 
faster than predicted, emission reductions would happen faster than 
estimated. If, assuming no change in total fleet VMT, the VMT 
attributed to a HD ZEV is less than that of the HD ICE vehicle it is 
displacing, emission reductions would happen slower than estimated. In 
addition, if pre-buy or low-buy occurs as a result of this proposed 
rulemaking, emission reductions would be smaller than anticipated. This 
is because, under pre-buy conditions, the pre-bought vehicles will not 
be subject to the tighter emission standards, and are less likely to be 
ZEVs; however, the pre-bought new vehicles are likely to be less 
polluting than the older HD vehicles they are replacing due to more 
stringent HD emission standards for new engines and vehicles (if it is 
a replacement purchase). Under low-buy, we would expect older, more 
polluting, HD vehicles would remain in use longer than they otherwise 
would in the absence of new regulation. We expect pre-buy and low-buy 
to be very small, if they occur at all. For more information on sales 
impacts, see Chapter 6.1.1 of the DRIA. We request comment on data and 
methods to estimate possible effects of the proposed emission standards 
on fleet turnover and to estimate the VMT of HD ZEVs in comparison to 
HD ICE vehicles.
ii. Mode Shift
    Another potential, though unlikely, effect of this proposed 
regulation may be mode shift. Mode shift would occur if goods that 
would normally be shipped by HD vehicle are instead shipped by another 
method (e.g., rail, boat, air) as a result of this action. Whether 
shippers switch to a different mode of transportation for freight 
depends not only on the cost per mile of the shipment (i.e., freight 
rate), but also the value of the shipment, the speed of transport 
needed for shipment (for example, for non-durable goods), and the 
availability of supporting infrastructure (e.g., rail lines, highways, 
waterways). Shifting from HD vehicles to other modes of transportation 
may occur if the cost of shipping goods by HD vehicles increases 
relative to other modes of transport, and it is feasible to switch the 
shipment from truck to another mode of transport. Chapter 3.3 of the 
DRIA and Section IV.D of this preamble discuss the estimated decrease 
in operational costs of this proposed rule, mainly due to the increase 
in the share of ZEVs in the on-road HD fleet. Because the effects of 
this proposed action are expected to reduce operational costs for 
trucks, we do not think mode shift would be a likely outcome of this 
proposed regulation.\975\ We are asking for comment on data and methods 
to estimate possible effects of the proposed emission standards on mode 
shift. For more information on mode shift, see Chapter 6.1.2 of the 
DRIA.
---------------------------------------------------------------------------

    \975\ If manufacturers comply by adding technology to ICE 
vehicles, we would also expect to see reduced operational costs 
through reduced fuel consumption.
---------------------------------------------------------------------------

iii. Class Shift
    Class shift is also a possible effect of this proposed rule. Class 
shift would occur if purchasers shift their purchases from one class of 
vehicle to another class of vehicle due to differences in cost among 
vehicle types. We expect that class shifting, if it does occur, would 
be limited. The proposed emission standards are projected to lead to an 
increase in the incremental cost per vehicle for many classes of 
vehicles across both vocational vehicles and tractor categories before 
accounting for the IRA vehicle and battery tax credits. After 
accounting for these credits, our estimates show that this upfront 
increase in cost is reduced, and in fact, we estimate that some 
vocational vehicles and tractor ZEVs have lower or equivalent upfront 
costs compared to comparable ICE vehicles. For more information, see 
Preamble Section IV.D or DRIA Chapter 3.4. Furthermore, the upfront 
costs for vocational vehicles and tractors would be offset by 
operational cost savings.
    Another reason EPA believes class shift would be limited, if it 
occurs, is that HD vehicles are typically configured and purchased to 
perform a specific function. For example, a concrete mixer is purchased 
to transport concrete, or a combination tractor is purchased to move 
freight with the use of a trailer. In addition, a purchaser in need of 
a specific vocational vehicle, such as a bus, box truck or street 
sweeper, would not be able to shift the purchase to a vehicle with a 
less stringent emission standard (such as the optional custom chassis 
standards for emergency vehicles, recreational vehicles, or mixed use 
(nonroad) type vehicles) and still meet their needs. The purchaser 
makes decisions based on many attributes of the vehicle, including the 
gross vehicle weight rating or gross combined weight rating of the 
vehicle, which in part determines the amount of freight or equipment 
that can be carried. Due to this, it may not be feasible for purchasers 
to switch to other vehicle classes. If a limited amount of shifting 
were to occur, we would expect negligible emission impacts (compared

[[Page 26071]]

to those emission reductions estimated to occur as a result of the 
proposed emission standards) because the vehicle classes that would be 
feasibly `switched' are all subject to this proposed rule. We request 
comment on data or methods to estimate the effect the proposed emission 
standards might have on class shifting.
iv. Domestic Production
    The proposed emission standards are not expected to provide 
incentives for manufacturers to shift between domestic and foreign 
production. This is because the emission standards apply to vehicles 
sold in the United States regardless of where such vehicles are 
produced. If foreign manufacturers already have increased expertise in 
satisfying the requirements of the emission standards, there may be 
some initial incentive for foreign production. However, given 
increasing global interest in reducing vehicle emissions, specifically 
through the use of ZEVs, as domestic manufacturers produce vehicles 
with reduced emissions, including ZEVs, the opportunity for domestic 
manufacturers to sell in other markets might increase. To the extent 
that the proposed emission standards might lead to application and use 
of technologies that other countries may seek now or in the future, 
developing this capacity for domestic producers now may provide some 
additional ability to serve those markets.
    As discussed in Preamble Section 1.C, and DRIA Chapter 1, the IRA 
contains tax credit incentives that are impacted by the location of 
production and may encourage domestic production of ZEV vehicles or 
components. A portion of these tax incentives are included in our cost 
analysis for the proposed rule, as describe in Section IV, and DRIA 
Chapter 3. We request comment on whether our standards would impact the 
domestic production of HD vehicle components.
2. Purchaser Acceptance
    We expect this proposed rule to lead to an increase in the adoption 
of HD BEVs and FCEVs for most HD vehicle types beginning in MY 2027 
(see Section II of this preamble or DRIA Chapter 2 for details). 
Businesses that operate HD vehicles are under competitive pressure to 
reduce operating costs, which should encourage purchasers to identify 
and rapidly adopt new vehicle technologies that reduce operating costs. 
As outlays for labor and fuel generally constitute the two largest 
shares of HD vehicle operating costs, depending on the price of fuel, 
distance traveled, type of HD vehicle, and commodity transported (if 
any), businesses that operate HDVs face strong incentives to reduce 
these costs.976 977 As explained in Section IV and Chapter 3 
of the DRIA, though HD ZEVs in general have higher upfront costs than 
comparable ICE vehicles, our costs analysis shows that the incremental 
upfront cost difference between a ZEV and a comparable ICE vehicle 
would be partially or fully offset by a combination of the federal 
vehicle tax credit and battery tax credit for HD ZEVs that are 
available through MY 2032 and operational savings.\978\ For the vehicle 
types for which we propose new CO2 emission standards, we 
expect that the ZEVs will have a lower total cost of ownership when 
compared to a comparable ICE vehicle (even after considering the 
upfront cost of purchasing the associated EVSE for a BEV), due to the 
expected cost savings in fuel, maintenance, and repair over the life of 
the HD ZEV when compared to comparable ICE vehicle. See Section IV of 
this preamble and Chapter 3 of the DRIA for more information on the 
estimated costs of this proposed rule.
---------------------------------------------------------------------------

    \976\ American Transportation Research Institute, An Analysis of 
the Operational Costs of Trucking, September 2013. Docket ID: EPA-
HQ-OAR-2014-0827-0512.
    \977\ Transport Canada, Operating Cost of Trucks, 2005. Docket 
ID: EPA-HQ-OAR-2014-0827-0070.
    \978\ For more information on the Federal tax credits, see 
Section I.C.
---------------------------------------------------------------------------

    In DRIA Chapter 6.2, we discuss the possibility that an ``energy 
efficiency gap'' or ``energy paradox'' has existed, where available 
technologies that would reduce the total cost of ownership for the 
vehicle (when evaluated over their expected lifetimes using 
conventional discount rates) have not been widely adopted, or the 
adoption is relatively slow, despite their potential to repay buyers' 
initial investments rapidly. We recognize that there are factors that 
may impact adoption of HD ZEVs, including uncertainty related to the 
technology and supporting infrastructure, as well as incentives created 
by this proposed rule for manufacturers to develop ZEV technology and 
educate purchasers.
    We expect that adoption rates of HD ZEVs will be impacted by buyers 
taking advantage of existing incentives, specifically the IRA vehicle 
tax credit and battery tax credit, as well as the extent to which 
buyers consider the cost savings of purchasing a ZEV over a HD ICE 
vehicle in their purchase decision, mainly observed through operational 
cost savings. We expect purchasing decisions would also be affected by 
purchasers' impressions of charging infrastructure support and 
availability, perceptions of the comparisons of quality and durability 
of the different HD powertrains, and resale value of the vehicle.
    The availability of existing incentives, specifically the Federal 
purchaser and battery manufacturing tax credits in the IRA, is expected 
to lead to lower upfront costs for purchasers of HD ZEVs than would 
otherwise occur.\979\ We expect this will result in a higher ZEV 
adoption rate than would otherwise exist absent such incentives. In 
addition, as purchasers consider more of the operational cost savings 
of a ZEV over a comparable ICE vehicle in their purchase decision, the 
smaller the impact of the higher upfront costs for purchasers of a ZEV 
compared to an ICE vehicle has on that decision, and purchasers are 
more likely to purchase a ZEV. We note that ZEVs may not be purchased 
at the rates estimated in the analysis for this proposed rule. They may 
be smaller if purchasers do not consider the full, or even a portion 
of, value of operational cost savings, which may happen due to 
uncertainty, e.g., uncertainty about future fuel prices. Additionally, 
this may occur if a principal-agent problem exists, causing split 
incentives.\980\ A principal-agent problem would exist if truck 
operators (agents) and truck purchasers who are not also operators 
(principals) value operational cost savings differently (split 
incentives), which could lead to differences in purchase decisions 
between truck operators and truck purchasers. For example, a HD vehicle 
purchaser may not be directly responsible for the future fuel costs of 
the vehicle they purchase, or the person who would be responsible for 
those fuel costs may not be involved in the purchase decision. In this 
case, truck operators may place a higher value on the potential savings 
in operational costs over the lifetime of a vehicle and give less 
weight to the increase in upfront cost that may be associated with a 
ZEV purchase, whereas a truck purchaser may weigh higher upfront costs 
more heavily than possible operational cost savings. Such potential 
split incentives, or market failures, could lead to lower ZEV adoption 
rates than we are estimating in this proposal, which may reduce the 
non-GHG environmental benefits of the proposed emission standards due 
to lower non-

[[Page 26072]]

GHG emission reductions than estimated in this proposal. Other examples 
of this might include if a purchaser values charging or fueling 
infrastructure, either the cost of installation or the availability, 
differently than the operator. The direction of the effect in this case 
would depend on who was responsible for the cost of the infrastructure 
installation, or who places more value on the availability of 
widespread infrastructure.
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    \979\ Note that the incentives exist in the baseline and under 
the scenario with our proposed standards.
    \980\ A principal-agent problem happens when there is a conflict 
in priorities (split incentives) between a ``principal,'' or the 
owner of an asset, and an ``agent,'' or the the person to whom 
control of the asset has been delegated, such as a manager or HD 
vehicle operator.
---------------------------------------------------------------------------

    Uncertainty about ZEV technology, charging infrastructure 
technology and availability for BEVs, or hydrogen refueling 
infrastructure for FCEVs, may affect ZEV adoption rates. As ZEVs become 
increasingly more affordable and ubiquitous, we expect uncertainty 
related to these technologies will diminish over time. As uncertainty 
related to these technologies decreases, it may lead to higher rates of 
ZEV adoption that estimated. In addition, ZEVs may be purchased at 
higher rates than estimated in the analysis if, for example, ZEV costs 
decrease faster than expected, or due to increasing commitments from 
fleet owners or operators to purchase ZEVs.
    We expect that the Federal vehicle and battery tax credits in the 
IRA, as well as purchasers' consideration of the lower operational 
costs of ZEVs, would mitigate any possible pre-buy by reducing the 
perceived purchase price or lifetime operational costs difference of a 
new, post-rule ZEV compared to a new pre- or post-rule ICE vehicle. We 
expect this would increase purchaser willingness to purchase a new ZEV. 
When purchasers are educated on charging or refueling infrastructure 
technology and availability, both as it stands at the time of possible 
purchase, as well as plans for future availability, uncertainty related 
to operating a new ZEV decreases.
    EPA recognizes that there is uncertainty related to ZEVs that may 
impact the adoption of this technology even though it reduces operating 
costs. Markets for both new and used HD vehicles may face these 
problems, although it is difficult to assess empirically the degree to 
which they do. We expect the proposed Phase 3 standards, if finalized, 
will help overcome such barriers by incentivizing the development of 
ZEV technologies and the education of HD vehicle purchasers on ZEV 
benefits and infrastructure.
    We request comment and data on acceptance of HD ZEVs.
3. VMT Rebound
    Historically, the ``rebound effect'' has been interpreted as more 
intensive vehicle use, resulting in an increase in liquid fuel in 
response to increased ICE vehicle fuel efficiency. Although much of 
this possible vehicle use increase is likely to take the form of an 
increase in the number of miles vehicles are driven, it can also take 
the form of an increase in the loaded operating weight of a vehicle or 
altering routes and schedules in response to improved fuel efficiency. 
More intensive use of those HD ICE vehicles consumes fuel and generates 
emissions, which reduces the fuel savings and avoided emissions that 
would otherwise be expected to result from increasing fuel efficiency 
of HD ICE vehicles.
    Unlike the LD vehicle rebound effect, there is little published 
literature on the HD vehicle rebound effect, and all of it focuses on 
the rebound effect due to increased ICE fuel efficiency. Winebrake et 
al. (2015) suggests that vocational trucks and tractor trailers have a 
rebound effect of essentially zero. Leard et al. (2015) estimate that 
tractor trailers have a rebound effect of 30 percent, while vocational 
vehicles have a 10 percent rebound rate.\981\ Patwary et al. (2021) 
estimated that the average rebound effect of the U.S. road freight 
sector is between about 7 to 9 percent, although their study indicated 
that rebound has increased over time.\982\ This is slightly smaller 
than the value found by Leard et al. (2015) for the similar sector of 
tractors. We do not have data that operational cost savings of 
switching from an ICE vehicle to a ZEV will affect the VMT driven of 
that vehicle, nor do we have data on how changing fuel prices might 
affect VMT of ZEVs over time. Given the increasing penetration of ZEVs 
in the HD fleet, and the estimated increase over the time frame of this 
proposed rule, we do not believe the rebound estimates in literature 
cited here are appropriate for use in our analysis. Therefore, we are 
not estimating any VMT rebound due to this rule. We request comment on 
the VMT response of HD ICE vehicles and HD ZEVs due to this rule, 
including the response of increasing efficiency within ICE vehicles, as 
well as the response to switching from an ICE vehicle to a ZEV. We 
request comment and data on the rebound assumptions for HD ICE vehicles 
and HD ZEVs.
---------------------------------------------------------------------------

    \981\ Leard, B., Linn, J., McConnell, V., and Raich, W. (2015). 
Fuel Costs, Economic Activity, and the Rebound Effect for Heavy-Duty 
Trucks. Resources For the Future Discussion Paper, 14-43.
    \982\ Patwary, A. L., Yu, T. E., English, B.C., Hughes, D. W., 
and Cho, S. H. (2021). Estimating the rebound effect of the US road 
freight transport. Transportation Research Record, 2675(6), 165-174.
---------------------------------------------------------------------------

4. Employment Impacts
    Economic theories of labor demand indicate that employers affected 
by environmental regulation may change their demand for different types 
of labor in different ways, increasing demand for some types, 
decreasing demand for other types, or not changing it at all for still 
other types. A variety of conditions can affect employment impacts of 
environmental regulation, including baseline labor market conditions 
and employer and worker characteristics such as industry and region. A 
growing body of literature has examined employment effects of 
environmental regulation. Morgenstern et al. decompose the labor 
consequences in a regulated industry facing increased abatement 
costs.\983\ This study identifies three separate components of labor 
demand effects. First, there is a demand effect caused by higher 
production costs, which in turn, results in increased market prices. 
Increased market prices reduce consumption (and production), thereby 
reducing demand for labor within the regulated industry. Second, there 
is a cost effect. As production costs increase, manufacturing plants 
use more of all inputs, including labor, to produce the same level of 
output. Third, there is a factor-shift effect, which occurs when post-
regulation production technologies may have different labor intensities 
than pre-regulation production technologies.\984\
---------------------------------------------------------------------------

    \983\ Morgenstern, R.D.; Pizer, W.A.; and Shih, J.-S. ``Jobs 
Versus the Environment: An Industry-Level Perspective.'' Journal of 
Environmental Economics and Management 43: 412-436. 2002.
    \984\ Additional literature using similar frameworks include 
Berman and Bui (2001) and Desch[ecirc]nes (2018). For more 
information on this literature, see the Chapter 10 of the RIA for 
the HD2027 rule, found at Docket ID EPA-HQ-OAR-2019-0055.
---------------------------------------------------------------------------

    Due to a lack of data, we are not able to estimate employment 
effects from this proposed rule. The overall effect of the proposed 
rule on employment in the heavy-duty vehicle manufacturing sector 
depends on the relative magnitude of factor-shift, cost, and demand 
effects, as well as possible differences in employment related to HD 
ICE and ZEV manufacturing. As markets shift to HD ZEVs, employment 
needs will shift as well. In Chapter 6.4.2 of the DRIA, we show that 
the amount of labor per million dollars in sales in motor vehicle 
manufacturing sectors has generally declined over time, indicating that 
fewer people have been needed to produce the same value of goods. For 
example, in 1997, motor vehicle body and trailer manufacturing employed

[[Page 26073]]

almost 3.4 employees per million dollars in sales. This fell to almost 
2.7 in 2021. In the electrical equipment manufacturing sector, which is 
involved in the production of EVs, employment has increased from almost 
2.3 to almost 2.7 per million dollars from 2007 to 2021. The 
International Union, United Automobile, Aerospace and Agricultural 
Implement Workers of America (UAW) states that re-training programs 
will be needed to support auto workers in a market with an increasing 
share of electric vehicles in order to prepare workers that might be 
displaced by the shift to the new technology.\985\ Volkswagen states 
that labor requirements for ICE vehicles are about 70 percent higher 
than their electric counterpart, but these changes in employment 
intensities in the manufacturing of the vehicles can be offset by 
shifting to the production of new components, for example batteries or 
battery cells.\986\ Climate Nexus indicates that transitioning to 
electric vehicles will lead to a net increase in jobs, a claim that is 
partially supported by the rising investment in batteries, vehicle 
manufacturing and charging stations.\987\ Though most of these 
statements are specifically referring to light-duty vehicles, they hold 
true for the HD market as well. The expected investment mentioned by 
Climate Nexus is also supported by recent Federal investment which will 
allow for increased investment along the vehicle supply chain, 
including domestic battery manufacturing, charging infrastructure, and 
vehicle manufacturing, both in the LD and HD markets.\988\ This 
investment includes the BIL, the CHIPS Act,\989\ and the IRA, which are 
expected to create domestic employment opportunities along the full 
automotive sector supply chain, from components and equipment 
manufacturing and processing to final assembly, as well as incentivize 
the development of reliable EV battery supply chains.\990\ For example, 
the IRA is expected to impact domestic employment through conditions on 
eligibility for purchase incentives and battery manufacturing 
incentives. These conditions include contingencies for domestic 
assembly, domestic critical materials production, and domestic battery 
manufacturing. The BlueGreen Alliance and the Political Economy 
Research Institute estimate that IRA will create over 9 million jobs 
over the next decade, with about 400,000 of those jobs being attributed 
directly to the battery and fuel cell vehicle provisions in the 
act.\991\ In addition, the IRA is expected to lead to increased demand 
in ZEVs through tax credits for purchasers of ZEVs.
---------------------------------------------------------------------------

    \985\ More information on UAW's comments can be found in the 
white paper ``Making EVs work for American workers'' found at 
https://uaw.org/wp-content/uploads/2019/07/190416-EV-White-Paper-REVISED-January-2020-Final.pdf.
    \986\ Herrmann, F., Beinhauer, W., Borrmann, D., Hertwig, M., 
Mack, J., Potinecke, T., Praeg, C., Rally, P. 2020. Effects of 
Electric Mobility and Digitlaisation on the Quality and Quantity of 
Employment at Volkswagen. Fraunhofer Institute for Industrial 
Engineering IAO. Study on behalf of the Sustainability Council of 
the Volkswagen Group. https://www.volkswagenag.com/presence/stories/2020/12/frauenhofer-studie/6095_EMDI_VW_Summary_um.pdf.
    \987\ See the report from Climate Nexus at https://climatenexus.org/climate-issues/energy/ev-job-impacts/.
    \988\ See Preamble Section I for information on the BIL and IRA 
provisions relevant to vehicle electrification, and the associated 
infrastructure.
    \989\ The CHIPS Act is the Creating Helpful Incentives to 
Produce Semiconductors and Science Act and was signed into lay on 
August 9, 2022. It is designed to strengthen supply chains, domestic 
manufacturing and national security. More information can be found 
at https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/09/fact-sheet-chips-and-science-act-will-lower-costs-create-jobs-strengthen-supply-chains-and-counter-china/.
    \990\ More information on how these acts are expected to aid 
employment growth and create opportunities for growth along the 
supply chain can be found in the January, 2023 White House 
publication ``Building a Clean Energy Economy: A Guidebook to the 
Inflation Reduction Act's Investments in Clean Energy and Climate 
Action.'' found online at https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf.
    \991\ Political Economy Research Institute. (2022). Job Creation 
Estimates Through Proposed Inflation Reduction Act. University of 
Massachusetts Amherst. Retrieved from https://www.bluegreenalliance.org/site/9-million-good-jobs-from-climate-action-the-inflation-reduction-act.
---------------------------------------------------------------------------

    The factor-shift effect on employment reflects potential employment 
changes due to changes in labor intensity of production resulting from 
compliance activities. The proposed standards do not mandate the use of 
a specific technology, and EPA anticipates that a compliant fleet under 
the proposed standards would include a diverse range of technologies 
including ICE and ZEV technologies. In our assessment that supports the 
appropriateness and feasibility of the proposed standards, we developed 
a technology pathway that could be used to meet each of the standards, 
which project the increased ZEV adoption rates. ZEVs and ICE vehicles 
require different inputs and have different costs of production, though 
there are some common parts as well. There is little research on the 
relative labor intensity needs of producing a HD ICE vehicle versus 
producing an equivalent HD ZEV. Though there are some news articles and 
research from the light-duty motor vehicle market, they do not provide 
a clear indication of the relationship between employment needs for 
ZEVs and ICE vehicles. Some studies find that LD BEVs are less complex, 
requiring fewer person-hours to assemble than an equivalent ICE 
vehicle.\992\ Others find that there is not a significant difference in 
the employment needed to produce ICE vehicles when compared to 
ZEVs.\993\ We do not have data on employment differences in traditional 
ICE manufacturing sectors and ZEV manufacturing sectors, especially for 
expected effects in the future, nor do we have data on the employment 
needed for the level of battery production we anticipate will be 
required to meet future HD ZEV demand. We request comment on data 
concerning the potential employment impacts of HD component and vehicle 
manufacturing of ZEVs, including batteries.
---------------------------------------------------------------------------

    \992\ Barret, J. and Bivens, J. (2021). The stakes for workers 
in how policymakers manage the coming shift to all-electric 
vehicles. Economic Policy Institute. https://www.epi.org/publication/ev-policy-workers.
    \993\ Kupper, D., Kuhlmann, K., Tominaga, K., Arora, A., 
Schlageter, J.. (2020). Shifting Gears in Auto Manufacturing. 
https://www.bcg.com/publications/2020/transformative-impact-of-electric-vehicles-on-auto-manufacturing.
---------------------------------------------------------------------------

    The demand effect reflects potential employment changes due to 
changes in new HD vehicle sales. If HD ICE vehicle sales decrease, 
fewer people would be needed to assemble trucks and the components used 
to manufacture them. On the other hand, if HD ZEV sales increase, more 
people would be needed to assemble HD ZEVs and their components, 
including batteries. Additional, short-term, effects might be seen if 
pre-buy or low-buy were to occur. If pre-buy occurs, HD vehicle sales 
may increase temporarily, leading to temporary increases in employment 
in the related manufacturing sectors. If low-buy occurs, there may be 
temporary decreases in employment in the manufacturing sectors related 
to HD vehicles.
    The cost effect reflects the potential impact on employment due to 
increased costs from adopting technologies needed for vehicles to meet 
the new emission standards. In the HD ICE vehicle manufacturing sector, 
if firms invest in lower emitting HD ICE vehicles, we would expect 
labor to be used to implement those technologies. We do not expect the 
rule to require compliance activities in the production of ZEVs, as 
these vehicles, by definition, emit zero emissions. In addition, though 
the proposed standards do not mandate the use of a specific technology, 
and EPA anticipates that a compliant fleet

[[Page 26074]]

under the proposed standards would include a diverse range of 
technologies including ICE and ZEV technologies, in our assessment that 
supports the appropriateness and feasibility of the proposed standards, 
we developed a technology pathway that could be used to meet each of 
the standards, which project increased ZEV adoption rates. Therefore, 
we expect little cost effect on employment due to this rule.
    We request comment on data and methods that could be used to 
estimate the potential effects of this action on employment in HD 
vehicle manufacturing sectors, and on how increasing electrification in 
the HD market in general, might impact employment in HD manufacturing 
sectors, both for ICE powertrains as well as electrified powertrains. 
We request comment on data and methods to estimate possible effects of 
the proposed emission standards on employment in the HD ICE and ZEVs 
manufacturing markets.
    As the share of ZEVs in the HD market increases, there may also be 
effects on employment in the associated BEV charging and hydrogen 
refueling infrastructure industries. These impacts may occur in several 
ways, including through greater demand for charging and fueling 
infrastructure to support more ZEVs, leading to more private and public 
charging and fueling facilities being constructed, or through greater 
use of existing facilities, which can lead to increased maintenance 
needs for those facilities. We request comment on data and methods that 
could be used to estimate the effect of this action on the HD BEV 
vehicle charging infrastructure industry.
    Because of the diversity of the HD vehicle market, we expect that 
entities from a wide range of transportation sectors would purchase 
vehicles subject to the proposed emission standards. HD vehicles are 
typically commercial in nature, and typically provide an ``intermediate 
good,'' meaning that such vehicles are used to provide a commercial 
service (transporting goods, municipal service vehicles, etc.), rather 
than serving as final consumer goods themselves (as most light-duty 
vehicles do). As a result, the purchase price of a new HD vehicle 
likely impacts the price of the service provided by that vehicle. If 
lifetime operational cost savings, or purchase incentives (as might be 
available for a new ZEV), are not accounted for in the prices for 
services provided by the new vehicles, this may result in higher prices 
for the services provided by these vehicles compared to the same 
services provided by a pre-regulation vehicle, and potentially reduce 
demand for the services such vehicles provide. In turn, there may be 
less employment in the sectors providing such services. On the other 
hand, if these cost savings are passed on to consumers through lower 
prices for services provided, it may lead to an increase in demand for 
those services, and therefore may lead to an increase in employment in 
those sectors providing those services. We expect that the actual 
effects on demand for the services provided by these vehicles and 
related employment would depend on cost pass-through, as well as 
responsiveness of demand to increases in transportation cost, should 
such increases occur.\994\
---------------------------------------------------------------------------

    \994\ Cost pass-through refers to the amount of increase in up-
front cost incurred by the HD vehicle owner that is then passed on 
to their customers in the form of higher prices for services 
provided by the HD vehicle owner.
---------------------------------------------------------------------------

    This action may also produce employment effects in other sectors, 
for example, in firms providing fuel. While reduced fuel consumption 
represents cost savings for purchasers of fuel, it could also represent 
a loss in value of output for the petroleum refining industry, which 
could result in reduced employment in that sector. Because the 
petroleum refining industry is material-intensive, and EPA estimates 
the reduction in fuel consumption will be mainly met by reductions in 
oil imports (see Section VI.F), the employment effect is not expected 
to be large.
    This proposed action could also provide some positive impacts on 
driver employment in the heavy-duty trucking industry. As discussed in 
Section IV, the reduction in fuel costs from purchasing a ZEV instead 
of an ICE vehicle would be expected to not only reduce operational 
costs for ZEV owners and operators, compared to an ICE vehicle, but may 
also provide additional incentives to purchase a HD ZEV over a HD ICE 
vehicle. For example, in comments submitted as part of the recent HD 
2027 proposal, the Zero Emission Transportation Association stated that 
driver satisfaction due to ``a smoother ride with minimal vibrations, 
less noise pollution, and a high-tech driving experience free from the 
fumes of diesel exhaust'' has the possibility of decreasing truck 
driver shortages and increasing driver retention.

F. Oil Imports and Electricity and Hydrogen Consumption

    The proposed standards would reduce not only GHG emissions but also 
liquid fuel consumption (i.e., oil consumption) while simultaneously 
increasing electricity and hydrogen consumption. Reducing liquid fuel 
consumption is a significant means of reducing GHG emissions from the 
transportation sector. As discussed in Section V and DRIA Chapter 4, we 
used an updated version of EPA's MOVES model to estimate the impact of 
the proposed standards on heavy-duty vehicle emissions, fuel 
consumption, and electricity consumption. In Chapter 6.5 of the DRIA, 
we present fossil fuel--diesel, gasoline, CNG--consumption impacts. 
Table 6-1 in Chapter 6 of the DRIA shows the estimated reduction in 
U.S. oil imports under the proposed standards relative to the reference 
case scenario. This proposal is projected to reduce U.S. oil imports 
4.3 billion gallons through 2055. The oil import reductions are the 
result of reduced consumption (i.e., reduced liquid fuel demand) of 
both diesel fuel and gasoline and our estimate that 86.4 percent of 
reduced liquid fuel demand results in reduced imports.\995\ DRIA Table 
6-1 also includes the projected increase in electricity and hydrogen 
consumption due to the proposed rule.
---------------------------------------------------------------------------

    \995\ To estimate the 86.4 percent import reduction factor, we 
look at changes in U.S. crude oil imports/exports and net refined 
petroleum products in the AEO 2022 Reference Case, Table 11. 
Petroleum and Other Liquids Supply and Disposition, in comparison to 
the Low Economic Growth Case from the AEO 2022. See the spreadsheet, 
``Low vs Reference case impact on Imports 2022 AEO.xlsx''.
---------------------------------------------------------------------------

VII. Benefits of the Proposed Program

A. Social Cost of GHGs

    EPA estimated the climate benefits for the proposed standards using 
measures of the social cost of three GHGs: Carbon, Methane, and Nitrous 
oxide. 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 such an 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 and is the 
theoretically appropriate value to use in conducting benefit-cost 
analyses of policies that affect GHG emissions. EPA and other Federal 
agencies began regularly incorporating SC-GHG estimates in their 
benefit-cost analyses conducted under Executive

[[Page 26075]]

Order (E.O.) 12866 \996\ since 2008, following a Ninth Circuit Court of 
Appeals remand of a rule for failing to monetize the benefits of 
reducing CO2 emissions in a rulemaking process.
---------------------------------------------------------------------------

    \996\ Benefit-cost analyses have been an integral part of 
executive branch rulemaking for decades. Presidents since the 1970s 
have issued executive orders requiring agencies to conduct analysis 
of the economic consequences of regulations as part of the 
rulemaking development process. E.O. 12866, released in 1993 and 
still in effect today, requires that for all regulatory actions that 
are significant under 3(f)(1), an agency provide an assessment of 
the potential costs and benefits of the regulatory action, and that 
this assessment include a quantification of benefits and costs to 
the extent feasible.''
---------------------------------------------------------------------------

    We estimate the global social benefits of CO2, 
CH4, and N2O emission reductions expected from 
the 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 updated estimates of the impacts of 
climate change can be developed based on the best available climate 
science and economics. We have evaluated the SC-GHG estimates in the 
TSD and have determined that these estimates are appropriate for use in 
estimating the global social benefits of CO2, CH4, and N2O 
emission reductions expected from this proposed rule. After considering 
the TSD, and the issues and studies discussed therein, EPA finds that 
these estimates, while likely an underestimate, are the best currently 
available SC-GHG estimates. These SC-GHG estimates were developed over 
many years using a transparent process, peer-reviewed methodologies, 
the best science available at the time of that process, and with input 
from the public. As discussed in Chapter 7 of the DRIA, 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 modeling 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 
(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. The 
EPA is participating in the IWG's work. In addition, while that process 
continues, EPA is continuously reviewing developments in the scientific 
literature on the SC-GHG, including more robust methodologies for 
estimating damages from emissions, and looking for opportunities to 
further improve SC-GHG estimation going forward. Most recently, EPA has 
developed a draft updated SC-GHG methodology within a sensitivity 
analysis in the regulatory impact analysis of EPA's November 2022 
supplemental proposal for oil and gas standards that is currently 
undergoing external peer review and a public comment process. See 
Chapter 7 of the DRIA for more discussion of this effort.
    We monetize benefits of the proposed standards and evaluate other 
costs in part to better enable a comparison of costs and benefits 
pursuant to E.O. 12866, but we recognize that there are benefits that 
we are currently unable to fully quantify. EPA's consistent practice 
has been to set standards to achieve improved air quality consistent 
with CAA section 202 and not to rely on cost-benefit calculations, with 
their uncertainties and limitations, in identifying the appropriate 
standards. Nonetheless, 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.
    Table VII-1 presents the estimated annual, undiscounted climate 
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 for the stream of years beginning with the first year of 
rule implementation, 2027, through 2055 for the proposed program. Also 
shown are the present values (PV) and equivalent annualized values 
(EAV) associated with each of the four interim SC-GHG values. As 
discussed in the DRIA Chapter 7, there are some limitations to the SC-
GHG analysis, including the incomplete way in which the integrated 
assessment models capture catastrophic and non-catastrophic impacts, 
their incomplete treatment of adaptation and technological change, 
uncertainty in the extrapolation of damages to high temperatures, and 
assumptions regarding risk aversion. Our analysis includes 
CO2 emission increases from EGUs that would result from our 
proposal (see Section V) but we have not quantified upstream emissions 
impacts associated with liquid fuel refining.

           Table VII-1--Climate Benefits From Reduction in GHG Emissions Associated With the Proposal
                                           [Millions of 2021 Dollars]
----------------------------------------------------------------------------------------------------------------
                                                                             Proposal
                                                 ---------------------------------------------------------------
                  Calendar Year                                                                       3% 95th
                                                    5% Average      3% Average     2.5% Average     Percentile
----------------------------------------------------------------------------------------------------------------
2027............................................             $33            $110            $160            $320
2028............................................              74             240             350             710
2029............................................             120             400             580           1,200
2030............................................             190             610             880           1,800
2031............................................             290             900           1,300           2,700
2032............................................             410           1,300           1,800           3,800
2033............................................             530           1,600           2,300           4,900
2034............................................             660           2,000           2,800           6,000
2035............................................             780           2,300           3,300           7,100
2036............................................             940           2,800           4,000           8,500
2037............................................           1,100           3,300           4,700           9,900

[[Page 26076]]

 
2038............................................           1,300           3,800           5,400          12,000
2039............................................           1,500           4,300           6,100          13,000
2040............................................           1,700           4,900           6,900          15,000
2041............................................           1,900           5,400           7,600          16,000
2042............................................           2,100           5,900           8,300          18,000
2043............................................           2,300           6,500           9,000          20,000
2044............................................           2,500           7,000           9,800          21,000
2045............................................           2,700           7,500          10,000          23,000
2046............................................           2,900           8,000          11,000          24,000
2047............................................           3,100           8,400          12,000          26,000
2048............................................           3,300           8,800          12,000          27,000
2049............................................           3,500           9,200          13,000          28,000
2050............................................           3,700           9,700          13,000          30,000
2051............................................           3,800          10,000          14,000          30,000
2052............................................           4,000          10,000          14,000          31,000
2053............................................           4,100          11,000          15,000          32,000
2054............................................           4,300          11,000          15,000          32,000
2055............................................           4,400          11,000          15,000          33,000
Present Value...................................          22,000          87,000         130,000         260,000
Equivalent Annualized Value.....................           1,400           4,600           6,500          14,000
----------------------------------------------------------------------------------------------------------------
Note: Climate benefits include changes in vehicle GHGs and EGU CO2 emissions, but do not include changes in
  other EGU GHGs or refinery GHGs.

B. Criteria Pollutant Health Benefits

    This section discusses the economic benefits from reductions in 
adverse health impacts resulting from non-GHG emission reductions that 
can be expected to occur as a result of the proposed CO2 
emission standards. GHG emissions are predominantly the byproduct of 
fossil fuel combustion processes that also produce criteria and 
hazardous air pollutant emissions. The heavy-duty vehicles that are 
subject to the proposed CO2 emission standards are also 
significant sources of mobile source air pollution such as directly-
emitted PM, NOX, VOCs, CO, SO2 and air toxics. We 
expect the proposed CO2 emission standards would lead to an 
increase in HD ZEVs and a decrease in HD ICE vehicles, which would 
result in reductions of these non-GHG pollutants (see Section V). Zero-
emission technologies would also affect emissions from upstream sources 
that occur during, for example, electricity generation and from the 
refining and distribution of liquid fuel (see Section V). This 
proposal's benefits analysis includes added emissions due to increased 
electricity generation but does not include emissions reductions from 
reduced petroleum refining.
    Changes in ambient concentrations of ozone, PM2.5, and 
air toxics that would result from the proposed CO2 emission 
standards are expected to affect human health by reducing premature 
deaths and other serious human health effects, and they are also 
expected to result in other important improvements in public health and 
welfare (see Section VI). Children, especially, benefit from reduced 
exposures to criteria and toxic pollutants because they tend to be more 
sensitive to the effects of these respiratory pollutants. Ozone and 
particulate matter have been associated with increased incidence of 
asthma and other respiratory effects in children, and particulate 
matter has been associated with a decrease in lung maturation.
    When feasible, EPA conducts full-scale photochemical air quality 
modeling to demonstrate how its national mobile source regulatory 
actions affect ambient concentrations of regional pollutants throughout 
the United States. The estimation of the human health impacts of a 
regulatory action requires national-scale photochemical air quality 
modeling to conduct a full-scale assessment of PM2.5 and 
ozone-related health benefits. Air quality modeling and associated 
analyses are not available for this document.
    For the analysis of the proposed CO2 emission standards 
(and analysis of the alternative standards in Section IX), we instead 
use a reduced-form ``benefit-per-ton'' (BPT) approach to estimate the 
monetized PM2.5-related health benefits of this proposal. 
The BPT approach estimates the monetized economic value of 
PM2.5-related emission reductions (such as direct PM, 
(NOX, and SO2) due to implementation of the 
proposed program. Similar to the SC-GHG approach for monetizing 
reductions in GHGs, the BPT approach estimates monetized health 
benefits of avoiding one ton of PM2.5-related emissions from 
a particular source sector. The value of health benefits from 
reductions (or increases) in PM2.5 emissions associated with 
this proposal were estimated by multiplying PM2.5-related 
BPT values by the corresponding annual reduction in tons of directly-
emitted PM2.5 and PM2.5 precursor emissions 
(NOX and SO2). As explained in Chapter 7.2 in the 
DRIA, the PM2.5 BPT values represent the monetized value of 
human health benefits, including reductions in both premature mortality 
and nonfatal illnesses.
    The mobile sector BPT estimates used in this proposal were 
published in 2019, but were recently updated using the suite of 
premature mortality and morbidity studies in use by EPA for the 2023 
p.m. NAAQS Reconsideration Proposal.997 998 The EGU BPT 
estimates used in this proposal were also recently updated.\999\ The 
health benefits

[[Page 26077]]

Technical Support Document (Benefits TSD) that accompanied the PM NAAQS 
Reconsideration Proposal details the approach used to estimate the 
PM2.5-related benefits reflected in the mobile source 
BPTs.\1000\ For more detailed information about the benefits analysis 
conducted for this proposal, including the BPT unit values used in this 
analysis, please refer to Chapter 7 of the DRIA.
---------------------------------------------------------------------------

    \997\ Wolfe, 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. Available at: https://doi.org/10.1016/J.SCITOTENV.2018.09.273.
    \998\ U.S. Environmental Protection Agency (U.S. EPA). 2023. PM 
NAAQS Reconsideration Proposal RIA. EPA-HQ-OAR-2019-0587. January.
    \999\ U.S. Environmental Protection Agency (U.S. EPA). 2023. 
Technical Support Document: Estimating the Benefit per Ton of 
Reducing Directly-Emitted PM2.5, PM2.5 
Precursors and Ozone Precursors from 21 Sectors. January.
    \1000\ U.S. Environmental Protection Agency (U.S. EPA). 2023. 
Estimating PM2.5- and Ozone-Attributable Health Benefits. 
Technical Support Document (TSD) for the PM NAAQS Reconsideration 
Proposal RIA. EPA-HQ-OAR-2019-0587. January.
---------------------------------------------------------------------------

    A chief limitation to using PM2.5-related BPT values is 
that they do not reflect benefits associated with reducing ambient 
concentrations of ozone. The PM2.5-related BPT values also 
do not capture the benefits associated with reductions in direct 
exposure to NO2 and mobile source air toxics, nor do they 
account for improved ecosystem effects or visibility. The estimated 
benefits of this proposal would be larger if we were able to monetize 
these unquantified benefits at this time.
    Table VII-2 presents the annual, undiscounted PM2.5-
related health benefits estimated for the stream of years beginning 
with the first year of rule implementation, 2027, through calendar year 
2055 for the proposed standards. Benefits are presented by Source: 
Onroad heavy-duty vehicles and EGUs. Because premature mortality 
typically constitutes the vast majority of monetized benefits in a 
PM2.5 benefits assessment, we present benefits based on risk 
estimates reported from two different long-term exposure studies using 
different cohorts to account for uncertainty in the benefits associated 
with avoiding PM-related premature deaths.1001 1002 Although 
annual benefits presented in the table are not discounted for the 
purposes of present value or annualized value calculations, annual 
benefits do reflect the use of 3-percent and 7-percent discount rates 
to account for avoided health outcomes that are expected to accrue over 
more than a single year (the ``cessation lag'' between the change in PM 
exposures and the total realization of changes in health effects). 
Table VII-2 also displays the present and annualized values of 
estimated benefits that occur from 2027 to 2055, discounted using both 
3-percent and 7-percent discount rates and reported in 2021 dollars. We 
estimate that the present value of benefits for the proposed program is 
$15 to $29 billion at a 3-percent discount rate and $5.8 to $11 billion 
at a 7-percent discount rate (2021 dollars).
---------------------------------------------------------------------------

    \1001\ Wu, X, Braun, D, Schwartz, J, Kioumourtzoglou, M and 
Dominici, F (2020). Evaluating the impact of long-term exposure to 
fine particulate matter on mortality among the elderly. Science 
advances 6(29): eaba5692.
    \1002\ Pope III, CA, Lefler, JS, Ezzati, M, Higbee, JD, 
Marshall, JD, Kim, S-Y, Bechle, M, Gilliat, KS, Vernon, SE and 
Robinson, AL (2019). Mortality risk and fine particulate air 
pollution in a large, representative cohort of US adults. 
Environmental health perspectives 127(7): 077007.

                               Table VII-2--Year-Over-Year Monetized PM2.5-Related Health Benefits of the Proposed Program
                                                                    [Millions, 2021$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Onroad heavy-duty vehicles                     EGUs                           Total benefits
                                                 -------------------------------------------------------------------------------------------------------
                                                    3% Discount     7% Discount                                             3% Discount     7% Discount
                                                       rate            rate        3% Discount rate    7% Discount rate        rate            rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027............................................          $23-49          $21-44          $(17)-(35)          $(15)-(32)         $6.4-13         $5.7-12
2028............................................          51-110           46-97           (37)-(76)           (33)-(69)           15-31           13-28
2029............................................          87-180          78-160          (61)-(130)          (55)-(110)           26-53           23-48
2030............................................         140-290         130-260         (120)-(260)         (110)-(230)           16-33           14-30
2031............................................         220-460         200-410         (240)-(500)         (220)-(450)       (22)-(45)       (20)-(40)
2032............................................         330-670         290-610         (400)-(820)         (360)-(730)      (70)-(140)      (64)-(130)
2033............................................         440-900         400-810        (560)-(1100)        (500)-(1000)     (120)-(240)     (110)-(210)
2034............................................       560-1,100       500-1,000        (720)-(1500)        (650)-(1300)     (160)-(330)     (150)-(300)
2035............................................       690-1,400       620-1,200        (890)-(1800)        (800)-(1600)     (210)-(410)     (190)-(370)
2036............................................       820-1,700       740-1,500        (930)-(1900)        (840)-(1700)     (110)-(220)     (100)-(200)
2037............................................       970-1,900       870-1,700        (930)-(1900)        (840)-(1700)           31-62           27-57
2038............................................     1,100-2,200     1,000-2,000        (890)-(1800)        (800)-(1600)         220-440         200-400
2039............................................     1,300-2,500     1,100-2,200        (810)-(1600)        (730)-(1500)         440-880         400-790
2040............................................     1,400-2,800     1,300-2,500        (700)-(1400)        (630)-(1200)       700-1,400       630-1,300
2041............................................     1,500-3,000     1,400-2,700        (660)-(1300)        (590)-(1200)       870-1,700       780-1,500
2042............................................     1,700-3,300     1,500-2,900        (610)-(1200)        (550)-(1100)     1,000-2,100       940-1,900
2043............................................     1,800-3,500     1,600-3,100        (540)-(1100)         (490)-(970)     1,200-2,400     1,100-2,200
2044............................................     1,900-3,700     1,700-3,300         (470)-(930)         (420)-(830)     1,400-2,800     1,300-2,500
2045............................................     2,000-3,900     1,800-3,500         (380)-(760)         (340)-(680)     1,600-3,100     1,400-2,800
2046............................................     2,100-4,100     1,900-3,700         (350)-(690)         (310)-(620)     1,700-3,400     1,600-3,100
2047............................................     2,200-4,300     2,000-3,800         (310)-(620)         (280)-(550)     1,900-3,600     1,700-3,300
2048............................................     2,300-4,400     2,000-4,000         (270)-(540)         (240)-(480)     2,000-3,900     1,800-3,500
2049............................................     2,300-4,600     2,100-4,100         (230)-(450)         (200)-(410)     2,100-4,100     1,900-3,700
2050............................................     2,400-4,700     2,200-4,300         (180)-(370)         (170)-(330)     2,300-4,400     2,000-3,900
2051............................................     2,500-4,900     2,300-4,400         (190)-(370)         (170)-(330)     2,300-4,500     2,100-4,100
2052............................................     2,600-5,100     2,400-4,600         (190)-(380)         (170)-(340)     2,400-4,700     2,200-4,200
2053............................................     2,700-5,200     2,400-4,700         (190)-(380)         (170)-(340)     2,500-4,800     2,300-4,400
2054............................................     2,800-5,400     2,500-4,800         (190)-(390)         (170)-(350)     2,600-5,000     2,300-4,500
2055............................................     2,900-5,500     2,600-5,000         (200)-(390)         (180)-(350)     2,700-5,200     2,400-4,600
Present Value...................................   23,000-46,000   10,000-20,000    (8,200)-(17,000)     (4,600)-(9,300)   15,000-29,000    5,800-11,000

[[Page 26078]]

 
Equivalent Annualized Value.....................     1,200-2,400       840-1,700         (430)-(860)         (380)-(760)       780-1,500         470-910
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: The range of benefits in this table reflect the range of premature mortality estimates derived from the Medicare study (Wu et al., 2020) and the
  NHIS study (Pope et al., 2019). All benefits estimates are rounded to two significant figures. Annual benefit values presented here are not
  discounted. Negative values in parentheses are health disbenefits related to increases in estimated emissions. The present value of benefits is the
  total aggregated value of the series of discounted annual benefits that occur between 2027-2055 (in 2021 dollars) using either a 3% or 7% discount
  rate. The benefits associated with the standards presented here do not include health benefits associated with reduced criteria pollutant emissions
  from refineries. The benefits in this table also do not include the full complement of health and environmental benefits that, if quantified and
  monetized, would increase the total monetized benefits.

    This analysis includes many data sources that are each subject to 
uncertainty, including projected emission inventories, air quality data 
from models, population data, population estimates, health effect 
estimates from epidemiology studies, economic data, and assumptions 
regarding the future state of the world (i.e., regulations, technology, 
and human behavior). When compounded, even small uncertainties can 
greatly influence the size of the total quantified benefits. There are 
also inherent limitations associated with using the BPT approach. 
Despite these uncertainties, we believe the criteria pollutant benefits 
presented here are our best estimate of benefits absent air quality 
modeling and we have confidence in the BPT approach and the 
appropriateness of relying on BPT health estimates for this rulemaking. 
Please refer to DRIA Chapter 7 for more information on the uncertainty 
associated with the benefits presented here.

C. Energy Security

    The proposed CO2 emission standards are designed to 
require reductions in GHG emissions from HD vehicles in the 2027-2032 
and beyond timeframe and, thereby, reduce liquid fuel consumption. We 
expect the standards will be met through a combination of zero-emission 
technologies and improvements in ICE vehicle technologies, which would, 
in turn, reduce the demand for liquid fuels and enable the United 
States to reduce 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 United 
States, thus increasing U.S. energy security.
    Energy security is broadly defined as the uninterrupted 
availability of energy sources at affordable prices.\1003\ Energy 
independence and energy security are distinct but related concepts. The 
goal of U.S. energy independence is the elimination of all U.S. imports 
of petroleum and other foreign sources of energy, but more broadly it 
is the elimination of U.S. sensitivity to the variations in the price 
and supply of foreign sources of energy.\1004\ See Chapter 7 of the 
DRIA for a more detailed assessment of energy security and energy 
independence impacts of this proposed rule and Section II.D.2.ii for a 
discussion on battery critical materials and supply.
---------------------------------------------------------------------------

    \1003\ International Energy Agency. ``Energy security: Ensuring 
the uninterrupted availability of energy sources at an affordable 
price''. Last updated December 2, 2019.
    \1004\ Greene, D. 2010. Measuring energy security: Can the 
United States achieve oil independence? Energy Policy 38, pp. 1614-
1621.
---------------------------------------------------------------------------

    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 estimates the risk of reductions in U.S. economic output 
and disruption to the U.S. economy caused by sudden disruptions in 
world oil supply and associated price shocks (i.e., labeled the avoided 
macroeconomic disruption/adjustment costs). These risks are quantified 
as ``macroeconomic oil security premiums,'' i.e., the extra costs of 
oil use besides its market price.
    For this proposed rule, EPA is using macroeconomic oil security 
premiums estimated using ORNL's methodology, which incorporates updated 
oil price projections and energy market and economic trends from the 
U.S. Department of Energy's Energy Information Administration's (EIA) 
Annual Energy Outlook (AEO) 2022. EPA and ORNL have worked together to 
revise the macroeconomic oil security premiums based upon recent energy 
security literature. We do not consider military cost impacts as a 
result of reductions in U.S. oil imports from this proposed rule due to 
methodological issues in quantifying these impacts.
    To calculate the oil security benefits of this proposed rule, EPA 
is using the ORNL macroeconomic oil security premium methodology with: 
(1) Estimated oil savings calculated by EPA and (2) An oil import 
reduction factor of 86.4 percent, which shows how much U.S. oil imports 
are reduced from changes in U.S. oil consumption. In Table VII-3, EPA 
presents the macroeconomic oil security premiums and the energy 
security benefits for the proposed HDV standards for the years from 
2027-2055.

[[Page 26079]]

 Table VII-3--Macroeconomic Oil Security Premiums (2021$/Barrel) and Energy Security Benefits With the Proposal
                                             [In millions of 2021$]
----------------------------------------------------------------------------------------------------------------
                                                                                                      Energy
                           Calendar year                             Macroeconomic oil security      security
                                                                          premiums (range)           benefits
----------------------------------------------------------------------------------------------------------------
2027..............................................................           $3.57 ($0.79-$6.65)             $15
2028..............................................................           $3.65 ($0.80-$6.79)              33
2029..............................................................           $3.72 ($0.80-$6.92)              55
2030..............................................................           $3.79 ($0.81-$7.06)              91
2031..............................................................           $3.87 ($0.85-$7.22)             140
2032..............................................................           $3.96 ($0.89-$7.38)             210
2033..............................................................           $4.04 ($0.92-$7.53)             280
2034..............................................................           $4.13 ($0.96-$7.69)             350
2035..............................................................           $4.21 ($1.00-$7.85)             420
2036..............................................................           $4.29 ($1.03-$7.98)             490
2037..............................................................           $4.36 ($1.06-$8.11)             560
2038..............................................................           $4.44 ($1.10-$8.24)             620
2039..............................................................           $4.51 ($1.13-$8.37)             690
2040..............................................................           $4.59 ($1.16-$8.50)             750
2041..............................................................           $4.65 ($1.19-$8.62)             800
2042..............................................................           $4.71 ($1.21-$8.73)             850
2043..............................................................           $4.76 ($1.24-$8.85)             900
2044..............................................................           $4.82 ($1.26-$8.96)             940
2045..............................................................           $4.88 ($1.29-$9.08)             990
2046..............................................................           $4.94 ($1.32-$9.18)           1,000
2047..............................................................           $5.00 ($1.35-$9.28)           1,100
2048..............................................................           $5.06 ($1.37-$9.37)           1,100
2049..............................................................           $5.12 ($1.40-$9.46)           1,100
2050..............................................................           $5.18 ($1.43-$9.56)           1,200
2051..............................................................           $5.18 ($1.43-$9.56)           1,200
2052..............................................................           $5.18 ($1.43-$9.56)           1,200
2053..............................................................           $5.18 ($1.43-$9.56)           1,200
2054..............................................................           $5.18 ($1.43-$9.56)           1,300
2055..............................................................           $5.18 ($1.43-$9.56)           1,300
PV, 3%............................................................  ............................          12,000
PV, 7%............................................................  ............................           6,000
EAV, 3%...........................................................  ............................             620
EAV, 7%...........................................................  ............................             490
----------------------------------------------------------------------------------------------------------------

VIII. Comparison of Benefits and Costs

    This section compares the estimated range of benefits associated 
with reductions of GHGs, monetized health benefits from reductions in 
PM2.5, energy security benefits, fuel savings, and vehicle-
related operating savings to total costs associated with the proposal 
and the alternative. Estimated costs are detailed and presented in 
Section IV of this preamble. Those costs include costs for both the new 
technology in our technology package and the operating costs associated 
with that new technology. Importantly, as detailed in Section IV of 
this preamble, the vehicle costs presented here exclude both the IRA 
battery tax credit and vehicle tax credit while the fuel savings 
exclude fuel taxes; as such, these costs, along with other operating 
costs, represent the social costs and/or savings associated with the 
proposed standards. Benefits from the reduction of GHG emissions and 
criteria pollutant emissions, and energy security benefits associated 
with reductions of imported oil, are presented in Section VII.

A. Methods

    EPA presents three different benefit-cost comparisons for the 
proposal and the alternative:
    1. A future-year snapshot comparison of annual benefits and costs 
in the year 2055, chosen to approximate the annual health benefits that 
would occur in a year when the program would be fully implemented and 
when most of the regulated fleet would have turned over. Benefits, 
costs, and net benefits are presented in year 2021 dollars and are not 
discounted. However, 3-percent and 7-percent discount rates were 
applied to account for avoided health outcomes that are expected to 
accrue over more than a single year (the ``cessation lag'' between the 
change in PM exposures and the total realization of changes in health 
effects).
    2. The present value (PV) of the stream of benefits, costs, and net 
benefits calculated for the years 2027 through 2055, discounted back to 
the first year of implementation of the proposed rule (2027) using both 
3-percent and 7-percent discount rates, and presented in year 2021 
dollars. Note that year-over-year costs are presented in Section IV and 
year-over-year benefits may be found in Section VII.
    3. The equivalent annualized value (EAV) of benefits, costs, and 
net benefits representing a flow of constant annual values that, had 
they occurred in each year from 2027 through 2055, would yield an 
equivalent present value to those estimated in method 2 (using either a 
3-percent or 7-percent discount rate). Each EAV represents a typical 
benefit, cost, or net benefit for each year of the analysis and is 
presented in year 2021 dollars.

B. Results

    Table VIII-1 shows the undiscounted annual monetized vehicle-
related technology package RPE costs of the proposal and alternative in 
calendar year 2055. The table also shows the PV and EAV of those costs 
for the calendar years 2027 through 2055 using both 3-percent and 7-
percent discount rates. The table includes an estimate of the vehicle 
technology package RPE costs and the costs associated with EVSE.

[[Page 26080]]

    Note that all costs, savings, and benefits estimates presented in 
the tables that follow are rounded to two significant figures; numbers 
may not sum due to independent rounding.

                               Table VIII-1--Vehicle-Related Technology Costs Associated With the Proposal and Alternative
                                                               [Millions of 2021 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Proposal                                               Alternative
                                       -----------------------------------------------------------------------------------------------------------------
                                             Vehicle                                                  Vehicle
                                            technology          EVSE RPE             Sum             technology          EVSE RPE             Sum
                                           package RPE                                              package RPE
--------------------------------------------------------------------------------------------------------------------------------------------------------
2055..................................            -$1,500             $2,900             $1,400            -$1,200             $2,100               $880
PV, 3%................................              9,000             47,000             56,000              4,000             33,000             37,000
PV, 7%................................             10,000             29,000             39,000              5,400             20,000             25,000
EAV, 3%...............................                470              2,500              2,900                210              1,700              1,900
EAV, 7%...............................                820              2,300              3,200                440              1,600              2,100
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Table VIII-2 shows the undiscounted annual monetized vehicle-
related operating savings of the proposal and alternative in calendar 
year 2055. The table also shows the PV and EAV of those savings for 
calendar years 2027 through 2055 using both 3-percent and 7-percent 
discount rates. The savings in diesel exhaust fluid (DEF) consumption 
arise from the electrification of the HD fleet and the corresponding 
decrease in diesel engine equipped vehicles which require DEF to 
maintain compliance with NOX emission standards. The 
maintenance and repair savings are substantial due again to 
electrification of the HD fleet, with HD BEVs and FCEVs projected to 
require 71 percent and 75 percent, respectively, of the maintenance and 
repair costs required of HD vehicles equipped with internal combustion 
engines.

                                                  Table VIII-2--Vehicle-Related Operating Savings Associated With the Proposal and Alternative
                                                                                  [Millions of 2021 dollars *]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Proposal                                                       Alternative
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                   Pre-tax fuel                    Maintenance &                   Pre-tax fuel                    Maintenance &
                                                                      savings       DEF savings   repair savings  Sum of savings      savings       DEF savings   repair savings  Sum of savings
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2055............................................................          $4,300          $2,300         $24,000         $31,000          $2,800          $1,700         $17,000         $22,000
PV, 3%..........................................................          28,000          22,000         200,000         250,000          18,000          15,000         140,000         180,000
PV, 7%..........................................................          14,000          11,000          99,000         120,000           8,900           7,900          71,000          87,000
EAV, 3%.........................................................           1,400           1,100          10,000          13,000             920             810           7,400           9,100
EAV, 7%.........................................................           1,100             900           8,100          10,000             720             640           5,800           7,100
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Fuel savings are net of savings in diesel, gasoline, and CNG consumption with increased electricity and hydrogen consumption; DEF savings accrue only to diesel vehicles; maintenance and
  repair savings include impacts associated with all fuels.

    Table VIII-3 shows the undiscounted annual monetized energy 
security benefits of the proposal and alternative in calendar year 
2055. The table also shows the PV and EAV of those benefits for 
calendar years 2027 through 2055 using both 3-percent and 7-percent 
discount rates.

 Table VIII-3--Energy Security Benefits Associated With the Proposal and
                               Alternative
                       [Millions of 2021 dollars]
------------------------------------------------------------------------
                                             Proposal       Alternative
------------------------------------------------------------------------
2055....................................          $1,300            $910
PV, 3%..................................          12,000           8,500
PV, 7%..................................           6,000           4,300
EAV, 3%.................................             620             440
EAV, 7%.................................             490             350
------------------------------------------------------------------------

    Table VIII-4 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 (IWG). As discussed in DRIA 
Chapter 7, there are some limitations to the SC-GHG analysis, including 
the incomplete way in which the integrated assessment models capture 
catastrophic and non-catastrophic impacts, their incomplete treatment 
of adaptation and technological change, uncertainty in the 
extrapolation of damages to high temperatures, and assumptions 
regarding risk aversion. These climate benefits include benefits 
associated with reduced vehicle GHGs and increased EGU CO2 
emissions, but do not include any impacts associated with petroleum 
extraction, petroleum transportation, or liquid fuel refining.
    Table VIII-5 shows the undiscounted annual monetized 
PM2.5-related health benefits of the proposal and 
alternative in calendar year 2055. The table also shows the PV and EAV 
of those benefits for calendar years 2027 through 2055 using both 3-
percent and 7-percent discount rates. The range of benefits in this 
table reflect the two premature mortality estimates derived from the 
Medicare study (Wu et al., 2020) and the NHIS study (Pope et al., 
2019).1005 1006
---------------------------------------------------------------------------

    \1005\ Wu, X, Braun, D, Schwartz, J, Kioumourtzoglou, M and 
Dominici, F (2020). Evaluating the impact of long-term exposure to 
fine particulate matter on mortality among the elderly. Science 
advances 6(29): eaba5692.
    \1006\ Pope III, CA, Lefler, JS, Ezzati, M, Higbee, JD, 
Marshall, JD, Kim, S-Y, Bechle, M, Gilliat, KS, Vernon, SE and 
Robinson, AL (2019). Mortality risk and fine particulate air 
pollution in a large, representative cohort of U.S. adults. 
Environmental health perspectives 127(7): 077007.

[[Page 26081]]

                       Table VIII-4--Climate Benefits From Reduction in GHG Emissions Associated With the Proposal and Alternative
                                                               [Millions of 2021 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Proposal                                     Alternative
                                                             -------------------------------------------------------------------------------------------
                                                                  5%         3%        2.5%      3% 95th        5%         3%        2.5%      3% 95th
                                                               Average    Average    Average    Percentile   Average    Average    Average    Percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2055........................................................     $4,400    $11,000    $15,000      $33,000     $3,200     $8,000    $11,000      $24,000
PV..........................................................     22,000     87,000    130,000      260,000     16,000     62,000     96,000      190,000
EAV.........................................................      1,400      4,600      6,500       14,000      1,000      3,300      4,700        9,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Climate benefits are based on changes (reductions) in CO2, CH4, and N2O emissions and are calculated using four different estimates of the social
  cost of carbon (SC-CO2), the social cost of methane (SC-CH4), and the social cost of nitrous oxide (SC-N2O) (model average at 2.5-percent, 3-percent,
  and 5-percent discount rates; 95th percentile at 3-percent discount rate). The 95th perncentile estimate was included to provide information on
  potentially higher-than-expected economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. We emphasize the
  importance and value of considering the benefits calculated using all four SC-CO2, SC-CH4, and SC-N2O estimates. As discussed in the Technical Support
  Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990 (IWG 2021), a consideration of climate
  benefits calculated using discount rates below 3 percent, including 2 percent and lower, are also warranted when discounting intergenerational
  impacts.
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.

      Table VIII-5--PM2.5-Related Emission Reduction Benefits Associated With the Proposal and Alternative
                                           [Millions of 2021 dollars]
----------------------------------------------------------------------------------------------------------------
                                                    Proposal                             Alternative
                                     ---------------------------------------------------------------------------
                                              3%                 7%                 3%                 7%
----------------------------------------------------------------------------------------------------------------
2055................................      $2,700-$5,200      $2,400-$4,600      $1,900-$3,700      $1,700-$3,300
PV..................................      15,000-29,000       5,800-11,000      11,000-21,000        4,200-8,200
EAV.................................          780-1,500            470-910          570-1,100            340-670
----------------------------------------------------------------------------------------------------------------
Notes: The range of benefits in this table reflects the range of premature mortality estimates derived from the
  Medicare study (Wu et al., 2020) and the NHIS study (Pope III et al., 2019). All benefits estimates are
  rounded to two significant figures. The present value of benefits is the total aggregated value of the series
  of discounted annual benefits that occur between 2027-2055 (in 2021 dollars) using either a 3-percent or 7-
  percent discount rate. The benefits associated with the standards presented here do not include health
  benefits associated with reduced criteria pollutant emissions from refineries. The benefits in this table also
  do not include the full complement of health and environmental benefits that, if quantified and monetized,
  would increase the total monetized benefits.

    Table VIII-6 shows the undiscounted annual net benefits of the 
proposal and alternative in calendar year 2055 using each of the four 
social cost of GHG valuations. The table also shows the PV and EAV of 
the net benefits for calendar years 2027 through 2055 using both 3-
percent and 7-percent discount rates. For presentational simplicity, we 
use the mid-point of the range of PM2.5 benefits in the 
annual 2055 net benefit calculation. For the calculation of PV and EAV 
net benefits, we use the high-end estimate of PM2.5 benefits 
assuming a 3-percent discount rate and the low-end estimate of benefits 
assuming a 7-percent discount rate in the corresponding 3- and 7-
percent PV and EAV estimates. These choices do not fundamentally alter 
the net benefit calculations since differences between the chosen 
PM2.5 benefit estimates are not reflected when net benefits 
are rounded to two significant figures. These net benefits include 
benefits associated with reduced vehicle GHGs and increased EGU 
CO2 emissions, but do not include any impacts associated 
with petroleum extraction, petroleum transportation or liquid fuel 
refining.

                                         Table VIII-6--Net Benefits Associated With the Proposal and Alternative
                                                               [Millions of 2021 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Proposal  Average                                Alternative
                                                             -------------------------------------------------------------------------------------------
                                                                  5%         3%        2.5%      3% 95th        5%         3%        2.5%      3% 95th
                                                               Average    Average    Average    Percentile   Average    Average    Average    percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2055........................................................    $39,000    $46,000    $50,000      $68,000    $28,000    $33,000    $36,000      $49,000
PV, 3%......................................................    260,000    320,000    370,000      500,000    180,000    230,000    260,000      360,000
PV, 7%......................................................    120,000    180,000    230,000      360,000     86,000    130,000    170,000      260,000
EAV, 3%.....................................................     14,000     17,000     19,000       26,000      9,800     12,000     13,000       19,000
EAV, 7%.....................................................      9,300     12,000     14,000       22,000      6,800      9,000     10,000       16,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Climate benefits are based on changes (reductions) in CO2, CH4, and N2O emissions and are calculated using four different estimates of the social
  cost of carbon (SC-CO2), the social cost of methane (SC-CH4), and the social cost of nitrous oxide (SC-N2O) (model average at 2.5-percent, 3-percent,
  and 5-percent discount rates; 95th percentile at 3-percent discount rate). The 95th perncentile estimate was included to provide information on
  potentially higher-than-expected economic impacts from climate change, conditional on the 3 percent estimate of the discount rate. We emphasize the
  importance and value of considering the benefits calculated using all four SC-CO2, SC-CH4, and SC-N2O estimates. As discussed in the Technical Support
  Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990 (IWG 2021), a consideration of climate
  benefits calculated using discount rates below 3 percent, including 2 percent and lower, are also warranted when discounting intergenerational
  impacts. 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 percent or 7 percent. Annual costs and
  benefits in 2055 are undiscounted values. Note that the benefits attributable to reductions in non-GHG pollutants associated with the standards
  included 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 pollutant benefits are based on benefit-per-ton values that reflect only human health impacts associated with
  reductions in PM2.5 exposure. For the purposes of presentational clarity in the calculation of net benefits, PM2.5-related benefits are averaged
  across the range of alternative estimates for 2055. For PV and EAV estimated with a 3% discount rate, we calculate net benefits using PM2.5-related
  benefits based on the Pope III et al., 2019 study of premature mortality. For PV and EAV estimated with a 7% discount rate, net benefits reflect PM2.5-
  related benefits based on the Wu et al., 2020 study.

[[Page 26082]]

    We summarize the vehicle costs, operational savings, and benefits 
of the proposal, as shown in Table VIII-7. Table VIII-7 presents the 
proposal's costs from Table VIII-1, operating savings from Table VIII-
2, benefits from Table VIII-3 through Table VIII-5, and net benefits 
from Table VIII-6 in a single table.

             Table VIII-7--Summary of Vehicle Costs, Operating Savings, and Benefits of the Proposal
                                           [Billions of 2021 dollars]
----------------------------------------------------------------------------------------------------------------
                                      CY 2055         PV, 3%          PV, 7%          EAV, 3%         EAV, 7%
----------------------------------------------------------------------------------------------------------------
Vehicle Technology Package RPE..           -$1.5              $9             $10           $0.47           $0.82
EVSE RPE........................             2.9              47              29             2.5             2.3
Sum of Vehicle Costs............            1.40              56              39             2.9             3.2
Pre-tax Fuel Savings............               4              28              14             1.4             1.1
Diesel Exhaust Fluid Savings....             2.3              22              11             1.1             0.9
Repair & Maintenance Savings....              24             200              99              10               8
Sum of Operating Savings........              31             250             120              13              10
Energy Security Benefits........             1.3              12             6.0            0.62            0.49
Climate Benefits: \a\
    5% Average..................             4.4              22              22             1.4             1.4
    3% Average..................              11              87              87             4.6             4.6
    2.5% Average................              15             130             130             6.5             6.5
    3% 95th Percentile..........              33             260             260              14              14
Criteria Air Pollutant Benefits:
 \b\
    PM2.5 Health Benefits--Wu et         2.4-2.7              15             5.8            0.78            0.47
     al., 2020..................
    PM2.5 Health Benefits--Pope          4.6-5.2              29            11.0             1.5            0.91
     III et al., 2019...........
Net Benefits: \a\ \c\
    With Climate 5% Average.....              39             260             120              14             9.3
    With Climate 3% Average.....              46             320             180              17              12
    With Climate 2.5% Average...              50             370             230              19              14
    With Climate 3% 95th                      68             500             360              26              22
     Percentile.................
----------------------------------------------------------------------------------------------------------------
\a\ 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 and equivalent annualized values of SC-GHGs for internal consistency,
  while all other costs and benefits are discounted at either 3% or 7%.
\b\ PM2.5-related health benefits are presented based on two different long-term exposure studies of mortality
  risk: a Medicare study (Wu et al., 2020) and a National Health Interview Survey study (Pope III et al., 2019).
  The benefits associated with the standards presented here do not include health benefits associated with
  reduced criteria pollutant emissions from refineries. The benefits in this table also do not include the full
  complement of health and environmental benefits that, if quantified and monetized, would increase the total
  monetized benefits. The range of benefits in CY2055 are estimated using either a 3% or 7% discount rate to
  account for avoided health outcomes that are expected to accrue over more than a single year.
\c\ For criteria pollutant benefits included in the calculation of net benefits, PM2.5-related benefits are
  averaged across the range of estimates in CY2055. For presentational clarity, the present and equivalent
  annualized value of net benefits for a 3% discount rate reflect benefits based on the Pope III et al. study
  while the present and equivalent annualized value of net benefits for a 7% discount rate reflect benefits
  based on the Wu et al. study.

    We have also estimated the total transfers associated with the 
proposed CO2 emission standards, as shown in Table VIII-8. 
The transfers consist of the IRA battery tax credit and vehicle tax 
credit and fuel taxes. None of these are included in the prior tables 
(i.e., Table VIII-1, Table VIII-2, and Table VIII-6) in this section's 
comparison of benefits and costs.

                                        Table VIII-8--Transfers Associated With the Proposal and the Alternative
                                                               [Millions of 2021 dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Proposal                                                 Alternative
                                     -------------------------------------------------------------------------------------------------------------------
                                        Battery tax     Vehicle tax                               Battery tax     Vehicle tax
                                          credits         credits      Fuel taxes      Sum          credits         credits      Fuel taxes      Sum
--------------------------------------------------------------------------------------------------------------------------------------------------------
2055................................              $0              $0       $6,600       $6,600              $0              $0       $4,700       $4,700
PV, 3%..............................           3,300           5,900       69,000       79,000           2,300           3,900       50,000       56,000
PV, 7%..............................           2,900           5,000       37,000       44,000           2,000           3,400       26,000       31,000
EAV, 3%.............................             170             310        3,600        4,100             120             210        2,600        2,900
EAV, 7%.............................             240             410        3,000        3,600             160             270        2,100        2,600
--------------------------------------------------------------------------------------------------------------------------------------------------------

IX. Analysis of Alternative CO2 Emission Standards

    As discussed throughout this preamble, in developing this proposal, 
EPA considered and is requesting comment on a regulatory alternative 
that would establish less stringent CO2 emission standards 
and, thus, would result in fewer GHG emission reductions than the 
CO2 emission standards we are proposing. This section 
presents estimates of technology costs, CO2 emission 
reductions, fuel savings, and other impacts associated with the 
alternative. We request comment on this analysis for the alternative 
set of CO2 standards. See Section II.H for our request for 
comment regarding the alternative set of standards than those proposed.
    We also are seeking comment on a more stringent set of emission 
standards that would be based on higher ZEV adoption rates on a 
national level around the same levels as the adoption rates included in 
the California ACT rule, as described in Section II.H.

[[Page 26083]]

A. Comparison of Proposal and Alternative

    The alternative represents a slower phase-in option for program 
implementation, which represents differences in timing, costs, and 
benefits of a HD vehicle CO2 emissions program. 
Specifically, the alternative has both a less aggressive phase-in of 
CO2 emissions standards from MYs 2027 through 2031 and a 
less stringent standard for MYs 2032 and beyond. The alternative was 
modeled using the same methodologies used to model the proposal, as 
described in Chapters 3 and 4 of the DRIA.
1. Slower Phase-In Alternative
    EPA developed and considered an alternative with a more gradual 
phase-in of CO2 emission standards for MYs 2027 through MY 
2031 and a less stringent final standard in MY 2032, as discussed in 
Section II.H. The ZEV adoption rates associated with level of 
stringency for MYs 2027 through 2032 under the slower phase-in 
alternative are shown in Table IX-1. The slower phase-in alternative 
ZEV adoption rates by regulatory subcategory and by MY are shown in 
DRIA Chapter 2.9.5. The slower phase-in alternative standards, 
presented in Table IX-2 through Table IX-5, are calculated using the 
same method as the proposed standards, as described in Preamble 
Sections II.F.2 and II.F.3, using the alternative ZEV adoption rates by 
regulatory subcategory.

                           Table IX-1--ZEV Technology Adoption Rates in the Technology Packages Considered for the Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            MY 2032 and
                                                            MY 2027 (%)     MY 2028 (%)     MY 2029 (%)     MY 2030 (%)     MY 2031 (%)      later (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vocational..............................................              14              20              25              30              35              40
Short-Haul Tractors.....................................               5               8              10              15              20              25
Long-Haul Tractors......................................               0               0               0              10              15              20
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                 Table IX-2--Alternative MY 2027 Through 2032+ Vocational Vehicle CO2 Emission Standards
                                                                    [Grams/ton-mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             CI medium                                       SI medium
                Model year                           Subcategory          CI light heavy       heavy      CI heavy heavy  SI light heavy       heavy
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027......................................  Urban.......................             318             227             244             364             266
                                            Multi-Purpose...............             281             204             205             323             237
                                            Regional....................             242             187             164             270             216
2028......................................  Urban.......................             294             218             239             340             257
                                            Multi-Purpose...............             257             195             200             299             228
                                            Regional....................             218             178             159             246             207
2029......................................  Urban.......................             275             211             235             321             250
                                            Multi-Purpose...............             238             188             196             280             221
                                            Regional....................             199             171             155             227             200
2030......................................  Urban.......................             255             206             212             301             245
                                            Multi-Purpose...............             218             183             173             260             216
                                            Regional....................             179             166             132             207             195
2031......................................  Urban.......................             235             199             205             281             238
                                            Multi-Purpose...............             198             176             166             240             209
                                            Regional....................             159             159             125             187             188
2032 and later............................  Urban.......................             215             192             195             261             231
                                            Multi-Purpose...............             178             169             156             220             202
                                            Regional....................             139             152             115             167             181
--------------------------------------------------------------------------------------------------------------------------------------------------------

                     Table IX-3--Alternative MY 2027 Through 2032+ Optional Custom Chassis Vocational Vehicle CO2 Emission Standards
                                                                    [Grams/ton-mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            MY 2032 and
        Optional custom chassis vehicle category              MY 2027         MY 2028         MY 2029         MY 2030         MY 2031          later
--------------------------------------------------------------------------------------------------------------------------------------------------------
School Bus..............................................             214             203             195             190             182             173
Other Bus...............................................             286             269             252             237             223             206
Coach Bus...............................................             205             205             205             185             174             164
Refuse Hauler...........................................             265             253             241             232             221             212
Concrete Mixer..........................................             275             265             256             246             237             228
Motor home..............................................             226             226             226             226             226             226
Mixed-use vehicle.......................................             316             316             316             316             316             316
Emergency vehicle.......................................             319             319             319             319             319             319
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 26084]]

                 Table IX-4--Alternative MY 2027 Through MY 2032+ Tractor CO2 Emission Standards
                                                [Grams/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                                    Class 7 all     Class 8 day       Class 8
              Model year                       Roof height          cab styles          cab         sleeper cab
----------------------------------------------------------------------------------------------------------------
                                        Low Roof................            91.4            69.7            64.1
                                        Mid Roof................            98.2            74.1            69.6
                                        High Roof...............            95.0            71.9            64.3
2028..................................  Low Roof................            88.5            67.5            64.1
                                        Mid Roof................            95.1            71.8            69.6
                                        High Roof...............            92.0            69.6            64.3
2029..................................  Low Roof................            86.6            66.1            64.1
                                        Mid Roof................            93.1            70.2            69.6
                                        High Roof...............            90.0            68.1            64.3
2030..................................  Low Roof................            81.8            62.4            57.7
                                        Mid Roof................            87.9            66.3            62.6
                                        High Roof...............            85.0            64.3            57.9
2031..................................  Low Roof................            77.0            58.7            54.5
                                        Mid Roof................            82.7            62.4            59.2
                                        High Roof...............            80.0            60.6            54.7
2032 and Later........................  Low Roof................            72.2            55.1            51.3
                                        Mid Roof................            77.6            58.5            55.7
                                        High Roof...............            75.0            56.8            51.4
----------------------------------------------------------------------------------------------------------------

 Table IX-5--Alternative MY 2027 Through MY 2032+ Heavy-Haul Tractor CO2
                           Emission Standards
                            [Grams/ton-mile]
------------------------------------------------------------------------
                                                           CO2 Emission
                                                             standards
                       Model Year                           (grams/ton-
                                                               mile)
 
------------------------------------------------------------------------
2027....................................................            48.3
2028....................................................            48.3
2029....................................................            48.3
2030....................................................            44.0
2031....................................................            43.0
2032 and Later..........................................            42.5
------------------------------------------------------------------------

    Based on our current analysis for each of the vocational vehicle 
and tractor subcategories, there appear to be technically feasible 
emission standards available that provide for greater CO2 
emission reductions through the proposed standards than through the 
slower phase-in alternative. As explained in section II.H, the proposed 
standards are therefore appropriate. Consequently, at this time, EPA 
does not believe that the slower phase-in alternative would be 
appropriate.
2. Proposed CO2 Emission Standards
    Details regarding MOVES modeling of these proposed standards are 
included in Section IV of this preamble and Chapter 4 of the DRIA. The 
ZEV adoption rates in the technology packages associated with the 
proposed level of stringency for MYs 2027 through 2032 under the 
proposal are shown in Table IX-6.

                       Table IX-6--ZEV Technology Adoption Rates in the Technology Packages Considered for the Proposed Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            MY 2032 and
                                                            MY 2027 (%)     MY 2028 (%)     MY 2029 (%)     MY 2030 (%)     MY 2031 (%)        later
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vocational..............................................              20              25              30              35              40              50
Short-Haul Tractors.....................................              10              12              15              20              30              35
Long-Haul Tractors......................................               0               0               0              10              20              25
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The bases for each of the proposed CO2 emission 
standards by model year and industry segment are discussed more fully 
earlier in this preamble Section II and in Chapter 2 of the DRIA. 
Section II of this preamble include explanation of how EPA arrived at 
the proposed CO2 emission standards, including discussion of 
the technologies upon which the CO2 emission standards are 
based and why the standards are reasonable in light of these 
technologies, based on all of the information available to us at the 
time of this proposal.

B. Emission Inventory Comparison of Proposal and Slower Phase-In 
Alternative

    Both the proposal and alternative were modeled in MOVES3.R3 by 
increasing ZEV adoption in HD vehicles, which means we model the 
alternative as displacing fewer HD ICE vehicles than the proposal. In 
general, this means the alternative has both lower downstream emission 
reductions and lower upstream EGU emission increases when compared to 
the proposal. Chapter 4.7 of the DRIA contains more discussion on the 
emission impacts of the alternative.
1. Downstream Emission Comparison
    Our estimates of the downstream emission reductions of GHGs that 
would result from the alternative, relative to the reference case, are 
presented in Table IX-7 for calendar years 2035, 2045, and 2055. Total 
GHG emissions, or CO2 equivalent (CO2e), are 
calculated by summing all GHG emissions multiplied by their 100-year 
Global Warming Potential (GWP).

[[Page 26085]]

            Table IX-7--Annual Downstream Heavy-Duty GHG Emission Reductions From the Alternative in Calendar Years (CY) 2035, 2045, and 2055
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                CY 2035 reductions              CY 2045 reductions              CY 2055 reductions
                                                         -----------------------------------------------------------------------------------------------
                Pollutant                  100-year GWP   Million metric                  Million metric                  Million metric
                                                               tons         Percent (%)        tons         Percent (%)        tons         Percent (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Carbon Dioxide (CO2)....................               1              36               9              73              19              90              22
Methane (CH4)...........................              25           0.003               5           0.011              17           0.022              22
Nitrous Oxide (N2O).....................             298           0.005               9           0.009              17           0.011              20
CO2 Equivalent (CO2e)...................  ..............              38               9              76              19              94              22
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Our estimated GHG emission reductions for the alternative are lower 
than for the proposal (see Section V of the preamble). In 2055, we 
estimate that the alternative would reduce emissions of CO2 
by 22 percent (the proposal's estimate is 30 percent), methane by 22 
percent (the proposal's estimate is 31 percent), and N2O by 
20 percent (the proposal's estimate is 28 percent). The resulting total 
GHG reduction, in CO2e, is 22 percent for the alternative 
versus 30 percent for the proposal.
    The warming impacts of GHGs are cumulative. Table IX-8 presents the 
cumulative GHG reductions that would result from the proposed standards 
and the alternative in 2055, in billion metric tons (BMT).

 Table IX-8--Cumulative 2027-2055 Downstream Heavy-Duty GHG Emission Reductions From the Proposed Standards and
                                                 the Alternative
----------------------------------------------------------------------------------------------------------------
                                                      Proposal GHG reductions       Alternative GHG reductions
                    Pollutant                    ---------------------------------------------------------------
                                                        BMT         Percent (%)         BMT         Percent (%)
----------------------------------------------------------------------------------------------------------------
Carbon Dioxide (CO2)............................             2.2              18             1.6              13
Methane (CH4)...................................         0.00035              17         0.00025              12
Nitrous Oxide (N2O).............................         0.00028              17          0.0002              12
CO2 Equivalent (CO2e)...........................             2.3              18             1.6              13
----------------------------------------------------------------------------------------------------------------

    Consistent with Table IX-7, the cumulative GHG emission reductions 
are smaller for the alternative than the proposal.
    We anticipate an increase in the use of zero-emission technologies 
to meet the CO2 emission standards for both the proposal and 
the alternative. Therefore, we also expect downstream emission 
reductions for criteria pollutants and air toxics would result from the 
alternative, as presented in Table IX-9.

 Table IX-9--Annual Downstream HD Criteria Pollutant and Air Toxic Emission Reductions From the Alternative in Calendar Years (CYs) 2035, 2045, and 2055
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                CY 2035 reductions              CY 2045 reductions              CY 2055 reductions
                        Pollutant                        -----------------------------------------------------------------------------------------------
                                                             U.S. tons      Percent (%)      U.S. tons      Percent (%)      U.S. tons      Percent (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Nitrogen Oxides (NOX)...................................          11,471               3          40,460              15          51,027              20
Primary Exhaust PM2.5...................................             199               5             501              22             701              28
Volatile Organic Compounds (VOC)........................           4,438               8          10,366              21          15,139              27
Sulfur Dioxide (SO2)....................................             147              10             298              19             373              23
Carbon Monoxide (CO)....................................          70,292               8         176,283              20         252,482              25
1,3-Butadiene...........................................              14              17              35              34              50              38
Acetaldehyde............................................              91               8             216              22             326              26
Benzene.................................................              82              13             208              30             302              36
Formaldehyde............................................              61               6             157              20             258              24
Naphthalene \a\.........................................               5               7              11              28              16              33
Ethylbenzene............................................              52               9             128              22             195              30
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Naphthalene includes both gas and particle phase emissions.

    Once again, the emission reductions in criteria pollutants and air 
toxics that would result from the alternative are smaller than those 
that would result from the proposal. For example, in 2055, we estimate 
the alternative would reduce NOX emissions by 20 percent, 
PM2.5 emissions by 28 percent, and VOC emissions by 27 
percent. This is compared to the proposal's reductions of 
NOX by 28 percent, PM2.5 by 39 percent, and VOC 
by 37 percent for the proposal. Reductions in emissions for air toxics 
from the alternative range from 24 percent for formaldehyde (the 
proposal's estimate is 33 percent) to 38 percent for 1,3-butadiene (the 
proposal's estimate is 51 percent).

[[Page 26086]]

2. Upstream Emission Comparison
    Our estimates of the additional CO2 emissions from EGUs 
due to the proposed standards, relative to the reference case, are 
presented in Table IX-10 for calendar years 2035, 2045, and 2055.

Table IX-10--Annual Upstream EGU CO2 Emission Increases From the Alternative in Calendar Years (CYs) 2035, 2045,
                                                    and 2055
----------------------------------------------------------------------------------------------------------------
                                                                  Additional EGU emissions (million metric tons)
                            Pollutant                            -----------------------------------------------
                                                                      CY 2035         CY 2045         CY 2055
----------------------------------------------------------------------------------------------------------------
Carbon Dioxide (CO2)............................................              15              12               8
----------------------------------------------------------------------------------------------------------------

    In 2055, we estimate the alternative would increase EGU emissions 
of CO2 by 8 million metric tons, compared to 11 million 
metric tons from the proposal. The EGU impacts decrease over time 
because of projected changes in the power generation mix.
    In Table IX-11, we present the cumulative CO2 increases 
from EGUs that we expect would result from the proposal and 
alternative, measured in billion metric tons (BMT).

 Table IX-11--Cumulative 2027-2055 EGU CO2 Emission Increases Reflecting
               the Proposed and Alternative GHG Standards
------------------------------------------------------------------------
                                            EGU CO2 emissions increase
                                                       (BMT)
                Pollutant                -------------------------------
                                             Proposal       Alternative
------------------------------------------------------------------------
Carbon Dioxide (CO2)....................             0.4             0.3
------------------------------------------------------------------------

    We estimate the alternative would result in 0.3 billion metric tons 
of increased CO2 emissions from EGUs, compared to 0.4 
billion metric tons from the proposal.
    Table IX-12 contains our estimates of EGU emission increases from 
the alternative for some criteria pollutants. In general, we expect the 
EGU emissions increases from the alternative to be 20 to 30 percent 
smaller than for the proposal.

Table IX-12--Annual Criteria Pollutant Emission Increases From EGUs From the Alternative in Calendar Years (CYs)
                                              2035, 2045, and 2055
----------------------------------------------------------------------------------------------------------------
                                                                       Additional EGU emissions (U.S. tons)
                            Pollutant                            -----------------------------------------------
                                                                      CY 2035         CY 2045         CY 2055
----------------------------------------------------------------------------------------------------------------
Nitrogen Oxides (NOX)...........................................           2,054           1,625             575
Primary PM2.5...................................................             885             761             549
Volatile Organic Compounds (VOC)................................             458             563             551
Sulfur Dioxide (SO2)............................................           7,235           1,863             666
----------------------------------------------------------------------------------------------------------------

    In addition to downstream and EGU emissions impacts, we also 
estimated impacts on select criteria pollutant emissions from 
refineries for calendar year 2055. This analysis assumes that the 
reduction in demand for liquid fuels would lead to reduced activity and 
emissions at refineries. The results are presented in Table IX-13. 
Additional detail on the refinery analysis is available in Chapter 
4.3.3 of the DRIA.

Table IX-13--Criteria Pollutant Emission Reductions From Refineries From
                  the Proposal and Alternative in 2055
------------------------------------------------------------------------
                                             CY 2055 refinery emission
                                              reductions (U.S. tons)
                Pollutant                -------------------------------
                                             Proposal       Alternative
------------------------------------------------------------------------
NOX.....................................           1,785           1,298
PM2.5...................................             436             318
VOC.....................................           1,227             894
SO2.....................................             642             468
------------------------------------------------------------------------

    Like the downstream emission reductions and the EGU emission 
increases, the refinery emission impacts of the alternative are 20 to 
30 percent smaller than the proposal.
3. Comparison of Net Emissions Impacts
    While we present a net emissions impact of the alternative 
CO2 emission standards, it is important to note that some 
upstream emission sources are not included in the analysis. Although we 
expect the alternative to reduce demand for refined fuels, we did not 
quantify emissions changes associated with producing or extracting 
crude or transporting crude or refined fuels. Also, because our 
analysis of refinery emissions only included select criteria 
pollutants, refinery emission impacts are therefore included in net 
criteria emission impacts for 2055 but not net CO2 emission 
impacts. Therefore, this analysis likely underestimates the net 
emissions reductions that may result from the alternative.
    Table IX-14 shows a summary of our modeled downstream, upstream, 
and net CO2 emission impacts of the alternative relative to 
the reference case, in million metric tons, for calendar years 2035, 
2045, and 2055.

[[Page 26087]]

                                       Table IX-14--Annual Net CO2 Emission Impacts \a\ From the Alternative in Calendar Years (CYs) 2035, 2045, and 2055
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CY 2035 impacts (MMT)                           CY 2045 impacts (MMT)                           CY 2055 impacts (MMT)
                    Pollutant                    -----------------------------------------------------------------------------------------------------------------------------------------------
                                                    Downstream          EGU             Net         Downstream          EGU             Net         Downstream          EGU             Net
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CO2.............................................             -36              15             -22             -73              12             -62             -90               8             -82
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

    In 2055, we estimate the alternative would result in a net decrease 
of 82 million metric tons of CO2 emissions. The net 
reduction for the proposal is 114 million metric tons. The net 
decreases become larger between 2035 and 2055 as we project the HD 
fleet to turn over and the power grid to use less fossil fuels.
    In Table IX-15, we present the cumulative net CO2 
emissions impact that we expect would result from the proposed 
standards and the alternative, in billion metric tons (BMT). Overall, 
we expect downstream reduction in CO2 emissions to be far 
larger than upstream increases from EGUs, and we expect the alternative 
would result in a net reduction of 1.3 billion metric tons from CYs 
2027 to 2055. This is about 28 percent less than the 1.8 billion metric 
tons of cumulative CO2 emissions reductions we expect from 
the proposal.

                               Table IX-15--Cumulative 2027-2055 EGU CO2 Emission Impacts \a\ (in BMT) of the Alternative
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Proposal                                       Alterative
                        Pollutant                        -----------------------------------------------------------------------------------------------
                                                            Downstream          EGU             Net         Downstream          EGU             Net
--------------------------------------------------------------------------------------------------------------------------------------------------------
Carbon Dioxide (CO2)....................................            -2.2             0.4             1.8            -1.6             0.3             1.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

    Table IX-16 contains a summary of the modeled net impacts of the 
alternative CO2 emission standards on criteria pollutant 
emissions considering downstream and EGUs, relative to the reference 
case for calendar years 2035 and 2045. Table IX-17 contains a similar 
summary for calendar year 2055 that includes estimates of net impacts 
of refinery, EGU, and downstream emissions.

             Table IX-16--Annual Net Impacts \a\ on Criteria Pollutant Emissions From the Alternative in Calendar Years (CYs) 2035 and 2045
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    CY 2035 impacts (U.S. tons)                     CY 2045 impacts (U.S. tons)
                        Pollutant                        -----------------------------------------------------------------------------------------------
                                                            Downstream          EGU             Net         Downstream          EGU             Net
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOX.....................................................         -11,471           2,054          -9,417         -40,460           1,625         -38,836
PM2.5...................................................            -199             885             687            -501             761             260
VOC.....................................................          -4,438             458          -3,980         -10,366             563          -9,802
SO2.....................................................            -147           7,235           7,088            -298           1,863           1,565
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

          Table IX-17--Net Impacts \a\ on Criteria Pollutant Emissions From the Alternative in CY 2055
----------------------------------------------------------------------------------------------------------------
                                                                    CY 2055 impacts (U.S. tons)
                    Pollutant                    ---------------------------------------------------------------
                                                    Downstream          EGU          Refinery           Net
----------------------------------------------------------------------------------------------------------------
NOX.............................................         -51,027             575          -1,298         -51,750
PM2.5...........................................            -701             549            -318            -471
VOC.............................................         -15,139             551            -894         -15,482
SO2.............................................            -373             666            -468            -175
----------------------------------------------------------------------------------------------------------------
\a\ We present emissions reductions as negative numbers and emission increases as positive numbers.

[[Page 26088]]

    By 2055, when considering downstream, EGU, and refinery emissions, 
we estimate a net decrease in emissions from all pollutants modeled 
(i.e., NOX, PM2.5, VOC, and SO2). In 
earlier years, when considering only downstream and EGU emissions, we 
estimate net decreases of NOX and VOC emissions, but net 
increases of PM2.5 and SO2 emissions. These 
increases become smaller over time. All net emission impacts for the 
alternative, whether they are positive or negative, are smaller in 
magnitude than for the proposal.

C. Program Costs Comparison of Proposal and Alternative

    Using the cost elements outlined in Sections IV.B, IV.C, and IV.D, 
we have estimated the costs associated with the proposal and 
alternative relative to the reference case, as shown in Table IX-18. 
Costs are presented in more detail in Chapter 3 of the DRIA. As noted 
earlier, costs are presented in 2021 dollars in undiscounted annual 
values along with net present values at both 3- and 7-percent discount 
rates with values discounted to the 2027 calendar year.
    As shown in Table IX-18, our analysis shows that the proposal 
scenario would have the lowest cost.

    Table IX-18--Total Technology, Operating Cost and EVSE Cost Impacts of the Proposed Option Relative to the Reference Case and the Alternative Option Relative to the Reference Case, All
                                                                                Regulatory Classes and All Fuels,
                                                                                 [Millions of 2021 dollars] \a\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Proposal                                                       Alternative
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                          Calendar year                                Total           Total                                           Total           Total
                                                                    technology       operating      Total EVSE     Total program    technology       operating      Total EVSE     Total program
                                                                       costs           costs           costs           cost            costs           costs           costs           cost
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2027............................................................          $2,000           -$330          $1,300          $3,000            $920           -$180            $710          $1,400
2028............................................................           1,800            -790           1,600           2,500           1,100            -490           1,100           1,600
2029............................................................           1,700          -1,400           1,900           2,200           1,000            -920           1,300           1,400
2030............................................................           2,000          -2,100           2,000           1,900           1,400          -1,400           1,500           1,400
2031............................................................           2,300          -2,800           2,200           1,700           1,400          -2,000           1,700           1,100
2032............................................................           2,000          -3,800           2,600             860           1,400          -2,700           1,900             510
2033............................................................           1,500          -4,900           2,600            -820             960          -3,500           1,800            -710
2034............................................................           1,300          -6,100           2,600          -2,200             810          -4,300           1,800          -1,700
2035............................................................           1,000          -7,400           2,500          -3,800             620          -5,200           1,700          -2,900
2036............................................................             750          -8,700           2,500          -5,500             440          -6,200           1,700          -4,000
2037............................................................             620         -10,000           2,500          -7,000             350          -7,200           1,700          -5,100
2038............................................................             410         -12,000           2,500          -8,700             200          -8,200           1,700          -6,300
2039............................................................             220         -13,000           2,600         -10,000              70          -9,100           1,800          -7,300
2040............................................................             140         -14,000           2,600         -12,000               9         -10,000           1,800          -8,400
2041............................................................             -40         -16,000           2,600         -13,000            -120         -11,000           1,800          -9,400
2042............................................................            -200         -17,000           2,600         -15,000            -230         -12,000           1,800         -10,000
2043............................................................            -360         -18,000           2,700         -16,000            -340         -13,000           1,800         -12,000
2044............................................................            -410         -20,000           2,700         -18,000            -370         -14,000           1,900         -13,000
2045............................................................            -550         -21,000           2,700         -19,000            -480         -15,000           1,900         -13,000
2046............................................................            -690         -22,000           2,700         -20,000            -570         -16,000           1,900         -14,000
2047............................................................            -820         -23,000           2,700         -22,000            -670         -17,000           1,900         -15,000
2048............................................................            -850         -24,000           2,700         -22,000            -680         -17,000           1,900         -16,000
2049............................................................            -970         -25,000           2,800         -23,000            -770         -18,000           1,900         -17,000
2050............................................................          -1,100         -26,000           2,800         -24,000            -850         -18,000           1,900         -17,000
2051............................................................          -1,100         -27,000           2,800         -25,000            -860         -19,000           2,000         -18,000
2052............................................................          -1,200         -28,000           2,900         -26,000            -940         -20,000           2,000         -19,000
2053............................................................          -1,300         -29,000           2,900         -27,000          -1,000         -21,000           2,000         -20,000
2054............................................................          -1,400         -30,000           2,900         -28,000          -1,100         -21,000           2,000         -20,000
2055............................................................          -1,500         -31,000           2,900         -29,000          -1,200         -22,000           2,100         -21,000
PV, 3%..........................................................           9,000        -250,000          47,000        -190,000           4,000        -180,000          33,000        -140,000
PV, 7%..........................................................          10,000        -120,000          29,000         -85,000           5,400         -87,000          20,000         -62,000
EAV, 3%.........................................................             470         -13,000           2,500         -10,000             210          -9,100           1,700          -7,200
EAV, 7%.........................................................             820         -10,000           2,300          -6,900             440          -7,100           1,600          -5,100
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Values show 2 significant digits; negative cost values denote savings; calendar year values are undiscounted, present values are discounted to 2027. Program Cost is the sum of Total Tech
  Cost, Total Operating Cost, and total EVSE costs.

D. Benefits

1. Social Cost of GHGs
    Our estimates of the climate benefits from the GHG emissions 
reductions associated with the alternative are similar to those 
discussed for the proposal in Section VII of this preamble. Table IX-19 
presents the estimated annual, undiscounted climate benefits (i.e., 
total GHG benefits), 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 on 
Social Cost of Greenhouse Gases \1007\ for the years beginning with the 
first year of rule implementation, 2027, through 2055 for the proposed 
program. Also shown are the present values and equivalent annualized 
values associated with each of the four interim SC-GHG values. For more 
detailed information about the climate benefits analysis conducted for 
the proposed and alternative programs, please refer to Section 7.1 of 
the draft RIA. Our analysis includes CO2 emission increases 
from EGUs (see Section V and Section IX.B); however, it does not 
include upstream emissions impacts associated with liquid fuel 
refining.
---------------------------------------------------------------------------

    \1007\ Interagency Working Group on Social Cost of Greenhouse 
Gases (IWG). 2021. Technical Support Document: Social Cost of 
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive 
Order 13990. February. United States Government. Available at: 
https://www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.

[[Page 26089]]

                              Table IX-19--Climate Benefits from Reduction in GHG Emissions Associated with the Proposal and Alternative, Millions of 2021 Dollars
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Proposal                                                       Alternative
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                          Calendar year                                Total           Total                                           Total           Total
                                                                    technology       operating      Total EVSE     Total program    technology       operating      Total EVSE     Total program
                                                                       costs           costs           costs           cost            costs           costs           costs           cost
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
5% Average......................................................      3% Average    2.5% Average         3% 95th      5% Average      3% Average    2.5% Average         3% 95th
                                                                                                      Percentile                                                      Percentile
2027............................................................              33            $110            $160            $320             $17             $57             $83            $170
2028............................................................              74             240             350             710              45             140             210             430
2029............................................................             120             400             580           1,200              80             250             370             760
2030............................................................             190             610             880           1,800             130             420             610           1,300
2031............................................................             290             900           1,300           2,700             200             630             910           1,900
2032............................................................             410           1,300           1,800           3,800             290             890           1,300           2,700
2033............................................................             530           1,600           2,300           4,900             380           1,200           1,700           3,500
2034............................................................             660           2,000           2,800           6,000             470           1,400           2,000           4,300
2035............................................................             780           2,300           3,300           7,100             550           1,700           2,400           5,000
2036............................................................             940           2,800           4,000           8,500             670           2,000           2,800           6,000
2037............................................................           1,100           3,300           4,700           9,900             790           2,300           3,300           7,100
2038............................................................           1,300           3,800           5,400          12,000             920           2,700           3,800           8,200
2039............................................................           1,500           4,300           6,100          13,000           1,100           3,100           4,400           9,400
2040............................................................           1,700           4,900           6,900          15,000           1,200           3,500           4,900          11,000
2041............................................................           1,900           5,400           7,600          16,000           1,400           3,900           5,400          12,000
2042............................................................           2,100           5,900           8,300          18,000           1,500           4,200           5,900          13,000
2043............................................................           2,300           6,500           9,000          20,000           1,700           4,600           6,500          14,000
2044............................................................           2,500           7,000           9,800          21,000           1,800           5,000           7,000          15,000
2045............................................................           2,700           7,500          10,000          23,000           2,000           5,400           7,500          16,000
2046............................................................           2,900           8,000          11,000          24,000           2,100           5,700           7,900          17,000
2047............................................................           3,100           8,400          12,000          26,000           2,200           6,000           8,300          18,000
2048............................................................           3,300           8,800          12,000          27,000           2,300           6,300           8,700          19,000
2049............................................................           3,500           9,200          13,000          28,000           2,500           6,600           9,100          20,000
2050............................................................           3,700           9,700          13,000          30,000           2,600           7,000           9,600          21,000
2051............................................................           3,800          10,000          14,000          30,000           2,700           7,200           9,900          22,000
2052............................................................           4,000          10,000          14,000          31,000           2,900           7,400          10,000          22,000
2053............................................................           4,100          11,000          15,000          32,000           3,000           7,600          10,000          23,000
2054............................................................           4,300          11,000          15,000          32,000           3,100           7,800          11,000          23,000
2055............................................................           4,400          11,000          15,000          33,000           3,200           8,000          11,000          24,000
PV..............................................................          22,000          87,000         130,000         260,000          16,000          62,000          96,000         190,000
EAV.............................................................           1,400           4,600           6,500          14,000           1,000           3,300           4,700           9,900
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2. Criteria Pollutant Reductions
    Table IX-20 presents the total annual, undiscounted 
PM2.5-related health benefits estimated for the stream of 
years beginning with the first year of rule implementation, 2027, 
through calendar year 2055 for the proposed and alternative programs. 
The range of benefits in Table IX-20 reflects the range of premature 
mortality estimates based on risk estimates reported from two different 
long-term exposure studies using different cohorts to account for 
uncertainty in the benefits associated with avoiding PM-related 
premature deaths.1008 1009 Although annual benefits 
presented in the table are not discounted for the purposes of present 
value or annualized value calculations, annual benefits do reflect the 
use of 3-percent and 7-percent discount rates to account for avoided 
health outcomes that are expected to accrue over more than a single 
year (the ``cessation lag'' between the change in PM exposures and the 
total realization of changes in health effects). The table also 
displays the present and annualized value of estimated benefits that 
occur from 2027 to 2055, discounted using both 3-percent and 7-percent 
discount rates and reported in 2021 dollars. We estimate that the 
present value of benefits for the alternative program is $11 to $21 
billion at a 3 percent discount rate and $4.2 to $8.2 billion at a 7 
percent discount rate (2021 dollars), which is less than that of the 
proposed program. For more detailed information about the benefits 
analysis conducted for the proposed and alternative programs, please 
refer to Chapter 7 of the draft RIA.
---------------------------------------------------------------------------

    \1008\ Wu, X, Braun, D, Schwartz, J, Kioumourtzoglou, M and 
Dominici, F (2020). Evaluating the impact of long-term exposure to 
fine particulate matter on mortality among the elderly. Science 
advances 6(29): eaba5692.
    \1009\ Pope III, CA, Lefler, JS, Ezzati, M, Higbee, JD, 
Marshall, JD, Kim, S-Y, Bechle, M, Gilliat, KS, Vernon, SE and 
Robinson, AL (2019). Mortality risk and fine particulate air 
pollution in a large, representative cohort of US adults. 
Environmental health perspectives 127(7): 077007.

Table IX--20-Year-Over-Year Monetized PM2.5-Related Health Benefits Associated With the Proposal and Alternative
                                           [Millions of 2021 Dollars]
----------------------------------------------------------------------------------------------------------------
                                                    Proposal                             Alternative
                                     ---------------------------------------------------------------------------
                                       3% Discount rate   7% Discount rate   3% Discount rate   7% Discount rate
----------------------------------------------------------------------------------------------------------------
2027................................            $6.4-13            $5.7-12           $4.7-9.6           $4.2-8.7
2028................................              15-31              13-28              12-25              11-22
2029................................              26-53              23-48              22-44              19-40
2030................................              16-33              14-30              12-24              11-21
2031................................          (22)-(45)          (20)-(40)         (6.8)-(18)         (6.2)-(16)

[[Page 26090]]

 
2032................................         (70)-(140)         (64)-(130)          (37)-(82)          (34)-(74)
2033................................        (120)-(240)        (110)-(210)         (67)-(150)         (61)-(130)
2034................................        (160)-(330)        (150)-(300)         (97)-(210)         (88)-(190)
2035................................        (210)-(410)        (190)-(370)        (120)-(260)        (110)-(240)
2036................................        (110)-(220)        (100)-(200)         (57)-(130)         (53)-(110)
2037................................              31-62              27-57              42-76              37-67
2038................................            220-440            200-400            180-340            160-310
2039................................            440-880            400-790            340-660            300-590
2040................................          700-1,400          630-1,300          520-1,000            470-920
2041................................          870-1,700          780-1,500          630-1,200          570-1,100
2042................................        1,000-2,100          940-1,900          750-1,500          680-1,300
2043................................        1,200-2,400        1,100-2,200          880-1,700          790-1,600
2044................................        1,400-2,800        1,300-2,500        1,000-2,000          920-1,800
2045................................        1,600-3,100        1,400-2,800        1,200-2,300        1,000-2,000
2046................................        1,700-3,400        1,600-3,100        1,300-2,400        1,100-2,200
2047................................        1,900-3,600        1,700-3,300        1,300-2,600        1,200-2,400
2048................................        2,000-3,900        1,800-3,500        1,400-2,800        1,300-2,500
2049................................        2,100-4,100        1,900-3,700        1,500-3,000        1,400-2,700
2050................................        2,300-4,400        2,000-3,900        1,600-3,100        1,500-2,800
2051................................        2,300-4,500        2,100-4,100        1,700-3,300        1,500-2,900
2052................................        2,400-4,700        2,200-4,200        1,800-3,400        1,600-3,000
2053................................        2,500-4,800        2,300-4,400        1,800-3,500        1,600-3,100
2054................................        2,600-5,000        2,300-4,500        1,900-3,600        1,700-3,200
2055................................        2,700-5,200        2,400-4,600        1,900-3,700        1,700-3,300
PV..................................      15,000-29,000       5,800-11,000      11,000-21,000        4,200-8,200
EAV.................................          780-1,500            470-910          570-1,100            340-670
----------------------------------------------------------------------------------------------------------------
Notes:The range of benefits in this table reflect the range of premature mortality estimates derived from the
  Medicare study (Wu et al., 2020) and the NHIS study (Pope et al., 2019). All benefits estimates are rounded to
  two significant figures. Annual benefit values presented here are not discounted. Negative values in
  parentheses are health disbenefits related to increases in estimated emissions. The present value of benefits
  is the total aggregated value of the series of discounted annual benefits that occur between 2027-2055 (in
  2021 dollars) using either a 3% or 7% discount rate. The benefits associated with the standards presented here
  do not include health benefits associated with reduced criteria pollutant emissions from refineries. The
  benefits in this table also do not include the full complement of health and environmental benefits that, if
  quantified and monetized, would increase the total monetized benefits.

3. Energy Security
    In Table IX-21, EPA presents the macroeconomic oil security 
premiums and the energy security benefits for the alternative 
CO2 emission standards for the years 2027 through 2055. The 
oil security premiums and the energy security benefits for the proposed 
CO2 emission standards can be found in Section VII.
---------------------------------------------------------------------------

    \1010\ ORNL's oil security premium methodology provides 
estimates through 2050. For years 2051-2055 we use the value of the 
2050 oil security premium.

Table IX--21 Oil Security Premiums (2021$/barrel) and the Energy Security Benefits (Millions of 2021$) from 2027-
                               2055 for Alternative GHG Emission Standards \1010\
----------------------------------------------------------------------------------------------------------------
                                                                                             Benefits
                        Calendar year                             Oil security   -------------------------------
                                                                premium  (range)     Proposal       Alternative
----------------------------------------------------------------------------------------------------------------
2027.........................................................              $3.57             $15              $8
                                                                   ($0.79-$6.65)
2028.........................................................              $3.65              33              20
                                                                   ($0.80-$6.79)
2029.........................................................              $3.72              55              35
                                                                   ($0.80-$6.92)
2030.........................................................              $3.79              91              63
                                                                   ($0.81-$7.06)
2031.........................................................              $3.87             140             100
                                                                   ($0.85-$7.22)
2032.........................................................              $3.96             210             150
                                                                   ($0.89-$7.38)
2033.........................................................              $4.04             280             200
                                                                   ($0.92-$7.53)
2034.........................................................              $4.13             350             250
                                                                   ($0.96-$7.69)

[[Page 26091]]

 
2035.........................................................              $4.21             420             300
                                                                   ($1.00-$7.85)
2036.........................................................              $4.29             490             350
                                                                   ($1.03-$7.98)
2037.........................................................              $4.36             560             400
                                                                   ($1.06-$8.11)
2038.........................................................              $4.44             620             450
                                                                   ($1.10-$8.24)
2039.........................................................              $4.51             690             490
                                                                   ($1.13-$8.37)
2040.........................................................              $4.59             750             530
                                                                   ($1.16-$8.50)
2041.........................................................              $4.65             800             570
                                                                   ($1.19-$8.62)
2042.........................................................              $4.71             850             610
                                                                   ($1.21-$8.73)
2043.........................................................              $4.76             900             650
                                                                   ($1.24-$8.85)
2044.........................................................              $4.82             940             680
                                                                   ($1.26-$8.96)
2045.........................................................              $4.88             990             710
                                                                   ($1.29-$9.08)
2046.........................................................              $4.94           1,000             740
                                                                   ($1.32-$9.18)
2047.........................................................              $5.00           1,100             760
                                                                   ($1.35-$9.28)
2048.........................................................              $5.06           1,100             790
                                                                   ($1.37-$9.37)
2049.........................................................              $5.12           1,100             810
                                                                   ($1.40-$9.46)
2050.........................................................              $5.18           1,200             840
                                                                   ($1.43-$9.56)
2051.........................................................              $5.18           1,200             850
                                                                   ($1.43-$9.56)
2052.........................................................              $5.18           1,200             870
                                                                   ($1.43-$9.56)
2053.........................................................              $5.18           1,200             890
                                                                   ($1.43-$9.56)
2054.........................................................              $5.18           1,300             900
                                                                   ($1.43-$9.56)
2055.........................................................              $5.18           1,300             910
                                                                   ($1.43-$9.56)
PV, 3%.......................................................  .................          12,000           8,500
PV, 7%.......................................................  .................           6,000           4,300
EAV, 3%......................................................  .................             620             440
EAV, 7%......................................................  .................             490             350
----------------------------------------------------------------------------------------------------------------

E. How do the proposal and alternative compare in overall benefits and 
costs?

    Table IX-22 shows the net benefits for the proposal and alternative 
relative to the baseline, at 3 percent and 7 percent discount rates, 
respectively. Section VIII.B of this preamble and Chapter 7 of the DRIA 
present more detailed results. These net benefits include benefits 
associated with reduced vehicle GHG and non-GHG emissions and EGU CO2 
emissions, but do not include any impacts associated with petroleum 
extraction, transportation or liquid fuel refining.

                                                             Table IX-22--Net Benefits Associated With the Proposal and Alternative
                                                                                   [Millions of 2021 dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Proposal                                                       Alternative
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      3% 95th                                                         3% 95th
                                                                    5% Average      3% Average     2.5% Average     Percentile      5% Average      3% Average     2.5% Average     Percentile
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2055............................................................         $39,000         $46,000         $50,000         $68,000         $28,000         $33,000         $36,000         $49,000
PV, 3%..........................................................         260,000         320,000         370,000         500,000         180,000         230,000         260,000         360,000
PV, 7%..........................................................         120,000         180,000         230,000         360,000          86,000         130,000         170,000         260,000
EAV, 3%.........................................................          14,000          17,000          19,000          26,000           9,800          12,000          13,000          19,000

[[Page 26092]]

 
EAV, 7%.........................................................           9,300          12,000          14,000          22,000           6,800           9,000          10,000          16,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Climate benefits are based on changes (reductions) in CO2, CH4, and N2O emissions and are calculated using four different estimates of the social cost of carbon (SC-CO2), the social
  cost of methane (SC-CH4), and the social cost of nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3 percent discount rate).
  We emphasize the importance and value of considering the benefits calculated using all four SC-CO2, SC-CH4, and SC-N2O estimates. As discussed in the Technical Support Document: Social Cost
  of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990 (IWG 2021), a consideration of climate benefits calculated using discount rates below 3 percent, including
  2 percent and lower, are also warranted when discounting intergenerational impacts. 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 percent or 7 percent. Annual costs and benefits
  in 2055 shown are undiscounted values. Note that the non-GHG impacts associated with the standards included 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. For the purposes of presentational clarity in the calculation of net benefits, PM2.5-related benefits are averaged across the range of alternative
  estimates for 2055. For PV and EAV estimated with a 3 percent discount rate, we calculate net benefits using PM2.5-related benefits based on the Pope III et al., 2019 study of premature
  mortality. For PV and EAV estimated with a 7 percent discount rate, net benefits reflect PM2.5-related benefits based on the Wu et al., 2020 study.

X. Preemption of State Standards and Requirements for New Locomotives 
or New Engines Used in Locomotives

A. Overview

    In April of 1998, EPA adopted its first-ever regulations addressing 
air pollutant emissions from new locomotives and new locomotive engines 
(including freshly built and remanufactured) under CAA section 
213(a)(5), 42 U.S.C. 7547(a)(5).\1011\ As part of the 1998 final rule 
EPA also promulgated regulations designed to codify the nonroad 
preemption provisions of section 209(e) of the CAA and to clarify the 
prohibition on certain new nonroad engines or nonroad vehicles 
standards by states or political subdivisions and other requirements 
relating to the control of emissions, including from new locomotives or 
new engines used in locomotives. EPA adopted a regulation that set a 
period equivalent in length to 133 percent of the regulatory useful 
life of a new locomotive or engine during which certain non-Federal 
requirements are preempted from applying to locomotives or engines used 
in locomotives.\1012\ EPA also adopted regulations to implement the CAA 
provisions allowing California to request authorization for other non-
Federal requirements on non-new locomotives and engines used in 
locomotives not otherwise prohibited.\1013\
---------------------------------------------------------------------------

    \1011\ Emission Standards for Locomotives and Locomotive 
Engines, 63 FR 18978 (April 16, 1998), codified at 40 CFR parts 85, 
89 and 92.
    \1012\ For purely informational purposes, EPA notes that it is 
not aware that its regulations addressing the scope of preemption of 
state regulation of other types of nonroad engines and nonroad 
vehicles present the concerns described here relating to 
locomotives. Moreover, EPA's regulations do not set an equivalent 
period of preemption for any other class of nonroad engines (other 
than locomotives). EPA has issued several authorizations of 
California regulations relating to other non-new nonroad standards. 
See 80 FR 76468 (December 9, 2015); 78 FR 58090 (September 20, 
2013). This action does not reopen any aspect of EPA's preemption 
regulations, policies, or actions regarding any other nonroad 
engines or vehicles, or regarding any other topics besides those 
expressly described in the text of the preamble and the proposed 
regulations.
    \1013\ To avoid confusion of the term ``used'' sometimes meaning 
``placed or mounted,'' we employ the term ``non-new'' to describe 
engines that do not meet the definition of ``new'' in section 
1074.5.
---------------------------------------------------------------------------

    CAA section 209(e)(2)(B) requires EPA to promulgate regulations 
implementing subsection 209(e), which addresses the prohibition of 
state standards regarding certain classes of nonroad engines or 
vehicles and potential EPA authorization of state standards for other 
nonroad engines or vehicles. The prohibited state standards or other 
requirements relating to the control of emissions include, under CAA 
section 209(e)(1)(B), those affecting new locomotives or new engines 
used in locomotives. Such state requirements cannot be authorized by 
EPA under section 209(b), pursuant to the final sentence of section 
209(e)(1), or under section 209(e)(2). However, section 209(e)(2) 
requires EPA to authorize, subject to certain criteria, California's 
adoption and enforcement of standards and other requirements relating 
to control of emissions from nonroad vehicles or engines other than 
those referred to in paragraph 209(e)(1), which would include non-new 
locomotives and non-new engines used in locomotives.
    EPA is concerned that our preemption regulations as adopted, 
particularly in extending preemption well beyond the CAA language of 
prohibiting the state regulation of new locomotives and new engines 
used in locomotives and to an extended point at which locomotives and 
engines are no longer new, may no longer be appropriate.\1014\ 
Specifically, our existing regulations may have the unintended effect 
of both exceeding Congress' prescribed prohibition on state regulation 
of new locomotives and engines in section 209(e)(1) and impeding states 
from adopting innovative programs to reduce locomotive emissions that 
may be permissible under CAA section 209(e)(2). In this rule, EPA 
proposes to revise our locomotive preemption regulations to better 
align with the precise language Congress provided in section 209(e) and 
the Congressional directive to EPA to implement the prohibition of 
state regulation of new locomotives and new engines used in locomotives 
while ensuring that states are not impeded from adopting programs as 
allowed by the CAA to address the contribution of air pollutant 
emissions from non-new locomotives and engines to their air quality 
issues. In this section, EPA outlines the reasons that its previous 
extension of the categorical prohibition of state regulations 
applicable to locomotives and engines up to 133 percent of the 
regulatory useful life is not required by the CAA and may no longer be 
appropriate considering developments since the 1998 rule. We believe it 
is necessary to better align our regulatory text with the plain 
language of the CAA to provide regulatory space for state controls that 
do not inappropriately affect the design and manufacture of new 
locomotives or new engines used in locomotives.
---------------------------------------------------------------------------

    \1014\ EPA announced an intent to review this issue in November 
2022. See https://www.epa.gov/regulations-emissions-vehicles-and-engines/petitions-address-harmful-emissions-locomotives.
---------------------------------------------------------------------------

B. Background

1. EPA's New Locomotive and Engine Standards and the Regulated Fleet 
\1015\
---------------------------------------------------------------------------

    \1015\ EPA provides this discussion of the Federal locomotive 
requirements under the CAA for background purposes only. In this 
proposal, EPA is not reopening the Federal locomotive requirements, 
and any comments on such will be deemed beyond the scope of the 
action.
---------------------------------------------------------------------------

    The Clean Air Act amendments of 1990 called on EPA to adopt 
emission

[[Page 26093]]

standards for new locomotives and new locomotive engines to achieve the 
greatest degree of emission reduction achievable through the 
application of technology which EPA determines will be available for 
the locomotives or engines, giving appropriate consideration to the 
cost of applying such technology within the period of time available to 
manufacturers and to associated noise, energy, and safety factors. CAA 
section 213(a)(5), 42 U.S.C. 7547(a)(5). From the beginning, EPA's new 
locomotive emission control program identified two ways by which 
locomotives and engines would be deemed ``new'' and thus subject to the 
standards: EPA imposed emission standards for so-called ``freshly 
manufactured'' locomotives that have increasing stringency levels based 
on which ``Tier'' the new locomotive belongs to, and We applied 
emission standards for older locomotives built beginning in 1973 that 
would apply when those older locomotives are ``remanufactured'' (all of 
the power assemblies are either replaced or are inspected and 
requalified either all at once or within a 5-year period) according to 
their original Tier. This approach was necessary due to the very long 
service lives of locomotives. As we explained in the 1998 rule, the 
service life of a locomotive can extend to 40 years and beyond, during 
which period the engine and the locomotive undergo several extensive 
remanufacturing operations that EPA has determined makes the locomotive 
or engine ``new'' again. These remanufacturing operations generally 
consist of, at a minimum, the replacement of the power assemblies 
(i.e., pistons, piston rings, cylinder liners, cylinder heads, fuel 
injectors, valves, etc.) with new components (or components that are in 
new condition) to restore the locomotive to the condition it was in 
when originally manufactured with respect to performance, durability, 
and emissions. Because they are designed to be rebuilt on a regular 
schedule, locomotives can remain in service as long as the main engine 
block remains serviceable. EPA's locomotive remanufacture program 
reduces emissions from these older locomotives, which are fitted with 
better parts and systems when they are remanufactured and become 
``new'' again. However, the stringency of the remanufacture standards 
has been limited by the extent to which new emission control technology 
can be retrofit on these older designs.
    Not surprisingly, recent fleet profile data shows that the in-
service locomotive fleet continues to be dominated by Tier 2 and 
earlier locomotives subject to EPA's less stringent emission 
standards.\1016\ According to data supporting EPA's 2020 National 
Emission Inventory, there are 16,787 locomotives in the Class I line-
haul fleet.\1017\ Of these, about 26 percent are Tier 3 or Tier 4 
locomotives subject to more stringent emission standards.\1018\ The 
other 74 percent are Tier 2 or earlier locomotives, broken down as 
follows: About 62 percent are remanufactured to the revised 
remanufacture standards adopted in 2008; 11 percent have not been 
remanufactured and continue to have the higher emissions of their 
original certification tier; and a small number, about 1 percent, are 
unregulated (pre-1973) locomotives. Class II and III \1019\ railroads 
are not generally subject to remanufacturing obligations. To the extent 
one of these railroads purchases a locomotive that was previously 
certified to EPA's standards, then the railroad must ensure the 
locomotive continues to comply with those standards. The Class II and 
III line-haul fleet consists of 3,447 locomotives. Of these, about 7 
percent are Tier 3 or 4 locomotives. The other 93 percent are Tier 2 or 
earlier, broken down as follows: About 39 percent of the locomotives 
are unregulated (pre-1973); 48 percent are Tier 0; and The other six 
percent are Tier 1 or Tier 2.
---------------------------------------------------------------------------

    \1016\ 2020 National Emissions Inventory Locomotive Methodology 
Prepared for U.S. Environmental Protection Agency by Eastern 
Research Group, Inc. (May 19, 2022). https://gaftp.epa.gov/air/nei/2020/doc/supporting_data/nonpoint/Rail/2020_NEI_Rail_062722.pdf.
    \1017\ The current classification of railroads adopted by the 
Surface Transportation Board (STB) in 2021 is based on annual 
carrier operating revenue, as follows: Class I railroads, greater 
than $943.9 million; Class II railroads, $42.4 to $943.9 million; 
Class III railroads less than $42.4 million. See 49 CFR 1201 (1-1 
Classification of Carriers).
    \1018\ EPA took action to set additional emission standards for 
new locomotives and engines in 2008; see final rule published at 73 
FR 37096 (June 30, 2008), Control of Emissions of Air Pollution From 
Locomotive Engines and Marine Compression-Ignition Engines Less Than 
30 Liters per Cylinder.
    \1019\ Ibid.
---------------------------------------------------------------------------

    Given the large share of older locomotives in the Class I, II and 
III railroad fleets, and their emissions contribution to ambient 
concentrations of air pollution that may cause violations of national 
ambient air quality standards (NAAQS), states and local entities who 
must develop state implementation plans (SIPs) demonstrating attainment 
of NAAQS have expressed interest in obtaining greater emissions 
reductions from this sector, including possibly adopting programs to 
achieve greater emission reductions from non-new locomotives beyond 
those achieved by EPA's standards applicable to new locomotives. States 
and local entities have expressed particular interest in addressing 
emissions from non-new locomotives for areas located along high traffic 
rail lines and/or in communities with environmental justice concerns. 
However, notwithstanding Congress' provision in section 209(e)(2) for 
EPA to authorize such state efforts, subject to certain criteria, the 
agency now believes that the pre-emption regulation for locomotives 
adopted in the 1998 rule might preclude states (following California as 
described Section X.B.2) from exploring some innovative local programs.
2. EPA's Regulatory Preemption of State Control of Locomotive and 
Engine Emissions
    As part of the 1998 locomotive rule EPA established regulations 
that prohibited state regulation of new locomotives and new engines 
used in locomotives. This is currently reflected in the regulatory text 
of 40 CFR 1074.12(a), and reflects Congress' command in CAA section 
209(e)(1)(B). In addition, to provide certainty to state, localities, 
and industry regarding the period when certain state controls would be 
prohibited under 209(e)(1)(B), EPA also provided that such prohibition 
would last for a period equal to 133 percent of the useful life of a 
new locomotive or new engine used in a locomotive--even after the 
locomotive or engine was placed into service and ceased to be ``new.'' 
\1020\ This is currently reflected at section 1074.12(b) of EPA's rule, 
along with several specific types of standards or other requirements 
that EPA then concluded are preempted. This decision to codify a 
prohibition period extending beyond when locomotives are new and to 
enumerate several preempted types of requirements was based on EPA's 
understanding of the nature of the locomotive industry, the regulatory 
landscape, and the then-existing emission control technologies 
considering the CAA and other relevant legal considerations.\1021\
---------------------------------------------------------------------------

    \1020\ Proposed Rule: Emission Standards for Locomotives and 
Locomotive Engines, 62 FR 6366 (February 11, 1997)
    \1021\ These considerations included: The language of the CAA 
and its legislative history (62 FR 6397-6398; Summary and Analysis 
of Comments on the Notice of Proposed Rulemaking for Emission 
Standards for Locomotives and Locomotive Engines, 1998), p. 12; 
court rulings (see 62 FR 6397, see also Allway Taxi, Inc. v. City of 
New York, 340 F. Supp. 1120, 1124 (S.D.N.Y. 1972)); Constitutional 
concerns (Summary and Analysis of Comments on the Notice of Proposed 
Rulemaking for Emission Standards for Locomotives and Locomotive 
Engines, 1998, pp. 13, 17, 18); and Technical challenges of states 
regulating non-new locomotives and engines used in locomotives 
(Summary and Analysis of Comments on the Notice of Proposed 
Rulemaking for Emission Standards for Locomotives and Locomotive 
Engines, 1998, Chapter 1 Section C).

---------------------------------------------------------------------------

[[Page 26094]]

    In 1998, the locomotive manufacturers and remanufacturers were 
anticipating a need to develop emission technologies to apply to their 
locomotive engines with uncontrolled emissions to comply with the first 
three Tiers of locomotive emission standards (Tiers 0, 1, and 2). They 
would eventually need to apply technology to meet Tiers 3 and 4, 
adopted in 2008 and fully phased-in by 2015. As EPA explained in 1998, 
there was a risk that some state regulations could have affected the 
design and manufacture of new locomotives and new engines used in 
locomotives (including freshly manufactured and remanufactured), and 
additional certainty was determined to be beneficial for all interested 
parties.\1022\ At the same time, in the 1998 rulemaking EPA explained 
that states may regulate the use and operation of locomotives in a 
manner that does not significantly affect the design or manufacture of 
a new (including remanufactured) locomotive or engine, potentially 
allowing states to control nuisances, and that California (and other 
states following California) may obtain an EPA authorization (waiver of 
Federal preemption) for standards and other requirements relating to 
the control of emissions from non-new locomotives and non-new engines 
used in locomotives, provided they did not significantly affect the 
design and manufacture of new locomotives or engines.\1023\ This 
allowance is currently reflected in EPA's rules at section 1074.101 
through 1074.115. However, to date California has not sought EPA 
authorization under section 209(e) of any program to address emissions 
from non-new locomotives or engines.
---------------------------------------------------------------------------

    \1022\ 63 FR 18979 and 18993-18994.
    \1023\ Summary and Analysis of Comments on the Notice of 
Proposed Rulemaking for Emission Standards for Locomotives and 
Locomotive Engines, EPA, EPA-420-R-97-101, pp. 17-18.
---------------------------------------------------------------------------

    By defining the period of preemption to be 133 percent of the 
useful life of a new locomotive or engine EPA intended to preclude 
certain forms of potential state regulation of non-new locomotives due 
to the concern they could significantly impact the design and 
manufacture of new locomotives and new engines used in locomotives. 
EPA's intention to preclude some but not all forms of state regulation 
is clearly discussed in the 1997 NPRM,\1024\ in the Summary and 
Analysis of Comments,\1025\ and in the final 1998 rulemaking \1026\ 
where we explained that ``The list of state controls that are 
explicitly preempted under today's regulation is not intended to be 
exclusive'' \1027\ and ``. . . all state requirements relating to the 
control of emissions from in-use locomotives and locomotive engines, 
including state requirements not listed as preempted [. . .], are 
subject to section 209(e)(2)'s waiver requirement.'' \1028\ This 
preemption language was recodified in the sections of 40 CFR part 1074, 
in October of 2008, as part of EPA's final rule establishing standards 
for the Control of Emissions from Nonroad Spark-Ignition Engines and 
Equipment.\1029\
---------------------------------------------------------------------------

    \1024\ See 62 FR 6366, 6398, and 6399.
    \1025\ Summary and Analysis of Comments on the Notice of 
Proposed Rulemaking for Emission Standards for Locomotives and 
Locomotive Engines, EPA, EPA-420-R-97-101, pp. 15-19.
    \1026\ See 63 FR 18978.
    \1027\ 63 FR 18994.
    \1028\ Ibid.
    \1029\ Oct 8, 2008, 73 FR 59033, Control of Emissions from 
Nonroad Spark-Ignition Engines & Equipment.
---------------------------------------------------------------------------

C. Evaluation of Impact of Regulatory Preemption

    In EPA's final 1998 action, EPA adopted regulations preempting 
certain state and local controls of locomotives and engines used in 
locomotives, which we determined to be appropriate based on our 
understanding of the information at the time.\1030\ The intent of these 
regulations was to provide ``certainty with respect to when state 
controls would be preempted'' (62 FR 6398) and determine that ``certain 
categories of potential state requirements would be preempted under the 
proposed approach'' (62 FR 6398).
---------------------------------------------------------------------------

    \1030\ See, 63 FR at 18993-18994, codified at 40 CFR 85.1603 
Application of definitions; scope of preemption. This was later 
recodified at 40 CFR 1074.12; see 73 FR 59034 (Oct. 8, 2008).
---------------------------------------------------------------------------

    EPA's explanation for the preemptions was particularly focused on 
specific types of controls listed in 40 CFR 1074.12(b), which we deemed 
categorically preempted for locomotives and engines up to 133 percent 
of the regulatory useful life.\1031\ For all other types of controls, 
the 1998 Locomotive final rulemaking stated that ``. . . all state 
requirements relating to the control of emissions from in-use 
locomotives and locomotive engines, including state requirements not 
listed as preempted in 40 CFR 85.1603(c)(1), are subject to section 
209(e)(2)'s waiver requirement.'' \1032\ Further, in our response to 
comments regarding preemption of state regulations we explained, 
``states may regulate the use and operation of locomotives in a manner 
that does not significantly affect the design or manufacture of a new 
(including remanufactured) locomotive or engine, potentially allowing 
states to control nuisances.'' \1033\ As an example, the final rule 
deviated from the proposal by excluding state in-use testing programs 
using the Federal test procedure from the list of preempted controls 
because EPA could not determine that it would violate 
209(e)(1)(B).\1034\ While these aspects of the 1998 rule make a case 
that there are opportunities for California to obtain authorization 
under CAA 209(e)(2) for eligible measures, we are concerned that the 
effect of our 1998 regulation has been to discourage consideration of 
all such opportunities.
---------------------------------------------------------------------------

    \1031\ Including but not limited to emission standards, 
mandatory fleet average standards, certification requirements, 
retrofit and aftermarket equipment requirements, and non-Federal in-
use testing requirements.
    \1032\ See, 63 FR 18994.
    \1033\ Summary and Analysis of Comments on the Notice of 
Proposed Rulemaking for Emission Standards for Locomotives and 
Locomotive Engines, EPA, EPA-420-R-97-101, p. 18.
    \1034\ 63 FR 18993-18994.
---------------------------------------------------------------------------

    At the same time, locomotive emission controls have developed 
significantly since the 1998 rule, and some of these developments call 
into question the factual underpinnings of EPA's prior decision to 
categorially preempt certain controls up to 133 percent of the 
regulatory useful life. It has been 15 years since EPA's 2008 rule was 
finalized and eight years since the first compliance year of the 
locomotive Tier 4 emissions standards. With the certainty provided by 
the long lead time prior to implementation of Tier 4 and the stability 
provided by a long period of unchanged standards, the emission control 
technologies for new diesel locomotives are now well established. In 
developing this proposal, we reviewed the technical basis for the types 
of controls in 40 CFR 1074.12(b) established in 1998 and evaluated 
currently available technologies and practices to investigate the 
extent to which our reasoning in 1998 still holds today, following more 
recent technological developments and the extent to which emissions 
control tools may be employed for existing locomotives without 
necessarily presenting significant effects on the

[[Page 26095]]

design and manufacture of new locomotives and engines.
    We have identified two examples of post-1998 emission controls that 
states would be prohibited from requiring for non-new locomotives under 
the language of 40 CFR 1074.12(b), but that initially appear would not 
significantly affect the design or manufacture of a new locomotive or 
locomotive engine and in fact have in some cases been voluntarily 
applied. Although we have not received any submission of an actual 
regulation addressing controls of this nature, which would need to be 
evaluated on its own basis under CAA section 209(e)(2), we discuss 
these possible measures that might not be preempted as requirements 
applying to new locomotives or new engines used in locomotives if 
evaluated on a case-by-case basis. Our evaluation suggests that the 
1998 regulatory provisions categorically preempting certain controls up 
to 133 percent of the useful life may be overly restrictive in 
precluding state consideration of potential measures to reduce 
emissions from existing locomotives.
    One example of a post-1998 control measure that we have identified 
as potentially not significantly affecting the design or manufacture of 
a new locomotive or engine is the retrofitting of an auxiliary power 
unit (APU) to support engine shutdown for idle reduction. In this 
scenario, installation of such an APU on a locomotive with an engine 
shutdown timer can enable the main engine to shut down while 
maintaining power to auxiliary functions such as air brake pressure and 
battery state of charge. There may be sufficient space and fluids 
onboard to accommodate this component without disrupting the existing 
equipment or the design of new remanufacturing kits. Under the terms of 
current 40 CFR 1074.12(b) this is an example of a requirement that may 
be categorically preempted because current section 1074.12(b) preempts 
state retrofit and aftermarket equipment requirements. Without 
evaluating the technical drawbacks or merits of any specific state 
requirement for such a retrofitting on existing locomotives, we observe 
that such a requirement could potentially be consistent with the 
statutory authorization criteria and be allowed if evaluated on its own 
merits under 40 CFR 1074.101 through 1074.115. As further evidence that 
such a retrofit requirement would not likely have an adverse effect on 
the design of new locomotives, this type of technology retrofit project 
is often pursued by locomotive operators on a voluntary basis.\1035\
---------------------------------------------------------------------------

    \1035\ See, for example, Railway Age, BNSF, Hotstart partner on 
locomotive retrofit, November 19, 2014. https://www.railwayage.com/freight/class-i/bnsf-hotstart-partner-on-locomotive-retrofit/ 
accessed January 2023.
---------------------------------------------------------------------------

    A second example of a post-1998 emission control measure that may 
not significantly affect the design or manufacture of a new locomotive 
or engine is the installation of a new load control calibration 
strategy that better manages load on the main engine while the 
locomotive is in line haul service. Such technology is utilized today 
and may be installed on units already in service \1036\ and is 
available as an upgrade in some certified remanufacture kits.\1037\ In 
this scenario, a locomotive would have certain software installed that 
governs how the engine is used during the route, which helps save fuel 
and reduces emissions. Because the components involved include minimal 
hardware, we do not believe implementation of this measure would result 
in a significant effect on the design of new locomotives. Therefore, a 
state imposing a requirement that existing locomotives employ it would 
not necessarily constitute a control of new locomotive emissions. 
Nonetheless, under the existing regulations, such a control may be 
categorically preempted. Without evaluating the technical drawbacks or 
merits of such a state's specific action to impose such a requirement 
for this kind of more recent technological measure, we believe that our 
1998 regulatory text may inappropriately restrict whether a state can 
request authorization under CAA section 209(e)(2) to impose such a 
requirement. Therefore, EPA believes that there are in fact reasonable 
examples of readily available technologies that if included as part of 
a state regulatory program could be considered for authorization under 
CAA section 209(e)(2) and our rules at 40 CFR 1074.101 through 
1074.115, but that under our 1998 regulatory text in 40 CFR 
1074.12(b)--adopted in advance of the development of these newer 
technological measures--California is currently discouraged from 
exploring. Any such program should be evaluated on its own terms, if 
submitted, rather than be assumed to significantly affect design and 
manufacture of new locomotives under a categorical regulatory 
preemption provision that did not account for more recent technological 
measures.
---------------------------------------------------------------------------

    \1036\ See, for example, https://www.nyabproducts.com/leader/ 
and https://www.wabteccorp.com/digital-electronics/train-performance-and-automation/trip-optimizer, accessed January 2023.
    \1037\ See, for example, Wabtec's certified remanufacture 
families PGETK0668T1Y and PGETK0668T0C, which are Tier 1 and Tier 0 
systems, respectively, that include the Trip Optimizer software as 
an energy saving design.
---------------------------------------------------------------------------

    While EPA's adoption of its regulations in 1998 helped facilitate a 
smooth regulatory progression from uncontrolled to regulated 
locomotives, the more recent technological developments of pollution 
control measures, such as those briefly discussed in this Section X, 
indicate that there may be instances now where the general conclusions 
reached in 1998 may no longer be supportable, and instead may result in 
our 1998 preemption rules inappropriately reaching beyond the scope of 
section 209(e)(1)'s prohibition on requirements that relate to new 
locomotives and new engines used in locomotives. Although EPA has 
discussed only some examples of potential control measures that might 
be considered for application under a state program for existing 
locomotives without significantly affecting the design and manufacture 
of new locomotives, the very nature of rapid technological development 
suggests that it is not necessary or possible for EPA to prejudge, as 
under the current text of 40 CFR 1074.12, all potential forms of state 
control of existing locomotives regarding whether they should remain 
preempted with no possibility of authorization under CAA section 
209(e)(2).
    EPA further believes that the examples discussed show there is 
sufficient information available to more generally call into question 
the conclusion that all the forms of state control explicitly preempted 
by the current text in 40 CFR 1074.12(b) would necessarily affect how 
manufacturers and remanufacturers design new locomotives and new 
engines used in locomotives. Based on these examples, along with the 
fact that any request from California (for its regulatory and 
technological approaches) under 40 CFR 1074.101 through 1074.115 would 
be evaluated on a case-by-case basis, we observe that by removing the 
language in 40 CFR 1074.12(b) EPA would still be required to evaluate 
any submission from California under CAA section 209(e)(1) and (2), 
providing the opportunity for public comment by all interested 
stakeholders. EPA seeks comment on this assessment and to what extent 
there would be public benefit if we were to retain the current 
regulatory text.
    While EPA can no longer say, for certain, that our conclusions in 
1998 about state imposition of in-use requirements will always be true 
for

[[Page 26096]]

those listed forms of standards or requirements, we are also not saying 
that such measures can or will be authorized under CAA section 
209(e)(2) (even for the examples provided). EPA is not concluding in 
this document that any of these forms of standards, if submitted, would 
be authorized, or that these forms of standards would not contravene 
CAA section 209(e)(1). Rather this action to revise 40 CFR 1074.12, if 
finalized, would better allow California the opportunity to explore, 
develop, and justify in a program-specific submission for authorization 
why a certain form of state regulation should be allowed under CAA 
section 209(e)(2) and our rules at 40 CFR 1074.101 through 1074.115, 
and allow EPA to evaluate such a submission on a case-by-case basis 
evaluating its specific merits rather than being categorically 
preempted without the benefit of an actual administrative record 
regarding the specific state regulation.
    The scope of this proposal includes the types of state measures 
preempted as well as the period of preemption. EPA's assessment that 
our previous general conclusions regarding what types of measures must 
be preempted at the outset may no longer be supportable necessarily 
extends to the period of preemption imposed by our regulations. The 
current text at 40 CFR 1074.12(b) preempts the state control of in-use 
locomotives for the categories of regulations listed for a period of 
133 percent of useful life of a new locomotive or engine. Since we now 
believe it is inappropriate to prejudge that all the listed types of 
measures would have such an effect, we likewise cannot say that the 
fixed period of preemption of such measures must still apply. EPA 
therefore proposes to remove the specified period of preemption in 40 
CFR 1074.12(b). In place of this, the EPA would include evaluation of 
the temporal nature of any submitted state controls as part of its 
evaluation of any authorization request under 40 CFR 1074.101 through 
1074.115.

D. What is EPA proposing?

    We believe the current preemption language may impede California's 
exploration of regulations of non-new locomotives and locomotive 
engines beyond what is required by CAA section 209(e). To address this, 
EPA is proposing to make several revisions in part 1074, including 
sections 1074.10, 1074.12, and 1074.101.
    In 40 CFR 1074.10, we propose to revise subsection (b) to contain 
text that is currently located in section 1074.12(a), and move the 
current text of subsection (b) into a new subsection (c). This would 
solely be a housekeeping measure, as no revisions to the content of the 
text or current subsection 1074.12(a) are proposed.
    In 40 CFR 1074.12, we are proposing to delete 40 CFR 1074.12 in its 
entirety. We believe the removal of the explicit period of preemption 
as well as the listed categories of state control measures would signal 
that not all state regulations are intended to be preempted and would 
better align the scope of the regulation with the CAA. We seek comment 
on these proposed revisions and whether they adequately align our 
regulations with the CAA, and whether they achieve the intended purpose 
of not impeding California from pursuing state-level standards or 
control measures that may be considered for authorization according to 
the procedures outlined in 40 CFR 1074.101 through 1074.115. We note 
that under the proposal, California rules addressing non-new 
locomotives or engines would still need to go through the authorization 
process at 40 CFR 1074.101 through 1074.105, which would ensure 
compliance with the statutory authorization criteria: California's 
determination that its standards will be, in the aggregate, at least as 
protective of public health and welfare as otherwise applicable Federal 
standards is not arbitrary and capricious; Any opponents of the 
authorization have not met their burdens to demonstrate that California 
does not need such standards to meet compelling and extraordinary 
conditions; and Any such opponents have not demonstrated that such 
standards and accompanying enforcement procedures are not consistent 
with section 209 of the CAA (including section 209(e)(1)).\1038\
---------------------------------------------------------------------------

    \1038\ 40 CFR 1074.105(b). Adopted at Part 85.1603(c)(1) in 1998 
and recodified in Part 1074 as part of the Control of Emissions From 
Nonroad Spark-Ignition Engines and Equipment, October 8, 2008, 73 FR 
59033.
---------------------------------------------------------------------------

    EPA notes that we would still have concerns related to 
authorization requests that included forms of state controls that would 
significantly affect the design or manufacture of a new locomotive or 
engine. However, EPA recognizes that significant advances in technology 
have occurred in the intervening years since 1998, along with 
innovative forms of regulations. Any state authorization application 
received by EPA would need to demonstrate why the submitted control 
measure would not significantly affect the design or manufacture of a 
new locomotive. As required by the CAA, the EPA would evaluate any such 
application on a case-by-case basis to determine if the controls may be 
authorized under section 209(e)(2).
    Note that certain categories of potential state requirements, while 
not expressly preempted by section 209(e)(1) or EPA's regulations 
implementing section 209(e)(1), may be preempted if they would create a 
conflict with other provisions of the Act. For example, section 
203(a)(3) of the Act prohibits tampering, and certain requirements to 
modify engines might constitute tampering. Analysis of such possible 
conflicts would be incorporated into the evaluation of EPA's review of 
an authorization request under 40 CFR 1074.101 through 1074.115.
    In 40 CFR 1074.101, we propose a minor housekeeping edit to 
paragraph (a) of this section, to refer to the relocated text in 
1074.10(b) that is being moved out of 1074.12.
    None of the proposed changes to our preemption regulations would 
have any impact on the regulation of new locomotives or engines used in 
locomotives (including freshly built and remanufactured) under 40 CFR 
part 1033. We are not reopening any aspect of the regulation of new 
locomotives or engines, and any comments on these topics will be deemed 
beyond the scope.

XI. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www.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

    Under section 3(f)(1) of Executive Order 12866, this action is a 
significant regulatory action that was submitted to the Office of 
Management and Budget (OMB) for review. Any changes made in response to 
recommendations received as part of Executive Order 12866 review have 
been documented in the docket. EPA prepared an analysis of the 
potential costs and benefits associated with this action. This 
analysis, the draft ``Regulatory Impact Analysis--Greenhouse Gas 
Emissions Standards for Heavy-Duty Vehicles-Phase 3--Notice of Proposed 
Rulemaking,'' is available in the docket. The analyses contained in 
this document are also summarized in Sections II, IV, V, VI, VII, VIII 
and IX of this preamble.

[[Page 26097]]

B. Paperwork Reduction Act (PRA)

    The information collection activities in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the PRA. The Information Collection Request (ICR) that EPA 
prepared has been assigned EPA ICR Number 2734.1. You can find a copy 
of the Supporting Statement in the docket for this rule, and it is 
briefly summarized here.
    This proposed rulemaking consists of targeted updates to the 
existing GHG emission standards for heavy-duty vehicles beginning with 
MY 2027 in consideration of zero-emission technology. The information 
collection activities for EPA's Phase 2 GHG program would not change as 
a result of this proposed rule, although manufacturers would experience 
a cost associated with reviewing the new requirements.

     Respondents/affected entities: Manufacturers of heavy-
duty onroad vehicles.
     Respondent's obligation to respond: Regulated entities 
must respond to the collection if they wish to sell their products 
in the United States, as prescribed by CAA section 203(a). 
Participation in some programs is voluntary; but once a manufacturer 
has elected to participate, it must submit the required information.
     Estimated number of respondents: Approximately 77 
heavy-duty vehicle manufacturers.
     Frequency of response: One-time burden associated with 
reviewing the new requirements for all manufacturers; for EV 
manufacturers, one-time burden associated with new battery health 
monitor provisions, warranty reporting requirements, and associated 
revisions to owners manuals
     Total estimated burden: 7,411 hours. Burden is defined 
at 5 CFR 1320.03(b)
     Total estimated cost: $1.622 million; includes an 
estimated $936,500 maintenance and operational costs.

    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.
    Submit your comments on the Agency's need for this information, the 
accuracy of the provided burden estimates and any suggested methods for 
minimizing respondent burden to EPA using the docket identified at the 
beginning of this rule. You may also send your ICR-related comments to 
OMB's Office of Information and Regulatory Affairs using the interface 
at www.reginfo.gov/public/do/PRAMain. Find this particular information 
collection by selecting ``Currently under Review--Open''. Since OMB is 
required to make a decision concerning the ICR between 30 and 60 days 
after receipt, OMB must receive comments no later than June 26, 2023. 
The EPA will respond to any ICR-related comments in the final rule.

C. 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. As 
explained elsewhere in this preamble, EPA is proposing to exempt small 
entities from the proposed revisions to EPA's Phase 2 GHG requirements 
for MY 2027 and the proposed additional GHG requirements for MYs 2028 
through 2032 and later. Small EV manufacturers would be subject to new 
battery health monitor provisions and warranty provisions, which 
include making associated revisions to owners manuals. There are 10 
small companies that would be affected by the proposal. The estimated 
burden is not expected to exceed 3 percent of annual revenue for any 
small entity, and is expected to be between 1 and 3 percent of annual 
revenue for only one company. We have therefore concluded that this 
action will have minimal impact on small entities within the regulated 
industries. More information concerning the small entities and our 
decision is presented in Chapter 9 of the draft RIA.

D. Unfunded Mandates Reform Act (UMRA)

    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 VIII and in 
the draft RIA, 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

    The action we are proposing for HD Phase 3 CO2 emission 
standards and related regulations does not have federalism 
implications. The proposed HD Phase 3 CO2 emission standards 
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.
    The action we are proposing with regard to preemption of State 
control of air pollutant emissions from new locomotives and new engines 
used in locomotives (described in Section X), however, does have 
federalism implications because the proposed revisions to part 1074 
involve existing regulations that preempt State law under CAA section 
209(e)(1). This action proposes revisions to current regulatory 
provisions in order to better align EPA's rules with CAA section 
209(e)'s statutory requirements. Today's action proposes to remove 
regulatory language that extended the preemption period beyond the 
point at which locomotives and engines are new. In this rule, EPA 
proposes to revise our locomotive preemption regulations to better 
align with precise language Congress provided in section 209(e) and the 
Congressional directive to EPA to implement the prohibition of state 
regulation of new locomotives and new engines used in locomotives while 
ensuring that states are not impeded from adopting programs as allowed 
by the CAA to address the contribution of air pollutant emissions from 
non-new locomotives and engines to their air quality issues. EPA 
consulted with representatives of various State and local governments 
in developing this proposed rule. We met with representatives from the 
National Association of State Energy Officials, the National 
Association of Clean Air Agencies, the Northeast States for Coordinated 
Air Use Management, the Ozone Transport Commission, and the Association 
of Air Pollution Control Agencies in a joint meeting on April 21, 2022. 
We met with representatives from CARB periodically from September to 
December 2022, and we met with representatives from the National 
Association of Clean Air Agencies, the Northeast States for Coordinated 
Air Use Management, and the Ozone Transport Commission in a joint 
meeting on December 13, 2022. In the spirit of Executive Order 13132, 
and consistent with EPA policy to promote communications between EPA 
and State and local governments, EPA specifically solicits comment on 
this proposed rule revision from State and local officials.

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.

[[Page 26098]]

This action does not have substantial direct effects on one or more 
Indian tribes, on the relationship between the Federal Government and 
Indian tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes. However, EPA plans to 
continue engaging with 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 and Safety Risks

    This action is subject to Executive Order 13045 because it is a 
significant regulatory action under section 3(f)(1) of Executive Order 
12866, and EPA believes that the environmental health risks or safety 
risks of the pollutants addressed by this action may have a 
disproportionate effect on children. The 2021 Policy on Children's 
Health also applies to this action.\1039\ Accordingly, we have 
evaluated the environmental health or safety effects of air pollutants 
affected by the proposed program on children. The results of this 
evaluation are described in Section VI of the preamble and Chapter 5 of 
the DRIA. The protection offered by these standards may be especially 
important for children because childhood represents a life stage 
associated with increased susceptibility to air pollutant-related 
health effects.
---------------------------------------------------------------------------

    \1039\ U.S. Environmental Protection Agency (2021). 2021 Policy 
on Children's Health. Washington, DC. https://www.epa.gov/system/files/documents/2021-10/2021-policy-on-childrens-health.pdf.
---------------------------------------------------------------------------

    This proposed rule would reduce emissions of GHGs, which would 
reduce the effects of climate change on children. GHGs contribute to 
climate change and the GHG emissions reductions resulting from 
implementation of this proposed rule 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 climate-related 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 
VI.A of this preamble.
    Children make up a substantial fraction of the U.S. population, and 
often have unique factors that contribute to their increased risk of 
experiencing a health effect from exposures to ambient air pollutants 
because of their continuous growth and development. Children are more 
susceptible than adults to many air pollutants because they have (1) a 
developing respiratory system, (2) increased ventilation rates relative 
to body mass compared with adults, (3) an increased proportion of oral 
breathing, particularly in boys, relative to adults, and (4) behaviors 
that increase chances for exposure. Even before birth, the developing 
fetus may be exposed to air pollutants through the mother that affect 
development and permanently harm the individual when the mother is 
exposed.
    In addition to reducing GHGs, this proposed rule would also reduce 
onroad emissions of criteria pollutants and air toxics. Section V of 
this preamble presents the estimated onroad emissions reductions from 
the proposed rule. Certain motor vehicle emissions present greater 
risks to children. Early lifestages (e.g., children) are thought to be 
more susceptible to tumor development than adults when exposed to 
carcinogenic chemicals that act through a mutagenic mode of 
action.\1040\ Exposure at a young age to these carcinogens could lead 
to a higher risk of developing cancer later in life. Chapter 5.2.8 of 
the DRIA describes a systematic review and meta-analysis conducted by 
the U.S. Centers for Disease Control and Prevention that reported a 
positive association between proximity to traffic and the risk of 
leukemia in children.
---------------------------------------------------------------------------

    \1040\ U.S. Environmental Protection Agency. (2005). 
Supplemental guidance for assessing susceptibility from early-life 
exposure to carcinogens. Washington, DC: Risk Assessment Forum. EPA/
630/R-03/003F. https://www3.epa.gov/airtoxics/childrens_supplement_final.pdf.
---------------------------------------------------------------------------

    The adverse effects of individual air pollutants may be more severe 
for children, particularly the youngest age groups, than adults. As 
described in Section VI.B of this preamble and Chapter 5 of the DRIA, 
the Integrated Science Assessments for a number of pollutants affected 
by this rule, including those for SO2, NO2, PM, ozone and 
CO, describe children as a group with greater susceptibility. Also, 
Section VI.B of this preamble and Chapter 5 of the DRIA discuss a 
number of childhood health outcomes associated with proximity to 
roadways, including evidence for exacerbation of asthma symptoms and 
suggestive evidence for new onset asthma.
    There is substantial evidence that people who live or attend school 
near major roadways are more likely to be people of color, Hispanic 
ethnicity, and/or low socioeconomic status. Within these highly exposed 
groups, children's exposure and susceptibility to health effects is 
greater than adults due to school-related and seasonal activities, 
behavior, and physiological factors.
    Children are not expected to experience greater ambient 
concentrations of air pollutants than the general population. However, 
because of their greater susceptibility to air pollution, including the 
impacts of a changing climate, and their increased time spent outdoors, 
it is likely that the emissions reductions associated with the proposed 
standards would have particular benefits for children's health.

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

    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 
Section VI of this preamble and Chapter 5 of the draft RIA, which is 
available in the docket for this action and is briefly summarized here.
    This action proposes to reduce CO2 emissions from heavy-
duty vehicles under revised GHG standards, which would result in 
significant reductions in the consumption of petroleum, would achieve 
energy security benefits, and would have no adverse energy effects. 
Because the GHG emission standards result in fuel savings, this rule 
encourages more efficient use of fuels. Section VI.F of this preamble 
describes our projected fuel savings due to the proposed standards.

[[Page 26099]]

I. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR 
Part 51

    This rulemaking involves technical standards. Except for the 
standards discussed in this Section XI.I, the standards included in the 
regulatory text as incorporated by reference were all previously 
approved for IBR and no change is included in this action.
    In accordance with the requirements of 1 CFR 51.5, we are proposing 
to incorporate by reference the use of standards and test methods from 
the United Nations. The referenced standards and test methods may be 
obtained from the UN Economic Commission for Europe, Information 
Service at Palais des Nations, CH-1211 Geneva 10, Switzerland; 
[email protected]; www.unece.org. We are incorporating by reference the 
following UN Economic Commission for Europe document:

------------------------------------------------------------------------
     Standard or test method          Regulation            Summary
------------------------------------------------------------------------
Addendum 22: United Nations       40 CFR 1037.115     GTR 22 establishes
 Global Technical Regulation No.   and 1037.810.       design protocols
 22, United Nations Global                             and procedures
 Technical Regulation on In-                           for measuring
 vehicle Battery Durability for                        durability and
 Electrified Vehicles, Adopted                         performance for
 April 14, 2022.                                       batteries used
                                                       with electric
                                                       vehicles and plug-
                                                       in hybrid-
                                                       electric
                                                       vehicles.
------------------------------------------------------------------------

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

    Executive Order 12898 (59 FR 7629, February 16, 1994) directs 
Federal agencies, to the greatest extent practicable and permitted by 
law, to make 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 (people of color and/or indigenous 
peoples) and low-income populations.
    EPA believes that the human health or environmental conditions that 
exist prior to this action result in or have the potential to result in 
disproportionate and adverse human health or environmental effects on 
people of color, low-income populations and/or indigenous peoples. EPA 
provides a summary of the evidence for potentially disproportionate and 
adverse effects among people of color and low-income populations in 
Section VI.D of the preamble for this rule.
    EPA believes that this action is likely to reduce existing 
disproportionate and adverse effects on people of color, low-income 
populations and/or indigenous peoples.
    Section VI.D.1 discusses the environmental justice issues 
associated with climate change. People of color, low-income populations 
and/or indigenous peoples may be especially vulnerable to the impacts 
of climate change. The GHG emission reductions from this proposal would 
contribute to efforts to reduce the probability of severe impacts 
related to climate change.
    In addition to reducing GHGs, this proposed rule would also reduce 
onroad emissions of criteria pollutants and air toxics. Section V of 
this preamble presents the estimated impacts from the proposed rule on 
onroad and EGU emissions. These non-GHG emission reductions from 
vehicles would improve air quality for the people who reside in close 
proximity to major roadways and who are disproportionately represented 
by people of color and people with low income, as described in Section 
VI.D.2 of this preamble. We expect that increases in criteria and toxic 
pollutant emissions from EGUs and reductions in petroleum-sector 
emissions could lead to changes in exposure to these pollutants for 
people living in the communities near these facilities. Analyses of 
communities in close proximity to these sources (such as EGUs and 
refineries) have found that a higher percentage of communities of color 
and low-income communities live near these sources when compared to 
national averages.
    EPA is additionally identifying and addressing environmental 
justice concerns by providing fair treatment and meaningful involvement 
with Environment Justice groups in developing this proposed action and 
soliciting input for this notice of proposed rulemaking.
    The information supporting this Executive Order review is contained 
in Section VI.D of the preamble for this rule, and all supporting 
documents have been placed in the public docket for this action.

XII. Statutory Authority and Legal Provisions

    Statutory authority for the proposed GHG standards is found in CAA 
section 202(a)(1)-(2), 42 U.S.C. 7521 (a)(1)-(2), which requires EPA to 
establish standards applicable to emissions of air pollutants from new 
motor vehicles and engines which cause or contribute to air pollution 
which may reasonably be anticipated to endanger public health or 
welfare. Statutory authority for this proposed rule overall is found at 
42 U.S.C. 7401-7675.

List of Subjects

40 CFR Part 1036

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Greenhouse 
gases, Incorporation by reference, Labeling, Motor vehicle pollution, 
Reporting and recordkeeping requirements, Warranties.

40 CFR Part 1037

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Incorporation 
by reference, Labeling, Motor vehicle pollution, Reporting and 
recordkeeping requirements, Warranties.

40 CFR Part 1054

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Labeling, Penalties, Reporting and recordkeeping requirements, 
Warranties.

40 CFR Part 1065

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Incorporation by reference, Reporting and 
recordkeeping requirements, Research.

40 CFR Part 1074

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Locomotives, Nonroad engines, Scope of 
preemption.

Michael S. Regan,
Administrator.
    For the reasons set out in the preamble, we are proposing to amend 
title 40, chapter I of the Code of Federal Regulations as set forth 
below.

[[Page 26100]]

PART 1036--CONTROL OF EMISSIONS FROM NEW AND IN-USE HEAVY-DUTY 
HIGHWAY ENGINES

0
1. The authority citation for part 1036 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

0
2. Amend Sec.  1036.101 by revising the introductory text and paragraph 
(a)(1) to read as follows:

Sec.  1036.101  Overview of exhaust emission standards.

    This part contains standards and other regulations applicable to 
the emission of the air pollutant defined as the aggregate group of six 
greenhouse gases: carbon dioxide, nitrous oxide, methane, 
hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.
    (a) * * *
    (1) Criteria pollutant standards for NOX, HC, PM, and CO 
apply as described in Sec.  1036.104. These pollutants are sometimes 
described collectively as ``criteria pollutants'' because they are 
either criteria pollutants under the Clean Air Act or precursors to the 
criteria pollutants ozone and PM.
* * * * *

Sec.  1036.104--  [Amended]

0
3. Amend Sec.  1036.104 by removing paragraph (c)(2)(iii).
0
4. Amend Sec.  1036.108 by revising paragraphs (a)(1)(iii) introductory 
text and (e) to read as follows:

Sec.  1036.108  Greenhouse gas emission standards--CO2, 
CH4, and N2O.

* * * * *
    (a) * * *
    (1) * * *
    (iii) The following Phase 2 and Phase 3 CO2 standards 
apply for compression-ignition engines and all Heavy HDE (in g/
hp[middot]hr):
* * * * *
    (e) Applicability for testing. The emission standards in this 
subpart apply as specified in this paragraph (e) to all duty-cycle 
testing (according to the applicable test cycles) of testable 
configurations, including certification, selective enforcement audits, 
and in-use testing. The CO2 FCLs serve as the CO2 
emission standards for the engine family with respect to certification 
and confirmatory testing instead of the standards specified in 
paragraph (a)(1) of this section. The FELs serve as the emission 
standards for the engine family with respect to all other duty-cycle 
testing. See Sec. Sec.  1036.235 and 1036.241 to determine which engine 
configurations within the engine family are subject to testing. Note 
that engine fuel maps and powertrain test results also serve as 
standards as described in Sec. Sec.  1036.535, 1036.540, 1036.545, and 
1036.630.
0
5. Amend Sec.  1036.110 by revising paragraphs (b)(6), (b)(9) 
introductory text, (b)(11)(ii) and (c)(1) to read as follows:

Sec.  1036.110  Diagnostic controls.

* * * * *
    (b) * * *
    (6) The provisions related to verification of in-use compliance in 
13 CCR 1971.1(l)(4) do not apply. The provisions related to 
manufacturer self-testing in 13 CCR 1971.5(c) also do not apply.
* * * * *
    (9) Design compression-ignition engines to make the following 
additional data-stream signals available on demand with a generic scan 
tool according to 13 CCR 1971.1(h)(4.2), if the engine is so equipped 
with the relevant components and OBD monitoring is required for those 
components:
* * * * *
    (11) * * *
    (ii) Send us results from any testing you performed for certifying 
engine families (including equivalent engine families) with the 
California Air Resources Board, including the results of any testing 
performed under 13 CCR 1971.1(l) for verification of in-use compliance 
and 13 CCR 1971.5(c) for manufacturer self-testing within the deadlines 
set out in 13 CCR 1971.1 and 1971.5.
* * * * *
    (c) * * *
    (1) For inducements specified in Sec.  1036.111 and any other AECD 
that derates engine output related to SCR or DPF systems, indicate the 
fault code for the detected problem, a description of the fault code, 
and the current speed restriction. For inducement faults under Sec.  
1036.111, identify whether the fault condition is for DEF level, DEF 
quality, or tampering; for other faults, identify whether the fault 
condition is related to SCR or DPF systems. If there are additional 
derate stages, also indicate the next speed restriction and the time 
remaining until starting the next restriction. If the derate involves 
something other than restricting vehicle speed, such as a torque 
derate, adjust the information to correctly identify any current and 
pending restrictions.
* * * * *
0
6. Amend Sec.  1036.111 by revising paragraphs (a)(2), (b) introductory 
text, (d), and (e) to read as follows:

Sec.  1036.111  Inducements related to SCR.

* * * * *
    (a) * * *
    (2) The provisions of this section apply differently based on an 
individual vehicle's speed history. A vehicle's speed category is based 
on the OBD system's recorded value for average speed for the preceding 
30 hours of non-idle engine operation. The vehicle speed category 
applies at the point that the engine first detects an inducement 
triggering condition identified under paragraph (b) of this section and 
continues to apply until the inducement triggering condition is fully 
resolved as specified in paragraph (e) of this section. Non-idle engine 
operation includes all operating conditions except those that qualify 
as idle based on OBD system controls as specified in 13 CCR 
1971.1(h)(5.4.10). Apply speed derates based on the following 
categories:

   Table 1 to Paragraph (a)(2) of Sec.   1036.111--Vehicle Categories
------------------------------------------------------------------------
           Vehicle category \a\                 Average speed (mi/hr)
------------------------------------------------------------------------
Low-speed.................................  speed <15.
Medium-speed..............................  15< speed <25.
High-speed................................  speed >25.
------------------------------------------------------------------------
\a\ A vehicle is presumed to be a high-speed vehicle if it has not yet
  logged 30 hours of non-idle operation.

* * * * *
    (b) Inducement triggering conditions. Create derate strategies that 
monitor for and trigger an inducement based on the following 
conditions:
* * * * *
    (d) Derate schedule. Engines must follow the derate schedule 
described in this paragraph (d) if the engine detects an inducement 
triggering condition identified in paragraph (b) of this section. The 
derate takes the form of a maximum drive speed for the vehicle. This 
maximum drive speed decreases over time based on hours of non-idle 
engine operation without regard to engine starting.
    (1) Apply speed-limiting derates according to the following 
schedule:

[[Page 26101]]

  Table 2 to Paragraph (d)(1) of Sec.   1036.111--Derate Schedule for Detected Inducement Triggering Conditions
                                                       \a\
----------------------------------------------------------------------------------------------------------------
               High-speed vehicles                     Medium-speed vehicles            Low-speed vehicles
----------------------------------------------------------------------------------------------------------------
                                                   Hours of non-                   Hours of non-
    Hours of non-idle engine       Maximum speed    idle engine    Maximum speed    idle engine    Maximum speed
            operation                 (mi/hr)        operation        (mi/hr)        operation        (mi/hr)
----------------------------------------------------------------------------------------------------------------
0...............................              65               0              55               0              45
6...............................              60               6              50               5              40
12..............................              55              12              45              10              35
20..............................              50              45              40              30              25
86..............................              45              70              35  ..............  ..............
119.............................              40              90              25  ..............  ..............
144.............................              35  ..............  ..............  ..............  ..............
164.............................              25  ..............  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
 \a\Hours start counting when the engine detects an inducement triggering condition specified in paragraph (b)
  of this section. For DEF supply, you may program the engine to reset the timer to three hours when the engine
  detects an empty DEF tank.

    (2) You may design and produce engines that will be installed in 
motorcoaches with an alternative derate schedule that starts with a 65 
mi/hr derate when an inducement triggering condition is first detected, 
steps down to 50 mi/hr after 80 hours, and concludes with a final 
derate speed of 25 mi/hr after 180 hours of non-idle operation.
    (e) Deactivating derates. Program the engine to deactivate derates 
as follows:
    (1) Evaluate whether the detected inducement triggering condition 
continues to apply. Deactivate derates if the engine confirms that the 
detected inducement triggering condition is resolved.
    (2) Allow a generic scan tool to deactivate inducement triggering 
codes while the vehicle is not in motion.
    (3) Treat any detected inducement triggering condition that recurs 
within 40 hours of engine operation as the same detected inducement 
triggering condition, which would restart the derate at the same point 
in the derate schedule that the system last deactivated the derate.
0
7. Amend Sec.  1036.120 by revising paragraph (c) to read as follows:

Sec.  1036.120  Emission-related warranty requirements.

* * * * *
    (c) Components covered. The emission-related warranty covers all 
components listed in 40 CFR part 1068, appendix A, and components from 
any other system you develop to control emissions. Note that this 
includes hybrid system components when a manufacturer's certified 
configuration includes hybrid system components. The emission-related 
warranty covers any components, regardless of the company that produced 
them, that are the original components or the same design as components 
from the certified configuration.
* * * * *
0
8. Amend Sec.  1036.125 by revising paragraph (h)(8)(iii) to read as 
follows:

Sec.  1036.125  Maintenance instructions and allowable maintenance.

* * * * *
    (h) * * *
    (8) * * *
    (iii) A description of the three types of SCR-related derates (DEF 
level, DEF quality and tampering) and that further information on the 
inducement cause (e.g., trouble codes) is available using the OBD 
system.
* * * * *
0
9. Amend Sec.  1036.150 by:
0
a. Revising paragraph (d);
0
b. Adding paragraph (f);
0
c. Revising paragraphs (j), and (k); and
0
d. Adding paragraph (aa).

    The additions and revisions read as follows:

Sec.  1036.150  Interim provisions.

* * * * *
    (d) Small manufacturers. The greenhouse gas standards of this part 
apply on a delayed schedule for manufacturers meeting the small 
business criteria specified in 13 CFR 121.201. Apply the small business 
criteria for NAICS code 336310 for engine manufacturers with respect to 
gasoline-fueled engines and 333618 for engine manufacturers with 
respect to other engines; the employee limits apply to the total number 
employees together for affiliated companies. Qualifying small 
manufacturers are not subject to the greenhouse gas emission standards 
in Sec.  1036.108 for engines with a date of manufacture on or after 
November 14, 2011 but before January 1, 2022. In addition, qualifying 
small manufacturers producing engines that run on any fuel other than 
gasoline, E85, or diesel fuel may delay complying with every later 
greenhouse gas standard under this part by one model year; however, 
small manufacturers may generate emission credits only by certifying 
all their engine families within a given averaging set to standards 
that apply for the current model year. Note that engines not yet 
subject to standards must nevertheless supply fuel maps to vehicle 
manufacturers as described in paragraph (n) of this section. Note also 
that engines produced by small manufacturers are subject to criteria 
pollutant standards.
    162 HEI Panel on the Health Effects of Long-Term Exposure to 
Traffic-Related Air Pollution (2022) Systematic review and meta-
analysis of selected health effects of long-term exposure to traffic-
related air pollution. Health Effects Institute Special Report 23. 
[Online at https://www.healtheffects.org/publication/systematic-review-and-meta-analysis-selected-health-effects-long-term-exposure-traffic] 
This more recent review focused on health outcomes related to birth 
effects, respiratory effects, cardiometabolic effects, and mortality.
* * * * *
    (f) Testing exemption for qualifying engines. Tailpipe 
CO2, CH4, HC, and CO emissions from engines 
fueled with neat hydrogen are deemed to be zero. No fuel mapping, and 
no testing for CO2, CH4, HC, or CO is required 
under this part for these engines.
* * * * *
    (j) Alternate standards under 40 CFR part 86. This paragraph (j) 
describes alternate emission standards that apply for model year 2023 
and earlier loose engines certified under 40 CFR 86.1819-14(k)(8). The 
standards of Sec.  1036.108 do not apply for these engines. The 
standards in this paragraph (j) apply for emissions measured with the 
engine installed in a complete vehicle

[[Page 26102]]

consistent with the provisions of 40 CFR 86.1819-14(k)(8)(vi). The only 
requirements of this part that apply to these engines are those in this 
paragraph (j), Sec. Sec.  1036.115 through 1036.135, 1036.535, and 
1036.540.
    (k) Limited production volume allowance under ABT. You may produce 
a limited number of Heavy HDE that continue to meet the standards that 
applied under 40 CFR 86.007-11 in model years 2027 through 2029. The 
maximum number of engines you may produce under this limited production 
allowance is 5 percent of the annual average of your actual production 
volume of Heavy HDE in model years 2023-2025 for calculating emission 
credits under Sec.  1036.705. Engine certification under this paragraph 
(k) is subject to the following conditions and requirements:
* * * * *
    (aa) Correcting credit calculations. If you notify us by October 1, 
2024 that errors mistakenly decreased your balance of emission credits 
for 2020 or any earlier model years, you may correct the errors and 
recalculate the balance of emission credits after applying a 10 percent 
discount to the credit correction.
0
10. Amend Sec.  1036.205 by revising paragraph (v) to read as follows:

Sec.  1036.205  Requirements for an application for certification.

* * * * *
    (v) Include good-faith estimates of U.S.-directed production 
volumes. Include a justification for the estimated production volumes 
if they are substantially different than actual production volumes in 
earlier years for similar models.
* * * * *
0
11. Amend Sec.  1036.240 by revising paragraph (c)(3) to read as 
follows:

Sec.  1036.240  Demonstrating compliance with criteria pollutant 
emission standards.

* * * * *
    (c) * * *
    (3) Sawtooth and other nonlinear deterioration patterns. The 
deterioration factors described in paragraphs (c)(1) and (2) of this 
section assume that the highest useful life emissions occur either at 
the end of useful life or at the low-hour test point. The provisions of 
this paragraph (c)(3) apply where good engineering judgment indicates 
that the highest useful life emissions will occur between these two 
points. For example, emissions may increase with service accumulation 
until a certain maintenance step is performed, then return to the low-
hour emission levels and begin increasing again. Such a pattern may 
occur with battery-based hybrid engines or hybrid powertrains. Base 
deterioration factors for engines with such emission patterns on the 
difference between (or ratio of) the point at which the highest 
emissions occur and the low-hour test point. Note that this applies for 
maintenance-related deterioration only where we allow such critical 
emission-related maintenance.
* * * * *
0
12. Amend Sec.  1036.241 by revising paragraph (c)(3) to read as 
follows:

Sec.  1036.241  Demonstrating compliance with greenhouse gas emission 
standards.

* * * * *
    (c) * * *
    (3) Sawtooth and other nonlinear deterioration patterns. The 
deterioration factors described in paragraphs (c)(1) and (2) of this 
section assume that the highest useful life emissions occur either at 
the end of useful life or at the low-hour test point. The provisions of 
this paragraph (c)(3) apply where good engineering judgment indicates 
that the highest useful life emissions will occur between these two 
points. For example, emissions may increase with service accumulation 
until a certain maintenance step is performed, then return to the low-
hour emission levels and begin increasing again. Such a pattern may 
occur with battery-based hybrid engines or hybrid powertrains. Base 
deterioration factors for engines with such emission patterns on the 
difference between (or ratio of) the point at which the highest 
emissions occur and the low-hour test point. Note that this applies for 
maintenance-related deterioration only where we allow such critical 
emission-related maintenance.
* * * * *
0
13. Amend Sec.  1036.245 by revising paragraphs (c)(3) introductory 
text and (c)(3)(ii) introductory text to read as follows:

Sec.  1036.245  Deterioration factors for exhaust emission standards.

* * * * *
    (c) * * *
    (3) Perform service accumulation in the laboratory by operating the 
engine or hybrid powertrain repeatedly over one of the following test 
sequences, or a different test sequence that we approve in advance:
* * * * *
    (ii) Duty-cycle sequence 2 is based on operating over the LLC and 
the vehicle-based duty cycles from 40 CFR part 1037. Select the vehicle 
subcategory and vehicle configuration from Sec.  1036.540 or Sec.  
1036.545 with the highest reference cycle work for each vehicle-based 
duty cycle. Operate the engine as follows for duty-cycle sequence 2:
* * * * *
0
14. Amend Sec.  1036.250 by revising paragraph (a) to read as follows:

Sec.  1036.250  Reporting and recordkeeping for certification.

    (a) By September 30 following the end of the model year, send the 
Designated Compliance Officer a report including the total U.S.-
directed production volume of engines you produced in each engine 
family during the model year (based on information available at the 
time of the report). Report the production by serial number and engine 
configuration. You may combine this report with reports required under 
subpart H of this part. We may waive the reporting requirements of this 
paragraph (a) for small manufacturers.
* * * * *
0
15. Amend Sec.  1036.301 by revising paragraph (c) to read as follows:

Sec.  1036.301  Measurements related to GEM inputs in a selective 
enforcement audit.

* * * * *
    (c) If your certification includes powertrain testing as specified 
in 40 CFR 1036.630, these selective enforcement audit provisions apply 
with respect to powertrain test results as specified in 40 CFR part 
1037, subpart D, and Sec.  1036.545. We may allow manufacturers to 
instead perform the engine-based testing to simulate the powertrain 
test as specified in 40 CFR 1037.551.
* * * * *
0
16. Amend Sec.  1036.405 by revising paragraphs (a)(1), (a)(3) and (d) 
to read as follows:

Sec.  1036.405  Overview of the manufacturer-run field-testing program.

    (a) * * *
    (1) We may select up to 25 percent of your engine families in any 
calendar year, calculated by dividing the number of engine families you 
certified in the model year corresponding to the calendar year by four 
and rounding to the nearest whole number. We will consider only engine 
families with annual U.S.-directed production volumes above 1,500 units 
in calculating the number of engine families subject to testing each 
calendar year under the annual 25 percent engine family limit. If you 
have only three or fewer families that each exceed an annual U.S.-
directed production volume of 1,500 units, we may select one engine 
family per calendar year for testing.
* * * * *
    (3) We will not select engine families for testing under this 
subpart from a

[[Page 26103]]

given model year if your total U.S.-directed production volume was less 
than 100 engines.
* * * * *
    (d) You must complete all the required testing and reporting under 
this subpart (for all ten test engines, if applicable), within 18 
months after we direct you to test a particular engine family. We will 
typically select engine families for testing and notify you in writing 
by June 30 of the applicable calendar year. If you request it, we may 
allow additional time to send us this information.
* * * * *
0
17. Amend Sec.  1036.420 by revising paragraph (a) to read as follows:

Sec.  1036.420  Pass criteria for individual engines.

* * * * *
    (a) Determine the emission standard for each regulated pollutant 
for each bin by adding the following accuracy margins for PEMS to the 
off-cycle standards in Sec.  1036.104(a)(3):

                Table 1 to Paragraph (a) of Sec.   1036.420--Accuracy Margins for In-Use Testing
----------------------------------------------------------------------------------------------------------------
                                          NOX                 HC                  PM                  CO
----------------------------------------------------------------------------------------------------------------
Bin 1...........................  0.4 g/hr..........
Bin 2...........................  5 mg/hp[middot]hr.  10 mg/hp[middot]hr  6 mg/hp[middot]hr.  0.25 g/
                                                                                               hp[middot]hr.
----------------------------------------------------------------------------------------------------------------

* * * * *
0
18. Amend Sec.  1036.501 by adding paragraph (g) to read as follows:

Sec.  1036.501  General testing provisions.

* * * * *
    (g) For testing engines that use regenerative braking through the 
crankshaft to only power an electric heater for aftertreatment devices, 
you may use the fuel mapping procedure in Sec.  1036.505(b)(1) or (2) 
and the nonhybrid engine testing procedures in Sec. Sec.  1036.510, 
1036.512, and 1036.514, as long as the recovered energy is less than 10 
percent of the total positive work for each applicable transient duty 
cycle. Otherwise, use powertrain testing procedures specified for 
hybrid engines or hybrid powertrains to create fuel maps and measure 
emissions. For engines that power an electric heater with a battery, 
you must meet the requirements related to charge-sustaining operation 
as described in 40 CFR 1066.501.
0
19. Amend Sec.  1036.505 by revising paragraphs (a), (b) introductory 
text, and (b)(3) and (4) to read as follows:

Sec.  1036.505  Engine data and information to support vehicle 
certification.

* * * * *
    (a) Identify engine make, model, fuel type, combustion type, engine 
family name, calibration identification, and engine displacement. Also 
identify whether the engines meet CO2 standards for 
tractors, vocational vehicles, or both. When certifying vehicles with 
GEM, for any fuel type not identified in Table 1 of Sec.  1036.550, 
select fuel type as diesel fuel for engines subject to compression-
ignition standards, and select fuel type as gasoline for engines 
subject to spark-ignition standards.
    (b) This paragraph (b) describes four different methods to generate 
engine fuel maps. For engines without hybrid components and for mild 
hybrid engines where you do not include hybrid components in the test, 
generate fuel maps using either paragraph (b)(1) or (2) of this 
section. For other hybrid engines, generate fuel maps using paragraph 
(b)(3) of this section. For hybrid powertrains and nonhybrid 
powertrains and for vehicles where the transmission is not automatic, 
automated manual, manual, or dual-clutch, generate fuel maps using 
paragraph (b)(4) of this section.
* * * * *
    (3) Determine fuel consumption at idle as described in Sec.  
1036.535(c) and (d) and determine cycle-average engine fuel maps as 
described in Sec.  1036.545, including cycle-average engine fuel maps 
for highway cruise cycles. Set up the test to apply accessory load for 
all operation by primary intended service class as described in the 
following table:

     Table 1 to Paragraph (b)(3) of Sec.   1036.505--Accessory Load
------------------------------------------------------------------------
                                                               Power
                                                           representing
             Primary intended service class               accessory load
                                                               (kW)
------------------------------------------------------------------------
Light HDV...............................................             1.5
Medium HDV..............................................             2.5
Heavy HDV...............................................             3.5
------------------------------------------------------------------------

    (4) Generate powertrain fuel maps as described in Sec.  1036.545 
instead of fuel mapping under Sec.  1036.535 or Sec.  1036.540. Note 
that the option in Sec.  1036.545(b)(2) is allowed only for hybrid 
engine testing. Disable stop-start systems and automatic engine 
shutdown systems when conducting powertrain fuel map testing using 
Sec.  1036.545.
* * * * *
0
20. Amend Sec.  1036.510 by:
0
a. Revising paragraphs (b)(2) introductory text, (b)(2)(vii), and 
(b)(2)(viii);
0
b. Removing paragraph (b)(2)(ix);
0
c. Revising paragraphs (c)(2)(i) introductory text, (d) introductory 
text, and (d)(1) and (2)(ii);
0
d. Removing the period in the heading in Figure 1 to paragraph (d)(4); 
and
0
e. Revising paragraphs (e), (f), and (g).

    The revisions read as follows:

Sec.  1036.510  Supplemental Emission Test.

* * * * *
    (b) * * *
    (2) Test hybrid engines and hybrid powertrains as described in 
Sec.  1036.545, except as specified in this paragraph (b)(2). Do not 
compensate the duty cycle for the distance driven as described in Sec.  
1036.545(g)(4). For hybrid engines, select the transmission from Table 
1 of Sec.  1036.540, substituting ``engine'' for ``vehicle'' and 
``highway cruise cycle'' for ``SET''. Disregard duty cycles in Sec.  
1036.545(j). For cycles that begin with idle, leave the transmission in 
neutral or park for the full initial idle segment. Place the 
transmission into drive no earlier than 5 seconds before the first 
nonzero vehicle speed setpoint. For SET testing only, place the 
transmission into park or neutral when the cycle reaches the final idle 
segment. Use the following vehicle parameters instead of those in Sec.  
1036.545 to define the vehicle model in Sec.  1036.545(a)(3):
* * * * *
    (vii) Select a combination of drive axle ratio, ka, and a tire 
radius, r, that represents the worst-case combination of final gear 
ratio, drive axle ratio, and tire size for CO2 expected for 
vehicles in which the hybrid engine or hybrid powertrain will be 
installed. This is typically the highest axle ratio and smallest tire 
radius. In selecting a drive axle ratio and tire radius, if 
representative, ensure that the maximum vehicle speed is no less than 
60 mi/hr. Manufacturers may request preliminary approval for selected 
drive axle ratio and tire radius consistent with the provisions of 
Sec.  1036.210. If the hybrid engine or hybrid powertrain is used 
exclusively in vehicles which are not capable of reaching 60 mi/hr, 
follow the provisions of 40 CFR 1066.425(b)(5).

[[Page 26104]]

Note for hybrid engines the final gear ratio can change depending on 
the duty-cycle, which will change the selection of the drive axle ratio 
and tire size. For example, Sec.  1036.520 prescribes a different top 
gear ratio than paragraph (b)(2) of this section.
    (viii) If you are certifying a hybrid engine, use a default 
transmission efficiency of 0.95 and create the vehicle model along with 
its default transmission shift strategy as described in Sec.  
1036.545(a)(3)(ii). Use the transmission parameters defined in Table 1 
of Sec.  1036.540 to determine transmission type and gear ratio. For 
Light HDV and Medium HDV, use the Light HDV and Medium HDV parameters 
for FTP, LLC, and SET duty cycles. For Tractors and Heavy HDVs, use the 
Tractor and Heavy HDV transient cycle parameters for the FTP and LLC 
duty cycles and the Tractor and Heavy HDV highway cruise cycle 
parameters for the SET duty cycle.
    (c) * * *
    (2) * * *
    (i) Determine road grade at each point based on the continuous 
rated power of the hybrid powertrain, Pcontrated, in kW 
determined in Sec.  1036.520, the vehicle speed (A, B, or C) in mi/hr 
for a given SET mode, vref[speed], and the specified road-
grade coefficients using the following equation:
* * * * *
    (d) Determine criteria pollutant emissions for plug-in hybrid 
engines and plug-in hybrid powertrains as follows:
    (1) Precondition the engine or powertrain in charge-sustaining 
mode. Perform testing as described in this section for hybrid engines 
or hybrid powertrains in charge-sustaining mode.
    (2) * * *
    (ii) Operate the engine or powertrain continuously over repeated 
SET duty cycles until you reach the end-of-test criterion defined in 40 
CFR 1066.501(a)(3).
* * * * *
    (e) Determine greenhouse gas pollutant emissions for plug-in hybrid 
engines and plug-in hybrid powertrains using the emissions results for 
all the SET test intervals for both charge-depleting and charge-
sustaining operation from paragraph (d)(2) of this section. Calculate 
the utility factor-weighted composite mass of emissions from the 
charge-depleting and charge-sustaining test results, 
eUF[emission]comp, using the following equation:
[GRAPHIC] [TIFF OMITTED] TP27AP23.032

Where:

i = an indexing variable that represents one test interval.
N = total number of charge-depleting test intervals.
e[emission][int]CDi = total mass of emissions in the 
charge-depleting portion of the test for each test interval, i, 
starting from i = 1, including the test interval(s) from the 
transition phase.
UFDCDi = utility factor fraction at distance 
DCDi from Eq. 1036.510-11, as determined by interpolating 
the approved utility factor curve for each test interval, i, 
starting from i = 1. Let UFDCD0 = 0.
j = an indexing variable that represents one test interval.
M = total number of charge-sustaining test intervals.
e[emission][int]CSj = total mass of emissions in the 
charge-sustaining portion of the test for each test interval, j, 
starting from j = 1.
UFRCD = utility factor fraction at the full charge-
depleting distance, RCD, as determined by interpolating the approved 
utility factor curve. RCD is the cumulative distance driven over N 
charge-depleting test intervals.
[GRAPHIC] [TIFF OMITTED] TP27AP23.033

Where:

k = an indexing variable that represents one recorded velocity 
value.
Q = total number of measurements over the test interval.
v = vehicle velocity at each time step, k, starting from k = 1. For 
tests completed under this section, v is the vehicle velocity from 
the vehicle model in Sec.  1036.545. Note that this should include 
charge-depleting test intervals that start when the engine is not 
yet operating.
[Delta]t = 1/frecord
frecord = the record rate.
Example using the charge-depletion test in Figure 1 of Sec.  
1036.510 for the SET for CO2 emission determination:

Q = 24000
v1 = 0 mi/hr
v2 = 0.8 mi/hr
v3 = 1.1 mi/hr
frecord = 10 Hz
[Delta]t = 1/10 Hz = 0.1 s
[GRAPHIC] [TIFF OMITTED] TP27AP23.034

DCD1 = 30.1 mi
DCD2 = 30.0 mi
DCD3 = 30.1 mi
DCD4 = 30.2 mi
DCD5 = 30.1 mi
N = 5
UFDCD1 = 0.11
UFDCD2 = 0.23
UFDCD3 = 0.34
UFDCD4 = 0.45
UFDCD5 = 0.53
eCO2SETCD1 = 0 g/hp[middot]hr
eCO2SETCD2 = 0 g/hp[middot]hr
eCO2SETCD3 = 0 g/hp[middot]hr
eCO2SETCD4 = 0 g/hp[middot]hr
eCO2SETCD5 = 174.4 g/hp[middot]hr
M = 1
eCO2SETCS = 428.1 g/hp[middot]hr
UFRCD = 0.53

[[Page 26105]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.035

eUFCO2comp = 215.2 g/hp[middot]hr

    (f) Calculate and evaluate cycle statistics as specified in 40 CFR 
1065.514 for nonhybrid engines and Sec.  1036.545 for hybrid engines 
and hybrid powertrains.
    (g) Calculate the total emission mass of each constituent, m, over 
the test interval as described in 40 CFR 1065.650. For nonhybrid 
engines, calculate the total work, W, over the test interval as 
described in 40 CFR 1065.650(d). For hybrid engines and hybrid 
powertrains, calculate total positive work over the test interval using 
system power, Psys. Determine Psys, using Sec.  1036.520(f).

0
21. Amend Sec.  1036.512 by:
0
a. Revising paragraphs (b)(2)(v), (c), (d) introductory text, (d)(1) 
and (2)(ii);
0
b. Removing the period in the heading in Figure 1 to paragraph (d)(4); 
and
0
c. Revising paragraph (f).

    The revisions read as follows:

Sec.  1036.512  Federal Test Procedure.

* * * * *
    (b) * * *
    (2) * * *
    (v) For plug-in hybrid engines and plug-in hybrid powertrains, test 
over the FTP in both charge-sustaining and charge-depleting operation 
for both criteria and greenhouse gas pollutant determination.
    (c) The FTP duty cycle consists of an initial run through the test 
interval from a cold start as described in 40 CFR part 1065, subpart F, 
followed by a (20 1) minute hot soak with no engine 
operation, and then a final hot start run through the same transient 
test interval. Engine starting is part of both the cold-start and hot-
start test intervals. Calculate the total emission mass of each 
constituent, m, over each test interval as described in 40 CFR 
1065.650. For nonhybrid engines, calculate the total work, W, over the 
test interval as described in 40 CFR 1065.650(d). For hybrid engines 
and hybrid powertrains, calculate total positive work over each test 
interval using system power, Psys. Determine Psys 
using Sec.  1036.520(f). For powertrains with automatic transmissions, 
account for and include the work produced by the engine from the CITT 
load. Calculate the official transient emission result from the cold-
start and hot-start test intervals using the following equation:
[GRAPHIC] [TIFF OMITTED] TP27AP23.036

    (d) Determine criteria pollutant emissions for plug-in hybrid 
engines and plug-in hybrid powertrains as follows:
    (1) Precondition the engine or powertrain in charge-sustaining 
mode. Perform testing as described in this section for hybrid engines 
or hybrid powertrains in charge-sustaining mode.
    (2) * * *
    (ii) Operate the engine or powertrain over one FTP duty cycle 
followed by alternating repeats of a 20-minute soak and a hot start 
test interval until you reach the end-of-test criteria defined in 40 
CFR 1066.501.
* * * * *
    (f) Calculate and evaluate cycle statistics as specified in 40 CFR 
1065.514 for nonhybrid engines and Sec.  1036.545 for hybrid engines 
and hybrid powertrains.
0
22. Revise Sec.  1036.514 to read as follows:

Sec.  1036.514  Low Load Cycle.

    (a) Measure emissions using the transient Low Load Cycle (LLC) as 
described in this section to determine whether engines meet the LLC 
emission standards in Sec.  1036.104.
    (b) The LLC duty cycle is described in paragraph (d) of appendix B 
of this part. The following procedures apply differently for testing 
nonhybrid engines, hybrid engines, and hybrid powertrains:
    (1) For nonhybrid engine testing, use the following procedures:
    (i) Use the normalized speed and torque values for engine testing 
in the LLC duty cycle described in paragraph (d) of appendix B of this 
part.
    (ii) Denormalize speed and torque values as described in 40 CFR 
1065.512 and 1065.610 with the following additional requirements:
    (A) The accessory load at idle described in paragraph (c) of this 
section must be applied using the optional declared idle power in 40 
CFR 1065.510(f)(6). Use of the optional declared idle torque in 40 CFR 
1065.510(f)(5)(iii) is not allowed and must be zero.
    (B) Replace paragraph 40 CFR 1065.610(d)(3)(vi) with the following:
    (1) For all other idle segments less than or equal to 200 s in 
length, set the reference speed and torque values to the warm-idle-in-
drive values. This is to represent the transmission operating in drive.
    (2) For idle segments more than 200 s in length, set the reference 
speed and torque values to the warm-idle-in-drive values for the first 
three seconds and the last three seconds of the idle segment. For all 
other points in the idle segment set the reference speed and torque 
values to the warm-idle-in-neutral values. This is to represent the 
transmission being manually shifted from drive to neutral near the 
beginning of the idle segment and back to drive near the end of the 
idle segment.
    (iii) Calculate and evaluate cycle statistics as described in 40 
CFR 1065.514. For testing spark-ignition gaseous-fueled engines with 
fuel delivery at a single-point in the intake manifold, you may apply 
the statistical criteria in Table 1 in this section to validate the 
LLC.

[[Page 26106]]

Table 1 to Paragraph (b)(1)(iii) of Sec.   1036.514--Statistical Criteria for Validating Duty Cycles for Gaseous-
                                        Fueled Spark-Ignition Engines \a\
----------------------------------------------------------------------------------------------------------------
              Parameter                         Speed                    Torque                   Power
----------------------------------------------------------------------------------------------------------------
Slope, a1............................  .......................  0.800 <=a1 <=1.030.....  0.800 <=a1 <=1.030.
Absolute value of intercept,
 [verbar]a0[verbar].
Standard error of the estimate, SEE..  .......................  .......................  <=15% of maximum mapped
                                                                                          power.
Coefficient of determination, r2.....  .......................  >=0.650................  >=0.650.
----------------------------------------------------------------------------------------------------------------
\a\ Statistical criteria apply as specified in 40 CFR 1065.514 unless otherwise specified.

    (2) Test hybrid engines and hybrid powertrains as described in 
Sec.  1036.510(b)(2), with the following exceptions:
    (i) Replace Pcontrated with Prated, which is 
the peak rated power determined in Sec.  1036.520.
    (ii) Keep the transmission in drive for all idle segments 200 
seconds or less. For idle segments more than 200 seconds, leave the 
transmission in drive for the first 3 seconds of the idle segment, 
place the transmission in park or neutral immediately after the 3rd 
second in the idle segment, and shift the transmission into drive again 
3 seconds before the end of the idle segment which is defined by the 
first nonzero vehicle speed setpoint.
    (iii) For hybrid engines, select the transmission from Table 1 of 
Sec.  1036.540, substituting ``engine'' for ``vehicle''.
    (iv) For hybrid engines, you may request to change the GEM-
generated engine reference torque at idle to better represent curb idle 
transmission torque (CITT).
    (v) For plug-in hybrid engines and plug-in hybrid powertrains, 
determine criteria pollutant and greenhouse gas emissions as described 
in Sec.  1036.510(d) and (e), replacing ``SET'' with ``LLC''.
    (vi) Calculate and evaluate cycle statistics as specified in Sec.  
1036.545.
    (c) Apply a vehicle accessory load for each idle point in the cycle 
based on a constant power. Use the power values in Table 2 to paragraph 
(c)(3) of this section based on primary intended service class. For 
nonhybrid engine testing, this is in addition to any applicable CITT. 
Additional provisions related to vehicle accessory load apply for the 
following special cases:
    (1) For engines with stop-start technology, account for the loss of 
mechanical work due to the lack of any idle accessory load during 
engine-off conditions by determining the total loss of mechanical work 
from idle accessory load during all engine-off intervals over the 
entire test interval and distributing that work over the engine-on 
intervals of the entire test interval based on a calculated average 
power. You may determine the engine-off time by running practice cycles 
or through engineering analysis.
    (2) Apply vehicle accessory power loads on idle points for hybrid 
powertrain testing where torque is measured at the axle input shaft or 
wheel hubs either as a mechanical or electrical load.
    (3) Table 2 follows:

 Table 2 to Paragraph (c)(3) of Sec.   1036.514--Accessory Load at Idle
------------------------------------------------------------------------
                                                               Power
                                                           representing
             Primary intended service class               accessory load
                                                               (kW)
------------------------------------------------------------------------
Light HDE...............................................             1.5
Medium HDE..............................................             2.5
Heavy HDE...............................................             3.5
------------------------------------------------------------------------

    (d) The test sequence consists of preconditioning the engine by 
running one or two FTPs with each FTP followed by (20 1) 
minutes with no engine operation and a hot start run through the LLC. 
You may start any preconditioning FTP with a hot engine. Perform 
testing as described in 40 CFR 1065.530 for a test interval that 
includes engine starting. Calculate the total emission mass of each 
constituent, m, over the test interval as described in 40 CFR 1065.650. 
For nonhybrid engines, calculate the total work, W, over the test 
interval as described in 40 CFR 1065.650(d). For hybrid engines and 
hybrid powertrains, calculate total positive work over the test 
interval using system power, Psys. Determine Psys using Sec.  
1036.520(f). For powertrains with automatic transmissions, account for 
and include the work produced by the engine from the CITT load.
0
23. Amend Sec.  1036.520 by revising the introductory text, paragraphs 
(b) introductory text, (d)(2) and (3), (h), and (i)(2) to read as 
follows:

Sec.  1036.520  Determining power and vehicle speed values for 
powertrain testing.

    This section describes how to determine the system peak power and 
continuous rated power of hybrid and nonhybrid powertrain systems and 
the vehicle speed for carrying out duty-cycle testing under this part 
and Sec.  1036.545.
* * * * *
    (b) Set up the powertrain test according to Sec.  1036.545, with 
the following exceptions:
* * * * *
    (d) * * *
    (2) Set maximum driver demand for a full load acceleration at 6.0% 
road grade with an initial vehicle speed of 0 mi/hr, continuing for 268 
seconds. You may decrease the road grade in the first 30 seconds or 
increase initial vehicle speed up to 5 mi/hr as needed to mitigate 
clutch slip.
    (3) Linearly ramp the grade from 6.0% down to 0.0% over 300 
seconds. Stop the test after the acceleration is less than 0.02 m/s\2\.
* * * * *
    (h) Determine rated power, Prated, as the maximum measured power 
from the data collected in paragraph (d)(2) of this section where the 
COV determined in paragraph (g) of this section is less than 2%.
    (i) * * *
    (2) For hybrid powertrains, Pcontrated is the maximum measured 
power from the data collected in paragraph (d)(3) of this section where 
the COV determined in paragraph (g) of this section is less than 2%.
* * * * *
0
24. Amend Sec.  1036.525 by revising the introductory text to read as 
follows:

Sec.  1036.525  Clean Idle test.

    Measure emissions using the procedures described in this section to 
determine whether engines and hybrid powertrains meet the clean idle 
emission standards in Sec.  1036.104(b). For plug-in hybrid engines and 
plug-in hybrid powertrains, perform the test with the hybrid function 
disabled.
* * * * *
0
25. Amend Sec.  1036.530 by adding paragraph (j) to read as follows:

Sec.  1036.530  Test procedures for off-cycle testing.

* * * * *

[[Page 26107]]

    (j) Fuel other than carbon-containing. The following procedures 
apply for testing engines using at least one fuel that is not a carbon-
containing fuel:
    (1) Use the following equation to determine 
mCO2,norm,testinterval instead of Eq. 1036.530-2:
[GRAPHIC] [TIFF OMITTED] TP27AP23.037

Where:

Wtestinterval = total positive work over the test 
interval as determined in 40 CFR 1065.650.
Pmax = the highest value of rated power for all the 
configurations included in the engine family.
ttestinterval = duration of the test interval. Note that 
the nominal value is 300 seconds.

Example:

Wtestinterval = 8.95 hp[middot]hr
Pmax = 406.5 hp
ttestinterval = 300.01 s = 0.08 hr
[GRAPHIC] [TIFF OMITTED] TP27AP23.038

mCO2,norm,testinterval = 0.2722
mCO2,norm,testinterval = 27.22%

    (2) Determine off-cycle emissions quantities as follows:
    (i) For engines subject to spark-ignition standards, use the 
following equation instead of Eq. 1036.530-3:
[GRAPHIC] [TIFF OMITTED] TP27AP23.039

Where:

    m[emission] = total emission mass for a given 
pollutant over the test interval as determined in paragraph (d)(2) 
of this section.
    Wtestinterval = total positive work over the test 
interval as determined in 40 CFR 1065.650.
    Example:

mNOx = 1.337 g
Wtestinterval = 38.2 hp[middot]hr
[GRAPHIC] [TIFF OMITTED] TP27AP23.040

eNOx,offcycle = 0.035 g/hp[middot]hr

    (ii) For engines subject to compression-ignition standards, use Eq. 
1036.530-4 to determine the off-cycle emission quantity for bin 1.
    (iii) For engines subject to compression-ignition standards, use 
the following equation instead of Eq. 1036.530-5 to determine the off-
cycle emission quantity for bin 2:
[GRAPHIC] [TIFF OMITTED] TP27AP23.041

Where:

i = an indexing variable that represents one 300 second test 
interval.
N = total number of 300 second test intervals in bin 2.
m[emission],testinterval,i = total emission mass for a 
given pollutant over the test interval i in bin 2 as determined in 
paragraph (d)(2) of this section.
Wtestinterval,i = total positive work over the test 
interval i in bin 2 as determined in 40 CFR 1065.650.
    Example:

N = 15439
mNOx1 = 0.546 g
mNOx2 = 0.549 g
mNOx3 = 0.556 g
Wtestinterval1 = 8.91 hp[middot]hr
Wtestinterval2 = 8.94 hp[middot]hr
Wtestinterval3 = 8.89 hp[middot]hr
[GRAPHIC] [TIFF OMITTED] TP27AP23.042

eNOx,offcycle,bin2 = 0.026 g/hp[middot]hr

0
26. Amend Sec.  1036.535 by revising paragraphs (b)(1)(ii) introductory 
text, (b)(1)(ii)(B), (b)(1)(iii), and (b)(10) to read as follows:

Sec.  1036.535  Determining steady-state engine fuel maps and fuel 
consumption at idle.

* * * * *
    (b) * * *
    (1) * * *
    (ii) Select the following required torque setpoints at each of the 
selected speed setpoints: zero (T = 0), maximum mapped torque, Tmax 
mapped, and eight (or more) equally spaced points between T = 0 and 
Tmax mapped. Select the maximum torque setpoint at each speed to 
conform to the torque map as follows:
* * * * *
    (B) Select Tmax at each speed setpoint as a single 
torque value to represent all

[[Page 26108]]

the default torque setpoints above the value determined in paragraph 
(b)(1)(ii)(A) of this section. All of the other default torque 
setpoints less than Tmax at a given speed setpoint are 
required torque setpoints.
    (iii) You may select any additional speed and torque setpoints 
consistent with good engineering judgment. For example you may need to 
select additional points if the engine's fuel consumption is nonlinear 
across the torque map. Avoid creating a problem with interpolation 
between narrowly spaced speed and torque setpoints near 
Tmax. For each additional speed setpoint, we recommend 
including a torque setpoint of Tmax; however, you may select 
torque setpoints that properly represent in-use operation. Increments 
for torque setpoints between these minimum and maximum values at an 
additional speed setpoint must be no more than one-ninth of 
Tmax,mapped. Note that if the test points were added for the 
child rating, they should still be reported in the parent fuel map. We 
will test with at least as many points as you. If you add test points 
to meet testing requirements for child ratings, include those same test 
points as reported values for the parent fuel map. For our testing, we 
will use the same normalized speed and torque test points you use, and 
we may select additional test points.
* * * * *
    (10) Correct the measured or calculated mean fuel mass flow rate, 
at each of the operating points to account for mass-specific net energy 
content as described in paragraph (e) of this section.
* * * * *
0
27. Amend Sec.  1036.540 by revising paragraph (b) to read as follows:

Sec.  1036.540  Determining cycle-average engine fuel maps.

* * * * *
    (b) General test provisions. The following provisions apply for 
testing under this section:
    (1) Measure NOX emissions for each specified sampling 
period in grams. You may perform these measurements using a 
NOX emission-measurement system that meets the requirements 
of 40 CFR part 1065, subpart J. Include these measured NOX 
values any time you report to us your fuel-consumption values from 
testing under this section. If a system malfunction prevents you from 
measuring NOX emissions during a test under this section but 
the test otherwise gives valid results, you may consider this a valid 
test and omit the NOX emission measurements; however, we may 
require you to repeat the test if we determine that you inappropriately 
voided the test with respect to NOX emission measurement.
    (2) The provisions related to carbon balance error verification in 
Sec.  1036.543 apply for all testing in this section. These procedures 
are optional, but we will perform carbon balance error verification for 
all testing under this section.
    (3) Correct fuel mass to a mass-specific net energy content of a 
reference fuel as described in paragraph (d)(13) of this section.
    (4) This section uses engine parameters and variables that are 
consistent with 40 CFR part 1065.
* * * * *
0
28. Revise Sec.  1036.543 to read as follows:

Sec.  1036.543  Carbon balance error verification.

    The optional carbon balance error verification in 40 CFR 1065.543 
compares independent assessments of the flow of carbon through the 
system (engine plus aftertreatment). This procedure applies for each 
individual interval in Sec. Sec.  1036.535(b), (c), and (d), 1036.540, 
and 1036.545.
0
29. Add Sec.  1036.545 to read as follows:

Sec.  1036.545  Powertrain testing.

    This section describes the procedure to measure fuel consumption 
and create engine fuel maps by testing a powertrain that includes an 
engine coupled with a transmission, drive axle, and hybrid components 
or any assembly with one or more of those hardware elements. Engine 
fuel maps are part of demonstrating compliance with Phase 2 and Phase 3 
vehicle standards under 40 CFR part 1037; the powertrain test procedure 
in this section is one option for generating this fuel-mapping 
information as described in Sec.  1036.505. Additionally, this 
powertrain test procedure is one option for certifying hybrid engines 
and hybrid powertrains to the engine standards in Sec. Sec.  1036.104 
and 1036.108.
    (a) General test provisions. The following provisions apply broadly 
for testing under this section:
    (1) Measure NOX emissions as described in paragraph (k) 
of this section. Include these measured NOX values any time 
you report to us your greenhouse gas emissions or fuel consumption 
values from testing under this section.
    (2) The procedures of 40 CFR part 1065 apply for testing in this 
section except as specified. This section uses engine parameters and 
variables that are consistent with 40 CFR part 1065.
    (3) Powertrain testing depends on models to calculate certain 
parameters. You can use the detailed equations in this section to 
create your own models, or use the GEM HIL model contained within GEM 
Phase 2, Version 4.0 (incorporated by reference, see Sec.  1036.810) to 
simulate vehicle hardware elements as follows:
    (i) Create driveline and vehicle models that calculate the angular 
speed setpoint for the test cell dynamometer, fnref,dyno, 
based on the torque measurement location. Use the detailed equations in 
paragraph (f) of this section, the GEM HIL model's driveline and 
vehicle submodels, or a combination of the equations and the submodels. 
You may use the GEM HIL model's transmission submodel in paragraph (f) 
of this section to simulate a transmission only if testing hybrid 
engines.
    (ii) Create a driver model or use the GEM HIL model's driver 
submodel to simulate a human driver modulating the throttle and brake 
pedals to follow the test cycle as closely as possible.
    (iii) Create a cycle-interpolation model or use the GEM HIL model's 
cycle submodel to interpolate the duty-cycles and feed the driver model 
the duty-cycle reference vehicle speed for each point in the duty-
cycle.
    (4) The powertrain test procedure in this section is designed to 
simulate operation of different vehicle configurations over specific 
duty cycles. See paragraphs (h) and (j) of this section.
    (5) For each test run, record engine speed and torque as defined in 
40 CFR 1065.915(d)(5) with a minimum sampling frequency of 1 Hz. These 
engine speed and torque values represent a duty cycle that can be used 
for separate testing with an engine mounted on an engine dynamometer 
under 40 CFR 1037.551, such as for a selective enforcement audit as 
described in 40 CFR 1037.301.
    (6) For hybrid powertrains with no plug-in capability, correct for 
the net energy change of the energy storage device as described in 40 
CFR 1066.501. For plug-in hybrid electric powertrains, follow 40 CFR 
1066.501 to determine End-of-Test for charge-depleting operation. You 
must get our approval in advance for your utility factor curve; we will 
approve it if you can show that you created it, using good engineering 
judgment, from sufficient in-use data of vehicles in the same 
application as the vehicles in which the plug-in hybrid electric 
powertrain will be installed. You may use methodologies described in 
SAE J2841 to develop the utility factor curve.

[[Page 26109]]

    (7) The provisions related to carbon balance error verification in 
Sec.  1036.543 apply for all testing in this section. These procedures 
are optional if you are only performing direct or indirect fuel-flow 
measurement, but we will perform carbon balance error verification for 
all testing under this section.
    (8) Do not apply accessory loads when conducting a powertrain test 
to generate inputs to GEM if torque is measured at the axle input shaft 
or wheel hubs.
    (9) If you test a powertrain over the duty cycle specified in Sec.  
1036.514, control and apply the electrical accessory loads using one of 
the following systems:
    (i) An alternator with dynamic electrical load control.
    (ii) A load bank connected directly to the powertrain's electrical 
system.
    (10) The following instruments are required with plug-in hybrid 
systems to determine required voltages and currents during testing and 
must be installed on the powertrain to measure these values during 
testing:
    (i) Measure the voltage and current of the battery pack directly 
with a DC wideband power analyzer to determine power. Measure all 
current entering and leaving the battery pack. Do not measure voltage 
upstream of this measurement point. The maximum integration period for 
determining amp-hours is 0.05 seconds. The power analyzer must have an 
accuracy for measuring current and voltage of 1% of point or 0.3% of 
maximum, whichever is greater. The power analyzer must not be 
susceptible to offset errors while measuring current.
    (ii) If safety considerations do not allow for measuring voltage, 
you may determine the voltage directly from the powertrain ECM.
    (11) The following figure provides an overview of the steps 
involved in carrying out testing under this section:

[[Page 26110]]

Figure 1 to Paragraph (a)(11) of Sec.  1036.545--Overview of Powertrain 
Testing
[GRAPHIC] [TIFF OMITTED] TP27AP23.043

[[Page 26111]]

    (b) Test configuration. Select a powertrain for testing as 
described in 40 CFR 1037.235 or Sec.  1036.235 as applicable. Set up 
the engine according to 40 CFR 1065.110 and 40 CFR 1065.405(b). Set the 
engine's idle speed to idle speed defined in 40 CFR 1037.520(h)(1).
    (1) The default test configuration consists of a powertrain with 
all components upstream of the axle. This involves connecting the 
powertrain's output shaft directly to the dynamometer or to a gear box 
with a fixed gear ratio and measuring torque at the axle input shaft. 
You may instead set up the dynamometer to connect at the wheel hubs and 
measure torque at that location. The preceding sentence may apply if 
your powertrain configuration requires it, such as for hybrid 
powertrains or if you want to represent the axle performance with 
powertrain test results. Alternately you may test the powertrain with a 
chassis dynamometer as long as you measure speed and torque at the 
powertrain's output shaft or wheel hubs.
    (2) For testing hybrid engines, connect the engine's crankshaft 
directly to the dynamometer and measure torque at that location.
    (c) Powertrain temperatures during testing. Cool the powertrain 
during testing so temperatures for oil, coolant, block, head, 
transmission, battery, and power electronics are within the 
manufacturer's expected ranges for normal operation. You may use 
electronic control module outputs to comply with this paragraph (c). 
You may use auxiliary coolers and fans.
    (d) Engine break in. Break in the engine according to 40 CFR 
1065.405, the axle assembly according to 40 CFR 1037.560, and the 
transmission according to 40 CFR 1037.565. You may instead break in the 
powertrain as a complete system using the engine break in procedure in 
40 CFR 1065.405.
    (e) Dynamometer setup. Set the dynamometer to operate in speed-
control mode (or torque-control mode for hybrid engine testing at idle, 
including idle portions of transient duty cycles). Record data as 
described in 40 CFR 1065.202. Command and control the dynamometer speed 
at a minimum of 5 Hz, or 10 Hz for testing hybrid engines. Run the 
vehicle model to calculate the dynamometer setpoints at a rate of at 
least 100 Hz. If the dynamometer's command frequency is less than the 
vehicle model dynamometer setpoint frequency, subsample the calculated 
setpoints for commanding the dynamometer setpoints.
    (f) Driveline and vehicle model. Use the GEM HIL model's driveline 
and vehicle submodels or the equations in this paragraph (f) to 
calculate the dynamometer speed setpoint, fnref,dyno, based 
on the torque measurement location. For all powertrains, configure GEM 
with the accessory load set to zero. For hybrid engines, configure GEM 
with the applicable accessory load as specified in Sec. Sec.  1036.505 
and 1036.514. For all powertrains and hybrid engines, configure GEM 
with the tire slip model disabled.
    (1) Driveline model with a transmission in hardware. For testing 
with torque measurement at the axle input shaft or wheel hubs, 
calculate, fnref,dyno, using the GEM HIL model's driveline submodel or 
the following equation:
[GRAPHIC] [TIFF OMITTED] TP27AP23.044

Where:

ka[speed] = drive axle ratio as determined in paragraph 
(h) of this section. Set ka[speed] equal to 1.0 if torque 
is measured at the wheel hubs.
vrefi = simulated vehicle reference speed as calculated 
in paragraph (f)(3) of this section.
r[speed] = tire radius as determined in paragraph (h) of 
this section.

    (2) Driveline model with a simulated transmission. For testing with 
the torque measurement at the engine's crankshaft, 
fnref,dyno is the dynamometer target speed from the GEM HIL 
model's transmission submodel. You may request our approval to change 
the transmission submodel, as long as the changes do not affect the 
gear selection logic. Before testing, initialize the transmission model 
with the engine's measured torque curve and the applicable steady-state 
fuel map from the GEM HIL model. You may request our approval to input 
your own steady-state fuel map. For example, this request for approval 
could include using a fuel map that represents the combined performance 
of the engine and hybrid components. Configure the torque converter to 
simulate neutral idle when using this procedure to generate engine fuel 
maps in Sec.  1036.505 or to perform the Supplemental Emission Test 
(SET) testing under Sec.  1036.510. You may change engine commanded 
torque at idle to better represent CITT for transient testing under 
Sec.  1036.512. You may change the simulated engine inertia to match 
the inertia of the engine under test. We will evaluate your requests 
under this paragraph (f)(2) based on your demonstration that that the 
adjusted testing better represents in-use operation.
    (i) The transmission submodel needs the following model inputs:
    (A) Torque measured at the engine's crankshaft.
    (B) Engine estimated torque determined from the electronic control 
module or by converting the instantaneous operator demand to an 
instantaneous torque in N[middot]m.
    (C) Dynamometer mode when idling (speed-control or torque-control).
    (D) Measured engine speed when idling.
    (E) Transmission output angular speed, fni,transmission, calculated 
as follows:
[GRAPHIC] [TIFF OMITTED] TP27AP23.045

Where:

ka[speed] = drive axle ratio as determined in paragraph 
(h) of this section.
vrefi = simulated vehicle reference speed as calculated 
in paragraph (f)(3) of this section.
r[speed] = tire radius as determined in paragraph (h) of 
this section.

    (ii) The transmission submodel generates the following model 
outputs:
    (A) Dynamometer target speed.
    (B) Dynamometer idle load.
    (C) Transmission engine load limit.
    (D) Engine speed target.
    (3) Vehicle model. Calculate the simulated vehicle reference speed, 
[nu]refi, using the GEM HIL model's vehicle submodel or the 
equations in this paragraph (f)(3):

[[Page 26112]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.046

Where:

i = a time-based counter corresponding to each measurement during 
the sampling period.
Let vref1 = 0; start calculations at i = 2. A 10-minute 
sampling period will generally involve 60,000 measurements.
T = instantaneous measured torque at the axle input, measured at the 
wheel hubs, or simulated by the GEM HIL model's transmission 
submodel. For configurations with multiple torque measurements, for 
example when measuring torque at the wheel hubs, T is the sum of all 
torque measurements.
Effaxle = axle efficiency. Use Effaxle = 0.955 
for T >= 0, and use Effaxle = 1/0.955 for T < 0. Use 
Effaxle = 1.0 if torque is measured at the wheel hubs.
M = vehicle mass for a vehicle class as determined in paragraph (h) 
of this section.
g = gravitational constant = 9.80665 m/s\2\.
Crr = coefficient of rolling resistance for a vehicle 
class as determined in paragraph (h) of this section.
Gi-1 = the percent grade interpolated at distance, 
Di-1, from the duty cycle in appendix D to this part 
corresponding to measurement (i-1).
[GRAPHIC] [TIFF OMITTED] TP27AP23.047

[rho] = air density at reference conditions. Use [rho] = 1.1845 kg/
m\3\.
CdA = drag area for a vehicle class as determined in 
paragraph (h) of this section.
Fbrake,i-1 = instantaneous braking force applied by the 
driver model.
[GRAPHIC] [TIFF OMITTED] TP27AP23.048

[Delta]t = the time interval between measurements. For example, at 
100 Hz, [Delta]t = 0.0100 seconds.
Mrotating = inertial mass of rotating components. Let 
Mrotating = 340 kg for vocational Light HDV or vocational 
Medium HDV. See paragraph (h) of this section for tractors and for 
vocational Heavy HDV.

    (4) Example. The following example illustrates a calculation of 
fnref,dyno using paragraph (f)(1) of this section where 
torque is measured at the axle input shaft. This example is for a 
vocational Light HDV or vocational Medium HDV with 6 speed automatic 
transmission at B speed (Test 4 in Table 1 to paragraph (h)(2)(ii) of 
this section).

[[Page 26113]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.049

    (g) Driver model. Use the GEM HIL model's driver submodel or design 
a driver model to simulate a human driver modulating the throttle and 
brake pedals. In either case, tune the model to follow the test cycle 
as closely as possible meeting the following specifications:
    (1) The driver model must meet the following speed requirements:
    (i) For operation over the highway cruise cycles, the speed 
requirements described in 40 CFR 1066.425(b) and (c).
    (ii) For operation over the transient cycle specified in appendix A 
of this part, the SET as defined Sec.  1036.510, the Federal Test 
Procedure (FTP) as defined in Sec.  1036.512, and the Low Load Cycle 
(LLC) as defined in Sec.  1036.514, the speed requirements described in 
40 CFR 1066.425(b) and (c).
    (iii) The exceptions in 40 CFR 1066.425(b)(4) apply to the highway 
cruise cycles, the transient cycle specified in appendix A of this 
part, SET, FTP, and LLC.
    (iv) If the speeds do not conform to these criteria, the test is 
not valid and must be repeated.
    (2) Send a brake signal when operator demand is zero and vehicle 
speed is greater than the reference vehicle speed from the test cycle. 
Include a delay before changing the brake signal to prevent dithering, 
consistent with good engineering judgment.
    (3) Allow braking only if operator demand is zero.
    (4) Compensate for the distance driven over the duty cycle over the 
course of the test. Use the following equation to perform the 
compensation in real time to determine your time in the cycle:
[GRAPHIC] [TIFF OMITTED] TP27AP23.050

Where:

vvehicle = measured vehicle speed.
vcycle = reference speed from the test cycle. If 
vcycle,i-1 < 1.0 m/s, set 
vcycle,i-1 = vvehiclei-1

    (h) Vehicle configurations to evaluate for generating fuel maps as 
defined in Sec.  1036.505. Configure the driveline and vehicle models 
from paragraph (f) of this section in the test cell to test the 
powertrain. Simulate multiple vehicle configurations that represent the 
range of intended vehicle applications using one of the following 
options:
    (1) For known vehicle configurations, use at least three equally 
spaced axle ratios or tire sizes and three different road loads (nine 
configurations), or at least four equally spaced axle ratios or tire 
sizes and two different road loads (eight configurations). Select axle 
ratios to represent the full range of expected vehicle installations. 
Select axle ratios and tire sizes such that the ratio of

[[Page 26114]]

engine speed to vehicle speed covers the range of ratios of minimum and 
maximum engine speed to vehicle speed when the transmission is in top 
gear for the vehicles in which the powertrain will be installed. Note 
that you do not have to use the same axle ratios and tire sizes for 
each GEM regulatory subcategory. You may determine appropriate 
Crr, CdA, and mass values to cover the range of 
intended vehicle applications or you may use the Crr, 
CdA, and mass values specified in paragraph (h)(2) of this 
section.
    (2) If vehicle configurations are not known, determine the vehicle 
model inputs for a set of vehicle configurations as described in Sec.  
1036.540(c)(3) with the following exceptions:
    (i) In the equations of Sec.  1036.540(c)(3)(i), 
ktopgear is the actual top gear ratio of the powertrain 
instead of the transmission gear ratio in the highest available gear 
given in Table 1 in Sec.  1036.540.
    (ii) Test at least eight different vehicle configurations for 
powertrains that will be installed in Spark-ignition HDE, vocational 
Light HDV, and vocational Medium HDV using the following table instead 
of Table 2 in Sec.  1036.540:
[GRAPHIC] [TIFF OMITTED] TP27AP23.051

    (iii) Select and test vehicle configurations as described in Sec.  
1036.540(c)(3)(iii) for powertrains that will be installed in 
vocational Heavy HDV and tractors using the following tables instead of 
Table 3 and Table 4 in Sec.  1036.540:
[GRAPHIC] [TIFF OMITTED] TP27AP23.052

[[Page 26115]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.053

    (3) For hybrid powertrain systems where the transmission will be 
simulated, use the transmission parameters defined in Sec.  
1036.540(c)(2) to determine transmission type and gear ratio. Use a 
fixed transmission efficiency of 0.95. The GEM HIL transmission model 
uses a transmission parameter file for each test that includes the 
transmission type, gear ratios, lockup gear, torque limit per gear from 
Sec.  1036.540(c)(2), and the values from Sec.  1036.505(b)(4) and (c).
    (i) [Reserved]
    (j) Duty cycles to evaluate. Operate the powertrain over each of 
the duty cycles specified in 40 CFR 1037.510(a)(2), and for each 
applicable vehicle configuration from paragraph (h) of this section. 
Determine cycle-average powertrain fuel maps by testing the powertrain 
using the procedures in Sec.  1036.540(d) with the following 
exceptions:
    (1) Understand ``engine'' to mean ``powertrain''.
    (2) Warm up the powertrain as described in Sec.  1036.520(c)(1).
    (3) Within 90 seconds after concluding the warm-up, start the 
transition to the preconditioning cycle as described in paragraph 
(j)(5) of this section.
    (4) For plug-in hybrid engines, precondition the battery and then 
complete all back-to-back tests for each vehicle configuration 
according to 40 CFR 1066.501 before moving to the next vehicle 
configuration. Figure 2 of this section provides an example of a 
charge-depleting test sequence where there are two test intervals that 
contain engine operation. Figure 2 follows:

Figure 2 to Paragraph (j)(4) of Sec.  1036.545--Generic Duty-Cycle 
Cycle Charge-Depleting Test Sequence
[GRAPHIC] [TIFF OMITTED] TP27AP23.054

    (5) If the preceding duty cycle does not end at 0 mi/hr, transition 
between duty cycles by decelerating at a rate of 2 mi/hr/s at 0% grade 
until the vehicle reaches zero speed. Shut off the powertrain. Prepare 
the powertrain and test cell for the next duty-cycle.

[[Page 26116]]

    (6) Start the next duty-cycle within 60 to 180 seconds after 
shutting off the powertrain.
    (i) To start the next duty-cycle, for hybrid powertrains, key on 
the vehicle and then start the duty-cycle. For conventional powertrains 
key on the vehicle, start the engine, wait for the engine to stabilize 
at idle speed, and then start the duty-cycle.
    (ii) If the duty-cycle does not start at 0 mi/hr, transition to the 
next duty cycle by accelerating at a target rate of 1 mi/hr/s at 0% 
grade. Stabilize for 10 seconds at the initial duty cycle conditions 
and start the duty-cycle.
    (7) Calculate cycle work using GEM or the speed and torque from the 
driveline and vehicle models from paragraph (f) of this section to 
determine the sequence of duty cycles.
    (8) Calculate the mass of fuel consumed for idle duty cycles as 
described in paragraph (n) of this section.
    (k) Measuring NOX emissions. Measure NOX 
emissions for each sampling period in grams. You may perform these 
measurements using a NOX emission-measurement system that 
meets the requirements of 40 CFR part 1065, subpart J. If a system 
malfunction prevents you from measuring NOX emissions during 
a test under this section but the test otherwise gives valid results, 
you may consider this a valid test and omit the NOX emission 
measurements; however, we may require you to repeat the test if we 
determine that you inappropriately voided the test with respect to 
NOX emission measurement.
    (l) [Reserved]
    (m) Measured output speed validation. For each test point, validate 
the measured output speed(s) with the corresponding reference values. 
For test setups where speed is measured at multiple locations, each 
location must meet the requirements in this paragraph (m). If the range 
of reference speed is less than 10 percent of the mean reference speed, 
you need to meet only the standard error of the estimate in Table 1 of 
this section. You may delete points when the vehicle is stopped. If 
your speed measurement is not at the location of fnref, correct your 
measured speed using the constant speed ratio between the two 
locations. Apply cycle-validation criteria for each separate transient 
or highway cruise cycle based on the following parameters:

  Table 4 to Paragraph (m) of Sec.   1036.545--Statistical Criteria for
                         Validating Duty Cycles
------------------------------------------------------------------------
               Parameter \a\                        Speed control
------------------------------------------------------------------------
Slope, a1.................................  0.990 <= a1 <= 1.010.
Absolute value of intercept,                <=2.0% of maximum fnref
 [verbar]a0[verbar].                         speed.
Standard error of the estimate, SEE.......  <=2.0% of maximum fnref
                                             speed.
Coefficient of determination, r2..........  >=0.990.
------------------------------------------------------------------------
\a\ Determine values for specified parameters as described in 40 CFR
  1065.514(e) by comparing measured and reference values for fnref,dyno.

    (n) Fuel consumption at idle. Record measurements using direct and/
or indirect measurement of fuel flow. Determine the fuel-consumption 
rates at idle for the applicable duty cycles described in 40 CFR 
1037.510(a)(2) as follows:
    (1) Direct fuel flow measurement. Determine the corresponding mean 
values for mean idle fuel mass flow rate, mifuelidle, for 
each duty cycle, as applicable. Use of redundant direct fuel-flow 
measurements require our advance approval.
    (2) Indirect fuel flow measurement. Record speed and torque and 
measure emissions and other inputs needed to run the chemical balance 
in 40 CFR 1065.655(c). Determine the corresponding mean values for each 
duty cycle. Use of redundant indirect fuel-flow measurements require 
our advance approval. Measure background concentration as described in 
Sec.  1036.535(b)(4)(ii). We recommend setting the CVS flow rate as low 
as possible to minimize background, but without introducing errors 
related to insufficient mixing or other operational considerations. 
Note that for this testing 40 CFR 1065.140(e) does not apply, including 
the minimum dilution ratio of 2:1 in the primary dilution stage. 
Calculate the idle fuel mass flow rate for each duty cycle, 
mifuelidle, for each set of vehicle settings, as follows:
[GRAPHIC] [TIFF OMITTED] TP27AP23.055

Where:

MC = molar mass of carbon.
wCmeas = carbon mass fraction of fuel (or mixture of test 
fuels) as determined in 40 CFR 1065.655(d), except that you may not 
use the default properties in Table 2 of 40 CFR 1065.655 to 
determine [alpha], [beta], and wC for liquid fuels.
niexh = the mean raw exhaust molar flow rate from which 
you measured emissions according to 40 CFR 1065.655.
xCcombdry = the mean concentration of carbon from fuel 
and any injected fluids in the exhaust per mole of dry exhaust.
xH2Oexhdry = the mean concentration of H2O in 
exhaust per mole of dry exhaust.
miCO2DEF = the mean CO2 mass emission rate 
resulting from diesel exhaust fluid decomposition over the duty 
cycle as determined in Sec.  1036.535(b)(9). If your engine does not 
use diesel exhaust fluid, or if you choose not to perform this 
correction, set equal to 0.
MCO2 = molar mass of carbon dioxide.

    Example:

[[Page 26117]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.056

    (o) Create GEM inputs. Use the results of powertrain testing to 
determine GEM inputs for the different simulated vehicle configurations 
as follows:
    (1) Correct the measured or calculated fuel masses, 
mfuel[cycle], and mean idle fuel mass flow rates, 
mifuelidle, if applicable, for each test result to a mass-
specific net energy content of a reference fuel as described in Sec.  
1036.535(e), replacing mean fuel with mifuelidle with 
mfuel[cycle] where applicable in Eq. 1036.535-4.
    (2) Declare fuel masses, mfuel[cycle] and 
mifuelidle. Determine mfuel[cycle] using the 
calculated fuel mass consumption values described in Sec.  
1036.540(d)(12). In addition, declare mean fuel mass flow rate for each 
applicable idle duty cycle, mifuelidle. These declared 
values may not be lower than any corresponding measured values 
determined in this section. If you use both direct and indirect 
measurement of fuel flow, determine the corresponding declared values 
as described in Sec.  1036.535(g)(2) and (3). These declared values, 
which serve as emission standards, collectively represent the 
powertrain fuel map for certification.
    (3) For engines designed for plug-in hybrid electric vehicles, the 
mass of fuel for each cycle, mfuel[cycle], is the utility 
factor-weighted fuel mass, mfuelUF[cycle]. This is 
determined by calculating mfuel for the full charge-
depleting and charge-sustaining portions of the test and weighting the 
results, using the following equation:
[GRAPHIC] [TIFF OMITTED] TP27AP23.057

Where:

i = an indexing variable that represents one test interval.
N = total number of charge-depleting test intervals.
mfuel[cycle]CDi = total mass of fuel in the charge-
depleting portion of the test for each test interval, i, starting 
from i = 1, including the test interval(s) from the transition 
phase.
UFDCDi = utility factor fraction at distance 
DCDi from Eq. 40 CFR 1037.505-9 as determined by 
interpolating the approved utility factor curve for each test 
interval, i, starting from i = 1.
Let UFDCD0 = 0
j = an indexing variable that represents one test interval.
M = total number of charge-sustaining test intervals.
mfuel[cycle]CSj = total mass of fuel over the charge-
sustaining portion of the test for each test interval, j, starting 
from j = 1.
UFRCD = utility factor fraction at the full charge-
depleting distance, RCD, as determined by interpolating the approved 
utility factor curve. RCD is the cumulative distance driven over N 
charge-depleting test intervals.
[GRAPHIC] [TIFF OMITTED] TP27AP23.058

Where:

k = an indexing variable that represents one recorded velocity 
value.
Q = total number of measurements over the test interval.
v = vehicle velocity at each time step, k, starting from k = 1. For 
tests completed under this section, v is the vehicle velocity as 
determined by Eq. 1036.545-1. Note that this should include charge-
depleting test intervals that start when the engine is not yet 
operating.
[Delta]t = 1/frecord
frecord = the record rate.

    Example for the 55 mi/hr cruise cycle:

Q = 8790
v1 = 55.0 mi/hr
v2 = 55.0 mi/hr
v3 = 55.1 mi/hr
frecord = 10 Hz
[Delta]t = 1/10 Hz = 0.1 s

[[Page 26118]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.059

DCD2 = 13.4 mi
DCD3 = 13.4 mi
N = 3
UFDCD1 = 0.05
UFDCD2 = 0.11
UFDCD3 = 0.21
mfuel55cruiseCD1 = 0 g
mfuel55cruiseCD2 = 0 g
mfuel55cruiseCD3 = 1675.4 g
M = 1
mfuel55cruiseCS = 4884.1 g
UFRCD = 0.21
[GRAPHIC] [TIFF OMITTED] TP27AP23.060

mfuelUF55cruise = 4026.0 g

    (4) For the transient cycle specified in 40 CFR 1037.510(a)(2)(i), 
calculate powertrain output speed per unit of vehicle speed,
[GRAPHIC] [TIFF OMITTED] TP27AP23.061

using one of the following methods:
    (i) For testing with torque measurement at the axle input shaft:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.062
    
    Example:

ka = 4.0
rB = 0.399 m
[GRAPHIC] [TIFF OMITTED] TP27AP23.063

    (ii) For testing with torque measurement at the wheel hubs, use Eq. 
1036.545-8 setting ka equal to 1.
    (iii) For testing with torque measurement at the engine's 
crankshaft:
[GRAPHIC] [TIFF OMITTED] TP27AP23.064

Where:

fnengine = average engine speed when vehicle speed is at 
or above 0.100 m/s.
vref = average simulated vehicle speed at or above 0.100 
m/s.

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.065
    
    (5) Calculate engine idle speed, by taking the average engine speed 
measured during the transient cycle test while the vehicle speed is 
below 0.100 m/s. (Note: Use all the charge-sustaining test intervals 
when determining engine idle speed for plug-in hybrid engines and plug-
in hybrid powertrains.)
    (6) For the cruise cycles specified in 40 CFR 1037.510(a)(2)(ii), 
calculate the average powertrain output speed, fnpowertrain, 
and the average powertrain output torque (positive torque only), 
Tpowertrain at vehicle speed at or above 0.100 m/s. (Note: 
Use all the charge-sustaining and charge-depleting test intervals when 
determining fnpowertrain and Tpowertrain for 
plug-in hybrid engines and plug-in hybrid powertrains.)
    (7) Calculate positive work, W[cycle], as the work over 
the duty cycle at the axle input shaft, wheel hubs, or the engine's 
crankshaft, as applicable, when vehicle speed is at or above 0.100 m/s. 
For plug-in hybrid engines and plug-in hybrid powertrains, calculate 
W[cycle] by calculating the positive work over each of the 
charge-sustaining and charge-depleting test intervals and then 
averaging them together. For test setups where speed and torque are 
measured at multiple locations, determine W[cycle] by 
integrating the sum of the power measured at each location.
    (8) The following tables illustrate the GEM data inputs 
corresponding to the different vehicle configurations for a given duty 
cycle:
    (i) For the transient cycle:

[[Page 26119]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.066

    (ii) For the cruise cycles:

  Table 6 to Paragraph (o)(8)(ii) of Sec.   1036.545--Generic Example of Output Matrix for Cruise Cycle Vehicle
                                                 Configurations
----------------------------------------------------------------------------------------------------------------
                                                                  Configuration
           Parameter            --------------------------------------------------------------------------------
                                    1        2        3        4        5        6        7      . . .      n
----------------------------------------------------------------------------------------------------------------
mfuel[cycle]...................
fpowertrain[cycle].............
Tpowertrain[cycle].............
W[cycle].......................
----------------------------------------------------------------------------------------------------------------

    (p) Determining useable battery energy. Useable battery energy 
(UBE) is defined as the total DC discharge energy, 
EDCDtotal, measured in DC Watt hours, over the charge-
depleting portion of the test sequence determined in paragraph (p)(2) 
of this section for the Heavy-duty Transient Test Cycle in 40 CFR part 
1037, appendix A. Select a representative vehicle configuration from 
paragraph (h) of this section for determination of UBE. UBE represents 
the total deliverable energy the battery is capable of providing while 
a powertrain is following a duty cycle on a dynamometer.
    (1) Measure DC discharge energy, EDCD, in watt-hours and 
DC discharge current per hour, CD, for the charge-depleting 
portion of the test sequence. The measurement points must capture all 
the current flowing into and out of the battery pack during powertrain 
operation, including current associated with regenerative braking. The 
equation for calculating powertrain EDCD is given in Eq. 
1036.545-12, however, it is expected that this calculation will 
typically be performed internally by the power analyzer specified in 
paragraph (a)(10)(i) of this section. Battery voltage measurements made 
by the powertrain's own on-board sensors (such as those available via a 
diagnostic port) may be used for calculating EDCD if these measurements 
are equivalent to those produced by the power analyzer.
[GRAPHIC] [TIFF OMITTED] TP27AP23.067

Where:

i = an indexing variable that represents one individual measurement.
N = total number of measurements.
V = battery DC bus voltage.
I = battery current.
[Delta]t = 1/frecord
frecord = the data recording frequency.

Example:

N = 13360
V1 = 454.0
V2 = 454.0
I1 = 0
I2 = 0
frecord = 20 Hz
[Delta]t = 1/20 = 0.05 s
[GRAPHIC] [TIFF OMITTED] TP27AP23.068

EDCD = 6540232.7 W[middot]s = 1816.7 W[middot]hr

    (2) Determine a declared UBE that is at or below the corresponding 
value determined in paragraph (p)(1) of this section, including those 
from redundant measurements. This declared UBE serves as the initial 
UBE determined under 40 CFR 1037.115(f).
0
30. Amend Sec.  1036.550 by revising paragraphs (b)(1)(i), (b)(2) 
introductory text, and (b)(2)(i) to read as follows:

Sec.  1036.550  Calculating greenhouse gas emission rates.

* * * * *
    (b) * * *
    (1) * * *
    (i) For liquid fuels, determine Emfuelmeas according to 
ASTM D4809 (incorporated by reference, see Sec.  1036.810). Have the 
sample analyzed by at least three different labs and determine the 
final value of your test fuel's Emfuelmeas as the median of 
all the lab test results you obtained as described in 40 CFR 
1065.602(m). If you have results from three different labs, we 
recommend you screen them to

[[Page 26120]]

determine if additional observations are needed. To perform this 
screening, determine the absolute value of the difference between each 
lab result and the average of the other two lab results. If the largest 
of these three resulting absolute value differences is greater than 
0.297 MJ/kg, we recommend you obtain additional results prior to 
determining the final value of Emfuelmeas.
* * * * *
    (2) Determine your test fuel's carbon mass fraction, wC, 
as described in 40 CFR 1065.655(d), expressed to at least three decimal 
places; however, you must measure fuel properties for [alpha] and 
[beta] rather than using the default values specified in 40 CFR 
1065.655(e).
    (i) For liquid fuels, have the sample analyzed by at least three 
different labs and determine the final value of your test fuel's 
wC as the median of all of the lab results you obtained as 
described in 40 CFR 1065.602(m). If you have results from three 
different labs, we recommend you screen them to determine if additional 
observations are needed. To perform this screening, determine the 
absolute value of the difference between each lab result and the 
average of the other two lab results. If the largest of these three 
resulting absolute value differences is greater than 1.56 percent 
carbon, we recommend you obtain additional results prior to determining 
the final value of wC.
* * * * *
0
31. Amend Sec.  1036.605 by revising paragraph (e) to read as follows:

Sec.  1036.605  Alternate emission standards for engines used in 
specialty vehicles.

* * * * *
    (e) In a separate application for a certificate of conformity, 
identify the corresponding nonroad engine family, describe the label 
required under section, state that you meet applicable diagnostic 
requirements under 40 CFR part 1039 or part 1048, and identify your 
projected U.S.-directed production volume.
* * * * *
0
32. Amend Sec.  1036.615 by revising paragraph (a) to read as follows:

Sec.  1036.615  Engines with Rankine cycle waste heat recovery and 
hybrid powertrains.

* * * * *
    (a) Pre-transmission hybrid powertrains. Test pre-transmission 
hybrid powertrains with the hybrid engine procedures of 40 CFR part 
1065 or with the post-transmission procedures in Sec.  1036.545. Pre-
transmission hybrid powertrains are those engine systems that include 
features to recover and store energy during engine motoring operation 
but not from the vehicle's wheels. Engines certified with pre-
transmission hybrid powertrains must be certified to meet the 
diagnostic requirements as specified in Sec.  1036.110 with respect to 
powertrain components and systems; if different manufacturers produce 
the engine and the hybrid powertrain, the hybrid powertrain 
manufacturer may separately certify its powertrain relative to 
diagnostic requirements.
* * * * *
0
33. Amend Sec.  1036.630 by revising paragraph (b) to read as follows:

Sec.  1036.630  Certification of engine greenhouse gas emissions for 
powertrain testing.

* * * * *
    (b) If you choose to certify only fuel map emissions for an engine 
family and to not certify emissions over powertrain cycles under Sec.  
1036.545, we will not presume you are responsible for emissions over 
the powertrain cycles. However, where we determine that you are 
responsible in whole or in part for the emission exceedance in such 
cases, we may require that you participate in any recall of the 
affected vehicles. Note that this provision to limit your 
responsibility does not apply if you also hold the certificate of 
conformity for the vehicle.
* * * * *
0
34. Amend Sec.  1036.705 by revising paragraph (c) introductory text, 
redesignating paragraph (c)(4) as paragraph (c)(5), and adding a new 
paragraph (c)(4) to read as follows:

Sec.  1036.705  Generating and calculating emission credits.

* * * * *
    (c) Compliance with the requirements of this subpart is determined 
at the end of the model year by calculating emission credits based on 
actual production volumes, excluding the following engines:
* * * * *
    (4) Engines certified to state emission standards that are 
different than the emission standards in this part.
* * * * *
0
35. Amend Sec.  1036.725 by revising paragraph (b)(2) to read as 
follows:

Sec.  1036.725  Required information for certification.

* * * * *
    (b) * * *
    (2) Calculations of projected emission credits (positive or 
negative) based on projected production volumes as described in Sec.  
1036.705(c). We may require you to include similar calculations from 
your other engine families to project your net credit balances for the 
model year. If you project negative emission credits for a family, 
state the source of positive emission credits you expect to use to 
offset the negative emission credits.
0
36. Amend Sec.  1036.730 by revising paragraphs (b)(4) and (f)(1) to 
read as follows:

Sec.  1036.730  ABT reports.

* * * * *
    (b) * * *
    (4) The projected and actual production volumes for calculating 
emission credits for the model year. If you changed an FEL/FCL during 
the model year, identify the actual production volume associated with 
each FEL/FCL.
* * * * *
    (f) * * *
    (1) If you notify us by the deadline for submitting the final 
report that errors mistakenly decreased your balance of emission 
credits, you may correct the errors and recalculate the balance of 
emission credits. If you notify us that errors mistakenly decreased 
your balance of emission credits after the deadline for submitting the 
final report, you may correct the errors and recalculate the balance of 
emission credits after applying a 10 percent discount to the credit 
correction, but only if you notify us within 24 months after the 
deadline for submitting the final report. If you report a negative 
balance of emission credits, we may disallow corrections under this 
paragraph (f)(1).
* * * * *
0
37. Amend Sec.  1036.735 by revising paragraph (d) to read as follows:

Sec.  1036.735  Recordkeeping.

* * * * *
    (d) Keep appropriate records to document production volumes of 
engines that generate or use emission credits under the ABT program. 
For example, keep available records of the engine identification number 
(usually the serial number) for each engine you produce that generates 
or uses emission credits. You may identify these numbers as a range. If 
you change the FEL/FCL after the start of production, identify the date 
you started using each FEL/FCL and the range of engine identification 
numbers associated with each FEL/FCL. You must also identify the 
purchaser and destination for each engine you produce to the extent 
this information is available.
* * * * *
0
38. Amend Sec.  1036.801 by:

[[Page 26121]]

0
a. Adding a definition of ``Carbon-containing fuel'' in alphabetical 
order.
0
b. Removing the definitions of ``Criteria pollutants'' and ``Greenhouse 
gas''.
0
c. Revising the definition of ``Hybrid''.
0
d. Removing the definitions of ``Hybrid engine'' and ``Hybrid 
powertrain''.
0
e. Revising the definition of ``Mild hybrid''.
0
f. Adding a definition of ``Neat'' in alphabetical order.
0
g. Revising the definitions of ``Small manufacturer'' and ``U.S.-
directed production volume''.

    The additions and revisions read as follows:

Sec.  1036.801  Definitions.

* * * * *
    Carbon-containing fuel has the meaning given in 40 CFR 1065.1001.
* * * * *
    Hybrid means relating to an engine or powertrain that includes a 
Rechargeable Energy Storage System. Hybrid engines store and recover 
energy in a way that is integral to the engine or otherwise upstream of 
the vehicle's transmission. Examples of hybrid engines include engines 
with hybrid components connected to the front end of the engine (P0), 
at the crankshaft before the clutch (P1), or connected between the 
clutch and the transmission where the clutch upstream of the hybrid 
feature is in addition to the transmission clutch(s) (P2). Engine-based 
systems that recover kinetic energy to power an electric heater in the 
aftertreatment are themselves not sufficient to qualify as a hybrid 
engine. Provisions that apply for hybrid powertrains apply equally for 
hybrid engines, except as specified. Note that certain provisions in 
this part treat hybrid powertrains intended for vehicles that include 
regenerative braking different than those intended for vehicles that do 
not include regenerative braking. The definition of hybrid includes 
plug-in hybrid electric powertrains.
* * * * *
    Mild hybrid means relating to a hybrid engine or hybrid powertrain 
with regenerative braking capability where the system recovers less 
than 20 percent of the total braking energy over the transient cycle 
defined in appendix A of 40 CFR part 1037.
* * * * *
    Neat has the meaning given in Sec.  1065.1001.
* * * * *
    Small manufacturer means a manufacturer meeting the criteria 
specified in 13 CFR 121.201. The employee and revenue limits apply to 
the total number of employees and total revenue together for all 
affiliated companies (as defined in 40 CFR 1068.30). Note that 
manufacturers with low production volumes may or may not be ``small 
manufacturers''.
* * * * *
    U.S.-directed production volume means the number of engines, 
subject to the requirements of this part, produced by a manufacturer 
for which the manufacturer has a reasonable assurance that sale was or 
will be made to ultimate purchasers in the United States. Note that 
this includes engines certified to state emission standards that are 
different than the emission standards in this part.
* * * * *
0
39. Amend Sec.  1036.805 by adding an entry for ``GCWR'' to Table 5 in 
alphabetical order to read as follows:

Sec.  1036.805  Symbols, abbreviations, and acronyms.

* * * * *
    (e) * * *

     Table 5 to Paragraph (e) of Sec.   1036.805--Other Acronyms and
                              Abbreviations
------------------------------------------------------------------------
                  Acronym                              Meaning
------------------------------------------------------------------------
 
                                * * * * *
GCWR......................................  gross combined weight
                                             rating.
 
                                * * * * *
------------------------------------------------------------------------

* * * * *
0
40. Amend Sec.  1036.810 by adding paragraph (e) to read as follows:

Sec.  1036.810  Incorporation by reference.

* * * * *
    (e) U.S. EPA, Office of Air and Radiation, 2565 Plymouth Road, Ann 
Arbor, MI 48105; www.epa.gov; [email protected].
    (1) Greenhouse gas Emissions Model (GEM) Phase 2, Version 4.0, 
April 2022 (``GEM Phase 2, Version 4.0''); IBR approved for Sec.  
1036.545(a).
    (2) [Reserved]
0
41. Amend Sec.  1036.815 by revising paragraph (b) to read as follows:

Sec.  1036.815  Confidential information.

* * * * *
    (b) Emission data or information that is publicly available cannot 
be treated as confidential business information as described in 40 CFR 
1068.11. Data that vehicle manufacturers need for demonstrating 
compliance with greenhouse gas emission standards, including fuel-
consumption data as described in Sec. Sec.  1036.535 and 1036.545, also 
qualify as emission data for purposes of confidentiality 
determinations.

PART 1037--CONTROL OF EMISSIONS FROM NEW HEAVY-DUTY MOTOR VEHICLES

0
42. The authority citation for part 1037 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

0
43. Amend Sec.  1037.1 by revising paragraph (a) to read as follows:

Sec.  1037.1  Applicability.

    (a) The regulations in this part 1037 apply for all new heavy-duty 
vehicles, except as provided in Sec.  1037.5. This includes battery 
electric vehicles, fuel cell electric vehicles, and vehicles fueled by 
conventional and alternative fuels.
* * * * *
0
44. Amend Sec.  1037.5 by:
0
a. Revising paragraph (e).
0
b. Removing paragraphs (g) and (h).
0
c. Redesignating paragraph (i) as paragraph (g).
    The revision reads as follows:

Sec.  1037.5  Excluded vehicles.

* * * * *
    (e) Vehicles subject to the heavy-duty emission standards of 40 CFR 
part 86. See 40 CFR part 86, subpart S, for emission standards that 
apply for these vehicles.
* * * * *
0
45. Amend Sec.  1037.101 by revising paragraphs (a)(2) and (b)(2) and 
(3) to read as follows:

Sec.  1037.101  Overview of emission standards.

* * * * *
    (a) * * *
    (2) Exhaust emissions of greenhouse gases. Emission standards apply 
as follows for greenhouse gas emissions:
    (i) CO2 emission standards apply as described in 
Sec. Sec.  1037.105 and 1037.106. No CH4 or N2O 
standards apply under this part. See 40 CFR part 1036 for 
CH4 or N2O standards that apply to engines used 
in these vehicles.
    (ii) Hydrofluorocarbon standards apply as described in Sec.  
1037.115(e). These pollutants are also ``greenhouse gas pollutants'' 
but are treated separately from exhaust greenhouse gas pollutants 
listed in paragraph (a)(2)(i) of this section.
* * * * *
    (b) * * *
    (2) For greenhouse gas pollutants, vehicles are regulated in the 
following groups:

[[Page 26122]]

    (i) Tractors above 26,000 pounds GVWR.
    (ii) Vocational vehicles.
    (3) The greenhouse gas emission standards apply differently 
depending on the vehicle service class as described in Sec.  1037.140. 
In addition, standards apply differently for vehicles with spark-
ignition and compression-ignition engines. References in this part 1037 
to ``spark-ignition'' or ``compression-ignition'' generally relate to 
the application of standards under 40 CFR 1036.140. For example, a 
vehicle with an engine certified to spark-ignition standards under 40 
CFR part 1036 is generally subject to requirements under this part 1037 
that apply for spark-ignition vehicles. However, note that emission 
standards for Heavy HDE are considered to be compression-ignition 
standards for purposes of applying vehicle emission standards under 
this part. Also, for spark-ignition engines voluntarily certified as 
compression-ignition engines under 40 CFR part 1036, you must choose at 
certification whether your vehicles are subject to spark-ignition 
standards or compression-ignition standards. Heavy-duty vehicles with 
no installed propulsion engine, such as battery electric vehicles, are 
subject to compression-ignition emission standards for the purpose of 
calculating emission credits.
* * * * *
0
46. Amend Sec.  1037.102 by revising the section heading and paragraph 
(b) introductory text to read as follows:

Sec.  1037.102  Criteria exhaust emission standards--NOX, HC, PM, and 
CO.

* * * * *
    (b) Heavy-duty vehicles with no installed propulsion engine, such 
as battery electric vehicles, are subject to criteria pollutant 
standards under this part. The emission standards that apply are the 
same as the standards that apply for compression-ignition engines under 
40 CFR 86.007-11 and 1036.104 for a given model year.
* * * * *
0
47. Amend Sec.  1037.105 by:
0
a. Revising paragraphs (a)(1) and (2) and (b)(1) and (4)
0
b. Removing and reserving paragraph (c).
0
c. Revising paragraph (h)(1).
    The revisions read as follows:

Sec.  1037.105  CO2 emission standards for vocational vehicles.

    (a) * * *
    (1) Heavy-duty vehicles at or below 14,000 pounds GVWR that are not 
subject to the greenhouse gas standards in 40 CFR part 86, subpart S, 
or that use engines certified under Sec.  1037.150(m).
    (2) Vehicles above 14,000 pounds GVWR and at or below 26,000 pounds 
GVWR, but not certified to the vehicle greenhouse gas standards in 40 
CFR part 86, subpart S.
* * * * *
    (b) * * *
    (1) Model year 2027 and later vehicles are subject to 
CO2 standards corresponding to the selected subcategories as 
shown in the following table:

                 Table 1 of Paragraph (b)(1) of Sec.   1037.105--Phase 3 CO2 Standards for Model Year 2027 and Later Vocational Vehicles
                                                                      [g/ton-mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Compression-ignition engine                Spark-ignition engine
                Model year                           Subcategory         -------------------------------------------------------------------------------
                                                                             Light HDV      Medium HDV       Heavy HDV       Light HDV      Medium HDV
--------------------------------------------------------------------------------------------------------------------------------------------------------
2027......................................  Urban.......................             294             213             232             340             252
                                            Multi-Purpose...............             257             190             193             299             223
                                            Regional....................             218             173             152             246             202
2028......................................  Urban.......................             275             209             228             321             248
                                            Multi-Purpose...............             238             186             189             280             219
                                            Regional....................             199             169             148             227             198
2029......................................  Urban.......................             255             202             225             301             241
                                            Multi-Purpose...............             218             179             186             260             212
                                            Regional....................             179             162             145             207             191
2030......................................  Urban.......................             238             195             200             284             234
                                            Multi-Purpose...............             201             172             161             243             205
                                            Regional....................             162             155             120             190             184
2031......................................  Urban.......................             219             188             193             265             227
                                            Multi-Purpose...............             182             165             154             224             198
                                            Regional....................             143             148             113             171             177
2032 and later............................  Urban.......................             179             176             177             225             215
                                            Multi-Purpose...............             142             153             138             184             186
                                            Regional....................             103             136              97             131             165
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *
    (4) Model year 2014 through 2020 vehicles are subject to Phase 1 
CO2 standards as shown in the following table:

                 Table 4 of Paragraph (b)(4) Sec.   1037.105--Phase 1 CO2 Standards for Model Year 2014 Through 2020 Vocational Vehicles
                                                                      [g/ton-mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Vehicle size                       CO2 standard for model years 2014-2016                     CO2 standard for model year 2017-2020
--------------------------------------------------------------------------------------------------------------------------------------------------------
Light HDV...........................                                                       388                                                       373
Medium HDV..........................                                                       234                                                       225
Heavy HDV...........................                                                       226                                                       222
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 26123]]

* * * * *
    (h) * * *
    (1) The following alternative emission standards apply by vehicle 
type and model year as follows:

     Table 5 of Paragraph (h)(1) of Sec.   1037.105--Optional Phase 3 CO2 Standards for Model Year 2027 and Later Custom Chassis Vocational Vehicles
                                                                      [g/ton-mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Model year      Model year      Model year      Model year      Model year      Model year
          Optional custom chassis vehicle type                 2027            2028            2029            2030            2031       2032 and later
--------------------------------------------------------------------------------------------------------------------------------------------------------
School Bus..............................................             190             182             176             168             163             149
Other Bus...............................................             286             269             255             237             220             189
Coach Bus...............................................             205             205             205             185             164             154
Refuse Hauler...........................................             253             241             232             221             212             191
Concrete Mixer..........................................             259             250             240             231             224             205
Motor home..............................................             226             226             226             226             226             226
Mixed-use vehicle.......................................             316             316             316             316             316             316
Emergency vehicle.......................................             319             319             319             319             319             319
--------------------------------------------------------------------------------------------------------------------------------------------------------

 Table 6 of Paragraph (h)(1) of Sec.   1037.105--Phase 2 Custom Chassis
               Standards for Model Years 2021 Through 2026
                              [g/ton-mile]
------------------------------------------------------------------------
                                      Assigned vehicle      Model year
         Vehicle type \a\               service class        2021-2026
------------------------------------------------------------------------
School bus........................  Medium HDV..........             291
Motor home........................  Medium HDV..........             228
Coach bus.........................  Heavy HDV...........             210
Other bus.........................  Heavy HDV...........             300
Refuse hauler.....................  Heavy HDV...........             313
Concrete mixer....................  Heavy HDV...........             319
Mixed-use vehicle.................  Heavy HDV...........             319
Emergency vehicle.................  Heavy HDV...........             324
------------------------------------------------------------------------
\a\ Vehicle types are generally defined in Sec.   1037.801. ``Other
  bus'' includes any bus that is not a school bus or a coach bus. A
  ``mixed-use vehicle'' is one that meets at least one of the criteria
  specified in Sec.   1037.631(a)(1) or (2).

* * * * *
0
48. Amend Sec.  1037.106 by revising the section heading and paragraph 
(b), removing and reserving paragraph (c), and revising paragraphs 
(f)(2) introductory text and (f)(2)(i) to read as follows:

Sec.  1037.106  CO2 emission standards for tractors above 
26,000 pounds GVWR.

* * * * *
    (b) CO2 standards in this paragraph (b) apply based on 
modeling and testing as described in subpart F of this part. The 
provisions of Sec.  1037.241 specify how to comply with these 
standards.
    (1) Model year 2027 and later tractors are subject to 
CO2 standards corresponding to the selected subcategories as 
shown in the following tables:

  Table 1 of Paragraph (b)(1) of Sec.   1037.106--CO2 Emission Standards for Model Year 2027 and Later Tractors
                                                  [g/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                    Class 7 all    Class 8  day       Class 8
         Model year               Roof height       cab styles          cab         sleeper cab     Heavy-haul
----------------------------------------------------------------------------------------------------------------
2027........................  Low...............            86.6            66.1            64.1            48.3
                              Mid...............            93.1            70.2            69.6
                              High..............            90.0            68.1            64.3
2028........................  Low...............            84.7            64.6            64.1            48.3
                              Mid...............            91.0            68.6            69.6
                              High..............            88.0            66.6            64.3
2029........................  Low...............            81.8            62.4            64.1            48.3
                              Mid...............            87.9            66.3            69.6
                              High..............            85.0            64.3            64.3
2030........................  Low...............            77.0            58.7            57.7            43.0
                              Mid...............            82.7            62.4            62.6
                              High..............            80.0            60.6            57.9
2031........................  Low...............            67.3            51.4            51.3            42.5
                              Mid...............            72.4            54.6            55.7
                              High..............            70.0            53.0            51.4
2032 and later..............  Low...............            63.5            48.4            48.1            41.1
                              Mid...............            68.2            51.5            52.2

[[Page 26124]]

 
                              High..............            66.0            50.0            48.2
----------------------------------------------------------------------------------------------------------------

    (2) Model year 2026 and earlier tractors are subject to 
CO2 standards corresponding to the selected subcategory as 
shown in the following table:

     Table 2 of Paragraph (b)(2) of Sec.   1037.106--CO2 Standards for Model Year 2026 and Earlier Tractors
                                                  [g/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                      Phase 1         Phase 1         Phase 2         Phase 2
                                                   standards for   standards for   standards for   standards for
                 Subcategory \a\                    model years     model years     model years     model years
                                                     2014-2016       2017-2020       2021-2023       2024-2026
----------------------------------------------------------------------------------------------------------------
Class 7 Low-Roof (all cab styles)...............             107             104           105.5            99.8
Class 7 Mid-Roof (all cab styles)...............             119             115           113.2           107.1
Class 7 High-Roof (all cab styles)..............             124             120           113.5           106.6
Class 8 Low-Roof Day Cab........................              81              80            80.5            76.2
Class 8 Low-Roof Sleeper Cab....................              68              66            72.3            68.0
Class 8 Mid-Roof Day Cab........................              88              86            85.4            80.9
Class 8 Mid-Roof Sleeper Cab....................              76              73            78.0            73.5
Class 8 High-Roof Day Cab.......................              92              89            85.6            80.4
Class 8 High-Roof Sleeper Cab...................              75              72            75.7            70.7
Heavy-Haul Tractors.............................  ..............  ..............            52.4            50.2
----------------------------------------------------------------------------------------------------------------

* * * * *
    (f) * * *
    (2) You may optionally certify Class 7 tractors not covered by 
paragraph (f)(1) of this section to the standards and useful life for 
Class 8 tractors. This paragraph (f)(2) applies equally for hybrid 
vehicles, battery electric vehicles, and fuel cell electric vehicles. 
Credit provisions apply as follows:
    (i) If you certify all your Class 7 tractors to Class 8 standards, 
you may use these Heavy HDV credits without restriction.
* * * * *

Sec.  1037.107  [Removed]

0
49. Remove Sec.  1037.107.
0
50. Amend Sec.  1037.115 by revising paragraphs (a) and (e)(1) and 
adding paragraph (f) to read as follows:

Sec.  1037.115  Other requirements.

* * * * *
    (a) Adjustable parameters. Vehicles that have adjustable parameters 
must meet all the requirements of this part for any adjustment in the 
practically adjustable range. We may require that you set adjustable 
parameters to any specification within the practically adjustable range 
during any testing. See 40 CFR 1068.50 for general provisions related 
to adjustable parameters. You must ensure safe vehicle operation 
throughout the practically adjustable range of each adjustable 
parameter, including consideration of production tolerances. Note that 
adjustable roof fairings are deemed not to be adjustable parameters.
* * * * *
    (e) * * *
    (1) This paragraph (e) is intended to address air conditioning 
systems for which the primary purpose is to cool the driver 
compartment. This would generally include all cab-complete pickups and 
vans. Similarly, it does not apply for self-contained air conditioning 
used to cool passengers or refrigeration units used to cool cargo on 
vocational vehicles. For purposes of this paragraph (e), a self-
contained system is an enclosed unit with its own evaporator and 
condenser even if it draws power from the engine.
* * * * *
    (f) Battery durability monitor. Battery electric vehicles and plug-
in hybrid electric vehicles must meet monitoring requirements related 
to batteries serving as a Rechargeable Energy Storage System from GTR 
No. 22 (incorporated by reference, see Sec.  1037.810). The 
requirements of this section apply starting in model year 2030. The 
following clarifications and adjustments to GTR No. 22 apply for 
vehicles subject to this section:
    (1) Install a customer-accessible display that monitors, estimates, 
and communicates the vehicle's State of Certified Energy (SOCE) include 
information in the application for certification as described in Sec.  
1037.205. Monitoring requirements related to State of Certified Range 
(SOCR) do not apply.
    (2) Accuracy requirements for SOCE in GTR No. 22 do not apply. 
Minimum Performance Requirements for battery durability also do not 
apply.
    (3) For battery electric vehicles, use good engineering judgment to 
develop a test procedure for determining useable battery energy (UBE).
    (4) For plug-hybrid electric vehicles, determine UBE as described 
in 40 CFR 1036.545.
0
51. Amend Sec.  1037.120 by:
0
a. Revising paragraph (b)(1)(iii).
0
b. Removing paragraph (b)(1)(iv).
0
c. Revising paragraph (c).
    The revisions read as follows:

Sec.  1037.120  Emission-related warranty requirements.

* * * * *
    (b) * * *
    (1) * * *
    (iii) 2 years or 24,000 miles for tires.
* * * * *
    (c) Components covered. The emission-related warranty covers tires, 
automatic tire inflation systems, tire pressure monitoring systems, 
vehicle

[[Page 26125]]

speed limiters, idle-reduction systems, devices added to the vehicle to 
improve aerodynamic performance (not including standard components such 
as hoods or mirrors even if they have been optimized for aerodynamics), 
fuel cell stacks, and RESS and other components used with hybrid 
systems, battery electric vehicles, and fuel cell electric vehicles to 
the extent such emission-related components are included in your 
application for certification. The emission-related warranty also 
covers other added emission-related components to the extent they are 
included in your application for certification, and any other 
components whose failure would increase a vehicle's CO2 
emissions. The emission-related warranty covers all components whose 
failure would increase a vehicle's emissions of air conditioning 
refrigerants (for vehicles subject to air conditioning leakage 
standards), and it covers all components whose failure would increase a 
vehicle's evaporative and refueling emissions (for vehicles subject to 
evaporative and refueling emission standards). The emission-related 
warranty covers components that are part of your certified 
configuration even if another company produces the component.
* * * * *
0
52. Amend Sec.  1037.130 by revising paragraph (a) to read as follows:

Sec.  1037.130  Assembly instructions for secondary vehicle 
manufacturers.

    (a) If you sell a certified incomplete vehicle to a secondary 
vehicle manufacturer, give the secondary vehicle manufacturer 
instructions for completing vehicle assembly consistent with the 
requirements of this part. Include all information necessary to ensure 
that the final vehicle assembly (including the engine) will be in its 
certified configuration.
* * * * *
0
53. Amend Sec.  1037.140 by revising paragraph (g)(5) introductory text 
to read as follows:

Sec.  1037.140  Classifying vehicles and determining vehicle 
parameters.

* * * * *
    (g) * * *
    (5) Heavy-duty vehicles with no installed propulsion engine, such 
as battery electric vehicles, are divided as follows:
* * * * *
0
54. Amend Sec.  1037.150 by:
0
a. Revising paragraphs (c), (f) and (p);
0
b. Removing paragraphs (u) through (x);
0
c. Redesignating paragraphs (y) through (bb) as paragraphs (u) through 
(x);
0
d. Revising newly redesignated paragraph (x); and
0
e. Adding a new paragraph (y).
    The revisions and addition read as follows:

Sec.  1037.150  Interim provisions.

* * * * *
    (c) Small manufacturers. The following provisions apply for small 
manufacturers:
    (1) The following provisions apply through model year 2026:
    (i) The greenhouse gas standards of Sec. Sec.  1037.105 and 
1037.106 are optional for small manufacturers producing vehicles with a 
date of manufacture before January 1, 2022. In addition, small 
manufacturers producing vehicles that run on any fuel other than 
gasoline, E85, or diesel fuel may delay complying with every later 
standard under this part by one model year.
    (ii) Qualifying manufacturers must notify the Designated Compliance 
Officer each model year before introducing excluded vehicles into U.S. 
commerce. This notification must include a description of the 
manufacturer's qualification as a small business under 13 CFR 121.201. 
Manufacturers must label excluded vehicles with the following 
statement: ``THIS VEHICLE IS EXCLUDED UNDER 40 CFR 1037.150(c).''
    (iii) Small manufacturers may meet Phase 1 standards instead of 
Phase 2 standards in the first year Phase 2 standards apply to them if 
they voluntarily comply with the Phase 1 standards for the full 
preceding year. Specifically, small manufacturers may certify their 
model year 2022 vehicles to the Phase 1 greenhouse gas standards of 
Sec. Sec.  1037.105 and 1037.106 if they certify all the vehicles from 
their annual production volume included in emission credit calculations 
for the Phase 1 standards starting on or before January 1, 2021.
    (2) The following provisions apply for model year 2027 and later 
for qualifying small manufacturers:
    (i) The following standards apply for vocational vehicles instead 
of the standards specified in Sec.  1037.105:

     Table 1 of Paragraph (c)(2)(i) of Sec.   1037.150--Small Manufacturer CO2 Standards Vocational Vehicles
                                                  [g/ton-mile]
----------------------------------------------------------------------------------------------------------------
             Engine cycle                     Vehicle size         Multi-purpose     Regional          Urban
----------------------------------------------------------------------------------------------------------------
Compression-ignition..................  Light HDV...............             330             291             367
Compression-ignition..................  Medium HDV..............             235             218             258
Compression-ignition..................  Heavy HDV...............             230             189             269
Spark-ignition........................  Light HDV...............             372             319             413
Spark-ignition........................  Medium HDV..............             268             247             297
----------------------------------------------------------------------------------------------------------------

  Table 2 of Paragraph (c)(2)(i) of Sec.   1037.150--Small Manufacturer
          CO2 Standards for Custom Chassis Vocational Vehicles
                              [g/ton-mile]
------------------------------------------------------------------------
                                      Assigned vehicle      MY 2027 and
         Vehicle type \a\               service class          later
------------------------------------------------------------------------
School bus........................  Medium HDV..........             271
Motor home........................  Medium HDV..........             226
Coach bus.........................  Heavy HDV...........             205
Other bus.........................  Heavy HDV...........             286
Refuse hauler.....................  Heavy HDV...........             298
Concrete mixer....................  Heavy HDV...........             316
Mixed-use vehicle.................  Heavy HDV...........             316

[[Page 26126]]

 
Emergency vehicle.................  Heavy HDV...........             319
------------------------------------------------------------------------
\a\ Vehicle types are generally defined in Sec.   1037.801. ``Other
  bus'' includes any bus that is not a school bus or a coach bus. A
  ``mixed-use vehicle'' is one that meets at least one of the criteria
  specified in Sec.   1037.631(a)(1) or (2).

    (ii) The following standards apply for tractors instead of the 
standards specified in Sec.  1037.106:

 Table 3 of Paragraph (c)(2)(ii) of Sec.   1037.150--Small manufacturer
      CO2 Standards for Class 7 and Class 8 Tractors by Subcategory
                              [g/ton-mile]
------------------------------------------------------------------------
                                                              Phase 2
                                                           standards for
                     Subcategory\a\                         model year
                                                          2027 and later
------------------------------------------------------------------------
Class 7 Low-Roof (all cab styles).......................            96.2
Class 7 Mid-Roof (all cab styles).......................           103.4
Class 7 High-Roof (all cab styles)......................           100.0
Class 8 Low-Roof Day Cab................................            73.4
Class 8 Low-Roof Sleeper Cab............................            64.1
Class 8 Mid-Roof Day Cab................................            78.0
Class 8 Mid-Roof Sleeper Cab............................            69.6
Class 8 High-Roof Day Cab...............................            75.7
Class 8 High-Roof Sleeper Cab...........................            64.3
Heavy-Haul Tractors.....................................            48.3
------------------------------------------------------------------------
\a\ Subcategory terms are defined in Sec.   1037.801.

    (iii) Small manufacturers producing vehicles that run on any fuel 
other than gasoline, E85, or diesel fuel may delay complying with the 
model year 2027 standards under this paragraph (c) by one model year.
    (iv) Label qualifying vehicles with the following statement: ``THIS 
VEHICLE MEETS PHASE 2 STANDARDS AS ALLOWED UNDER 40 CFR 1037.150(c).''
    (v) Small manufacturers may bank emission credits only by 
certifying all their vehicle families within a given averaging set to 
the Phase 3 standards that apply for the current model year.
    (vi) The battery durability monitor requirements of Sec.  
1037.115(f) apply for vehicles subject to standards under this 
paragraph (c).
    (3) See paragraphs (r), (t), (u), and (w) of this section for 
additional allowances for small manufacturers.
* * * * *
    (f) Testing exemption for qualifying vehicles. Tailpipe 
CO2 emissions from battery electric vehicles, fuel cell 
electric vehicles, and vehicles with engines fueled with neat hydrogen 
are deemed to be zero. No CO2-related testing is required 
under this part for these vehicles.
* * * * *
    (p) Credit multiplier for advanced technology. You may calculate 
credits you generate from vehicles certified with advanced technology 
as follows:
    (1) For Phase 1 vehicles, multiply the credits by 1.50, except that 
you may not apply this multiplier in addition to the early-credit 
multiplier of paragraph (a) of this section.
    (2) For model year 2026 and earlier, apply multipliers of 3.5 for 
plug-in hybrid electric vehicles, 4.5 for battery electric vehicles, 
and 5.5 for fuel cell electric vehicles; calculate credits relative to 
the Phase 2 standard. In model year 2027, the advanced technology 
multiplier applies only for fuel cell electric vehicles, with credits 
multiplied relative to the Phase 3 standard.
* * * * *
    (x) Transition to updated GEM. (1) Vehicle manufacturers may 
demonstrate compliance with Phase 2 greenhouse gas standards in model 
years 2021 through 2023 using GEM Phase 2, Version 3.0, Version 3.5.1, 
or Version 4.0 (all incorporated by reference, see Sec.  1037.810). 
Manufacturers may change to a different version of GEM for model years 
2022 and 2023 for a given vehicle family after initially submitting an 
application for certification; such a change must be documented as an 
amendment under Sec.  1037.225. Manufacturers may submit an end-of-year 
report for model year 2021 using any of the three regulatory versions 
of GEM, but only for demonstrating compliance with the custom-chassis 
standards in Sec.  1037.105(h); such a change must be documented in the 
report submitted under Sec.  1037.730. Once a manufacturer certifies a 
vehicle family based on GEM Version 4.0, it may not revert back to 
using GEM Phase 2, Version 3.0 or Version 3.5.1 for that vehicle family 
in any model year.
    (2) Vehicle manufacturers may certify for model years 2021 through 
2023 based on fuel maps from engines or powertrains that were created 
using GEM Phase 2, Version 3.0, Version 3.5.1, or Version 4.0 (all 
incorporated by reference, see Sec.  1037.810). Vehicle manufacturers 
may alternatively certify in those years based on fuel maps from 
powertrains that were created using GEM Phase 2, Version 3.0, GEM HIL 
model 3.8, or GEM Phase 2, Version 4.0 (all incorporated by reference, 
see

[[Page 26127]]

Sec.  1037.810). Vehicle manufacturers may continue to certify vehicles 
in later model years using fuel maps generated with earlier versions of 
GEM for model year 2024 and later vehicle families that qualify for 
using carryover provisions in Sec.  1037.235(d).
    (y) Correcting credit calculations. If you notify us by October 1, 
2024 that errors mistakenly decreased your balance of emission credits 
for 2020 or any earlier model years, you may correct the errors and 
recalculate the balance of emission credits after applying a 10 percent 
discount to the credit correction.
0
55. Amend Sec.  1037.205 by revising the introductory text, paragraphs 
(b) introductory text, (b)(6), (e), (o), and (q) to read as follows:

Sec.  1037.205  What must I include in my application?

    This section specifies the information that must be in your 
application, unless we ask you to include less information under Sec.  
1037.201(c). We may require you to provide additional information to 
evaluate your application. References to testing and emission-data 
vehicles refer to testing vehicles or components to measure any 
quantity that serves as an input value for modeling emission rates 
under Sec.  1037.520.
* * * * *
    (b) Explain how the emission control system operates. As 
applicable, describe in detail all system components for controlling 
greenhouse gas emissions, including all auxiliary emission control 
devices (AECDs) and all fuel-system components you will install on any 
production vehicle. Identify the part number of each component you 
describe. For this paragraph (b), treat as separate AECDs any devices 
that modulate or activate differently from each other. Also describe 
your modeling inputs as described in Sec.  1037.520, with the following 
additional information if it applies for your vehicles:
* * * * *
    (6) If you perform powertrain testing under 40 1036.545, report 
both CO2 and NOX emission levels corresponding to 
each test run.
* * * * *
    (e) Describe any test equipment and procedures that you used, 
including any special or alternate test procedures you used (see Sec.  
1037.501). Include information describing the procedures you used to 
determine CdA values as specified in Sec. Sec.  1037.525 and 
1037.527. Describe which type of data you are using for engine fuel 
maps (see 40 CFR 1036.505).
* * * * *
    (o) Report calculated and modeled emission results as for ten 
configurations. Include modeling inputs and detailed descriptions of 
how they were derived. Unless we specify otherwise, include the 
configuration with the highest modeling result, the lowest modeling 
result, and the configurations with the highest projected sales.
* * * * *
    (q) For battery electric vehicles and plug-in hybrid electric 
vehicles, describe the recharging procedures and methods for 
determining battery performance, such as state of charge and charging 
capacity. Also include the certified usable battery energy for each 
battery durability subfamily.
* * * * *

Sec.  1037.230  [Amended]

0
56. Amend Sec.  1037.230 by removing paragraphs (a)(3) and (d)(3).
0
57. Amend Sec.  1037.231 by revising paragraph (a) to read as follows:

Sec.  1037.231  Powertrain families.

    (a) If you choose to perform powertrain testing as specified in 40 
CFR 1036.545, use good engineering judgment to divide your product line 
into powertrain families that are expected to have similar fuel 
consumptions and CO2 emission characteristics throughout the 
useful life. Your powertrain family is limited to a single model year.
* * * * *
0
58. Amend Sec.  1037.235 by revising the introductory text, paragraphs 
(a) and (c)(3) and removing paragraph (g)(3) to read as follows:

Sec.  1037.235  Testing requirements for certification.

    This section describes the emission testing you must perform to 
show compliance with respect to the greenhouse gas emission standards 
in subpart B of this part, and to determine any input values from Sec.  
1037.520 that involve measured quantities.
    (a) Select emission-data vehicles that represent production 
vehicles and components for the vehicle family consistent with the 
specifications in Sec. Sec.  1037.205(o) and 1037.520. Where the test 
results will represent multiple vehicles or components with different 
emission performance, use good engineering judgment to select worst-
case emission data vehicles or components. In the case of powertrain 
testing under 40 CFR 1036.545, select a test engine, test hybrid 
components, test axle and test transmission as applicable, by 
considering the whole range of vehicle models covered by the powertrain 
family and the mix of duty cycles specified in Sec.  1037.510. If the 
powertrain has more than one transmission calibration, for example 
economy vs. performance, you may weight the results from the powertrain 
testing in 40 CFR 1036.545 by the percentage of vehicles in the family 
by prior model year for each configuration. This can be done, for 
example, through the use of survey data or based on the previous model 
year's sales volume. Weight the results of Mfuel[cycle]
[GRAPHIC] [TIFF OMITTED] TP27AP23.069

and W[cycle] from Table 2 of 40 CFR 1036.545 according to 
the percentage of vehicles in the family that use each transmission 
calibration.
* * * * *
    (c) * * *
    (3) Before we test one of your vehicles or components, we may set 
its adjustable parameters to any point within the practically 
adjustable ranges, if applicable.
* * * * *
0
59. Amend Sec.  1037.241 to read as follows:

Sec.  1037.241  Demonstrating compliance with exhaust emission 
standards for greenhouse gas pollutants.

    (a) Compliance determinations for purposes of certification depend 
on whether or not you participate in the ABT program in subpart H of 
this part.
    (1) If none of your vehicle families generate or use emission 
credits in a given model year, each of your vehicle families is 
considered in compliance with the CO2 emission standards in 
Sec. Sec.  1037.105 and 1037.106 if all vehicle configurations in the 
family have calculated or modeled CO2 emission rates from 
Sec.  1037.520 that are at or below the applicable standards. A vehicle 
family is deemed not to comply if any vehicle configuration in the 
family has a calculated or modeled CO2 emission rate that is 
above the applicable standard.
    (2) If you generate or use emission credits with one or more 
vehicle families in a given model year, your vehicle families within an 
averaging set are considered in compliance with the CO2 
emission standards in Sec. Sec.  1037.105 and 1037.106 if the sum of 
positive and negative credits for all vehicle configurations in those 
vehicle families lead to a zero balance or a positive balance of 
credits, except as allowed bySec.  1037.745. Note that the FEL is 
considered to be the applicable emission standard for an individual 
configuration.

[[Page 26128]]

    (b) We may require you to provide an engineering analysis showing 
that the performance of your emission controls will not deteriorate 
during the useful life with proper maintenance. If we determine that 
your emission controls are likely to deteriorate during the useful 
life, we may require you to develop and apply deterioration factors 
consistent with good engineering judgment. For example, you may need to 
apply a deterioration factor to address deterioration of battery 
performance for a hybrid vehicle. Where the highest useful life 
emissions occur between the end of useful life and at the low-hour test 
point, base deterioration factors for the vehicles on the difference 
between (or ratio of) the point at which the highest emissions occur 
and the low-hour test point.

Sec.  1037.310  [Removed]

0
60. Remove Sec.  1037.310.
0
61. Amend Sec.  1037.315 by revising paragraph (a) to read as follows:

Sec.  1037.315  Audit procedures related to powertrain testing.

    (a) For vehicles certified based on powertrain testing as specified 
in 40 CFR 1036.545, we may apply the selective enforcement audit 
requirements to the powertrain. If engine manufacturers perform the 
powertrain testing and include those results in their certification 
under 40 CFR part 1036, they are responsible for selective enforcement 
audits related to those results. Otherwise, the certificate holder for 
the vehicle is responsible for the selective enforcement audit.
* * * * *
0
62. Amend Sec.  1037.401 by revising paragraph (b) to read as follows:

Sec.  1037.401  General provisions.

* * * * *
    (b) We may measure the drag area of a vehicle you produced after it 
has been placed into service. We may use any of the procedures as 
specified in Sec. Sec.  1037.525 and 1037.527 for measuring drag area. 
Your vehicle conforms to the regulations of this part with respect to 
aerodynamic performance if we measure its drag area to be at or below 
the maximum drag area allowed for the bin to which that configuration 
was certified.
0
63. Amend Sec.  1037.501 by revising paragraphs (a) and (h) and 
removing paragraph (i) to read as follows:

Sec.  1037.501  General testing and modeling provisions.

* * * * *
    (a) Except as specified in subpart B of this part, you must 
demonstrate that you meet emission standards using emission modeling as 
described in Sec.  1037.520. This modeling depends on several measured 
values as described in this subpart F. You may use fuel-mapping 
information from the engine manufacturer as described in 40 CFR 
1036.535 and 1036.540, or you may use powertrain testing as described 
in 40 CFR 1036.545.
* * * * *
    (h) Note that declared GEM inputs for fuel maps and aerodynamic 
drag area typically includes compliance margins to account for testing 
variability; for other measured GEM inputs, the declared values are 
typically the measured values without adjustment.
0
64. Amend Sec.  1037.510 by:
0
a. Revising paragraphs (a) introductory text, (a)(2) introductory text, 
and (a)(2)(iii) and (iv);
0
b. In paragraph (b) in Equation 1037.510-1, in the Where entries for 
vmoving and w[cycle], removing the text ``table 1 
to this section'' and adding, in its place, the text ``table 1 of this 
section''; and
0
c. Revising paragraphs (c)(3) and (d).
    The revisions read as follows:

Sec.  1037.510  Duty-cycle exhaust testing.

* * * * *
    (a) Measure emissions by testing the powertrain on a powertrain 
dynamometer with the applicable duty cycles. Each duty cycle consists 
of a series of speed commands over time--variable speeds for the 
transient test and constant speeds for the highway cruise tests. None 
of these cycles include vehicle starting or warmup.
* * * * *
    (2) Perform cycle-average engine fuel mapping as described in 40 
CFR 1036.540. For powertrain testing under 40 CFR 1036.545 or Sec.  
1037.555, perform testing as described in this paragraph (a)(2) to 
generate GEM inputs for each simulated vehicle configuration, and test 
runs representing different idle conditions. Perform testing as 
follows:
* * * * *
    (iii) Drive idle. Perform testing at a loaded idle condition for 
Phase 2 vocational vehicles. For engines with an adjustable warm idle 
speed setpoint, test at the minimum warm idle speed and the maximum 
warm idle speed; otherwise simply test at the engine's warm idle speed. 
Warm up the powertrain as described in 40 CFR 1036.520(d). Within 60 
seconds after concluding the warm-up, linearly ramp the powertrain down 
to zero vehicle speed over 20 seconds. Apply the brake and keep the 
transmission in drive (or clutch depressed for manual transmission). 
Stabilize the powertrain for (601) seconds and then sample 
emissions for (301) seconds.
    (iv) Parked idle. Perform testing at a no-load idle condition for 
Phase 2 vocational vehicles. For engines with an adjustable warm idle 
speed setpoint, test at the minimum warm idle speed and the maximum 
warm idle speed; otherwise simply test at the engine's warm idle speed. 
Warm up the powertrain as described in 40 CFR 1036.520(d). Within 60 
seconds after concluding the warm-up, linearly ramp the powertrain down 
to zero vehicle speed in 20 seconds. Put the transmission in park (or 
neutral for manual transmissions and apply the parking brake if 
applicable). Stabilize the powertrain for (1801) seconds 
and then sample emissions for (6001) seconds.
* * * * *
    (c) * * *
    (3) Table 1 follows:

                                    Table 1 of Paragraph (c)(3) of Sec.   1037.510--Weighting Factors for Duty Cycles
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Distance-weighted                               Time-weighted \a\
                                         ------------------------------------------------------------------------------------------------  Average speed
                                                             55 mi/hr        65 mi/hr                                                       during non-
                                             Transient        cruise          cruise        Drive idle      Parked idle      Non-idle       idle cycles
                                             (percent)       (percent)       (percent)       (percent)       (percent)       (percent)      (mi/hr) \b\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Day Cabs................................              19              17              64  ..............  ..............  ..............  ..............
Sleeper Cabs............................               5               9              86  ..............  ..............  ..............  ..............
Heavy-haul Tractors.....................              19              17              64  ..............  ..............  ..............  ..............
Vocational--Regional....................              20              24              56               0              25              75           38.41
Vocational--Multi-Purpose (2b-7)........              54              29              17              17              25              58           23.18
Vocational--Multi-Purpose (8)...........              54              23              23              17              25              58           23.27
Vocational--Urban (2b-7)................              92               8               0              15              25              60           16.25
Vocational--Urban (8)...................              90              10               0              15              25              60           16.51
Vocational with conventional powertrain               42              21              37  ..............  ..............  ..............  ..............
 (Phase 1 only).........................

[[Page 26129]]

 
Vocational Hybrid Vehicles (Phase 1                   75               9              16  ..............  ..............  ..............  ..............
 only)..................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Note that these drive idle and non-idle weighting factors do not reflect additional drive idle that occurs during the transient cycle. The transient
  cycle does not include any parked idle.
\b\ These values apply even for vehicles not following the specified speed traces.

* * * * *
    (d) For highway cruise and transient testing, compare actual 
second-by-second vehicle speed with the speed specified in the test 
cycle and ensure any differences are consistent with the criteria as 
specified in 40 CFR 1036.545(g)(1). If the speeds do not conform to 
these criteria, the test is not valid and must be repeated.
* * * * *

Sec.  1037.515  [Removed]

0
65. Remove Sec.  1037.515.
0
66. Amend Sec.  1037.520 by revising the introductory text and 
paragraphs (a)(2) introductory text, (b)(3), (e)(1) and (3), (g)(4), 
and (j)(1) to read as follows:

Sec.  1037.520  Modeling CO2 emissions to show compliance for 
vocational vehicles and tractors.

    This section describes how to use the Greenhouse gas Emissions 
Model (GEM) to show compliance with the CO2 standards of 
Sec. Sec.  1037.105 and 1037.106 for vocational vehicles and tractors. 
Use GEM version 2.0.1 to demonstrate compliance with Phase 1 standards; 
use GEM Phase 2, Version 4.0 to demonstrate compliance with Phase 2 and 
Phase 3 standards (both incorporated by reference, see Sec.  1037.810). 
Use good engineering judgment when demonstrating compliance using GEM.
    (a) * * *
    (2) For Phase 2 and Phase 3 vehicles, the GEM inputs described in 
paragraphs (a)(1)(i) through (v) of this section continue to apply. 
Note that the provisions in this part related to vehicle speed limiters 
and automatic engine shutdown systems are available for vocational 
vehicles in Phase 2 and Phase 3. The rest of this section describes 
additional GEM inputs for demonstrating compliance with Phase 2 and 
Phase 3 standards. Simplified versions of GEM apply for limited 
circumstances as follows:
    (b) * * *
    (3) For Phase 2 and Phase 3 tractors other than heavy-haul 
tractors, determine bin levels and CdA inputs as follows:
    (i) Determine bin levels for high-roof tractors based on 
aerodynamic test results as specified in Sec.  1037.525 and summarized 
in the following table:

   Table 3 to Paragraph (b)(3)(i) of Sec.   1037.520--Bin Determinations for Phase 2 and Phase 3 High-Roof Tractors Based on Aerodynamic Test Results
                                                                      [CdA in m\2\]
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Tractor type                     Bin I          Bin II          Bin III         Bin IV           Bin V          Bin VI          Bin VII
--------------------------------------------------------------------------------------------------------------------------------------------------------
Day Cabs................................           >=7.2         6.6-7.1         6.0-6.5         5.5-5.9         5.0-5.4         4.5-4.9           <=4.4
Sleeper Cabs............................           >=6.9         6.3-6.8         5.7-6.2         5.2-5.6         4.7-5.1         4.2-4.6           <=4.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (ii) For low- and mid-roof tractors, you may either use the same 
bin level that applies for an equivalent high-roof tractor as shown in 
Table 3 of this section, or you may determine your bin level based on 
aerodynamic test results as described in Table 4 of this section.

 Table 4 to Paragraph (b)(3)(ii) of Sec.   1037.520--Bin Determinations for Phase 2 and Phase 3 Low-Roof and Mid-Roof Tractors Based on Aerodynamic Test
                                                                         Results
                                                                      [CdA in m\2\]
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Tractor type                     Bin I          Bin II          Bin III         Bin IV           Bin V          Bin VI          Bin VII
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low-Roof Cabs...........................           >=5.4         4.9-5.3         4.5-4.8         4.1-4.4         3.8-4.0         3.5-3.7           <=3.4
Mid-Roof Cabs...........................           >=5.9         5.5-5.8         5.1-5.4         4.7-5.0         4.4-4.6         4.1-4.3           <=4.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (iii) Determine the CdA input according to the tractor's 
bin level as described in the following table:

                     Table 5 to Paragraph (b)(3)(iii) of Sec.   1037.520--Phase 2 and Phase 3 CdA Tractor Inputs Based on Bin Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Tractor type                     Bin I          Bin II          Bin III         Bin IV           Bin V          Bin VI          Bin VII
--------------------------------------------------------------------------------------------------------------------------------------------------------
High-Roof Day Cabs......................            7.45            6.85            6.25            5.70            5.20            4.70            4.20
High-Roof Sleeper Cabs..................            7.15            6.55            5.95            5.40            4.90            4.40            3.90
Low-Roof Cabs...........................            6.00            5.60            5.15            4.75            4.40            4.10            3.80
Mid-Roof Cabs...........................            7.00            6.65            6.25            5.85            5.50            5.20            4.90
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 26130]]

* * * * *
    (e) * * *
    (1) Vehicle weight reduction inputs for wheels are specified 
relative to dual-wide tires with conventional steel wheels. For 
purposes of this paragraph (e)(1), an aluminum alloy qualifies as 
light-weight if a dual-wide drive wheel made from this material weighs 
at least 21 pounds less than a comparable conventional steel wheel. The 
inputs are listed in Table 6 of this section. For example, a tractor or 
vocational vehicle with aluminum steer wheels and eight (4 x 2) dual-
wide aluminum drive wheels would have an input of 210 pounds (2 x 21 + 
8 x 21).

                           Table 6 to Sec.   1037.520--Wheel-Related Weight Reductions
----------------------------------------------------------------------------------------------------------------
                                                                                                      Weight
                                                                                      Weight        reduction--
                                                                                    reduction--    Phase 2  and
                   Tire type                                Material                  Phase 1         Phase 3
                                                                                    (pounds per     (pounds per
                                                                                      wheel)          wheel)
----------------------------------------------------------------------------------------------------------------
Wide-Base Single Drive Tire with . . .\a\.....  Steel Wheel.....................              84              84
                                                Aluminum Wheel..................             139             147
                                                Light-Weight Aluminum Alloy                  147             147
                                                 Wheel.
Steer Tire or Dual-wide Drive Tire with . . ..  High-Strength Steel Wheel.......               8               8
                                                Aluminum Wheel..................              21              25
                                                Light-Weight Aluminum Alloy                   30              25
                                                 Wheel.
----------------------------------------------------------------------------------------------------------------
\a\ The weight reduction for wide-base tires accounts for reduced tire weight relative to dual-wide tires.

* * * * *
    (3) Weight-reduction inputs for vocational-vehicle components other 
than wheels are specified in the following table:

 Table 8 to Sec.   1037.520--Nonwheel-Related Weight Reductions From Alternative Materials for Phase 2 and Phase
                                              3 Vocational Vehicles
                                                  [pounds] \a\
----------------------------------------------------------------------------------------------------------------
                                                                                   Vehicle type
               Component                        Material         -----------------------------------------------
                                                                     Light HDV    Medium HDV \b\     Heavy HDV
----------------------------------------------------------------------------------------------------------------
Axle Hubs--Non-Drive..................  Aluminum................                40                            40
                                                                 -----------------------------------------------
Axle Hubs--Non-Drive..................  High Strength Steel.....                 5                             5
                                                                 -----------------------------------------------
Axle--Non-Drive.......................  Aluminum................                60                            60
                                                                 -----------------------------------------------
Axle--Non-Drive.......................  High Strength Steel.....                15                            15
                                                                 -----------------------------------------------
Brake Drums--Non-Drive................  Aluminum................                60                            60
                                                                 -----------------------------------------------
Brake Drums--Non-Drive................  High Strength Steel.....                42                            42
                                                                 -----------------------------------------------
Axle Hubs--Drive......................  Aluminum................                40                            80
                                                                 -----------------------------------------------
Axle Hubs--Drive......................  High Strength Steel.....                10                            20
                                                                 -----------------------------------------------
Brake Drums--Drive....................  Aluminum................                70                           140
                                                                 -----------------------------------------------
Brake Drums--Drive....................  High Strength Steel.....                37                            74
                                                                 -----------------------------------------------
Suspension Brackets, Hangers..........  Aluminum................                67                           100
                                                                 -----------------------------------------------
Suspension Brackets, Hangers..........  High Strength Steel.....                20                            30
                                                                 -----------------------------------------------
Crossmember--Cab......................  Aluminum................              10              15              15
Crossmember--Cab......................  High Strength Steel.....               2               5               5
Crossmember--Non-Suspension...........  Aluminum................              15              15              15
Crossmember--Non-Suspension...........  High Strength Steel.....               5               5               5
Crossmember--Suspension...............  Aluminum................              15              25              25
Crossmember--Suspension...............  High Strength Steel.....               6               6               6
Driveshaft............................  Aluminum................              12              40              50
Driveshaft............................  High Strength Steel.....               5              10              12
Frame Rails...........................  Aluminum................             120             300             440
Frame Rails...........................  High Strength Steel.....              40              40              87
----------------------------------------------------------------------------------------------------------------
\a\ Weight-reduction values apply per vehicle unless otherwise noted.
\b\ For Medium HDV with 6 x 4 or 6 x 2 axle configurations, use the values for Heavy HDV.

[[Page 26131]]

* * * * *
* * * * *
    (g) * * *
    (4) GEM inputs associated with powertrain testing include 
powertrain family, transmission calibration identifier, test data from 
40 CFR 1036.545, and the powertrain test configuration (dynamometer 
connected to transmission output or wheel hub). You do not need to 
identify or provide inputs for transmission gear ratios, fuel map data, 
or engine torque curves, which would otherwise be required under 
paragraph (f) of this section.
* * * * *
    (j) * * *
    (1) Intelligent controls. Enter 2 for tractors with predictive 
cruise control. This includes any cruise control system that 
incorporates satellite-based global-positioning data for controlling 
operator demand. For tractors without predictive cruise control and for 
all vocational vehicles, enter 1.5 if they have neutral coasting or 
full cylinder deactivation when coasting, unless good engineering 
judgment indicates that a lower percentage should apply.
* * * * *
0
67. Amend Sec.  1037.525 by revising paragraphs (a) introductory text, 
(b)(1), (4), and (5), (c)(1) introductory text, and (c)(2) introductory 
text to read as follows:

Sec.  1037.525  Aerodynamic measurements for tractors.

* * * * *
    (a) General provisions. The GEM input for a tractor's aerodynamic 
performance is a Cd value for Phase 1 and a CdA 
value for Phase 2 and Phase 3. The input value is measured or 
calculated for a tractor in a specific test configuration with a 
trailer, such as a high-roof tractor with a box van meeting the 
requirements for the standard trailer.
* * * * *
    (b) * * *
    (1) Determine the functional relationship between your alternate 
method and coastdown testing. Specify this functional relationship as 
Falt-aero for a given alternate drag measurement method. The 
effective yaw angle, [psi]eff, is assumed to be zero degrees 
for Phase 1. For Phase 2 and Phase 3, determine [Psi]eff 
from coastdown test results using the following equation:
[GRAPHIC] [TIFF OMITTED] TP27AP23.070

Where:

CdAcoastdown([psi]eff) = the 
average drag area measured during coastdown at an effective yaw 
angle, [psi]eff.
CdAalt([psi]eff) = the average drag 
area calculated from an alternate drag measurement method at an 
effective yaw angle, [psi]eff.
* * * * *
    (4) Measure the drag area using your alternate method for a Phase 2 
and Phase 3 tractor used to determine Falt-aero with testing 
at yaw angles of 0[deg], 1[deg], 3[deg], 4.5[deg], 6[deg], and 9[deg] (you may 
include additional angles), using direction conventions described in 
Figure 2 of SAE J1252 (incorporated by reference, see Sec.  1037.810). 
Also, determine the drag area at the coastdown effective yaw angle, 
CdAalt([psi]eff), by taking the 
average drag area at [psi]eff and -[psi]eff for 
your vehicle using the same alternate method.
    (5) For Phase 2 and Phase 3 testing, determine separate values of 
Falt-aero for at least one high-roof day cab and one high-
roof sleeper cab for model year 2021, at least two high-roof day cabs 
and two high-roof sleeper cabs for model year 2024, and at least three 
high-roof day cabs and three high-roof sleeper cabs for model year 
2027. These test requirements are cumulative; for example, you may meet 
these requirements by testing two vehicles to support model year 2021 
certification and four additional vehicles to support model year 2023 
certification. For any untested tractor models, apply the value of 
Falt-aero from the tested tractor model that best represents 
the aerodynamic characteristics of the untested tractor model, 
consistent with good engineering judgment. Testing under this paragraph 
(b)(5) continues to be valid for later model years until you change the 
tractor model in a way that causes the test results to no longer 
represent production vehicles. You must also determine unique values of 
Falt-aero for low-roof and mid-roof tractors if you 
determine CdA values based on low or mid-roof tractor 
testing as shown in Table 4 of Sec.  1037.520. For Phase 1 testing, if 
good engineering judgment allows it, you may calculate a single, 
constant value of Falt-aero for your whole product line by 
dividing the coastdown drag area, CdAcoastdown, 
by drag area from your alternate method, CdAalt.
* * * * *
    (c) * * *
    (1) Apply the following method for all Phase 2 and Phase 3 testing 
with an alternate method:
* * * * *
    (2) Apply the following method for Phase 2 and Phase 3 coastdown 
testing other than coastdown testing used to establish 
Falt-aero:
* * * * *

Sec.  1037.526  [Removed]

0
68. Remove Sec.  1037.526.
0
69. Revise Sec.  1037.527 to read as follows:

Sec.  1037.527  Aerodynamic measurements for vocational vehicles.

    This section describes a methodology for determining vocational 
vehicle aerodynamic input values for as described in Sec.  1037.520. 
This measurement is optional. A vocational vehicle's aerodynamic 
performance is based on a [Delta]CdA value relative to a 
baseline vehicle. Determine a [Delta]CdA value by performing 
A to B testing as follows:
    (a) Determine a baseline CdA value for a vehicle 
representing a production configuration without the aerodynamic 
improvement. Repeat this testing and measure CdA for a 
vehicle with the improved aerodynamic design.
    (b) Use good engineering judgment to perform paired tests that 
accurately demonstrate the reduction in aerodynamic drag associated 
with the improved design.
    (c) Measure CdA in m2 to two decimal places. 
Calculate [Delta]CdA by subtracting the drag area for the 
test vehicle from the drag area for the baseline vehicle.
0
70. Amend Sec.  1037.528 by:
0
a. Revising the introductory text, paragraphs (b) introductory text and 
(h)(5)(iv);
0
b. Removing paragraph (h)(7);
0
c. Redesignating paragraphs (h)(8) through (12) as paragraphs (h)(7) 
through (11); and
0
d. Revising newly redesignated paragraph (h)(10).
    The revisions read as follows:

Sec.  1037.528  Coastdown procedures for calculating drag area 
(CdA).

    The coastdown procedures in this section describe how to calculate 
drag area, CdA, for Phase 2 and Phase 3 tractors and 
vocational vehicles, subject to the provisions of Sec. Sec.  1037.525 
and 1037.527. These procedures are considered the reference method for 
tractors. Follow the provisions of Sections 1 through 9 of SAE J2263 
(incorporated by reference, see Sec.  1037.810), with the 
clarifications and exceptions described in this section. Several of 
these exceptions are from SAE J1263 (incorporated by reference, see 
Sec.  1037.810). The coastdown procedures in 40 CFR 1066.310 apply 
instead of the provisions of this section for Phase 1 tractors.
* * * * *
    (b) To determine CdA values for a tractor, perform 
coastdown testing with a tractor-trailer combination using the 
manufacturer's tractor and a standard

[[Page 26132]]

trailer. Prepare the vehicles for testing as follows:
* * * * *
    (h) * * *
    (5) * * *
    (iv) Calculate [Delta]Fspin using the following 
equation:
[GRAPHIC] [TIFF OMITTED] TP27AP23.119

Example:

[Delta]Fspin = 129.7-52.7
[Delta]Fspin = 77.0 N
* * * * *
    (10) Calculate drag area, CdA, in m2 for each 
high-speed segment using the following equation, expressed to at least 
three decimal places:
[GRAPHIC] [TIFF OMITTED] TP27AP23.071

Where:

Fhi = road load force at high speed determined from Eq. 
1037.528-7.
Flo,pair = the average of Flo values for a 
pair of opposite direction runs calculated as described in paragraph 
(h)(9) of this section.
[Delta]Fspin = the difference in drive-axle spin loss 
force between high-speed and low-speed coastdown segments. This is 
described in paragraph (h)(5) of this section for tractor testing.
[Delta]FTRR = the difference in tire rolling resistance 
force between high-speed and low-speed coastdown segments as 
described in paragraph (h)(6) of this section.
v2air,lo,pair = the average of 
v2air,lo values for a pair of opposite 
direction runs calculated as described in paragraph (h)(9) of this 
section.
R = specific gas constant = 287.058 J/(kg[middot]K).
T = mean air temperature expressed to at least one decimal Place.
pact = mean absolute air pressure expressed to at least 
one decimal place.

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.072
    
* * * * *
0
71. Amend Sec.  1037.530 by revising the introductory text, paragraphs 
(a) introductory text, (c), and (d) introductory text to read as 
follows:

Sec.  1037.530  Wind-tunnel procedures for calculating drag area 
(CdA).

    The wind-tunnel procedure specified in this section is an alternate 
procedure for tractors.
    (a) You may measure drag areas consistent with published SAE 
procedures as described in this section using any wind tunnel 
recognized by the Subsonic Aerodynamic Testing Association, subject to 
the provisions of Sec. Sec.  1037.525 and 1037.527. If your wind tunnel 
does not meet the specifications described in this section, you may ask 
us to approve it as an alternate method under Sec.  1037.525(d). All 
wind tunnels and wind tunnel tests must meet the specifications 
described in SAE J1252 (incorporated by reference, see Sec.  1037.810), 
with the following exceptions and additional provisions:
* * * * *
    (c) To determine CdA values for certifying tractors, 
perform wind-tunnel testing with a tractor-trailer combination using 
the manufacturer's tractor and a standard trailer. Use a moving/rolling 
floor if the facility has one. For Phase 1 tractors, conduct the wind 
tunnel tests at a zero yaw angle. For Phase 2 and Phase 3 vehicles, 
conduct the wind tunnel tests by measuring the drag area at yaw angles 
of +4.5[deg] and -4.5[deg] and calculating the average of those two 
values.
    (d) In your request to use wind-tunnel testing for tractors, 
describe how you meet all the specifications that apply under this 
section, using terminology consistent with SAE J1594 (incorporated by 
reference, see Sec.  1037.810). If you request our approval to use 
wind-tunnel testing even though you do not meet all the specifications 
of this section, describe how your method nevertheless qualifies as an 
alternate method under Sec.  1037.525(d) and include all the following 
information:
* * * * *
0
72. Amend Sec.  1037.532 by revising the introductory text, paragraphs 
(a) introductory text, (b), and (c) introductory text to read as 
follows:

Sec.  1037.532  Using computational fluid dynamics to calculate drag 
area (CdA).

    This section describes how to use commercially available 
computational fluid dynamics (CFD) software to determine CdA 
values, subject to the provisions of Sec. Sec.  1037.525 and 1037.527. 
This is considered to be an alternate method for tractors.
    (a) For Phase 2 and Phase 3 vehicles, use SAE J2966 (incorporated 
by

[[Page 26133]]

reference, see Sec.  1037.810), with the following clarifications and 
exceptions:
* * * * *
    (b) For Phase 1 tractors, apply the procedures as specified in 
paragraphs (c) through (f) of this section. Paragraphs (c) through (f) 
of section apply for Phase 2 and Phase 3 vehicles only as specified in 
paragraph (a) of this section.
    (c) To determine CdA values for certifying a tractor, 
perform CFD modeling based on a tractor-trailer combination using the 
manufacturer's tractor and a standard trailer. Perform all CFD modeling 
as follows:
* * * * *
0
73. Amend Sec.  1037.540 by:
0
a. Revising the introductory text and paragraphs (c)(2) and (5), 
(d)(4), and (f) introductory text; and
0
b. In paragraph (f)(3), by removing the text ``the approved utility 
factor curve'' and adding, in its place, the text ``the utility factor 
curve in appendix E of this part''.

    The revisions read as follows:

Sec.  1037.540  Special procedures for testing vehicles with hybrid 
power take-off.

    This section describes optional procedures for quantifying the 
reduction in greenhouse gas emissions for vehicles as a result of 
running power take-off (PTO) devices with a hybrid energy delivery 
system. See 40 CFR 1036.545 for powertrain testing requirements that 
apply for drivetrain hybrid systems. The procedures are written to test 
the PTO by ensuring that the engine produces all of the energy with no 
net change in stored energy (charge-sustaining), and for plug-in hybrid 
electric vehicles, also allowing for drawing down the stored energy 
(charge-depleting). The full charge-sustaining test for the hybrid 
vehicle is from a fully charged rechargeable energy storage system 
(RESS) to a depleted RESS and then back to a fully charged RESS. You 
must include all hardware for the PTO system. You may ask us to modify 
the provisions of this section to allow testing hybrid vehicles that 
use a technology other than batteries for storing energy, consistent 
with good engineering judgment. For plug-in hybrid electric vehicles, 
use a utility factor to properly weight charge-sustaining and charge-
depleting operation as described in paragraph (f)(3) of this section.
* * * * *
    (c) * * *
    (2) Prepare the vehicle for testing by operating it as needed to 
stabilize the RESS at a full state of charge (or equivalent for 
vehicles that use a technology other than batteries for storing 
energy).
* * * * *
    (5) Operate the vehicle over one or both of the denormalized PTO 
duty cycles without turning the vehicle off, until the engine starts 
and then shuts down. This may require running multiple repeats of the 
PTO duty cycles. For systems that are not plug-in hybrid systems, the 
test cycle is completed once the engine shuts down. For plug-in hybrid 
systems, continue running until the PTO hybrid is running in a charge-
sustaining mode such that the ``End of Test'' requirements defined in 
40 CFR 1066.501 are met. Measure emissions as described in paragraph 
(b)(7) of this section. Use good engineering judgment to minimize the 
variability in testing between the two types of vehicles.
* * * * *
    (d) * * *
    (4) Divide the total PTO operating time from paragraph (d)(3) of 
this section by a conversion factor of 0.0144 hr/mi for Phase 1 and 
0.0217 hr/mi for Phase 2 and Phase 3 to determine the equivalent 
distance driven. The conversion factors are based on estimates of 
average vehicle speed and PTO operating time as a percentage of total 
engine operating time; the Phase 2 and Phase 3 conversion factor is 
calculated from an average speed of 27.1 mi/hr and PTO operation 37% of 
engine operating time, as follows:
[GRAPHIC] [TIFF OMITTED] TP27AP23.073

* * * * *
    (f) For Phase 2 and Phase 3, calculate the delta PTO fuel results 
for input into GEM during vehicle certification as follows:
* * * * *

Sec.  1037.550--[Removed]  

0
74. Remove Sec.  1037.550.
0
75. Amend Sec.  1037.551 by revising the introductory text and 
paragraphs (b) and (c) to read as follows:

Sec.  1037.551  Engine-based simulation of powertrain testing.

    40 CFR 1036.545 describes how to measure fuel consumption over 
specific duty cycles with an engine coupled to a transmission; 40 CFR 
1036.545(a)(5) describes how to create equivalent duty cycles for 
repeating those same measurements with just the engine. This Sec.  
1037.551 describes how to perform this engine testing to simulate the 
powertrain test. These engine-based measurements may be used for 
selective enforcement audits as described in Sec.  1037.301, as long as 
the test engine's operation represents the engine operation observed in 
the powertrain test. If we use this approach for confirmatory testing, 
when making compliance determinations, we will consider the uncertainty 
associated with this approach relative to full powertrain testing. Use 
of this approach for engine SEAs is optional for engine manufacturers.
* * * * *
    (b) Operate the engine over the applicable engine duty cycles 
corresponding to the vehicle cycles specified in Sec.  1037.510(a)(2) 
for powertrain testing over the applicable vehicle simulations 
described in 40 CFR 1036.545(j). Warm up the engine to prepare for the 
transient test or one of the highway cruise cycles by operating it one 
time over one of the simulations of the corresponding duty cycle. Warm 
up the engine to prepare for the idle test by operating it over a 
simulation of the 65-mi/hr highway cruise cycle for 600 seconds. Within 
60 seconds after concluding the warm up cycle, start emission sampling 
while the engine operates over the duty cycle. You may perform any 
number of test runs directly in succession once the engine is warmed 
up. Perform cycle validation as described in 40 CFR 1065.514 for engine 
speed, torque, and power.
    (c) Calculate the mass of fuel consumed as described in 40 CFR 
1036.545(n) and (o). Correct each measured value for the test fuel's 
mass-specific net energy content as described in 40 CFR 1036.550. Use 
these corrected values to determine whether the engine's emission 
levels conform to the declared fuel-consumption rates from the 
powertrain test.
0
76. Amend Sec.  1037.555 by revising the introductory text to read as 
follows:

Sec.  1037.555  Special procedures for testing Phase 1 hybrid systems.

    This section describes a powertrain testing procedure for 
simulating a chassis test with a pre-transmission or

[[Page 26134]]

post-transmission hybrid system to perform A to B testing of Phase 1 
vehicles. These procedures may also be used to perform A to B testing 
with non-hybrid systems. See 40 CFR 1036.545 for Phase 2 and Phase 3 
hybrid systems.
* * * * *
0
77. Amend Sec.  1037.560 by revising paragraph (e)(2) to read as 
follows:

Sec.  1037.560  Axle efficiency test.

* * * * *
    (e) * * *
    (2) Maintain gear oil temperature at (81 to 83) [deg]C. You may 
alternatively specify a lower range by shifting both temperatures down 
by the same amount for all test points or on a test point by test point 
basis. We will test your axle assembly using the same temperature range 
you specify for your testing. You may use an external gear oil 
conditioning system, as long as it does not affect measured values.
* * * * *
0
78. Amend Sec.  1037.601 by revising paragraph (b) to read as follows:

Sec.  1037.601  General compliance provisions.

* * * * *
    (b) Vehicles exempted from the applicable standards of 40 CFR part 
86 or part 1036 other than glider vehicles are exempt from the 
standards of this part without request. Similarly, vehicles other than 
glider vehicles are exempt without request if the installed engine is 
exempted from the applicable standards in 40 CFR part 86 or part 1036.
* * * * *
0
79. Amend Sec.  1037.610 by revising paragraph (f)(2) to read as 
follows:

Sec.  1037.610  Vehicles with off-cycle technologies.

* * * * *
    (f) * * *
    (2) For model years 2021 and later, you may not rely on an approval 
for model years before 2021. You must separately request our approval 
before applying an improvement factor or credit under this section for 
Phase 2 and Phase 3 vehicles, even if we approved an improvement factor 
or credit for similar vehicle models before model year 2021. Note that 
Phase 2 and Phase 3 approval may carry over for multiple years.
* * * * *
0
80. Amend Sec.  1037.615 by revising paragraphs (a) and (d) through (g) 
to read as follows:

Sec.  1037.615  Advanced technologies.

    (a) This section describes how to calculate emission credits for 
advanced technologies. You may calculate Phase 1 advanced technology 
credits through model year 2020 for hybrid vehicles with regenerative 
braking, vehicles equipped with Rankine-cycle engines, battery electric 
vehicles, and fuel cell vehicles. You may calculate Phase 2 advanced 
technology credits through model year 2026 for plug-in hybrid electric 
vehicles, battery electric vehicles, and fuel cell vehicles. You may 
calculate Phase 3 advanced technology credits for model year 2027 for 
fuel cell vehicles. You may not generate credits for Phase 1 engine 
technologies for which the engines generate credits under 40 CFR part 
1036.
* * * * *
    (d) For Phase 2 and Phase 3 plug-in hybrid electric vehicles and 
for fuel cells powered by any fuel other than hydrogen, calculate 
CO2 credits using an FEL based on emission measurements from 
powertrain testing. Phase 2 and Phase 3 advanced technology credits do 
not apply for hybrid vehicles that have no plug-in capability.
    (e) [Reserved]
    (f) For battery electric vehicles and for fuel cell electric 
vehicles, calculate CO2 credits using an FEL of 0 g/ton-
mile. Note that these vehicles are subject to compression-ignition 
standards for CO2.
    (g) As specified in subpart H of this part, advanced-technology 
credits generated from Phase 1 vehicles under this section may be used 
under this part 1037 outside of the averaging set in which they were 
generated, or they may be used under 40 CFR part 86, subpart S, or 40 
CFR part 1036. Advanced-technology credits generated from Phase 2 and 
Phase 3 vehicles are subject to all the averaging-set restrictions that 
apply to other emission credits.
* * * * *

Sec.  1037.620  [Amended]

0
81. Amend Sec.  1037.620 by removing paragraph (c) and redesignating 
paragraphs (d) through (f) as paragraphs (c) through (e).
0
82. Amend Sec.  1037.622 by revising the introductory text and 
paragraph (d)(5) to read as follows:

Sec.  1037.622  Shipment of partially complete vehicles to secondary 
vehicle manufacturers.

    This section specifies how manufacturers may introduce partially 
complete vehicles into U.S. commerce (or in the case of certain custom 
vehicles, introduce complete vehicles into U.S. commerce for 
modification by a small manufacturer). The provisions of this section 
are intended to accommodate normal business practices without 
compromising the effectiveness of certified emission controls. You may 
not use the provisions of this section to circumvent the intent of this 
part. For vehicles subject to both exhaust greenhouse gas and 
evaporative standards, the provisions of this part apply separately for 
each certificate.
* * * * *
    (d) * * *
    (5) The provisions of this paragraph (d) may apply separately for 
vehicle greenhouse gas, evaporative, and refueling emission standards.
* * * * *
0
83. AmendSec.  1037.630 by revising paragraphs (a)(1)(iii) and (c) to 
read as follows:

Sec.  1037.630  Special purpose tractors.

    (a) * * *
    (1) * * *
    (iii) Model year 2020 and earlier tractors with a gross combination 
weight rating (GCWR) at or above 120,000 pounds. Note that Phase 2 and 
Phase 3 tractors meeting the definition of ``heavy-haul'' in Sec.  
1037.801 must be certified to the heavy-haul standards in Sec. Sec.  
1037.106 or 1037.670.
* * * * *
    (c) Production limit. No manufacturer may produce more than 21,000 
Phase 1 vehicles under this section in any consecutive three model year 
period. This means you may not exceed 6,000 in a given model year if 
the combined total for the previous two years was 15,000. The 
production limit applies with respect to all Class 7 and Class 8 Phase 
1 tractors certified or exempted as vocational tractors. No production 
limit applies for tractors subject to Phase 2 and Phase 3 standards.
* * * * *
0
84. Amend Sec.  1037.631 by revising paragraph (a) introductory text to 
read as follows:

Sec.  1037.631  Exemption for vocational vehicles intended for off-road 
use.

* * * * *
    (a) Qualifying criteria. Vocational vehicles intended for off-road 
use are exempt without request, subject to the provisions of this 
section, if they are primarily designed to perform work off-road (such 
as in oil fields, mining, forests, or construction sites), and they 
meet at least one of the criteria of paragraph (a)(1) of this section 
and at least one of the criteria of paragraph (a)(2) of this section. 
See Sec.  1037.105(h) for alternate Phase 2 and Phase 3 standards that 
apply for vehicles meeting only one of these sets of criteria.
* * * * *
0
85. Amend Sec.  1037.635 by revising paragraph (b)(1) to read as 
follows:

[[Page 26135]]

Sec.  1037.635  Glider kits and glider vehicles.

* * * * *
    (b) * * *
    (1) The engine must meet the greenhouse gas standards of 40 CFR 
part 1036 that apply for the engine model year corresponding to the 
vehicle's date of manufacture. For example, for a vehicle with a 2024 
date of manufacture, the engine must meet the greenhouse gas standards 
that apply for model year 2024.
* * * * *
0
86. Amend Sec.  1037.640 by revising the introductory text to read as 
follows:

Sec.  1037.640  Variable vehicle speed limiters.

    This section specifies provisions that apply for vehicle speed 
limiters (VSLs) that you model under Sec.  1037.520. This does not 
apply for VSLs that you do not model under Sec.  1037.520. (e) This 
section is written to apply for tractors; however, you may use good 
engineering judgment to apply equivalent adjustments for Phase 2 and 
Phase 3 vocational vehicles with vehicle speed limiters.

* * * * *
0
87. Amend Sec.  1037.660 by revising paragraphs (a)(1)(iv), (2), and 
(3) to read as follows:

Sec.  1037.660  Idle-reduction technologies.

* * * * *
    (a) * * *
    (1) * * *
    (iv) For Phase 2 and Phase 3 tractors, you may identify AES systems 
as ``adjustable'' if, before delivering to the ultimate purchaser, you 
enable authorized dealers to modify the vehicle in a way that disables 
the AES system or makes the threshold inactivity period longer than 300 
seconds. However, the vehicle may not be delivered to the ultimate 
purchaser with the AES system disabled or the threshold inactivity 
period set longer than 300 seconds. You may allow dealers or repair 
facilities to make such modifications; this might involve password 
protection for electronic controls, or special tools that only you 
provide. Any dealers making any modifications before delivery to the 
ultimate purchaser must notify you, and you must account for such 
modifications in your production and ABT reports after the end of the 
model year. Dealers failing to provide prompt notification are in 
violation of the tampering prohibition of 40 CFR 1068.101(b)(1). Dealer 
notifications are deemed to be submissions to EPA. Note that these 
adjustments may not be made if the AES system was not ``adjustable'' 
when first delivered to the ultimate purchaser.
* * * * *
    (2) Neutral idle. Phase 2 and Phase 3 vehicles with hydrokinetic 
torque converters paired with automatic transmissions qualify for 
neutral-idle credit in GEM modeling if the transmission reduces torque 
equivalent to shifting into neutral throughout the interval during 
which the vehicle's brake pedal is depressed and the vehicle is at a 
zero-speed condition (beginning within five seconds of the vehicle 
reaching zero speed with the brake depressed). If a vehicle reduces 
torque partially but not enough to be equivalent to shifting to 
neutral, you may use the provisions of Sec.  1037.610(g) to apply for 
an appropriate partial emission reduction; this may involve A to B 
testing with the powertrain test procedure in 40 CFR 1036.545 or the 
spin-loss portion of the transmission efficiency test in Sec.  
1037.565.
    (3) Stop-start. Phase 2 and Phase 3 vocational vehicles qualify for 
stop-start reduction in GEM modeling if the engine shuts down no more 
than 5 seconds after the vehicle's brake pedal is depressed when the 
vehicle is at a zero-speed condition.
* * * * *
0
88. Amend Sec.  1037.665 by revising paragraphs (a)(1) and (d) to read 
as follows:

Sec.  1037.665  Production and in-use tractor testing.

* * * * *
    (a) * * *
    (1) Each calendar year, select for testing three sleeper cabs and 
two day cabs certified to Phase 1 or Phase 2 or Phase 3 standards. If 
we do not identify certain vehicle configurations for your testing, 
select models that you project to be among your 12 highest-selling 
vehicle configurations for the given year.
* * * * *
    (d) Greenhouse gas standards do not apply with respect to testing 
under this section. Note however that NTE standards apply for any 
qualifying operation that occurs during the testing in the same way 
that it would during any other in-use testing.
0
89. Amend Sec.  1037.670 by revising paragraph (a) to read as follows:

Sec.  1037.670  Optional CO2 emission standards for tractors at or 
above 120,000 pounds GCWR.

    (a) You may certify tractors at or above 120,000 pounds GCWR to the 
following CO2 standards instead of the Phase 2 
CO2 standards of Sec.  1037.106:

 Table 1 of Paragraph (a) of Sec.   1037.670--Optional CO2 Standards for
     Model Year 2026 and Earlier Tractors Above 120,000 Pounds GCWR
                            (g/ton-mile) \a\
------------------------------------------------------------------------
                                            Model years     Model years
               Subcategory                   2021-2023       2024-2026
------------------------------------------------------------------------
Heavy Class 8 Low-Roof Day Cab..........            53.5            50.8
Heavy Class 8 Low-Roof Sleeper Cab......            47.1            44.5
Heavy Class 8 Mid-Roof Day Cab..........            55.6            52.8
Heavy Class 8 Mid-Roof Sleeper Cab......            49.6            46.9
Heavy Class 8 High-Roof Day Cab.........            54.5            51.4
Heavy Class 8 High-Roof Sleeper Cab.....            47.1            44.2
------------------------------------------------------------------------
\a\ Note that these standards are not directly comparable to the
  standards for Heavy-Haul Tractors in Sec.   1037.106 because GEM
  handles aerodynamic performance differently for the two sets of
  standards.

* * * * *
0
90. Amend Sec.  1037.701 by revising paragraphs (a) and (h) to read as 
follows:

Sec.  1037.701  General provisions.

    (a) You may average, bank, and trade emission credits for purposes 
of certification as described in this subpart and in subpart B of this 
part to show compliance with the standards of Sec. Sec.  1037.105 and 
1037.106. Note that Sec.  1037.105(h) specifies standards involving 
limited or no use of emission credits under this subpart. Participation 
in this program is voluntary.
* * * * *

[[Page 26136]]

    (h) See Sec.  1037.740 for special credit provisions that apply for 
credits generated under 40 CFR 86.1819-14(k)(7), 40 CFR 1036.615, or 
Sec.  1037.615.
* * * * *
0
91. Revise Sec.  1037.705 to read as follows:

Sec.  1037.705  Generating and calculating CO2 emission 
credits.

    (a) The provisions of this section apply separately for calculating 
CO2 emission credits for each pollutant.
    (b) For each participating family or subfamily, calculate positive 
or negative emission credits relative to the otherwise applicable 
emission standard. Calculate positive emission credits for a family or 
subfamily that has an FEL below the standard. Calculate negative 
emission credits for a family or subfamily that has an FEL above the 
standard. Sum your positive and negative credits for the model year 
before rounding. Round the sum of emission credits to the nearest 
megagram (Mg), using consistent units with the following equation:

Emission credits (Mg) = (Std-FEL) [middot] PL [middot] Volume [middot] 
UL [middot] 10-\6\

Where:

Std = the emission standard associated with the specific regulatory 
subcategory (g/ton-mile). For credits generated on all model year 
2027 and later vocational vehicles with tailpipe CO2 
emissions deemed to be zero under 40 CFR 1037.150(f), use the 
emission standard in Sec.  1037.105 that applies for the 
compression-ignition multi-purpose subcategory for the corresponding 
vehicle weight class.
FEL = the family emission limit for the vehicle subfamily (g/ton-
mile).
PL = standard payload, in tons.
Volume = U.S.-directed production volume of the vehicle subfamily, 
subject to the exclusions described in paragraph (c) of this 
section. For example, if you produce three configurations with the 
same FEL, the subfamily production volume would be the sum of the 
production volumes for these three configurations.
UL = useful life of the vehicle, in miles, as described in 
Sec. Sec.  1037.105 and 1037.106.

    (c) Compliance with the requirements of this subpart is determined 
at the end of the model year by calculating emission credits based on 
actual production volumes, excluding any of the following engines:
    (1) Vehicles that you do not certify to the CO2 
standards of this part because they are permanently exempted under 
subpart G of this part or under 40 CFR part 1068.
    (2) Exported vehicles even if they are certified under this part 
and labeled accordingly.
    (3) Vehicles not subject to the requirements of this part, such as 
those excluded under Sec.  1037.5.
    (4) Any other vehicles, where we indicate elsewhere in this part 
1037 that they are not to be included in the calculations of this 
subpart.
0
92. Amend Sec.  1037.710 by revising paragraph (c) to read as follows:

Sec.  1037.710  Averaging.

* * * * *
    (c) If you certify a vehicle family to an FEL that exceeds the 
otherwise applicable standard, you must obtain enough emission credits 
to offset the vehicle family's deficit by the due date for the final 
report required in Sec.  1037.730. The emission credits used to address 
the deficit may come from your other vehicle families that generate 
emission credits in the same model year (or from later model years as 
specified in Sec.  1037.745), from emission credits you have banked 
from previous model years, or from emission credits generated in the 
same or previous model years that you obtained through trading.
0
93. Amend Sec.  1037.715 by revising paragraph (a) to read as follows:

Sec.  1037.715  Banking.

    (a) Banking is the retention of surplus emission credits by the 
manufacturer generating the emission credits for use in future model 
years for averaging or trading.
* * * * *
0
94. Amend Sec.  1037.720 by revising paragraph (a) to read as follows:

Sec.  1037.720  Trading.

    (a) Trading is the exchange of emission credits between 
manufacturers, or the transfer of credits to another party to retire 
them. You may use traded emission credits for averaging, banking, or 
further trading transactions. Traded emission credits remain subject to 
the averaging-set restrictions based on the averaging set in which they 
were generated.
* * * * *
0
95. Amend Sec.  1037.730 by revising paragraphs (b)(4) and (f) to read 
as follows:

Sec.  1037.730  ABT reports.

* * * * *
    (b) * * *
    (4) The projected and actual production volumes for the model year 
for calculating emission credits. If you changed an FEL during the 
model year, identify the actual production volume associated with each 
FEL.
* * * * *
    (f) * * *
    (1) If you notify us by the deadline for submitting the final 
report that errors mistakenly decreased your balance of emission 
credits, you may correct the errors and recalculate the balance of 
emission credits. If you notify us that errors mistakenly decreased 
your balance of emission credits after the deadline for submitting the 
final report, you may correct the errors and recalculate the balance of 
emission credits after applying a 10 percent discount to the credit 
correction, but only if you notify us within 24 months after the 
deadline for submitting the final report. If you report a negative 
balance of emission credits, we may disallow corrections under this 
paragraph (f)(1).
* * * * *
0
96. Amend Sec.  1037.740 by:
0
a. Removing paragraphs (a)(4) and (5);
0
b. Redesignating paragraph (a)(6) as paragraph (a)(4); and
0
c. Revising paragraphs (b)(1) introductory text and (b)(2).

    The revisions read as follows:

Sec.  1037.740  Restrictions for using emission credits.

* * * * *
    (a) * * *
    (4) Note that other separate averaging sets also apply for emission 
credits not related to this part. For example, vehicles certified to 
the greenhouse gas standards of 40 CFR part 86, subpart S, comprise a 
single averaging set. Separate averaging sets also apply for engines 
under 40 CFR part 1036, including engines used in vehicles subject to 
this subpart.
    (b) * * *
    (1) Credits generated from Phase 1 vehicles may be used for any of 
the averaging sets identified in paragraph (a) of this section; you may 
also use those credits to demonstrate compliance with the 
CO2 emission standards in 40 CFR part 86, subpart S, and 40 
CFR part 1036. Similarly, you may use Phase 1 advanced-technology 
credits generated under 40 CFR 86.1819-14(k)(7) or 40 CFR 1036.615 to 
demonstrate compliance with the CO2 standards in this part. 
The maximum amount of advanced-technology credits generated from Phase 
1 vehicles that you may bring into each of the following service class 
groups is 60,000 Mg per model year:
* * * * *
    (2) Credits generated from Phase 2 and Phase 3 vehicles are subject 
to all the averaging-set restrictions that apply to other emission 
credits.
* * * * *
0
97. Amend Sec.  1037.745 by revising paragraph (a) to read as follows:

[[Page 26137]]

Sec.  1037.745  End-of-year CO2 credit deficits.

* * * * *
    (a) Your certificate for a vehicle family for which you do not have 
sufficient CO2 credits will not be void if you remedy the 
deficit with surplus credits within three model years (this applies 
equally for tractors and vocational vehicles). For example, if you have 
a credit deficit of 500 Mg for a vehicle family at the end of model 
year 2015, you must generate (or otherwise obtain) a surplus of at 
least 500 Mg in that same averaging set by the end of model year 2018.
* * * * *
0
98. Amend Sec.  1037.801 by:
0
a. Adding a definition of ``Battery electric vehicle'' in alphabetical 
order;
0
b. Removing the definition of ``Box van'';
0
c. Revising the definition of ``Class'';
0
d. Removing the definitions of ``Container chassis'', ``Electric 
vehicle'', and ``Flatbed trailer'';
0
e. Adding a definition of ``Fuel cell electric vehicle'' in 
alphabetical order;
0
f. Revising the definitions of ``Heavy-duty vehicle'' and ``Heavy-haul 
tractor'';
0
g. Adding a definition of ``Hybrid'' in alphabetical order;
0
h. Removing the definitions of ``Hybrid engine or hybrid powertrain'' 
and ``Hybrid vehicle'';
0
i. Revising the definitions of ``Low rolling resistance tire'', 
``Manufacturer'', and ``Model year'';
0
j. Adding a definition of ``Neat'' in alphabetical order;
0
k. Revising the definitions of ``Phase 1'' and ``Phase 2'';
0
l. Adding definitions of ``Phase 3'' and ``Plug-in hybrid electric 
vehicle'' in alphabetical order;
0
m. Revising the definitions of ``Preliminary approval'', ``Small 
manufacturer'', and ``Standard payload'';
0
n. Removing the definitions of ``Standard tractor'' and ``Tank 
trailer''; and
0
o. Revising the definitions of ``Tire rolling resistance level 
(TRRL)'', ``Trailer'', ``U.S.-directed production volume'', and 
``Vehicle''.
    The additions and revision read as follows:

Sec.  1037.801  Definitions.

* * * * *
    Battery electric vehicle means a motor vehicle powered solely by an 
electric motor where energy for the motor is supplied by one or more 
batteries that receive power from an external source of electricity. 
Note that this definition does not include hybrid vehicles or plug-in 
hybrid electric vehicles.
* * * * *
    Class means relating to GVWR classes for vehicles, as follows:
    (1) Class 2b means relating to heavy-duty motor vehicles at or 
below 10,000 pounds GVWR.
    (2) Class 3 means relating to heavy-duty motor vehicles above 
10,000 pounds GVWR but at or below 14,000 pounds GVWR.
    (3) Class 4 means relating to heavy-duty motor vehicles above 
14,000 pounds GVWR but at or below 16,000 pounds GVWR.
    (4) Class 5 means relating to heavy-duty motor vehicles above 
16,000 pounds GVWR but at or below 19,500 pounds GVWR.
    (5) Class 6 means relating to heavy-duty motor vehicles above 
19,500 pounds GVWR but at or below 26,000 pounds GVWR.
    (6) Class 7 means relating to heavy-duty motor vehicles above 
26,000 pounds GVWR but at or below 33,000 pounds GVWR.
    (7) Class 8 means relating to heavy-duty motor vehicles above 
33,000 pounds GVWR.
* * * * *
    Fuel cell electric vehicle means a motor vehicle powered solely by 
an electric motor where energy for the motor is supplied by hydrogen 
fuel cells. Fuel cell electric vehicles may include energy storage from 
the fuel cells or from regenerative braking in a battery.
* * * * *
    Heavy-duty vehicle means any motor vehicle that has a GVWR above 
8,500 pounds. An incomplete vehicle is also a heavy-duty vehicle if it 
has a curb weight above 6,000 pounds or a basic vehicle frontal area 
greater than 45 square feet.
    Heavy-haul tractor means a tractor with GCWR greater than or equal 
to 120,000 pounds. A heavy-haul tractor is not a vocational tractor in 
Phase 2 and Phase 3.
* * * * *
    Hybrid has the meaning given in 40 CFR 1036.801. Note that a hybrid 
vehicle is a vehicle with a hybrid powertrain (including a hybrid 
engine). This includes plug-in hybrid electric vehicles.
* * * * *
    Low rolling resistance tire means a tire on a vocational vehicle 
with a TRRL at or below of 7.7 N/kN, a steer tire on a tractor with a 
TRRL at or below 7.7 N/kN, a drive tire on a tractor with a TRRL at or 
below 8.1 N/kN.
* * * * *
    Manufacturer has the meaning given in section 216(1) of the Act. In 
general, this term includes any person who manufactures or assembles a 
vehicle (including an incomplete vehicle) for sale in the United States 
or otherwise introduces a new motor vehicle into commerce in the United 
States. This includes importers who import vehicles for resale, 
entities that manufacture glider kits, and entities that assemble 
glider vehicles.
* * * * *
    Model year means one of the following for compliance with this 
part. Note that manufacturers may have other model year designations 
for the same vehicle for compliance with other requirements or for 
other purposes:
    (1) For tractors and vocational vehicles with a date of manufacture 
on or after January 1, 2021, model year means the manufacturer's annual 
new model production period based on the vehicle's date of manufacture, 
where the model year is the calendar year corresponding to the date of 
manufacture, except as follows:
    (i) The vehicle's model year may be designated as the year before 
the calendar year corresponding to the date of manufacture if the 
engine's model year is also from an earlier year. You may ask us to 
extend your prior model year certificate to include such vehicles. Note 
that Sec.  1037.601(a)(2) limits the extent to which vehicle 
manufacturers may install engines built in earlier calendar years.
    (ii) The vehicle's model year may be designated as the year after 
the calendar year corresponding to the vehicle's date of manufacture. 
For example, a manufacturer may produce a new vehicle by installing the 
engine in December 2023 and designating it as a model year 2024 
vehicle.
    (2) For Phase 1 tractors and vocational vehicles with a date of 
manufacture before January 1, 2021, model year means the manufacturer's 
annual new model production period, except as restricted under this 
definition and 40 CFR part 85, subpart X. It must include January 1 of 
the calendar year for which the model year is named, may not begin 
before January 2 of the previous calendar year, and it must end by 
December 31 of the named calendar year. The model year may be set to 
match the calendar year corresponding to the date of manufacture.
    (i) The manufacturer who holds the certificate of conformity for 
the vehicle must assign the model year based on the date when its 
manufacturing operations are completed relative to its annual model 
year period. In unusual circumstances where completion of your assembly 
is delayed, we may allow you to assign a model year one year

[[Page 26138]]

earlier, provided it does not affect which regulatory requirements will 
apply.
    (ii) Unless a vehicle is being shipped to a secondary vehicle 
manufacturer that will hold the certificate of conformity, the model 
year must be assigned prior to introduction of the vehicle into U.S. 
commerce. The certifying manufacturer must redesignate the model year 
if it does not complete its manufacturing operations within the 
originally identified model year. A vehicle introduced into U.S. 
commerce without a model year is deemed to have a model year equal to 
the calendar year of its introduction into U.S. commerce unless the 
certifying manufacturer assigns a later date.
* * * * *
    Neat has the meaning given in 40 CFR 1065.1001.
* * * * *
    Phase 1 means relating to the Phase 1 standards specified in 
Sec. Sec.  1037.105 and 1037.106. For example, a vehicle subject to the 
Phase 1 standards is a Phase 1 vehicle.
    Phase 2 means relating to the Phase 2 standards specified in 
Sec. Sec.  1037.105 and 1037.106.
    Phase 3 means relating to the Phase 3 standards specified in 
Sec. Sec.  1037.105 and 1037.106.
* * * * *
    Plug-in hybrid electric vehicle means a hybrid vehicle that has the 
capability to charge one or more batteries from an external source of 
electricity while the vehicle is parked.
* * * * *
    Preliminary approval means approval granted by an authorized EPA 
representative prior to submission of an application for certification, 
consistent with the provisions of Sec.  1037.210.
* * * * *
    Small manufacturer means a manufacturer meeting the small business 
criteria specified in 13 CFR 121.201 for heavy-duty truck manufacturing 
(NAICS code 336120). The employee limit applies to the total number 
employees for all affiliated companies (as defined in 40 CFR 1068.30).
* * * * *
    Standard payload means the payload assumed for each vehicle, in 
tons, for modeling and calculating emission credits, as follows:
    (1) For vocational vehicles:
    (i) 2.85 tons for Light HDV.
    (ii) 5.6 tons for Medium HDV.
    (iii) 7.5 tons for Heavy HDV.
    (2) For tractors:
    (i) 12.5 tons for Class 7.
    (ii) 19 tons for Class 8, other than heavy-haul tractors.
    (iii) 43 tons for heavy-haul tractors.
* * * * *
    Tire rolling resistance level (TRRL) means a value with units of N/
kN that represents the rolling resistance of a tire configuration. 
TRRLs are used as modeling inputs under Sec.  1037.520. Note that a 
manufacturer may use the measured value for a tire configuration's 
coefficient of rolling resistance, or assign some higher value.
* * * * *
    Trailer means a piece of equipment designed for carrying cargo and 
for being drawn by a tractor when coupled to the tractor's fifth wheel.
* * * * *
    U.S.-directed production volume means the number of vehicle units, 
subject to the requirements of this part, produced by a manufacturer 
for which the manufacturer has a reasonable assurance that sale was or 
will be made to ultimate purchasers in the United States. Note that 
this includes vehicles certified to state emission standards that are 
different than the emission standards in this part.
* * * * *
    Vehicle means equipment intended for use on highways that meets at 
least one of the criteria of paragraph (1) of this definition, as 
follows:
    (1) The following equipment are vehicles:
    (i) A piece of equipment that is intended for self-propelled use on 
highways becomes a vehicle when it includes at least an engine, a 
transmission, and a frame. (Note: For purposes of this definition, any 
electrical, mechanical, and/or hydraulic devices attached to engines 
for the purpose of powering wheels are considered to be transmissions.)
    (ii) A piece of equipment that is intended for self-propelled use 
on highways becomes a vehicle when it includes a passenger compartment 
attached to a frame with one or more axles.
    (2) Vehicles may be complete or incomplete vehicles as follows:
    (i) A complete vehicle is a functioning vehicle that has the 
primary load carrying device or container (or equivalent equipment) 
attached when it is first sold as a vehicle. Examples of equivalent 
equipment would include fifth wheel trailer hitches, firefighting 
equipment, and utility booms.
    (ii) An incomplete vehicle is a vehicle that is not a complete 
vehicle. Incomplete vehicles may also be cab-complete vehicles. This 
may include vehicles sold to secondary vehicle manufacturers.
    (iii) You may ask us to allow you to certify a vehicle as 
incomplete if you manufacture the engines and sell the unassembled 
chassis components, as long as you do not produce and sell the body 
components necessary to complete the vehicle.
* * * * *
0
99. In Sec.  1037.805 amend Table 5 in paragraph (e) by adding an entry 
for ``GHG'' in alphabetical order and removing the entry for ``PHEV'' 
to read as follows:

Sec.  1037.805  Symbols, abbreviations, and acronyms.

* * * * *
    (e) * * *

     Table 5 to Paragraph (e) of Sec.   1037.805--Other Acronyms and
                              Abbreviations
------------------------------------------------------------------------
                  Acronym                              Meaning
------------------------------------------------------------------------
 
                                * * * * *
GHG.......................................  Greenhouse gas.
 
                                * * * * *
------------------------------------------------------------------------

* * * * *
0
100. Amend Sec.  1037.810 by:
0
a. Removing paragraph (c)(9);
0
b. Redesignating paragraph (c)(10) as paragraph (c)(9);
0
c. Revising paragraph (d)(4);
0
d. Removing the text ``bb'' in paragraphs (d)(2), (3), and (5) and add, 
in their place, the text ``x''; and
0
e. Adding paragraph (e).

    The revision and addition read as follows:

Sec.  1037.810  Incorporation by reference.

* * * * *
    (d) * * *
    (4) Greenhouse gas Emissions Model (GEM) Phase 2, Version 4.0, 
April 2022 (``GEM Phase 2, Version 4.0''); IBR approved for Sec. Sec.  
1037.150(x); 1037.520.
* * * * *
    (e) UN Economic Commission for Europe, Information Service, Palais 
des Nations, CH-1211 Geneva 10, Switzerland; [email protected]; 
www.unece.org:
    (1) Addendum 22: United Nations Global Technical Regulation, No. 
22, United Nations Global Technical Regulation on In-vehicle Battery 
Durability for Electrified Vehicles, Adopted April 14, 2022, (``GTR No. 
22''); IBR approved for Sec.  1037.115(f).
    (2) [Reserved]

[[Page 26139]]

0
101. Revise appendix C of part 1037 to read as follows:

Appendix C of Part 1037--Emission Control Identifiers

    This appendix identifies abbreviations for emission control 
information labels, as required under Sec.  1037.135.

Vehicle Speed Limiters
    --VSL--Vehicle speed limiter
    --VSLS--``Soft-top'' vehicle speed limiter
    --VSLE--Expiring vehicle speed limiter
    --VSLD--Vehicle speed limiter with both ``soft-top'' and 
expiration
Idle Reduction Technology
    --IRT5--Engine shutoff after 5 minutes or less of idling
    --IRTE--Expiring engine shutoff
Tires
    --LRRA--Low rolling resistance tires (all)
    --LRRD--Low rolling resistance tires (drive)
    --LRRS--Low rolling resistance tires (steer)
Aerodynamic Components
    --ATS--Aerodynamic side skirt and/or fuel tank fairing
    --ARF--Aerodynamic roof fairing
    --ARFR--Adjustable height aerodynamic roof fairing
    --TGR--Gap reducing tractor fairing (tractor to trailer gap)
Other Components
    --ADVH--Vehicle includes advanced hybrid technology components
    --ADVO--Vehicle includes other advanced-technology components 
(i.e., non-hybrid system)
    --INV--Vehicle includes innovative (off-cycle) technology 
components
    --ATI--Automatic tire inflation system
    --TPMS--Tire pressure monitoring system

0
102. Amend appendix D of part 1037 by revising the appendix heading to 
read as follows:

Appendix D of Part 1037--Heavy-Duty Grade Profile for Phase 2 and Phase 
3 Steady-State Test Cycles

* * * * *

PART 1054--CONTROL OF EMISSIONS FROM NEW, SMALL NONROAD SPARK-
IGNITION ENGINES AND EQUIPMENT

0
103. The authority citation for part 1054 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

0
104. Amend Sec.  1054.501 by revising paragraph (b)(7) to read as 
follows:

Sec.  1054.501  How do I run a valid emission test?

* * * * *
    (b) * * *
    (7) Determine your test fuel's carbon mass fraction, wc, 
using a calculation based on fuel properties as described in 40 CFR 
1065.655(d); however, you must measure fuel properties for [alpha] and 
[beta] rather than using the default values specified in 40 CFR 
1065.655(e).
* * * * *

PART 1065--ENGINE-TESTING PROCEDURES

0
105. The authority citation for part 1065 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

0
106. Amend Sec.  1065.210 by revising paragraph (a) to read as follows:

Sec.  1065.210  Work input and output sensors.

    (a) Application. Use instruments as specified in this section to 
measure work inputs and outputs during engine operation. We recommend 
that you use sensors, transducers, and meters that meet the 
specifications in Table 1 of Sec.  1065.205. Note that your overall 
systems for measuring work inputs and outputs must meet the linearity 
verifications in Sec.  1065.307. We recommend that you measure work 
inputs and outputs where they cross the system boundary as shown in 
Figure 1 of this section. The system boundary is different for air-
cooled engines than for liquid-cooled engines. If you choose to measure 
work before or after a work conversion, relative to the system 
boundary, use good engineering judgment to estimate any work-conversion 
losses in a way that avoids overestimation of total work. For example, 
if it is impractical to instrument the shaft of an exhaust turbine 
generating electrical work, you may decide to measure its converted 
electrical work. As another example, your engine may include an engine 
exhaust electrical heater where the heater is powered by an external 
power source. In these cases, assume an electrical generator efficiency 
of 0.67 ([eta]=0.67), which is a conservative estimate of the 
efficiency and could over-estimate brake-specific emissions. As another 
example, you may decide to measure the tractive (i.e., electrical 
output) power of a locomotive, rather than the brake power of the 
locomotive engine. In these cases, divide the electrical work by 
accurate values of electrical generator efficiency ([eta]<1), or assume 
an efficiency of 1 ([eta]=1), which would over-estimate brake-specific 
emissions. For the example of using locomotive tractive power with a 
generator efficiency of 1 ([eta]=1), this means using the tractive 
power as the brake power in emission calculations. Do not underestimate 
any work conversion efficiencies for any components outside the system 
boundary that do not return work into the system boundary. And do not 
overestimate any work conversion efficiencies for components outside 
the system boundary that do return work into the system boundary. In 
all cases, ensure that you are able to accurately demonstrate 
compliance with the applicable standards in this chapter. Figure 1 
follows:
BILLING CODE 6560-50-P

[[Page 26140]]

Figure 1 to paragraph (a) of Sec.  1065.210: Work Inputs, Outputs, and 
System Boundaries
[GRAPHIC] [TIFF OMITTED] TP27AP23.074

BILLING CODE 6560-50-C
* * * * *

[[Page 26141]]

0
107. Amend subpart C by adding a new center header ``H2 AND 
H2O MEASUREMENTS'' after Sec.  1065.250 and adding 
Sec. Sec.  1065.255 and 1065.257 under the new center header to read as 
follows:

H2 and H2O MEASUREMENTS

Sec.  1065.255  H2 measurement devices.

    (a) General component requirements. We recommend that you use an 
analyzer that meets the specifications in Table 1 of Sec.  1065.205. 
Note that your system must meet the linearity verification in Sec.  
1065.307.
    (b) Instrument types. You may use any of the following analyzers to 
measure H2:
    (1) Magnetic sector mass spectrometer.
    (2) Raman spectrometer.
    (c) Interference verification. Certain species can positively 
interfere with magnetic sector mass spectroscopy and raman spectroscopy 
by causing a response similar to H2. When running the 
interference verification for these analyzers, use good engineering 
judgment to determine interference species. Note that for raman 
spectroscopy interference species are dependent on the H2 
infrared absorption band chosen by the instrument manufacturer. For 
each analyzer determine the H2 infrared absorption band. For 
each H2 infrared adsorption band, determine the interference 
species to use in the verification. Use the interference species 
specified by the instrument manufacturer or use good engineering 
judgment to determine the interference species.

Sec.  1065.257  Fourier transform infrared analyzer for H2O 
measurement.

    (a) Component requirements. We recommend that you use an FTIR 
analyzer that meets the specifications in Table 1 of Sec.  1065.205. 
Note that your system must meet the linearity verification in Sec.  
1065.307 using a water generation system that meets the requirements of 
Sec.  1065.750(a)(6). Use appropriate analytical procedures for 
interpretation of infrared spectra. For example, EPA Test Method 320 
(see Sec.  1065.266(b)) and ASTM D6348 (incorporated by reference, see 
Sec.  1065.1010) are considered valid methods for spectral 
interpretation. You must use heated FTIR analyzers that maintain all 
surfaces that are exposed to emissions at a temperature of (110 to 202) 
[deg]C.
    (b) Interference verification. Certain species can interfere with 
FTIR analyzers by causing a response similar to the water.
    (1) Perform CO2 interference verification for FTIR 
analyzers using the procedures of Sec.  1065.357 as CO2 gas 
can positively interfere with FTIR analyzers by causing a response 
similar to H2O.
    (2) Use good engineering judgment to determine other interference 
species for FTIR analyzers. Possible interference species include, but 
are not limited to, CO, NO, C2H4, and 
C7H8. Perform interference verification using the 
procedures of Sec.  1065.357, replacing occurances of CO2 
(except for Sec.  1065.357(e)(1)) with the targeted interferent specie. 
Note that interference species, with the exception of CO2, 
are dependent on the H2O infrared absorption band chosen by 
the instrument manufacturer. For each analyzer determine the 
H2O infrared absorption band. For each H2O 
infrared absorption band, use good engineering judgment to determine 
interference species to use in the verification.
0
108. Amend Sec.  1065.266 by revising paragraph (e) as follows:

Sec.  1065.266  Fourier transform infrared analyzer.

* * * * *
    (e) Interference verification. Perform interference verification 
for FTIR analyzers using the procedures of Sec.  1065.366. Certain 
species can interfere with FTIR analyzers by causing a response similar 
to the hydrocarbon species of interest. When running the interference 
verification for these analyzers, use interference species as follows:
    (1) The interference species for CH4 are CO2, 
H2O, and C2H6.
    (2) The interference species for C2H6 are 
CO2, H2O, and CH4.
    (3) The interference species for other measured hydrocarbon species 
are CO2, H2O, CH4, and 
C2H6.
0
109. Revise the undesignated center heading preceding Sec.  1065.270 to 
read as follows:

NOX, N2O, and NH3 MEASUREMENTS
0
110. Add Sec.  1065.277 under the undesignated and newly revised center 
header ``NOX, N2O, and NH3 
Measurements'' to read as follows:

Sec.  1065.277  NH3 measurement devices.

    (a) General component requirements. We recommend that you use an 
analyzer that meets the specifications in Table 1 of Sec.  1065.205. 
Note that your system must meet the linearity verification in Sec.  
1065.307.
    (b) Instrument types. You may use any of the following analyzers to 
measure NH3:
    (1) Nondispersive ultravoilet (NDUV) analyzer.
    (2) Fourier transform infrared (FTIR) analyzer. Use appropriate 
analytical procedures for interpretation of infrared spectra. For 
example, EPA Test Method 320 (see Sec.  1065.266(b)) and ASTM D6348 
(incorporated by reference, see Sec.  1065.1010) are considered valid 
methods for spectral interpretation.
    (3) Laser infrared analyzer. Examples of laser infrared analyzers 
are pulsed-mode high-resolution narrow band mid-infrared analyzers, 
modulated continuous wave high-resolution narrow band mid-infrared 
analyzers, and modulated continuous wave high-resolution near-infrared 
analyzers. A quantum cascade laser, for example, can emit coherent 
light in the mid-infrared region where nitrogen compounds including 
NH3 have strong absorption.
    (c) Sampling system. NH3 has a tendency to adsorb to 
surfaces that it encounters. Minimize NH3 losses and 
sampling artifacts by using sampling system components (sample lines, 
prefilters and valves) made of stainless steel or PTFE heated to (110 
to 202) [deg]C. If you heat these components to temperatures >=130 
[deg]C, use good engineering judgement to minimize NH3 
formation due to thermal decomposition and hydrolysis of any DEF 
present in the sample gas. Use a sample line that is as short as 
practically possible.
    (d) Interference verification. Certain species can positively 
interfere with NDUV, FTIR, and laser infrared analyzers by causing a 
response similar to NH3. Perform interference verification 
for NDUV analyzers using the procedures of Sec.  1065.372, replacing 
occurances of NOX with NH3 and interference 
species with those listed in paragraph (d)(1) of this section. NDUV 
analyzers must have combined interference that is within (0.02.0) [mu]mol/mol. Perform interference verification for FTIR and 
laser infrared analyzers using the procedures of Sec.  1065.377. When 
running the interference verification for these analyzers, use 
interference species as follows:
    (1) For NDUV analyzers, use SO2 and H2O as 
the interference species.
    (2) Use good engineering judgment to determine interference species 
for FTIR and laser infrared analyzers. Note that interference species, 
with the exception of H2O, are dependent on the 
NH3 infrared absorption band chosen by the instrument 
manufacturer. For each analyzer determine the NH3 infrared 
absorption band. For each NH3 infrared absorption band, use 
the interference gases specified by the instrument manufacturer or use 
good engineering judgment to determine the interference gases to use in 
the verification.

[[Page 26142]]

0
111. Amend Sec.  1065.315 by revising paragraphs (a)(2) and (3) to read 
as follows:

Sec.  1065.315  Pressure, temperature, and dewpoint calibration.

    (a) * * *
    (2) Temperature. We recommend digital dry-block or stirred-liquid 
temperature calibrators, with data logging capabilities to minimize 
transcription errors. We recommend using calibration reference 
quantities that are NIST-traceable within 0.5% uncertainty 
of absolute temperature. You may perform linearity verification for 
temperature measurement systems with thermocouples, RTDs, and 
thermistors by removing the sensor from the system and using a 
simulator in its place. Use a NIST-traceable simulator that is 
independently calibrated and, as appropriate, cold-junction 
compensated. The simulator uncertainty scaled to absolute temperature 
must be less than 0.5% of Tmax. If you use this option, you 
must use sensors that the supplier states are accurate to better than 
0.5% of Tmax compared with their standard calibration curve.
    (3) Dewpoint. We recommend a minimum of three different 
temperature-equilibrated and temperature-monitored calibration salt 
solutions in containers that seal completely around the dewpoint 
sensor. We recommend using calibration reference quantities that are 
NIST-traceable within 0.5% uncertainty of absolute dewpoint 
temperature.
* * * * *
0
112. Amend subpart D by adding a new center header ``H2O 
MEASUREMENTS'' after Sec.  1065.355 and adding Sec. Sec.  1065.357 
under the new center header to read as follows:

H2O MEASUREMENTS

Sec.  1065.357  CO2 interference verification for H2O FTIR analyzers.

    (a) Scope and frequency. If you measure H2O using an 
FTIR analyzer, verify the amount of CO2 interference after 
initial analyzer installation and after major maintenance.
    (b) Measurement principles. CO2 can interfere with an 
FTIR analyzer's response to H2O. If the FTIR analyzer uses 
compensation algorithms that utilize measurements of other gases to 
meet this interference verification, simultaneously conduct these other 
measurements to test the compensation algorithms during the analyzer 
interference verification.
    (c) System requirements. An H2O FTIR analyzer must have 
a CO2 interference that is within (0.00.4) mmol/
mol, though we strongly recommend a lower interference that is within 
(0.00.2) mmol/mol.
    (d) Procedure. Perform the interference verification as follows:
    (1) Start, operate, zero, and span the H2O FTIR analyzer 
as you would before an emission test.
    (2) Use a CO2 span gas that meets the specifications of 
Sec.  1065.750 and a concentration that is approximately the maximum 
CO2 concentration expected during emission testing.
    (3) Introduce the CO2 test gas into the sample system.
    (4) Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the transfer line and to 
account for analyzer response.
    (5) While the analyzer measures the sample's concentration, record 
30 seconds of sampled data. Calculate the arithmetic mean of this data. 
The analyzer meets the interference verification if this value is 
within (0.0  0.4) mmol/mol.
    (e) Exceptions. The following exceptions apply:
    (1) You may omit this verification for CO2 for engines 
operating on fuels other than carbon-containing fuels.
    (2) You may omit this verification if you can show by engineering 
analysis that for your H2O sampling system and your 
emission-calculation procedures, the CO2 interference for 
your H2O FTIR analyzer always affects your brake-specific 
emission results within 0.5% of each of the applicable 
standards in this chapter. This specification also applies for vehicle 
testing, except that it relates to emission results in g/mile or g/
kilometer.
    (3) You may use an H2O FTIR analyzer that you determine 
does not meet this verification, as long as you try to correct the 
problem and the measurement deficiency does not adversely affect your 
ability to show that engines comply with all applicable emission 
standards.
0
113. Amend Sec.  1065.360 by revising paragraphs (a)(4), (b), (d) 
introductory text, and (d)(12) to read as follows:

Sec.  1065.360  FID optimization and verification.

    (a) * * *
    (4) You may determine the methane (CH4) and ethane 
(C2H6) response factors as a function of the 
molar water concentration in the raw or diluted exhaust. If you choose 
the option in this paragraph (a)(4), generate and verify the humidity 
level (or fraction) as described in Sec.  1065.365(g).
    (b) Calibration. Use good engineering judgment to develop a 
calibration procedure, such as one based on the FID-analyzer 
manufacturer's instructions and recommended frequency for calibrating 
the FID. Alternately, you may remove system components for off-site 
calibration. For a FID that measures THC, calibrate using 
C3H8 calibration gases that meet the 
specifications of Sec.  1065.750. For a FID that measures 
CH4, calibrate using CH4 calibration gases that 
meet the specifications of Sec.  1065.750. We recommend FID analyzer 
zero and span gases that contain approximately the flow-weighted mean 
concentration of O2 expected during testing. If you use a 
FID to measure CH4 downstream of a nonmethane cutter (NMC), 
you may calibrate that FID using CH4 calibration gases with 
the NMC. Regardless of the calibration gas composition, calibrate on a 
carbon number basis of one (C1). For example, if you use a 
C3H8 span gas of concentration 200 [mu]mol/mol, 
span the FID to respond with a value of 600 [mu]mol/mol. As another 
example, if you use a CH4 span gas with a concentration of 
200 [mu]mol/mol, span the FID to respond with a value of 200 [mu]mol/
mol.
* * * * *
    (d) THC FID CH4 response factor determination. This procedure is 
only for FID analyzers that measure THC. Since FID analyzers generally 
have a different response to CH4 versus 
C3H8, determine the THC-FID analyzer's 
CH4 response factor, RFCH4[THC-FID], after FID 
optimization. Use the most recent RFCH4[THC-FID] measured 
according to this section in the calculations for HC determination 
described in Sec.  1065.660 to compensate for CH4 response. 
Determine RFCH4[THC-FID] as follows, noting that you do not 
determine RFCH4[THC-FID] for FIDs that are calibrated and 
spanned using CH4 with an NMC:
* * * * *
    (12) You may determine the response factor as a function of molar 
water concentration and use this response factor to account for the 
CH4 response for NMHC determination described in Sec.  
1065.660(b)(2)(iii). If you use this option, humidify the 
CH4 span gas as described in Sec.  1065.365(g) and repeat 
the steps in paragraphs (d)(7) through (9) of this section until 
measurements are complete for each setpoint in the selected range. 
Divide each mean measured CH4 concentration by the recorded 
span concentration of the CH4 calibration gas, adjusted for 
water content, to determine the FID analyzer's CH4 response 
factor, RFCH4[THC-FID]. Use the CH4 response 
factors at the different setpoints to create a functional relationship 
between response factor and molar water concentration,

[[Page 26143]]

downstream of the last sample dryer if any sample dryers are present. 
Use this functional relationship to determine the response factor 
during an emission test.
* * * * *
0
114. Revise Sec.  1065.365 to read as follows:

Sec.  1065.365  Nonmethane cutter penetration fractions and NMC FID 
response factors.

    (a) Scope and frequency. If you use a FID analyzer and a nonmethane 
cutter (NMC) to measure methane (CH4), determine the NMC's 
penetration fractions of CH4, PFCH4, and ethane 
(C2H6), PFC2H6. As detailed in this 
section, these penetration fractions may be determined as a combination 
of NMC penetration fractions and FID analyzer response factors, 
depending on your particular NMC and FID analyzer configuration. 
Perform this verification after installing the NMC. Repeat this 
verification within 185 days of testing to verify that the catalytic 
activity of the NMC has not deteriorated. Note that because NMCs can 
deteriorate rapidly and without warning if they are operated outside of 
certain ranges of gas concentrations and outside of certain temperature 
ranges, good engineering judgment may dictate that you determine an 
NMC's penetration fractions more frequently.
    (b) Measurement principles. A NMC is a heated catalyst that removes 
nonmethane hydrocarbons from an exhaust sample stream before the FID 
analyzer measures the remaining hydrocarbon concentration. An ideal NMC 
would have a CH4 penetration fraction, PFCH4, of 
1.000, and the penetration fraction for all other nonmethane 
hydrocarbons would be 0.000, as represented by PFC2H6. The 
emission calculations in Sec.  1065.660 use the measured values from 
this verification to account for less than ideal NMC performance.
    (c) System requirements. We do not limit NMC penetration fractions 
to a certain range. However, we recommend that you optimize an NMC by 
adjusting its temperature to achieve a PFC2H6 <0.02, as 
determined by paragraphs (d), (e), or (f) of this section, as 
applicable, using dry gases. If we use an NMC for testing, it will meet 
this recommendation. If adjusting NMC temperature does not result in 
achieving this recommendation, we recommend that you replace the 
catalyst material. Use the most recently determined penetration values 
from this section to calculate HC emissions according to Sec.  1065.660 
and Sec.  1065.665 as applicable.
    (d) Procedure for a FID calibrated with the NMC. The method 
described in this paragraph (d) is recommended over the procedures 
specified in paragraphs (e) and (f) of this section and required for 
any gaseous-fueled engine, including dual-fuel and flexible-fuel 
engines. For any gaseous-fueled engine, including dual-fuel and 
flexible-fuel engines, you must determine the combined CH4 
response factor and penetration fraction, RFPFCH4[NMC-FID], 
and combined C2H6 response factor and penetration 
fraction, RFPFC2H6[NMC-FID], as a function of the molar 
water concentration in the raw or diluted exhaust as described in 
paragraphs (d)(9) and (g) of this section. Note that 
RFPFCH4[NMC-FID] is set equal to 1.0 only for zero molar 
water concentration. For any other engine you may use the same 
procedure, or you may set RFPFCH4[NMC-FID] equal to 1.0 and 
determine RFPFC2H6[NMC-FID] at zero molar water 
concentration. Generate and verify the humidity generation as described 
in paragraph (g) of this section.
    (1) Select CH4 and C2H6 analytical 
gas mixtures and ensure that both mixtures meet the specifications of 
Sec.  1065.750. Select a CH4 concentration that you would 
use for spanning the FID during emission testing and select a 
C2H6 concentration that is typical of the peak 
NMHC concentration expected at the hydrocarbon standard or equal to the 
THC analyzer's span value. For CH4 analyzers with multiple 
ranges, perform this procedure on the highest range used for emission 
testing.
    (2) Start, operate, and optimize the NMC according to the 
manufacturer's instructions, including any temperature optimization.
    (3) Confirm that the FID analyzer meets all the specifications of 
Sec.  1065.360.
    (4) Start and operate the FID analyzer according to the 
manufacturer's instructions.
    (5) Zero and span the FID with the NMC as you would during emission 
testing. Span the FID through the NMC by using CH4 span gas.
    (6) Introduce the C2H6 analytical gas mixture 
upstream of the NMC. Use good engineering judgment to address the 
effect of hydrocarbon contamination if your point of introduction is 
vastly different from the point of zero/span gas introduction.
    (7) Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the NMC and to account for 
the analyzer's response.
    (8) While the analyzer measures a stable concentration, record 30 
seconds of sampled data. Calculate the arithmetic mean of these data 
points.
    (9) Divide the mean C2H6 concentration by the 
reference concentration of C2H6, converted to a 
C1 basis and adjusted for water content, if necessary. The 
result is the combined C2H6 response factor and 
penetration fraction, RFPFC2H6[NMC-FID]. Use this combined 
C2H6 response factor and 
C2H6 penetration fraction and the product of the 
CH4 response factor and CH4 penetration fraction, 
RFPFCH4[NMC-FID], set to 1.0 in emission calculations 
according to Sec.  1065.660(b)(2)(i) or (d)(1)(i) or Sec.  1065.665, as 
applicable. If you are generating mixtures as a function of molar water 
concentration, follow the guidance in paragraph (g) of this section and 
repeat the steps in paragraphs (d)(6) to (9) of this section until all 
setpoints have been completed. Use RFPFC2H6[NMC-FID] at the 
different setpoints to create a functional relationship between 
RFPFC2H6[NMC-FID] and molar water concentration, downstream 
of the last sample dryer if any sample dryers are present. Use this 
functional relationship to determine the combined response factor and 
penetration fraction during the emission test.
    (10) If required by this paragraph (d), repeat the steps in 
paragraphs (d)(6) through (9) of this section, but with the 
CH4 analytical gas mixture instead of 
C2H6 and determine RFPFCH4[NMC-FID] 
instead.
    (11) Use this combined C2H6 response factor 
and penetration fraction, RFPFC2H6[NMC-FID], and this 
combined CH4 response factor and penetration fraction, 
RFPFCH4[NMC-FID], in emission calculations according to 
Sec. Sec.  1065.660(b)(2)(i) and 1065.660(d)(1)(i).
    (e) Procedure for a FID calibrated with propane, bypassing the NMC. 
If you use a single FID for THC and CH4 determination with 
an NMC that is calibrated with propane, C3H8, by 
bypassing the NMC, determine its penetration fractions, 
PFC2H6[NMC-FID] and PFCH4[NMC-FID], as follows:
    (1) Select CH4 and C2H6 analytical 
gas mixtures and ensure that both mixtures meet the specifications of 
Sec.  1065.750. Select a CH4 concentration that you would 
use for spanning the FID during emission testing and select a 
C2H6 concentration that is typical of the peak 
NMHC concentration expected at the hydrocarbon standard and the 
C2H6 concentration typical of the peak total 
hydrocarbon (THC) concentration expected at the hydrocarbon standard or 
equal to the THC analyzer's span value. For CH4 analyzers 
with multiple ranges, perform this procedure on the highest range used 
for emission testing.
    (2) Start and operate the NMC according to the manufacturer's

[[Page 26144]]

instructions, including any temperature optimization.
    (3) Confirm that the FID analyzer meets all the specifications of 
Sec.  1065.360.
    (4) Start and operate the FID analyzer according to the 
manufacturer's instructions.
    (5) Zero and span the FID as you would during emission testing. 
Span the FID by bypassing the NMC and by using 
C3H8 span gas. Note that you must span the FID on 
a C1 basis. For example, if your span gas has a propane 
reference value of 100 [mu]mol/mol, the correct FID response to that 
span gas is 300 [mu]mol/mol because there are three carbon atoms per 
C3H8 molecule.
    (6) Introduce the C2H6 analytical gas mixture 
upstream of the NMC. Use good engineering judgment to address the 
effect of hydrocarbon contamination if your point of introduction is 
vastly different from the point of zero/span gas introduction.
    (7) Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the NMC and to account for 
the analyzer's response.
    (8) While the analyzer measures a stable concentration, record 30 
seconds of sampled data. Calculate the arithmetic mean of these data 
points.
    (9) Reroute the flow path to bypass the NMC, introduce the 
C2H6 analytical gas mixture, and repeat the steps 
in paragraphs (e)(7) through (8) of this section.
    (10) Divide the mean C2H6 concentration 
measured through the NMC by the mean C2H6 
concentration measured after bypassing the NMC. The result is the 
C2H6 penetration fraction, 
PFC2H6[NMC-FID]. Use this penetration fraction according to 
Sec.  1065.660(b)(2)(ii), Sec.  1065.660(d)(1)(ii), or Sec.  1065.665, 
as applicable.
    (11) Repeat the steps in paragraphs (e)(6) through (10) of this 
section, but with the CH4 analytical gas mixture instead of 
C2H6. The result will be the CH4 
penetration fraction, PFCH4[NMC-FID]. Use this penetration 
fraction according to Sec.  1065.660(b)(2)(ii) or Sec.  1065.665, as 
applicable.
    (f) Procedure for a FID calibrated with CH4, bypassing the NMC. If 
you use a FID with an NMC that is calibrated with CH4, by 
bypassing the NMC, determine its combined C2H6 
response factor and penetration fraction, RFPFC2H6[NMC-FID], 
as well as its CH4 penetration fraction, 
PFCH4[NMC-FID], as follows:
    (1) Select CH4 and C2H6 analytical 
gas mixtures and ensure that both mixtures meet the specifications of 
Sec.  1065.750. Select a CH4 concentration that you would 
use for spanning the FID during emission testing and select a 
C2H6 concentration that is typical of the peak 
NMHC concentration expected at the hydrocarbon standard or equal to the 
THC analyzer's span value. For CH4 analyzers with multiple 
ranges, perform this procedure on the highest range used for emission 
testing.
    (2) Start and operate the NMC according to the manufacturer's 
instructions, including any temperature optimization.
    (3) Confirm that the FID analyzer meets all the specifications of 
Sec.  1065.360.
    (4) Start and operate the FID analyzer according to the 
manufacturer's instructions.
    (5) Zero and span the FID as you would during emission testing. 
Span the FID by bypassing the NMC and by using CH4 span gas.
    (6) Introduce the C2H6 analytical gas mixture 
upstream of the NMC. Use good engineering judgment to address the 
effect of hydrocarbon contamination if your point of introduction is 
vastly different from the point of zero/span gas introduction.
    (7) Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the NMC and to account for 
the analyzer's response.
    (8) While the analyzer measures a stable concentration, record 30 
seconds of sampled data. Calculate the arithmetic mean of these data 
points.
    (9) Divide the mean C2H6 concentration by the 
reference concentration of C2H6, converted to a 
C1 basis. The result is the combined 
C2H6 response factor and 
C2H6 penetration fraction, 
RFPFC2H6[NMC-FID]. Use this combined 
C2H6 response factor and penetration fraction 
according to Sec.  1065.660(b)(2)(iii) or (d)(1)(iii) or Sec.  
1065.665, as applicable.
    (10) Introduce the CH4 analytical gas mixture upstream 
of the NMC. Use good engineering judgment to address the effect of 
hydrocarbon contamination if your point of introduction is vastly 
different from the point of zero/span gas introduction.
    (11) Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the NMC and to account for 
the analyzer's response.
    (12) While the analyzer measures a stable concentration, record 30 
seconds of sampled data. Calculate the arithmetic mean of these data 
points.
    (13) Reroute the flow path to bypass the NMC, introduce the 
CH4 analytical gas mixture, and repeat the steps in 
paragraphs (e)(11) and (12) of this section.
    (14) Divide the mean CH4 concentration measured through 
the NMC by the mean CH4 concentration measured after 
bypassing the NMC. The result is the CH4 penetration 
fraction, PFCH4[NMC-FID]. Use this CH4 
penetration fraction according to Sec.  1065.660(b)(2)(iii) or 
(d)(1)(iii) or Sec.  1065.665, as applicable.
    (g) Test gas humidification. If you are generating gas mixtures as 
a function of the molar water concentration in the raw or diluted 
exhaust according to paragraph (d) of this section, then create a 
humidified test gas by bubbling the analytical gas mixture that meets 
the specifications in Sec.  1065.750 through distilled H2O 
in a sealed vessel or use a device that introduces distilled 
H2O as vapor into a controlled gas flow. Determine 
H2O concentration as an average value over intervals of at 
least 30 seconds. We recommend that you design your system so the wall 
temperatures in the transfer lines, fittings, and valves from the point 
where the mole fraction of H2O in the humidified calibration 
gas, xH2Oref, is measured to the analyzer are at least 5 
[deg]C above the local calibration gas dewpoint. Verify the humidity 
generator's uncertainty upon initial installation, within 370 days 
before verifying response factors and penetration fractions, and after 
major maintenance. Use the uncertainties from the calibration of the 
humidity generator's measurements and follow NIST Technical Note 1297 
(incorporated by reference, see Sec.  1065.1010) to verify that the 
amount of H2O in xH2Oref is determined within 
3% uncertainty, UxH2O, for one of the options 
described in Sec.  1065.750(a)(6)(i) or (ii). If the humidity generator 
requires assembly before use, after assembly follow the instrument 
manufacturer's instructions to check for leaks.
    (1) If the sample does not pass through a dryer during emission 
testing, generate at least five different H2O concentrations 
that cover the range from less than the minimum expected to greater 
than the maximum expected water concentration during testing. Use good 
engineering judgment to determine the target concentrations.
    (2) If the sample passes through a dryer during emission testing, 
humidify your test gas to an H2O level at or above the level 
determined in Sec.  1065.145(e)(2) for that dryer and determine a 
single wet analyzer response to the dehumidified sample.
0
115. Amend Sec.  1065.366 by revising paragraph (b) to read as follows:

Sec.  1065.366  Interference verification for FTIR analyzers.

* * * * *
    (b) Measurement principles. Certain species can interfere with 
analyzers by

[[Page 26145]]

causing a response similar to the target analyte. If the analyzer uses 
compensation algorithms that utilize measurements of other gases to 
meet this interference verification, simultaneously conduct these other 
measurements to test the compensation algorithms during the analyzer 
interference verification.
* * * * *
0
116. Amend Sec.  1065.375 by revising paragraphs (b) and (d)(9) to read 
as follows:

Sec.  1065.375  Interference verification for N2O analyzers.

* * * * *
    (b) Measurement principles. Certain species can positively 
interfere with analyzers by causing a response similar to 
N2O. If the analyzer uses compensation algorithms that 
utilize measurements of other gases to meet this interference 
verification, simultaneously conduct these other measurements to test 
the compensation algorithms during the analyzer interference 
verification.
* * * * *
    (d) * * *
    (9) You may also run interference procedures separately for 
individual interference species. If the concentration of the 
interference species used are higher than the maximum levels expected 
during testing, you may scale down each observed interference value 
(the arithmetic mean of 30 second data described in paragraph (d)(7) of 
this section) by multiplying the observed interference by the ratio of 
the maximum expected concentration value to the actual value used 
during this procedure. You may run separate interference concentrations 
of H2O (down to 0.025 mol/mol H2O content) that 
are lower than the maximum levels expected during testing, but you must 
scale up the observed H2O interference by multiplying the 
observed interference by the ratio of the maximum expected 
H2O concentration value to the actual value used during this 
procedure. The sum of the scaled interference values must meet the 
tolerance for combined interference as specified in paragraph (c) of 
this section.
0
117. Add Sec.  1065.377 to read as follows:

Sec.  1065.377  Interference verification for NH3 analyzers.

    (a) Scope and frequency. See Sec.  1065.277 to determine whether 
you need to verify the amount of interference after initial analyzer 
installation and after major maintenance.
    (b) Measurement principles. Certain species can positively 
interfere with analyzers by causing a response similar to 
NH3. If the analyzer uses compensation algorithms that 
utilize measurements of other gases to meet this interference 
verification, simultaneously conduct these other measurements to test 
the compensation algorithms during the analyzer interference 
verification.
    (c) System requirements. Analyzers must have combined interference 
that is within (0.02.0) [mu]mol/mol.
    (d) Procedure. Perform the interference verification as follows:
    (1) Start, operate, zero, and span the NH3 analyzer as 
you would before an emission test. If the sample is passed through a 
dryer during emission testing, you may run this verification test with 
the dryer if it meets the requirements of Sec.  1065.342. Operate the 
dryer at the same conditions as you will for an emission test. You may 
also run this verification test without the sample dryer.
    (2) Create a humidified test gas using a multi component span gas 
that incorporates the target interference species and meets the 
specifications in Sec.  1065.750 and a humidity generator device that 
introduces distilled H2O as vapor into a controlled gas 
flow. If the sample does not pass through a dryer during emission 
testing, humidify your test gas to an H2O level at or above 
the maximum expected during emission testing. If the sample passes 
through a dryer during emission testing, you must humidify your test 
gas to an H2O level at or above the level determined in 
Sec.  1065.145(e)(2) for that dryer. Use interference span gas 
concentrations that are at least as high as the maximum expected during 
testing.
    (3) Introduce the humidified interference test gas into the sample 
system. You may introduce it downstream of any sample dryer, if one is 
used during testing.
    (4) If the sample is not passed through a dryer during this 
verification test, measure the H2O mole fraction, 
xH2O, of the humidified interference test gas as close as 
possible to the inlet of the analyzer. For example, measure dewpoint, 
Tdew, and absolute pressure, ptotal, to calculate 
xH2O. Verify that the H2O content meets the 
requirement in paragraph (d)(2) of this section. If the sample is 
passed through a dryer during this verification test, you must verify 
that the H2O content of the humidified test gas downstream 
of the vessel meets the requirement in paragraph (d)(2) of this section 
based on either direct measurement of the H2O content (e.g., 
dewpoint and pressure) or an estimate based on the vessel pressure and 
temperature. Use good engineering judgment to estimate the 
H2O content. For example, you may use previous direct 
measurements of H2O content to verify the vessel's level of 
saturation.
    (5) If a sample dryer is not used in this verification test, use 
good engineering judgment to prevent condensation in the transfer 
lines, fittings, or valves from the point where xH2O is 
measured to the analyzer. We recommend that you design your system so 
that the wall temperatures in the transfer lines, fittings, and valves 
from the point where xH2O is measured to the analyzer are at 
least 5 [deg]C above the local sample gas dewpoint.
    (6) Allow time for the analyzer response to stabilize. 
Stabilization time may include time to purge the transfer line and to 
account for analyzer response.
    (7) While the analyzer measures the sample's concentration, record 
its output for 30 seconds. Calculate the arithmetic mean of this data. 
When performed with all the gases simultaneously, this is the combined 
interference.
    (8) The analyzer meets the interference verification if the result 
of paragraph (d)(7) of this section meets the tolerance in paragraph 
(c) of this section.
    (9) You may also run interference procedures separately for 
individual interference species. If the concentration of the 
interference species used are higher than the maximum levels expected 
during testing, you may scale down each observed interference value 
(the arithmetic mean of 30 second data described in paragraph (d)(7) of 
this section) by multiplying the observed interference by the ratio of 
the maximum expected concentration value to the actual value used 
during this procedure. You may run separate interference concentrations 
of H2O (down to 0.025 mol/mol H2O content) that 
are lower than the maximum levels expected during testing, but you must 
scale up the observed H2O interference by multiplying the 
observed interference by the ratio of the maximum expected 
H2O concentration value to the actual value used during this 
procedure. The sum of the scaled interference values must meet the 
tolerance for combined interference as specified in paragraph (c) of 
this section.
0
118. Amend Sec.  1065.512 by revising paragraphs (b)(1) and (2) to read 
as follows:

Sec.  1065.512  Duty cycle generation.

* * * * *

[[Page 26146]]

    (b) * * *
    (1) Engine speed for variable-speed engines. For variable-speed 
engines, normalized speed may be expressed as a percentage between warm 
idle speed, fnidle, and maximum test speed, 
fntest, or speed may be expressed by referring to a defined 
speed by name, such as ``warm idle,'' ``intermediate speed,'' or ``A,'' 
``B,'' or ``C'' speed. Section 1065.610 describes how to transform 
these normalized values into a sequence of reference speeds, 
fnref. Running duty cycles with negative or small normalized 
speed values near warm idle speed may cause low-speed idle governors to 
activate and the engine torque to exceed the reference torque even 
though the operator demand is at a minimum. In such cases, we recommend 
controlling the dynamometer so it gives priority to follow the 
reference torque instead of the reference speed and let the engine 
govern the speed. Note that the cycle-validation criteria in Sec.  
1065.514 allow an engine to govern itself. This allowance permits you 
to test engines with enhanced-idle devices, to simulate the effects of 
transmissions such as automatic transmissions, and for engines with 
speed derate intended to limit exhaust mass flowrate.
    (i) For example, an enhanced-idle device might be an idle speed 
value that is normally commanded only under cold-start conditions to 
quickly warm up the engine and aftertreatment devices. In this case, 
negative and very low normalized speeds will generate reference speeds 
below this higher enhanced-idle speed. Control the dynamometer so it 
gives priority to follow the reference torque, controlling the operator 
demand so it gives priority to follow reference speed and let the 
engine govern the speed when the operator demand is at minimum.
    You may do either of the following when using enhanced-idle 
devices:
    (A) While running an engine where the ECM broadcasts an enhanced-
idle speed that is above the denormalized speed, use the broadcast 
speed as the reference speed. Use these new reference points for duty-
cycle validation. This does not affect how you determine denormalized 
reference torque in paragraph (b)(2) of this section.
    (B) If an ECM broadcast signal is not available, perform one or 
more practice cycles to determine the enhanced-idle speed as a function 
of cycle time. Generate the reference cycle as you normally would but 
replace any reference speed that is lower than the enhanced-idle speed 
with the enhanced-idle speed. This does not affect how you determine 
denormalized reference torque in paragraph (b)(2) of this section.
    (ii) For example, an engine with power derate intended to limit 
exhaust mass flowrate might include controls that reduce engine speed 
under cold-start conditions, resulting in reduced exhaust flow that 
assists other aftertreatment thermal management technologies (e.g., 
electric heater). In this case, normalized speeds will generate 
reference speeds above this engine speed derate. Control the 
dynamometer so it gives priority to follow the reference speed, 
controlling the operator demand so it gives priority to follow 
reference torque. You may do one of the following, as specified, when 
using engine derate devices:
    (A) While running an engine where the ECM broadcasts engine derate 
speed that is below the denormalized speed, use the broadcast speed as 
the reference speed. Use these new reference points for duty-cycle 
validation. This does not affect how you determine denormalized 
reference torque in paragraph (b)(2) of this section.
    (B) If an ECM broadcast signal is not available, perform one or 
more practice cycles to determine the engine derate speed as a function 
of cycle time. Generate the reference cycle as you normally would but 
replace any reference speed that is greater than the engine derate 
speed with the engine derate speed. This does not affect how you 
determine denormalized reference torque in paragraph (b)(2) of this 
section.
    (2) Engine torque for variable-speed engines. For variable-speed 
engines, normalized torque is expressed as a percentage of the mapped 
torque at the corresponding reference speed. Section 1065.610 describes 
how to transform normalized torques into a sequence of reference 
torques, Tref. Section 1065.610 also describes special 
requirements for modifying transient duty cycles for variable-speed 
engines intended primarily for propulsion of a vehicle with an 
automatic or manual transmission. Section 1065.610 also describes under 
what conditions you may command Tref greater than the 
reference torque you calculated from a normalized duty cycle, which 
permits you to command Tref values that are limited by a 
declared minimum torque. For any negative torque commands, command 
minimum operator demand and use the dynamometer to control engine speed 
to the reference speed, but if reference speed is so low that the idle 
governor activates, we recommend using the dynamometer to control 
torque to zero, CITT, or a declared minimum torque as appropriate. Note 
that you may omit power and torque points during motoring from the 
cycle-validation criteria in Sec.  1065.514. Also, use the maximum 
mapped torque at the minimum mapped speed as the maximum torque for any 
reference speed at or below the minimum mapped speed.
* * * * *
0
119. Amend Sec.  1065.530 by revising paragraphs (b)(4), (9), and (11) 
to read as follows:

Sec.  1065.530  Emission test sequence.

* * * * *
    (b) * * *
    (4) Pre-heat or pre-cool heat exchangers in the sampling system to 
within their operating temperature tolerances for a test interval.
* * * * *
    (9) Select gas analyzer ranges. You may automatically or manually 
switch gas analyzer ranges during a test interval only if switching is 
performed by changing the span over which the digital resolution of the 
instrument is applied. During a test interval you may not switch the 
gains of an analyzer's analog operational amplifier(s).
* * * * *
    (11) We recommend that you verify gas analyzer responses after 
zeroing and spanning by sampling a calibration gas that has a 
concentration near one-half of the span gas concentration. Based on the 
results and good engineering judgment, you may decide whether or not to 
re-zero, re-span, or re-calibrate a gas analyzer before starting a test 
interval.
* * * * *
0
120. Amend Sec.  1065.601 by revising paragraph (c)(1)(i) and removing 
and reserving paragraph (c)(1)(ii) to read as follows:

Sec.  1065.601  Overview.

* * * * *
    (c) * * *
    (1) * * *
    (i) ISO 8178-4 Section 9.1.6, NOX Correction for 
Humidity and Temperature. See Sec.  1065.670 for approved methods for 
humidity corrections.
    (ii) [Reserved].
* * * * *
0
121. Amend Sec.  1065.602 by adding paragraph (m) to read as follows:

Sec.  1065.602  Statistics.

* * * * *
    (m) Median. Determine median, M, as described in this paragraph 
(m). Arrange the data points in the data set in increasing order where 
the smallest value is ranked 1, the second-smallest value is ranked 2, 
etc.

[[Page 26147]]

    (1) For even numbers of data points:
    (i) Determine the rank of the data point whose value is used to 
determine the median as follows:
[GRAPHIC] [TIFF OMITTED] TP27AP23.075

Where:

i = an indexing variable that represents the rank of the data point 
whose value is used to determine the median.
N = the number of data points in the set.

    Example:

    [GRAPHIC] [TIFF OMITTED] TP27AP23.076
    

    (ii) Determine the median as the average of the data point i and 
the data point i + 1 as follows:
[GRAPHIC] [TIFF OMITTED] TP27AP23.077

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.078
    
    (2) For odd numbers of data points, determine the rank of the data 
point whose value is the median and the corresponding median value as 
follows:
[GRAPHIC] [TIFF OMITTED] TP27AP23.079

Where:

i = an indexing variable that represents the rank of the data point 
whose value is the median.
N = the number of data points in the set.

    Example:

    [GRAPHIC] [TIFF OMITTED] TP27AP23.080
    
0
122. Amend Sec.  1065.655 by revising the section heading and 
paragraphs (a), (b)(4), and (e)(4) introductory text to read as 
follows:

Sec.  1065.655  Chemical balances of carbon-containing fuel, DEF, 
intake air, and exhaust.

    (a) General. Chemical balances of fuel, intake air, and exhaust may 
be used to calculate flows, the amount of water in their flows, and the 
wet concentration of constituents in their flows. Use the chemical 
balance calculations in this section for carbon-containing fuels. For 
fuels other than carbon-containing fuels use the chemical balance 
calculations of section Sec.  1065.656. With one flow rate of either 
fuel, intake air, or exhaust, you may use chemical balances to 
determine the flows of the other two. For example, you may use chemical 
balances along with either intake air or fuel flow to determine raw 
exhaust flow. Note that chemical balance calculations allow measured 
values for the flow rate of diesel exhaust fluid for engines with urea-
based selective catalytic reduction.
    (b) * * *
    (4) The amount of water in a raw or diluted exhaust flow, 
xH2Oexh, when you do not measure the amount of water to 
correct for the amount of water removed by a sampling system. Note that 
you may not use the FTIR based water measurement method in Sec.  
1065.257 to determine xH2Oexh. Correct for removed water 
according to Sec.  1065.659.
* * * * *
    (e) * * *
    (4) Calculate [alpha], [beta], [gamma], and [delta] as described in 
this paragraph (e)(4). If your fuel mixture contains fuels other than 
carbon-containing fuel, calculate those fuels' mass fractions 
wH, wC, wO, and wN as 
described in Sec.  1065.656(d) and set the fuels' mass fraction 
wS to zero. Calculate [alpha], [beta], [gamma], and [delta] 
using the following equations:
* * * * *
0
123. Add Sec.  1065.656 to read as follows:

Sec.  1065.656  Chemical balances of fuels other than carbon-containing 
fuel, DEF, intake air, and exhaust.

    (a) General. Chemical balances of fuel, DEF, intake air, and 
exhaust may be used to calculate flows, the amount of water in their 
flows, and the wet concentration of constituents in their flows. Use 
the chemical balance calculations in this section for fuels other than 
carbon-containing fuels. For carbon-containing fuels, use the chemical 
balance calculations in section Sec.  1065.655, including any dual-
fuels or flexible-fuels where one of the fuels contains carbon. With 
one flow rate of either fuel, intake air, or exhaust, you may use 
chemical balances to determine the flows of the other two. For example, 
you may use chemical balances along with either intake air or fuel flow 
to determine raw exhaust flow. Note that chemical balance calculations 
allow measured values for the flow rate of diesel exhaust fluid for 
engines with urea-based selective catalytic reduction.
    (b) Procedures that require chemical balances. We require chemical 
balances when you determine the following:
    (1) A value proportional to total work, W when you choose to 
determine brake-specific emissions as described in Sec.  1065.650(f).
    (2) Raw exhaust molar flow rate either from measured intake air 
molar flow rate or from fuel mass flow rate as described in paragraph 
(f) of this section.
    (3) Raw exhaust molar flow rate from measured intake air molar flow 
rate and dilute exhaust molar flow rate as described in paragraph (g) 
of this section.
    (4) The amount of water in a raw or diluted exhaust flow, 
xH2Oexh, when you do not measure the amount of water to 
correct for the amount of water removed by a sampling system. Correct 
for removed water according to Sec.  1065.659.
    (5) The calculated total dilution air flow when you do not measure 
dilution air flow to correct for background emissions as described in 
Sec.  1065.667(c) and (d).
    (c) Chemical balance procedure. The calculations for a chemical 
balance involve a system of equations that require iteration. We 
recommend using a computer to solve this system of equations. You must 
guess the initial values of two of the following quantities: the amount 
of water in the measured flow, xH2Oexhdry, the amount of 
hydrogen in the measured flow, xH2exhdry, the fraction of 
dilution air in diluted exhaust, xdil/exhdry, and the amount 
of intake air required to produce actual combustion products per mole 
of dry exhaust, xint/exhdry. You may use time-weighted mean 
values of intake air humidity and dilution air humidity in the chemical 
balance; as long as your intake air and dilution air humidities remain 
within tolerances of 0.0025 mol/mol of their respective 
mean values over the test interval. For each emission concentration, x, 
and amount of water, xH2Oexh, you must determine their 
completely dry concentrations, xdry and 
xH2Oexhdry. You must also use your fuel mixture's atomic 
carbon-to-hydrogen ratio, [tau], oxygen-to-hydrogen ratio, [phiv], and 
nitrogen-to-hydrogen ratio, [omega]; you may optionally account for 
diesel exhaust fluid (or other fluids injected into the exhaust), if 
applicable. You may calculate [tau], [phiv], and [omega] based on 
measured

[[Page 26148]]

fuel composition or based on measured fuel and diesel exhaust fluid (or 
other fluids injected into the exhaust) composition together, as 
described in paragraph (e) of this section. You may alternatively use 
any combination of default values and measured values as described in 
paragraph (e) of this section. Use the following steps to complete a 
chemical balance:
    (1) Convert your measured concentrations such as, 
xH2Omeas, xO2meas, xH2meas, 
xNOmeas, xNO2meas, xNH3meas, and 
xH2Oint, to dry concentrations by dividing them by one minus 
the amount of water present during their respective measurements; for 
example: xH2Omeas, xH2OxO2meas, 
xH2OxNOmeas, and xH2Oint. If the amount of water 
present during a ``wet'' measurement is the same as an unknown amount 
of water in the exhaust flow, xH2Oexh, iteratively solve for 
that value in the system of equations. If you measure only total 
NOX and not NO and NO2 separately, use good 
engineering judgment to estimate a split in your total NOX 
concentration between NO and NO2 for the chemical balances. 
For example, if you measure emissions from a stoichiometric combustion 
engine, you may assume all NOX is NO. For a lean-burn 
combustion engine, you may assume that your molar concentration of 
NOX, xNOX, is 75% NO and 25% NO2. For 
NO2 storage aftertreatment systems, you may assume 
xNOX is 25% NO and 75% NO2. Note that for 
calculating the mass of NOX emissions, you must use the 
molar mass of NO2 for the effective molar mass of all 
NOX species, regardless of the actual NO2 
fraction of NOX.
    (2) Enter the equations in paragraph (c)(4) of this section into a 
computer program to iteratively solve for xH2Oexhdry, 
xH2exhdry, xdil/exhdry, and 
xint/exhdry. Use good engineering judgment to guess initial 
values for xH2Oexhdry, xH2exhdry, 
xdil/exhdry, and xint/exhdry. We recommend 
guessing an initial amount of water that is about twice the amount of 
water in your intake or dilution air. We recommend guessing an initial 
amount of hydrogen of 0 mol/mol. We recommend guessing an initial 
xint/exhdry of 1 mol/mol. We also recommend guessing an 
initial, xdil/exhdry of 0.8 mol/mol. Iterate values in the 
system of equations until the most recently updated guesses are all 
within 1% or 1 [mu]mol/mol, whichever is 
larger, of their respective most recently calculated values.
    (3) Use the following symbols and subscripts in the equations for 
performing the chemical balance calculations in this paragraph (c):

 Table 1 of Sec.   1065.656--Symbols and Subscripts for Chemical Balance
                                Equations
------------------------------------------------------------------------
 
------------------------------------------------------------------------
x[emission]meas..............  Amount of measured emission in the sample
                                at the respective gas analyzer.
x[emission]exh...............  Amount of emission per dry mole of
                                exhaust.
x[emission]exhdry............  Amount of emission per dry mole of dry
                                exhaust.
xH2O[emission]meas...........  Amount of H2O in sample at emission-
                                detection location; measure or estimate
                                these values according to Sec.
                                1065.145(e)(2).
xdil/exh.....................  Amount of dilution gas or excess air per
                                mole of exhaust.
xdil/exhdry..................  amount of dilution gas and/or excess air
                                per mole of dry exhaust.
xHcombdry....................  Amount of hydrogen from fuel and any
                                injected fluids in the exhaust per mole
                                of dry exhaust.
xint/exhdry..................  Amount of intake air required to produce
                                actual combustion products per mole of
                                dry (raw or diluted) exhaust.
xraw/exhdry..................  Amount of undiluted exhaust, without
                                excess air, per mole of dry (raw or
                                diluted) exhaust.
xCO2int......................  Amount of intake air CO2 per mole of
                                intake air.
xCO2intdry...................  amount of intake air CO2 per mole of dry
                                intake air; you may use xCO2intdry = 375
                                [micro]mol/mol, but we recommend
                                measuring the actual concentration in
                                the intake air.
xH2Oint......................  Amount of H2O in the intake air, based on
                                a humidity measurement of intake air.
xH2Ointdry...................  Amount of intake air H2O per mole of dry
                                intake air.
xO2int.......................  Amount of intake air O2 per mole of
                                intake air.
xCO2dil......................  Amount of dilution gas CO2 per mole of
                                dilution gas.
xCO2dildry...................  Amount of dilution gas CO2 per mole of
                                dry dilution gas; if you use air as
                                diluent, you may use xCO2dildry = 375
                                [micro]mol/mol, but we recommend
                                measuring the actual concentration in
                                the dilution gas.
xH2Odil......................  Amount of dilution gas H2O per mole of
                                dilution gas.
xH2Odildry...................  Amount of dilution gas H2O per mole of
                                dry dilution gas.
t............................  Atomic carbon-to-hydrogen ratio of the
                                fuel (or mixture of test fuels) and any
                                injected fluids.
f............................  Atomic oxygen-to-hydrogen ratio of the
                                fuel (or mixture of test fuels) and any
                                injected fluids.
v............................  Atomic nitrogen-to-hydrogen ratio of the
                                fuel (or mixture of test fuels) and any
                                injected fluids.
------------------------------------------------------------------------

    (4) Use the equations specified in this section to iteratively 
solve for xint/exhdry, xdil/exhdry, 
xH2exhdry, and xH2Oexhdry. For some quantities 
multiple equations are provided. The calculation of xO2exhdry is only 
required when xO2meas is measured. The calculation of 
xNH3exhdry is only required for engines that use ammonia as 
fuel, for all other fuels xNH3exhdry may be set to zero.

[[Page 26149]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.081

[GRAPHIC] [TIFF OMITTED] TP27AP23.082

[GRAPHIC] [TIFF OMITTED] TP27AP23.083

[[Page 26150]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.084

[GRAPHIC] [TIFF OMITTED] TP27AP23.085

    (5) Depending on your measurements, use the equations and guess the 
quantities specified in Table 2 of this section:

[[Page 26151]]

  Table 2 of Sec.   1065.656--Chemical Balance Equations for Different
                              Measurements
------------------------------------------------------------------------
        When measuring                Guess              Calculate
------------------------------------------------------------------------
(i) xO2meas and xH2Omeas......  xint/exhdry and    (A) xH2exhdry using
                                 xH2exhdry.         Eq. 1065.656-4
                                                    (B) xH2Oexhdry using
                                                       Eq. 1065.656-6
                                                    (C) xHcombdry using
                                                       Eq. 1065.656-8
                                                    (D) xO2exhdry using
                                                       Eq. 1065.656-14
                                                   (E) xraw/exhdry using
                                                       Eq. 1065.656-15
(ii) xO2meas and xH2meas......  xint/exhdry and    (A) xH2exhdry using
                                 xH2Oexhdry.        Eq. 1065.656-3
                                                    (B) xH2Oexhdry using
                                                       Eq. 1065.656-7
                                                    (C) xHcombdry using
                                                       Eq. 1065.656-9
                                                    (D) xO2exhdry using
                                                       Eq. 1065.656-14
                                                   (E) xraw/exhdry using
                                                       Eq. 1065.656-15
(iii) xH2Omeas and xH2meas....  xint/exhdry and    (A) xH2exhdry using
                                 xdil/exhdry.       Eq. 1065.656-3
                                                    (B) xH2Oexhdry using
                                                       Eq. 1065.656-6
                                                    (C) xHcombdry using
                                                       Eq. 1065.656-8
                                                   (D) xraw/exhdry using
                                                       Eq. 1065.656-16
------------------------------------------------------------------------

    (d) Mass fractions of fuel. Determine the mass fractions of fuel, 
wH, wC, wO, and wN, based 
on the fuel properties as determined in paragraph (e) of this section, 
optionally accounting for diesel exhaust fluid's contribution to [tau], 
[phiv], and [omega], or other fluids injected into the exhaust, if 
applicable (for example, the engine is equipped with an emission 
control system that utilizes DEF). Calculate wH, 
wC, wO, and N using the following 
equations:
[GRAPHIC] [TIFF OMITTED] TP27AP23.086

Where:

wH = hydrogen mass fraction of the fuel (or mixture of 
test fuels) and any injected fluids.
wC = carbon mass fraction of the fuel (or mixture of test 
fuels) and any injected fluids.
wO = oxygen mass fraction of the fuel (or mixture of test 
fuels) and any injected fluids.
wN = nitrogen mass fraction of the fuel (or mixture of 
test fuels) and any injected fluids.
MH = molar mass of hydrogen.
[tau] = atomic carbon-to- hydrogen ratio of the fuel (or mixture of 
test fuels) and any injected fluids.
MC = molar mass of carbon.
[phiv] = atomic oxygen-to-hydrogen ratio of the fuel (or mixture of 
test fuels) and any injected fluids.
MO = molar mass of oxygen.
[omega] = atomic sulfur-to-hydrogen ratio of the fuel (or mixture of 
test fuels) and any injected fluids.
MN = molar mass of nitrogen.

    (e) Fuel and diesel exhaust fluid composition. Determine fuel and 
diesel exhaust fluid composition represented by [tau], [phiv], and 
[omega], as described in this paragraph (e). When using measured fuel 
or diesel exhaust fluid properties, you must determine values for 
[tau], [phiv], and [omega] in all cases. If you determine compositions 
based on measured values and the default value listed in Table 3 of 
this section is zero, you may set [tau], [phiv], and [omega] to zero; 
otherwise determine [tau], [phiv], and [omega] based on measured 
values. Determine elemental mass fractions and values for [tau], 
[phiv], and [omega] as follows:
    (1) For fuel and diesel exhaust fluid, use the default values for 
[tau], [phiv], and [omega] in Table 3 of this section, or use good 
engineering judgment to determine those values based on measurement.
    (2) For nonconstant fuel mixtures, you must account for the varying 
proportions of the different fuels. This paragraph (e)(2) generally 
applies for dual-fuel and flexible-fuel engines, but it also applies if 
diesel exhaust fluid is injected in a way that is not strictly 
proportional to fuel flow. Account for these varying concentrations 
either with a batch measurement that provides averaged values to 
represent the test interval, or by analyzing data from continuous mass 
rate measurements. Application of average values from a batch 
measurement generally applies to

[[Page 26152]]

situations where one fluid is a minor component of the total fuel 
mixture; consistent with good engineering judgment.
    (4) Calculate [tgr], [phi] and [ohgr] using the following 
equations;
[GRAPHIC] [TIFF OMITTED] TP27AP23.087

[GRAPHIC] [TIFF OMITTED] TP27AP23.088

Where:

N = total number of fuels and injected fluids over the duty cycle.
j = an indexing variable that represents one fuel or injected fluid, 
starting with j = 1.
mj = the mass flow rate of the fuel or any injected fluid j. For 
applications using a single fuel and no DEF fluid, set this value to 
1. For batch measurements, divide the total mass of fuel over the 
test interval duration to determine a mass rate.
wHj = hydrogen mass fraction of fuel or any injected 
fluid j.
wCj = carbon mass fraction of fuel or any injected fluid 
j.
wOj = oxygen mass fraction of fuel or any injected fluid 
j.
wNj = nitrogen mass fraction of fuel or any injected 
fluid j.

    (4) Table 3 follows:

 Table 3 of Sec.   1065.656-Default Values of [tau], [phiv], and [omega]
------------------------------------------------------------------------
                                           Atomic carbon, oxygen, and
        Fuel or injected fluid             nitrogen-to-hydrogen ratios
                                             HC[tau]O[phiv]N[omega]
------------------------------------------------------------------------
Hydrogen..............................  HC0O0N0
Ammonia...............................  HC0O0N0.333
Diesel exhaust fluid..................  HC0.056O0.444N0.112
------------------------------------------------------------------------

    (f) Calculated raw exhaust molar flow rate from measured intake air 
molar flow rate or fuel mass flow rate. You may calculate the raw 
exhaust molar flow rate from which you sampled emissions, 
nexh, based on the measured intake air molar flow rate, 
nint, or the measured fuel mass flow rate, mfuel, 
and the values calculated using the chemical balance in paragraph (c) 
of this section. The chemical balance must be based on raw exhaust gas 
concentrations. Solve for the chemical balance in paragraph (c) of this 
section at the same frequency that you update and record 
nint or mfuel. For laboratory tests, calculating 
raw exhaust molar flow rate using measured fuel mass flow rate is valid 
only for steady-state testing. See Sec.  1065.915(d)(5)(iv) for 
application to field testing.
    (1) Crankcase flow rate. If engines are not subject to crankcase 
controls under the standard-setting part, you may calculate raw exhaust 
flow based on nint or mfuel using one of the 
following:
    (i) You may measure flow rate through the crankcase vent and 
subtract it from the calculated exhaust flow.
    (ii) You may estimate flow rate through the crankcase vent by 
engineering analysis as long as the uncertainty in your calculation 
does not adversely affect your ability to show that your engines comply 
with applicable emission standards.
    (iii) You may assume your crankcase vent flow rate is zero.
    (2) Intake air molar flow rate calculation. Calculate 
nexh based on nint using the following equation:
[GRAPHIC] [TIFF OMITTED] TP27AP23.089

Where:

nexh = raw exhaust molar flow rate from which you 
measured emissions.
nint = intake air molar flow rate including humidity in 
intake air.

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.090
    
    (3) Fluid mass flow rate calculation. This calculation may be used 
only for steady-state laboratory testing. See Sec.  1065.915(d)(5)(iv) 
for application to field testing. Calculate nexh based on mj 
using the following equation:

[[Page 26153]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.091

Where:

nexh = raw exhaust molar flow rate from which you 
measured emissions.
j = an indexing variable that represents one fuel or injected fluid, 
starting with j = 1.
N = total number of fuels and injected fluids over the duty cycle.
mj = the mass flow rate of the fuel or any injected fluid j.
wHf = hydrogen mass fraction of the fuel and any injected 
fluid j.

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.092
    
    (g) Calculated raw exhaust molar flow rate from measured intake air 
molar flow rate, dilute exhaust molar flow rate, and dilute chemical 
balance. You may calculate the raw exhaust molar flow rate, 
nexh, based on the measured intake air molar flow rate, 
nint, the measured dilute exhaust molar flow rate, 
ndexh, and the values calculated using the chemical balance 
in paragraph (c) of this section. Note that the chemical balance must 
be based on dilute exhaust gas concentrations. For continuous-flow 
calculations, solve for the chemical balance in paragraph (c) of this 
section at the same frequency that you update and record 
nint and ndexh. This calculated ndexh 
may be used for the PM dilution ratio verification in Sec.  1065.546; 
the calculation of dilution air molar flow rate in the background 
correction in Sec.  1065.667; and the calculation of mass of emissions 
in Sec.  1065.650(c) for species that are measured in the raw exhaust.
    (1) Crankcase flow rate. If engines are not subject to crankcase 
controls under the standard-setting part, calculate raw exhaust flow as 
described in paragraph (f)(1) of this section.
    (2) Dilute exhaust and intake air molar flow rate calculation. 
Calculate nexh as follows:
[GRAPHIC] [TIFF OMITTED] TP27AP23.093

    Example:

nint = 7.930 mol/s
xraw/exhdry = 0.1544 mol/mol
xint/exhdry = 0.1451 mol/mol
xH2Oexh = 32.46 mmol/mol = 0.03246 mol/mol
ndexh = 49.02 mol/s
nexh = (0.1544 -0.1451) [middot] (1 - 0.03246) [middot] 
49.02 + 7.930 = 0.4411 + 7.930 = 8.371 mol/s

0
124. Amend Sec.  1065.660 by revising paragraphs (b)(2) and (3) 
introductory text, (c)(1)(ii) and (2) introductory text, (d), and (e) 
to read as follows:

Sec.  1065.660  THC, NMHC, NMNEHC, CH4, and C2H6 determination.

* * * * *
    (b) * * *
    (2) For a nonmethane cutter (NMC), calculate xNMHC using 
the NMC's penetration fractions, response factors, and/or combined 
penetration fractions and response factors as described in Sec.  
1065.365, the THC FID's CH4 response factor, 
RFCH4[THC-FID], from Sec.  1065.360, the initial THC 
contamination and dry-to-wet corrected THC concentration, 
xTHC[THC-FID]cor, as determined in paragraph (a) of this 
section, and the dry-to-wet corrected CH4 concentration, 
xTHC[NMC-FID]cor, optionally corrected for initial THC 
contamination as determined in paragraph (a) of this section.
    (i) Use the following equation for an NMC configured as described 
in Sec.  1065.365(d):
[GRAPHIC] [TIFF OMITTED] TP27AP23.094

[[Page 26154]]

Where:

xNMHC = concentration of NMHC.
xTHC[THC-FID]cor = concentration of THC, initial THC 
contamination and dry-to-wet corrected, as measured by the THC FID 
during sampling while bypassing the NMC.
xTHC[NMC-FID]cor = concentration of THC, initial THC 
contamination (optional) and dry-to-wet corrected, as measured by 
the NMC FID during sampling through the NMC.
RFCH4[THC-FID] = response factor of THC FID to 
CH4, according to Sec.  1065.360(d).
RFPFC2H6[NMC-FID] = NMC combined 
C2H6 response factor and penetration fraction, 
according to Sec.  1065.365(d).
RFPFCH4[NMC-FID] = NMC combined CH4 response 
factor and penetration fraction, according to Sec.  1065.365(d).

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.095
    
    (ii) Use the following equation for penetration fractions 
determined using an NMC configuration as outlined in Sec.  1065.365(e):
[GRAPHIC] [TIFF OMITTED] TP27AP23.096

Where:

xNMHC = concentration of NMHC.
xTHC[THC-FID]cor = concentration of THC, initial THC 
contamination and dry-to-wet corrected, as measured by the THC FID 
during sampling while bypassing the NMC.
PFCH4[NMC-FID] = NMC CH4 penetration fraction, 
according to Sec.  1065.365(e).
xTHC[NMC-FID]cor = concentration of THC, initial THC 
contamination (optional) and dry-to-wet corrected, as measured by 
the THC FID during sampling through the NMC.
PFC2H6[NMC-FID] = NMC C2H6 
penetration fraction, according to Sec.  1065.365(e).

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.097
    
    (iii) Use the following equation for an NMC configured as described 
in Sec.  1065.365(f)Sec.  :
[GRAPHIC] [TIFF OMITTED] TP27AP23.098

Where:

xNMHC = concentration of NMHC.
xTHC[THC-FID]cor = concentration of THC, initial THC 
contamination and dry-to-wet corrected, as measured by the THC FID 
during sampling while bypassing the NMC.
PFCH4[NMC-FID] = NMC CH4 penetration fraction, 
according to Sec.  1065.365(f).
xTHC[NMC-FID]cor = concentration of THC, initial THC 
contamination (optional) and dry-to-wet corrected, as measured by 
the THC FID during sampling through the NMC.

[[Page 26155]]

RFPFC2H6[NMC-FID] = NMC combined 
C2H6 response factor and penetration fraction, 
according to Sec.  1065.365(f).
RFCH4[THC-FID] = response factor of THC FID to 
CH4, according to Sec.  1065.360(d).

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.099
    
    (3) For a GC-FID or FTIR, calculate xNMHC using the THC analyzer's 
CH4 response factor, RFCH4[THC-FID], from Sec.  
1065.360, and the initial THC contamination and dry-to-wet corrected 
THC concentration, xTHC[THC-FID]cor, as determined in 
paragraph (a) of this section as follows:
* * * * *
    (c) * * *
    (1) * * *
    (ii) If the content of your fuel test contains at least 0.010 mol/
mol of C2H6, you may omit the calculation of 
NMNEHC concentration and calculate the mass of NMNEHC as described in 
Sec.  1065.650(c)(6)(ii).
    (2) For a GC-FID, NMC FID, or FTIR, calculate xNMNEHC 
using the THC analyzer's CH4 response factor, 
RFCH4[THC-FID], and C2H6 response 
factor, RFC2H6[THC-FID], from Sec.  1065.360, the initial 
contamination and dry-to-wet corrected THC concentration, 
xTHC[THC-FID]cor, as determined in paragraph (a) of this 
section, the dry-to-wet corrected CH4 concentration, 
xCH4, as determined in paragraph (d) of this section, and 
the dry-to-wet corrected C2H6 concentration, 
xC2H6, as determined in paragraph (e) of this section as 
follows:
* * * * *
    (d) CH4 determination. Use one of the following methods to 
determine methane (CH4) concentration, xCH4:
    (1) For a nonmethane cutter (NMC), calculate xCH4 using 
the NMC's penetration fractions, response factors, and/or combined 
penetration fractions and response factors as described in Sec.  
1065.365, the THC FID's CH4 response factor, 
RFCH4[THC-FID], from Sec.  1065.360, the initial THC 
contamination and dry-to-wet corrected THC concentration, 
xTHC[THC-FID]cor, as determined in paragraph (a) of this 
section, and the dry-to-wet corrected CH4 concentration, 
xTHC[NMC-FID]cor, optionally corrected for initial THC 
contamination as determined in paragraph (a) of this section.
    (i) Use the following equation for an NMC configured as described 
in Sec.  1065.365(d):
[GRAPHIC] [TIFF OMITTED] TP27AP23.100

Where:

xCH4 = concentration of CH4.
xTHC[NMC-FID]cor = concentration of THC, initial THC 
contamination (optional) and dry-to-wet corrected, as measured by 
the NMC FID during sampling through the NMC.
xTHC[THC-FID]cor = concentration of THC, initial THC 
contamination and dry-to-wet corrected, as measured by the THC FID 
during sampling while bypassing the NMC.
RFPFC2H6[NMC-FID] = NMC combined 
C2H6 response factor and penetration fraction, 
according to Sec.  1065.365(d).
RFCH4[THC-FID] = response factor of THC FID to 
CH4, according to Sec.  1065.360(d).
RFPFCH4[NMC-FID] = NMC combined CH4 response 
factor and penetration fraction, according to Sec.  1065.365(d).

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.101
    
    (ii) Use the following equation for an NMC configured as described 
in Sec.  1065.365(e):

[[Page 26156]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.102

Where:

xCH4 = concentration of CH4.
xTHC[NMC-FID]cor = concentration of THC, initial THC 
contamination (optional) and dry-to-wet corrected, as measured by 
the NMC FID during sampling through the NMC.
xTHC[THC-FID]cor = concentration of THC, initial THC 
contamination and dry-to-wet corrected, as measured by the THC FID 
during sampling while bypassing the NMC.
PFC2H6[NMC-FID] = NMC C2H6 
penetration fraction, according to Sec.  1065.365(e).
RFCH4[THC-FID] = response factor of THC FID to 
CH4, according to Sec.  1065.360(d).
PFCH4[NMC-FID] = NMC CH4 penetration fraction, 
according to Sec.  1065.365(e).

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.103
    
    (iii) Use the following equation for an NMC configured as described 
in Sec.  1065.365(f):
[GRAPHIC] [TIFF OMITTED] TP27AP23.104

Where:

xCH4 = concentration of CH4.
xTHC[NMC-FID]cor = concentration of THC, initial THC 
contamination (optional) and dry-to-wet corrected, as measured by 
the NMC FID during sampling through the NMC.
xTHC[THC-FID]cor = concentration of THC, initial THC 
contamination and dry-to-wet corrected, as measured by the THC FID 
during sampling while bypassing the NMC.
RFPFC2H6[NMC-FID] = the combined 
C2H6 response factor and penetration fraction 
of the NMC, according to Sec.  1065.365(f).
PFCH4[NMC-FID] = NMC CH4 penetration fraction, 
according to Sec.  1065.365(f).
RFCH4[THC-FID] = response factor of THC FID to 
CH4, according to Sec.  1065.360(d).

    Example:
    [GRAPHIC] [TIFF OMITTED] TP27AP23.105
    
    (2) For a GC-FID or FTIR, xCH4 is the actual dry-to-wet 
corrected CH4 concentration as measured by the analyzer.
    (e) C2H6 determination. For a GC-FID or FTIR, xC2H6 is 
the C1-equivalent, dry-to-wet corrected 
C2H6 concentration as measured by the analyzer.
0
125. Amend Sec.  1065.670 by revising paragraphs (a) introductory text 
and (b) introductory text to read as follows:

Sec.  1065.670  NOX intake-air humidity and temperature corrections.

* * * * *
    (a) For compression-ignition engines operating on carbon-containing 
fuels and lean-burn combustion engines operating on fuels other than 
carbon-containing fuels, correct for intake-air humidity using the 
following equation:
* * * * *
    (b) For spark-ignition engines operating on carbon-containing fuels 
and stoichiometric combustion engines operating on fuels other than 
carbon-

[[Page 26157]]

containing fuels, correct for intake-air humidity using the following 
equation:
* * * * *
0
126. Amend Sec.  1065.750 by revising paragraph (a)(1)(ii) and adding 
paragraph (a)(6) to read as follows:

Sec.  1065.750  Analytical gases.

* * * * *
    (a) * * *
    (1) * * *
    (ii) Contamination as specified in the following table:

  Table 1 of Sec.   1065.750--General Specifications for Purified Gases
                                   \a\
------------------------------------------------------------------------
          Constituent                Purified air          Purified N2
------------------------------------------------------------------------
THC (C1-equivalent)...........  <=0.05 [mu]mol/mol....  <=0.05 [mu]mol/
                                                         mol
CO............................  <=1 [mu]mol/mol.......  <=1 [mu]mol/mol
CO2...........................  <=10 [mu]mol/mol......  <=10 [mu]mol/mol
O2............................  0.205 to 0.215 mol/mol  <=2 [mu]mol/mol
NOX...........................  <=0.02 [mu]mol/mol....  <=0.02 [mu]mol/
                                                         mol
N2O \b\.......................  <=0.02 [mu]mol/mol....  <=0.02 [mu]mol/
                                                         mol
H2 \c\........................  <=1 [mu]mol/mol.......  <=1 [mu]mol/mol
NH3 \d\.......................  <=1 [mu]mol/mol.......  <=1 [mu]mol/mol
H2O \e\.......................  <=5 [mu]mol/mol.......  <=5 [mu]mol/mol
------------------------------------------------------------------------
\a\ We do not require these levels of purity to be NIST-traceable.
\b\ The N2O limit applies only if the standard-setting part requires you
  to report N2O or certify to an N2O standard.
\c\ The H2 limit only applies for testing with H2 fuel.
\d\ The NH3 limit only applies for testing with NH3 fuel.
\e\ The H2O limit only applies for water measurement according to Sec.
  1065.257.

* * * * *
    (6) If you measure H2O using an FTIR analyzer, generate 
H2O calibration gases with a humidity generator using one of 
the options in this paragraph (a)(6). Use good engineering judgment to 
prevent condensation in the transfer lines, fittings, or valves from 
the humidity generator to the FTIR analyzer. Design your system so the 
wall temperatures in the transfer lines, fittings, and valves from the 
point where the mole fraction of H2O in the humidified 
calibration gas, xH2Oref, is measured to the analyzer are at 
a temperature of (110 to 202) [deg]C. Calibrate the humidity generator 
upon initial installation, within 370 days before verifying the 
H2O measurement of the FTIR, and after major maintenance. 
Use the uncertainties from the calibration of the humidity generator's 
measurements and follow NIST Technical Note 1297 (incorporated by 
reference, see Sec.  1065.1010) to verify that the amount of 
H2O in the calibration gas, xH2Oref, is 
determined within 3% uncertainty, UxH2O. If the 
humidity generator requires assembly before use, after assembly follow 
the instrument manufacturer's instructions to check for leaks. You may 
generate the H2O calibration gas using one of the following 
options:
    (i) Bubble gas that meets the requirements of paragraph (a)(1) of 
this section through distilled H2O in a sealed vessel. 
Adjust the amount of H2O in the calibration gas by changing 
the temperature of the H2O in the sealed vessel. Determine 
absolute pressure, pabs, and dewpoint, Tdew, of 
the humidified gas leaving the sealed vessel. Calculate the amount of 
H2O in the calibration gas as described in Sec.  1065.645(a) 
and (b). Calculate the uncertainty of the amount of H2O in 
the calibration gas, UxH2O, using the following equations:
[GRAPHIC] [TIFF OMITTED] TP27AP23.106

[GRAPHIC] [TIFF OMITTED] TP27AP23.107

[GRAPHIC] [TIFF OMITTED] TP27AP23.108

[[Page 26158]]

Where:

[GRAPHIC] [TIFF OMITTED] TP27AP23.109

    Example:

    [GRAPHIC] [TIFF OMITTED] TP27AP23.110
    

    (ii) Use a device that introduces a measured flow of distilled 
H2O as vapor into a measured flow of gas that meets the 
requirements of paragraph (a)(1) of this section. Determine the molar 
flows of gas and H2O that are mixed to generate the 
calibration gas.
    (A) Calculate the amount of H2O in the calibration gas 
as follows:

[[Page 26159]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.111

    (B) Calculate the uncertainty of the amount of H2O in 
the generated calibration gas, UxH2O, using the following 
equations:
[GRAPHIC] [TIFF OMITTED] TP27AP23.112

[GRAPHIC] [TIFF OMITTED] TP27AP23.114

[GRAPHIC] [TIFF OMITTED] TP27AP23.115

Where:
[GRAPHIC] [TIFF OMITTED] TP27AP23.116

    (C) The following example is a solution for UxH2O using 
the equations in paragraph (c)(6)(B) of this section:

[[Page 26160]]

[GRAPHIC] [TIFF OMITTED] TP27AP23.117

[GRAPHIC] [TIFF OMITTED] TP27AP23.118

* * * * *
0
127. Amend Sec.  1065.1001 by:
0
a. Adding definitions of ``Carbon-containing fuel'', ``Lean-burn 
engine'', and ``Neat'' in alphabetical order; and
0
b. Revising the definition for ``Rechargeable Energy Storage System 
(RESS)''.

    The additions and revisions read as follows:

Sec.  1065.1001  Definitions.

* * * * *
    Carbon-containing fuel means an engine fuel that is characterized 
by compounds containing carbon. For example, gasoline, diesel, alcohol, 
liquefied petroleum gas, and natural gas are carbon-containing fuels.
* * * * *
    Lean-burn engine means an engine with a nominal air fuel ratio 
substantially leaner than stoichiometric. For example, diesel-fueled 
engines are typically lean-burn engines, and gasoline-fueled engines 
are lean-burn engines if they have an air-to-fuel mass ratio above 
14.7:1.
* * * * *
    Neat means fuel that is free from mixture or dilution with other 
fuels. For example, hydrogen or natural gas fuel used without diesel 
pilot fuel are neat.
* * * * *
    Rechargeable Energy Storage System (RESS) means engine or equipment 
components that store recovered energy for later use to propel the 
vehicle or accomplish a different primary function. Examples of RESS 
include the battery system or a hydraulic accumulator in a hybrid 
vehicle.
* * * * *
0
128. Amend Sec.  1065.1005 by revising the entry for MNMNEHC 
in Table 7 of paragraph (f)(2) to read as follows:

Sec.  1065.1005  Symbols, abbreviations, acronyms, and units of 
measure.

* * * * *
    (f) * * *
    (2) * * *

                                    Table 7 of Sec.   1065.1005--Molar Masses
----------------------------------------------------------------------------------------------------------------
                                                                                                g/mol (10-
                     Symbol                                     Quantity                 3[middot]kg[middot]mol-
                                                                                                    1)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
MNMNEHC........................................  effective C1 molar mass of nonmethane             13.875389
                                                  nonethane hydrocarbon\b\.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *
0
129. Amend Sec.  1065.1010 by revising paragraphs (a)(40) and (e)(2) to 
read as follows:

Sec.  1065.1010  Incorporation by reference.

* * * * *
    (a) * * *
    (40) ASTM D6348-12[epsi]1, Standard Test Method for 
Determination of Gaseous Compounds by Extractive Direct Interface 
Fourier Transform Infrared (FTIR) Spectroscopy, approved February 1, 
2012 (``ASTM D6348''), IBR approved for Sec. Sec.  1065.257(a), 
1065.266(b), 1065.275(b), and 1065.277(b).
* * * * *
    (e) * * *
    (2) NIST Technical Note 1297, 1994 Edition, Guidelines for 
Evaluating and Expressing the Uncertainty of NIST Measurement Results, 
IBR approved for

[[Page 26161]]

Sec. Sec.  1065.365(g), 1065.750(a), and 1065.1001.

PART 1074--PREEMPTION OF STATE STANDARDS AND PROCEDURES FOR WAIVER 
OF FEDERAL PREEMPTION FOR NONROAD ENGINES AND NONROAD VEHICLES

0
130. The authority citation for part 1074 continues to read as follows:
    Authority: 42 U.S.C. 7401-7671q.
0
131. Amend Sec.  1074.10 by revising paragraph (b) and adding paragraph 
(c) to read as follows:

Sec.  1074.10  Scope of preemption.

* * * * *
    (b) States and localities are preempted from adopting or enforcing 
standards or other requirements relating to the control of emissions 
from new locomotives and new engines used in locomotives.
    (c) For nonroad engines or vehicles other than those described in 
paragraph (a) and (b) of this section, States and localities are 
preempted from enforcing any standards or other requirements relating 
to control of emissions from nonroad engines or vehicles except as 
provided in subpart B of this part.

Sec.  1074.12  [Removed]

0
132. Remove Sec.  1074.12.
0
133. Amend Sec.  1074.101 by revising paragraph (a) to read as follows:

Sec.  1074.101  Procedures for California nonroad authorization 
requests.

    (a) California must request authorization from the Administrator to 
enforce its adopted standards and other requirements relating to 
control of emissions from nonroad engines or vehicles that are not 
preempted by Sec.  1074.10(a) or (b). The request must include the 
record on which the state rulemaking was based.
* * * * *
[FR Doc. 2023-07955 Filed 4-24-23; 8:45 am]
 BILLING CODE 6560-50-P