Document ID: NHTSA-2014-0132-0001
Agency: nhtsa
Document Type: Proposed Rule
Title: Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium and Heavy-Duty Engines and Vehicles; Phase 2
Posted Date: 2015-07-13T04:00Z

[Federal Register Volume 80, Number 133 (Monday, July 13, 2015)]
[Proposed Rules]
[Pages 40137-40765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-15500]

[[Page 40137]]

Vol. 80

Monday,

No. 133

July 13, 2015

Part II

Environmental Protection Agency

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40 CFR Parts 9, 22, 85, et al.

Department of Transportation

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National Highway Traffic Safety Administration

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49 CFR Parts 512, 523, 534, et al.

Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and 
Heavy-Duty Engines and Vehicles--Phase 2; Proposed Rule

  Federal Register / Vol. 80 , No. 133 / Monday, July 13, 2015 / 
Proposed Rules  

[[Page 40138]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 22, 85, 86, 600, 1033, 1036, 1037, 1039, 1042, 
1043, 1065, 1066, and 1068

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 512, 523, 534, 535, 537, and 538

[EPA-HQ-OAR-2014-0827; NHTSA-2014-0132; FRL-9927-21-OAR]
RIN 2060-AS16; RIN 2127-AL52

Greenhouse Gas Emissions and Fuel Efficiency Standards for 
Medium- and Heavy-Duty Engines and Vehicles--Phase 2

AGENCY: Environmental Protection Agency (EPA) and Department of 
Transportation (DOT) National Highway Traffic Safety Administration 
(NHTSA)

ACTION: Proposed rule.

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SUMMARY: EPA and NHTSA, on behalf of the Department of Transportation, 
are each proposing rules to establish a comprehensive Phase 2 Heavy-
Duty (HD) National Program that will reduce greenhouse gas (GHG) 
emissions and fuel consumption for new on-road heavy-duty vehicles. 
This technology-advancing program would phase in over the long-term, 
beginning in the 2018 model year and culminating in standards for model 
year 2027, responding to the President's directive on February 18, 
2014, to develop new standards that will take us well into the next 
decade. NHTSA's proposed fuel consumption standards and EPA's proposed 
carbon dioxide (CO2) emission standards are tailored to each 
of four regulatory categories of heavy-duty vehicles: Combination 
tractors; trailers used in combination with those tractors; heavy-duty 
pickup trucks and vans; and vocational vehicles. The proposal also 
includes separate standards for the engines that power combination 
tractors and vocational vehicles. Certain proposed requirements for 
control of GHG emissions are exclusive to EPA programs. These include 
EPA's proposed hydrofluorocarbon standards to control leakage from air 
conditioning systems in vocational vehicles, and EPA's proposed nitrous 
oxide (N2O) and methane (CH4) standards for 
heavy-duty engines. Additionally, NHTSA is addressing misalignment in 
the Phase 1 standards between EPA and NHTSA to ensure there are no 
differences in compliance standards between the agencies. In an effort 
to promote efficiency, the agencies are also proposing to amend their 
rules to modify reporting requirements, such as the method by which 
manufacturers submit pre-model, mid-model, and supplemental reports. 
EPA's proposed HD Phase 2 GHG emission standards are authorized under 
the Clean Air Act and NHTSA's proposed HD Phase 2 fuel consumption 
standards authorized under the Energy Independence and Security Act of 
2007. These standards would begin with model year 2018 for trailers 
under EPA standards and 2021 for all of the other heavy-duty vehicle 
and engine categories. The agencies estimate that the combined 
standards would reduce CO2 emissions by approximately 1 
billion metric tons and save 1.8 billion barrels of oil over the life 
of vehicles and engines sold during the Phase 2 program, providing over 
$200 billion in net societal benefits. As noted, the proposal also 
includes certain EPA-specific provisions relating to control of 
emissions of pollutants other than GHGs. EPA is seeking comment on non-
GHG emission standards relating to the use of auxiliary power units 
installed in tractors. In addition, EPA is proposing to clarify the 
classification of natural gas engines and other gaseous-fueled heavy-
duty engines, and is proposing closed crankcase standards for emissions 
of all pollutants from natural gas heavy-duty engines. EPA is also 
proposing technical amendments to EPA rules that apply to emissions of 
non-GHG pollutants from light-duty motor vehicles, marine diesel 
engines, and other nonroad engines and equipment. Finally, EPA is 
proposing to require that rebuilt engines installed in new incomplete 
vehicles meet the emission standards applicable in the year of 
assembly, including all applicable standards for criteria pollutants.

DATES: Comments on all aspects of this proposal must be received on or 
before September 11, 2015. Under the Paperwork Reduction Act (PRA), 
comments on the information collection provisions are best assured of 
consideration if the Office of Management and Budget (OMB) receives a 
copy of your comments on or before August 12, 2015.
    EPA and NHTSA will announce the public hearing dates and locations 
for this proposal in a supplemental Federal Register document.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2014-0827 (for EPA's docket) and NHTSA-2014-0132 (for NHTSA's 
docket) by one of the following methods:
     Online: www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     Email: a-and-r-docket@epa.gov.
     Mail:
    EPA: Air and Radiation Docket and Information Center, Environmental 
Protection Agency, Mail code: 28221T, 1200 Pennsylvania Ave. NW., 
Washington, DC 20460.
    NHTSA: Docket Management Facility, M-30, U.S. Department of 
Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New 
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery:
    EPA: EPA Docket Center, EPA WJC West Building, Room 3334, 1301 
Constitution Ave. NW., Washington, DC 20460. Such deliveries are only 
accepted during the Docket's normal hours of operation, and special 
arrangements should be made for deliveries of boxed information.
    NHTSA: West Building, Ground Floor, Rm. W12-140, 1200 New Jersey 
Avenue SE., Washington, DC 20590, between 9 a.m. and 4 p.m. Eastern 
Time, Monday through Friday, except Federal holidays.
    Instructions: EPA and NHTSA have established dockets for this 
action under Direct your comments to Docket ID No. EPA-HQ-OAR-2014-0827 
and/or NHTSA-2014-0132, respectively. See the SUPPLEMENTARY INFORMATION 
section on ``Public Participation'' for more information about 
submitting written comments.
    Docket: All documents in the docket are listed on the 
www.regulations.gov Web site. Although listed in the index, some 
information is not publicly available, e.g., confidential business 
information 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. Publicly available docket materials are available either 
electronically through www.regulations.gov or in hard copy at the 
following locations:
    EPA: Air and Radiation Docket and Information Center, EPA Docket 
Center, EPA/DC, EPA WJC West Building, 1301 Constitution Ave. NW., Room 
3334, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 
4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744, and the 
telephone number for the Air Docket is (202) 566-1742.
    NHTSA: Docket Management Facility, M-30, U.S. Department of

[[Page 40139]]

Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New 
Jersey Avenue SE., Washington, DC 20590. The telephone number for the 
docket management facility is (202) 366-9324. The docket management 
facility is open between 9 a.m. and 5 p.m. Eastern Time, Monday through 
Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: EPA: For hearing information or to 
register, please contact: JoNell Iffland, Office of Transportation and 
Air Quality, Assessment and Standards Division (ASD), Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; 
Telephone number: (734) 214-4454; Fax number: (734) 214-4816; Email 
address: iffland.jonell@epa.gov. For all other information related to 
the rule, please contact: Tad Wysor, Office of Transportation and Air 
Quality, Assessment and Standards Division (ASD), Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; 
telephone number: (734) 214-4332; email address: wysor.tad@epa.gov.
    NHTSA: Ryan Hagen or Analiese Marchesseault, Office of Chief 
Counsel, National Highway Traffic Safety Administration, 1200 New 
Jersey Avenue SE., Washington, DC 20590. Telephone: (202) 366-2992; 
ryan.hagen@dot.gov or analiese.marchesseault@dot.gov.

SUPPLEMENTARY INFORMATION: 

A. Does this action apply to me?

    This proposed action would affect companies that manufacture, sell, 
or import into the United States new heavy-duty engines and new Class 
2b through 8 trucks, including combination tractors, all types of 
buses, vocational vehicles including municipal, commercial, 
recreational vehicles, and commercial trailers as well as \3/4\-ton and 
1-ton pickup trucks and vans. The heavy-duty category incorporates all 
motor vehicles with a gross vehicle weight rating of 8,500 lbs or 
greater, and the engines that power them, except for medium-duty 
passenger vehicles already covered by the greenhouse gas standards and 
corporate average fuel economy standards issued for light-duty model 
year 2017-2025 vehicles. Proposed regulated categories and entities 
include the following:

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                                                 Examples of potentially
            Category             NAICS code \a\     affected entities
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Industry.......................          336111  Motor Vehicle
                                                  Manufacturers, Engine
                                                  Manufacturers, Truck
                                                  Manufacturers, Truck
                                                  Trailer Manufacturers.
                                         336112
                                         333618
                                         336120
                                         336212
Industry.......................          541514  Commercial Importers of
                                                  Vehicles and Vehicle
                                                  Components.
                                         811112
                                         811198
Industry.......................          336111  Alternative Fuel
                                                  Vehicle Converters.
                                         336112
                                         422720
                                         454312
                                         541514
                                         541690
                                         811198
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Note:\a\ North American Industry Classification System (NAICS).

This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely covered by these rules. 
This table lists the types of entities that the agencies are aware may 
be regulated by this action. Other types of entities not listed in the 
table could also be regulated. To determine whether your activities are 
regulated by this action, you should carefully examine the 
applicability criteria in the referenced regulations. You may direct 
questions regarding the applicability of this action to the persons 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.

B. Public Participation

    EPA and NHTSA request comment on all aspects of this joint proposed 
rule. This section describes how you can participate in this process.

(1) How do I prepare and submit comments?

    In this joint proposal, there are many issues common to both EPA's 
and NHTSA's proposals. For the convenience of all parties, comments 
submitted to the EPA docket will be considered comments submitted to 
the NHTSA docket, and vice versa. An exception is that comments 
submitted to the NHTSA docket on NHTSA's Draft Environmental Impact 
Statement (EIS) will not be considered submitted to the EPA docket. 
Therefore, the public only needs to submit comments to either one of 
the two agency dockets, although they may submit comments to both if 
they so choose. Comments that are submitted for consideration by one 
agency should be identified as such, and comments that are submitted 
for consideration by both agencies should be identified as such. Absent 
such identification, each agency will exercise its best judgment to 
determine whether a comment is submitted on its proposal.
    Further instructions for submitting comments to either EPA or NHTSA 
docket are described below.
    EPA: Direct your comments to Docket ID No. EPA-HQ-OAR-2014-0827. 
EPA's policy is that all comments received will be included in the 
public docket without change and may be made available online at 
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or email. The 
www.regulations.gov Web site is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through www.regulations.gov your email 
address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your

[[Page 40140]]

name and other contact information in the body of your comment and with 
any disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    NHTSA: Your comments must be written and in English. To ensure that 
your comments are correctly filed in the Docket, please include the 
Docket number NHTSA-2014-0132 in your comments. Your comments must not 
be more than 15 pages long.\1\ NHTSA established this limit to 
encourage you to write your primary comments in a concise fashion. 
However, you may attach necessary additional documents to your 
comments, and there is no limit on the length of the attachments. If 
you are submitting comments electronically as a PDF (Adobe) file, we 
ask that the documents submitted be scanned using the Optical Character 
Recognition (OCR) process, thus allowing the agencies to search and 
copy certain portions of your submissions.\2\ Please note that pursuant 
to the Data Quality Act, in order for the substantive data to be relied 
upon and used by the agency, it must meet the information quality 
standards set forth in the OMB and Department of Transportation (DOT) 
Data Quality Act guidelines. Accordingly, we encourage you to consult 
the guidelines in preparing your comments. OMB's guidelines may be 
accessed at http://www.whitehouse.gov/omb/fedreg/reproducible.html. 
DOT's guidelines may be accessed at http://www.dot.gov/dataquality.htm.
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    \1\ See 49 CFR 553.21.
    \2\ Optical character recognition (OCR) is the process of 
converting an image of text, such as a scanned paper document or 
electronic fax file, into computer-editable text.
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(2) Tips for Preparing Your Comments

    When submitting comments, please remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Explain why you agree or disagree, suggest alternatives, 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified in the DATES section above.

(3) How can I be sure that my comments were received?

    NHTSA: If you submit your comments by mail and wish Docket 
Management to notify you upon its receipt of your comments, enclose a 
self-addressed, stamped postcard in the envelope containing your 
comments. Upon receiving your comments, Docket Management will return 
the postcard by mail.

(4) How do I submit confidential business information?

    Any confidential business information (CBI) submitted to one of the 
agencies will also be available to the other agency. However, as with 
all public comments, any CBI information only needs to be submitted to 
either one of the agencies' dockets and it will be available to the 
other. Following are specific instructions for submitting CBI to either 
agency. If you have any questions about CBI or the procedures for 
claiming CBI, please consult the persons identified in the FOR FURTHER 
INFORMATION CONTACT section.
    EPA: Do not submit CBI to EPA through www.regulations.gov or email. 
Clearly mark the part or all of the information that you claim to be 
CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark 
the outside of the disk or CD ROM as CBI and then identify 
electronically within the disk or CD ROM the specific information that 
is claimed as CBI. Information not marked as CBI will be included in 
the public docket without prior notice. In addition to one complete 
version of the comment that includes information claimed as CBI, a copy 
of the comment that does not contain the information claimed as CBI 
must be submitted for inclusion in the public docket. Information so 
marked will not be disclosed except in accordance with procedures set 
forth in 40 CFR part 2.
    NHTSA: If you wish to submit any information under a claim of 
confidentiality, you should submit three copies of your complete 
submission, including the information you claim to be confidential 
business information, to the Chief Counsel, NHTSA, at the address given 
above under FOR FURTHER INFORMATION CONTACT. When you send a comment 
containing confidential business information, you should include a 
cover letter setting forth the information specified in our 
confidential business information regulation.\3\
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    \3\ See 49 CFR part 512.
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    In addition, you should submit a copy from which you have deleted 
the claimed confidential business information to the Docket by one of 
the methods set forth above.

(5) How can I read the comments submitted by other people?

    You may read the materials placed in the docket for this document 
(e.g., the comments submitted in response to this document by other 
interested persons) at any time by going to http://www.regulations.gov. 
Follow the online instructions for accessing the dockets. You may also 
read the materials at the EPA Docket Center or NHTSA Docket Management 
Facility by going to the street addresses given above under ADDRESSES.

(6) How do I participate in the public hearings?

    EPA and NHTSA will announce the public hearing dates and locations 
for this proposal in a supplemental Federal Register document. At all 
hearings, both agencies will accept comments on the rulemaking, and 
NHTSA will also accept comments on the EIS.
    If you would like to present testimony at the public hearings, we 
ask that you notify EPA and NHTSA contact persons listed in the FOR 
FURTHER INFORMATION CONTACT section at least ten days before the 
hearing. Once EPA and NHTSA learn how many people have registered to 
speak at the public hearing, we will allocate an appropriate amount of 
time to each participant. For planning purposes, each speaker should 
anticipate speaking for approximately ten minutes, although we may need 
to adjust the time for each speaker if there is a large turnout. We 
suggest that you bring copies of your statement or other material for 
EPA and NHTSA panels. It would also be helpful if you send us a copy of 
your statement or other materials before the hearing. To accommodate as 
many speakers as possible, we prefer that speakers not use 
technological aids (e.g., audio-visuals, computer slideshows). However, 
if you plan to do so, you must notify the contact persons in the FOR 
FURTHER INFORMATION CONTACT section above. You also must make 
arrangements to provide your presentation or any other

[[Page 40141]]

aids to EPA and NHTSA in advance of the hearing in order to facilitate 
set-up. In addition, we will reserve a block of time for anyone else in 
the audience who wants to give testimony. The agencies will assume that 
comments made at the hearings are directed to the proposed rule unless 
commenters specifically reference NHTSA's EIS in oral or written 
testimony.
    The hearing will be held at a site accessible to individuals with 
disabilities. Individuals who require accommodations such as sign 
language interpreters should contact the persons listed under FOR 
FURTHER INFORMATION CONTACT section above no later than ten days before 
the date of the hearing.
    EPA and NHTSA will conduct the hearing informally, and technical 
rules of evidence will not apply. We will arrange for a written 
transcript of the hearing and keep the official record of the hearing 
open for 30 days to allow you to submit supplementary information. You 
may make arrangements for copies of the transcript directly with the 
court reporter.

C. Did EPA conduct a peer review before issuing this notice?

    This regulatory action is supported by influential scientific 
information. Therefore, EPA conducted a peer review consistent with 
OMB's Final Information Quality Bulletin for Peer Review. As described 
in Section II.C.3, a peer review of updates to the vehicle simulation 
model (GEM) for the proposed Phase 2 standards has been completed. This 
version of GEM is based on the model used for the Phase 1 rule, which 
was peer-reviewed by a panel of four independent subject matter experts 
(from academia and a national laboratory). The peer review report and 
the agency's response to the peer review comments are available in 
Docket ID No. EPA-HQ-OAR-2014-0827.

D. Executive Summary

(1) Commitment to Greenhouse Gas Emission Reductions and Vehicle Fuel 
Efficiency

    As part of the Climate Action Plan announced in June 2013,\4\ the 
President directed the Environmental Protection Agency (EPA) and the 
Department of Transportation's (DOT) National Highway Traffic Safety 
Administration (NHTSA) to set the next round of standards to reduce 
greenhouse gas (GHG) emissions and improve fuel efficiency for medium- 
and heavy-duty vehicles. More than 70 percent of the oil used in the 
United States and 28 percent of GHG emissions come from the 
transportation sector, and since 2009 EPA and NHTSA have worked with 
industry and states to develop ambitious, flexible standards for both 
the fuel economy and GHG emissions of light-duty vehicles and the fuel 
efficiency and GHG emissions of heavy-duty vehicles.5 6 The 
standards proposed here (referred to as Phase 2) would build on the 
light-duty vehicle standards spanning model years 2011 to 2025 and on 
the initial phase of standards (referred to as Phase 1) for new medium 
and heavy-duty vehicles (MDVs and HDVs) and engines in model years 2014 
to 2018. Throughout every stage of development for these programs, EPA 
and NHTSA (collectively, the agencies, or ``we'') have worked in close 
partnership not only with one another, but with the vehicle 
manufacturing industry, environmental community leaders, and the State 
of California among other entities to create a single, effective set of 
national standards.
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    \4\ The White House, The President's Climate Action Plan (June, 
2013). http://www.whitehouse.gov/share/climate-action-plan.
    \5\ The White House, Improving the Fuel Efficiency of American 
Trucks--Bolstering Energy Security, Cutting Carbon Pollution, Saving 
Money and Supporting Manufacturing Innovation (Feb. 2014), 2.
    \6\ U.S. Environmental Protection Agency. 2014. Inventory of 
U.S. Greenhouse Gas Emissions and Sinks: 1990-2012. EPA 430-R-14-
003. Mobile sources emitted 28 percent of all U.S. GHG emissions in 
2012. Available at http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2014-Main-Text.pdf.
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    Through two previous rulemakings, EPA and NHTSA have worked with 
the auto industry to develop new fuel economy and GHG emission 
standards for light-duty vehicles. Taken together, the light-duty 
vehicle standards span model years 2011 to 2025 and are the first 
significant improvement in fuel economy in approximately two decades. 
Under the final program, average new car and light truck fuel economy 
is expected to double by 2025.\7\ This is projected to save consumers 
$1.7 trillion at the pump--roughly $8,200 per vehicle for a MY2025 
vehicle--reducing oil consumption by 2.2 million barrels a day in 2025 
and slashing GHG emissions by 6 billion metric tons over the lifetime 
of the vehicles sold during this period.\8\ These fuel economy 
standards are already delivering savings for American drivers. Between 
model years 2008 and 2013, the unadjusted average test fuel economy of 
new passenger cars and light trucks sold in the United States has 
increased by about four miles per gallon. Altogether, light-duty 
vehicle fuel economy standards finalized after 2008 have already saved 
nearly one billion gallons of fuel and avoided more than 10 million 
tons of carbon dioxide emissions.\9\
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    \7\ Id.
    \8\ Id.
    \9\ Id. at 3.
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    Similarly, EPA and NHTSA have previously developed joint GHG 
emission and fuel efficiency standards for MDVs and HDVs. Prior to 
these Phase 1 standards, heavy-duty trucks and buses--from delivery 
vans to the largest tractor-trailers--were required to meet pollution 
standards for soot and smog-causing air pollutants, but no requirements 
existed for the fuel efficiency or carbon pollution from these 
vehicles.\10\ By 2010, total fuel consumption and GHG emissions from 
MDVs and HDVs had been growing, and these vehicles accounted for 23 
percent of total U.S. transportation-related GHG emissions.\11\ In 
August 2011, the agencies finalized the groundbreaking Phase 1 
standards for new MDVs and HDVs in model years 2014 through 2018. This 
program, developed with support from the trucking and engine 
industries, the State of California, Environment Canada, and leaders 
from the environmental community, set standards that are expected to 
save a projected 530 million barrels of oil and reduce carbon emissions 
by about 270 million metric tons, representing one of the most 
significant programs available to reduce domestic emissions of 
GHGs.\12\ The Phase 1 program, as well as the many additional actions 
called for in the President's 2013 Climate Action Plan \13\ including 
this Phase 2 rulemaking, not only result in meaningful decreases in GHG 
emissions, but support--indeed are critical for--United States 
leadership to encourage other countries to also achieve meaningful GHG 
reductions.
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    \10\ Id.
    \11\ Id.
    \12\ Id. at 4.
    \13\ The President's Climate Action Plan calls for GHG-cutting 
actions including, for example, reducing carbon emissions from power 
plants and curbing hydrofluorocarbon and methane emissions.
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    This proposal builds on our commitment to robust collaboration with 
stakeholders and the public. It follows an expansive and thorough 
outreach effort in which the agencies gathered input, data and views 
from many interested stakeholders, involving over 200 meetings with 
heavy-duty vehicle and engine manufacturers, technology suppliers, 
trucking fleets, truck drivers, dealerships, environmental 
organizations, and state agencies. As with the previous light-duty 
rules and the heavy-duty Phase 1 rule, the agencies have consulted

[[Page 40142]]

frequently with the California Air Resources Board staff during the 
development of this Phase 2 proposal, given California's unique ability 
among the states to adopt their own GHG standards for on-highway 
engines and vehicles. The agencies look forward to feedback and ongoing 
conversation following the release of this proposed rule from all 
stakeholders--including through planned public hearings, written 
comments, and other opportunities for input.

(2) Overview of Phase 1 Medium- and Heavy-Duty Vehicle Standards

    The President's direction to EPA and NHTSA to develop GHG emission 
and fuel efficiency standards for MDVs and HDVs resulted in the 
agencies' promulgation of the Phase 1 program in 2011, which covers new 
trucks and heavy vehicles in model years 2014 to 2018. The Phase 1 
program includes specific standards for combination tractors, heavy-
duty pickup trucks and vans, and vocational vehicles, and includes 
separate standards for both vehicles and engines. The program offers 
extensive flexibility, allowing manufacturers to reach standards 
through average fleet calculations, a mix of technologies, and the use 
of various credit and banking programs.
    The Phase 1 program was developed through close consultation with 
industry and other stakeholders, resulting in standards tailored to the 
specifics of each different class of vehicles and engines.
     Heavy-duty combination tractors. Combination tractors--
semi trucks that typically pull trailers--are regulated under nine 
subcategories based on weight class, cab type, and roof height. These 
vehicles represent approximately two-thirds of all fuel consumption and 
GHG emissions from MDVs and HDVs.
     Heavy-duty pickup trucks and vans. Heavy-duty pickup and 
van standards are based on a ``work factor'' attribute that combines a 
vehicle's payload, towing capabilities, and the presence of 4-wheel 
drive. These vehicles represent about 15 percent of the fuel 
consumption and GHG emissions from MDVs and HDVs.
     Vocational vehicles. Specialized vocational vehicles, 
which consist of a very wide variety of truck and bus types (e.g., 
delivery, refuse, utility, dump, cement, transit bus, shuttle bus, 
school bus, emergency vehicles, and recreational vehicles) are 
regulated in three subcategories based on engine classification. These 
vehicles represent approximately 20 percent of the fuel consumption and 
GHG emissions from MDVs and HDVs. The Phase 1 program includes EPA GHG 
standards for recreational vehicles, but not NHTSA fuel efficiency 
standards.\14\
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    \14\ The proposed Phase 2 program would also include NHTSA 
recreational vehicle fuel efficiency standards.
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     Heavy-duty engines. In addition to vehicle types, the 
Phase 1 rule has separate standards for heavy-duty engines, to assure 
they contribute to the overall vehicle reductions in fuel consumption 
and GHG emissions.
    The Phase 1 standards are premised on utilization of immediately 
available technologies. The Phase 1 program provides flexibilities that 
facilitate compliance. These flexibilities help provide sufficient lead 
time for manufacturers to make necessary technological improvements and 
reduce the overall cost of the program, without compromising overall 
environmental and fuel consumption objectives. The primary flexibility 
provisions are an engine averaging, banking, and trading (ABT) program 
and a vehicle ABT program. These ABT programs allow for emission and/or 
fuel consumption credits to be averaged, banked, or traded within each 
of the regulatory subcategories. However, credits are not allowed to be 
transferred across subcategories.
    The Phase 1 program is projected to save 530 million barrels of oil 
and avoid 270 million metric tons of GHG emissions.\15\ At the same 
time, the program is projected to produce $50 billion in fuel savings, 
and net societal benefits of $49 billion. Today, the Phase 1 fuel 
efficiency and GHG reduction standards are already reducing GHG 
emissions and U.S. oil consumption, and producing fuel savings for 
America's trucking industry. The market appears to be very accepting of 
the new technology, and the agencies have seen no evidence of ``pre-
buy'' effects in response to the standards.
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    \15\ The White House, Improving the Fuel Efficiency of American 
Trucks--Bolstering Energy Security, Cutting Carbon Pollution, Saving 
Money and Supporting Manufacturing Innovation (Feb. 2014), 4.
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(3) Overview of Proposed Phase 2 Medium- and Heavy-Duty Vehicle 
Standards

    The Phase 2 GHG and fuel efficiency standards for MDVs and HDVs are 
a critical next step in improving fuel efficiency and reducing GHG. The 
proposed Phase 2 standards carry forward our commitment to meaningful 
collaboration with stakeholders and the public, as they build on more 
than 200 meetings with manufacturers, suppliers, trucking fleets, 
dealerships, state air quality agencies, non-governmental organizations 
(NGOs), and other stakeholders to identify and understand the 
opportunities and challenges involved with this next level of fuel 
saving technology. These meetings have been invaluable to the agencies, 
enabling the development of a proposal that appropriately balances all 
potential impacts and effectively minimizes the possibility of 
unintended consequences.
    Phase 2 would include technology-advancing standards that would 
phase in over the long-term (through model year 2027) to result in an 
ambitious, yet achievable program that would allow manufacturers to 
meet standards through a mix of different technologies at reasonable 
cost. The Phase 2 standards would maintain the underlying regulatory 
structure developed in the Phase 1 program, such as the general 
categorization of MDVs and HDVs and the separate standards for vehicles 
and engines. However, the Phase 2 program would build on and advance 
Phase 1 in a number of important ways including: Basing standards not 
only on currently available technologies but also on utilization of 
technologies now under development or not yet widely deployed while 
providing significant lead time to assure adequate time to develop, 
test, and phase in these controls; developing standards for trailers; 
further encouraging innovation and providing flexibility; including 
vehicles produced by small business manufacturers; incorporating 
enhanced test procedures that (among other things) allow individual 
drivetrain and powertrain performance to be reflected in the vehicle 
certification process; and using an expanded and improved compliance 
simulation model.
     Strengthening standards to account for ongoing 
technological advancements. Relative to the baseline as of the end of 
Phase 1, the proposed standards (labeled Alternative 3 or the 
``preferred alternative'' throughout this proposal) would achieve 
vehicle fuel savings of up to 8 percent and 24 percent, depending on 
the vehicle category. While costs are higher than for Phase 1, benefits 
greatly exceed costs, and payback periods are short, meaning that 
consumers will see substantial net savings over the vehicle lifetime. 
Payback is estimated at about two years for tractors and trailers, 
about five years for vocational vehicles, and about three years for 
heavy-duty pickups and vans. The agencies are further proposing to 
phase in these MY 2027 standards with interim standards for model years 
2021 and 2024 (and for certain types of trailers, EPA is proposing 
model year 2018 phase-in standards as well).

[[Page 40143]]

    In addition to the proposed standards, the agencies are considering 
another alternative (Alternative 4), which would achieve the same 
performance as the proposed standards 2-3 years earlier, leading to 
overall reductions in fuel use and greenhouse gas emissions. The 
agencies believe Alternative 4 has the potential to be the maximum 
feasible and appropriate alternative; however, based on the evidence 
currently before us, EPA and NHTSA have outstanding questions regarding 
relative risks and benefits of Alternative 4 due to the timeframe 
envisioned by that alternative. The agencies are proposing Alternative 
3 based on their analyses and projections, and taking into account the 
agencies' respective statutory considerations. The comments that the 
agencies receive on this proposal will be instrumental in helping us 
determine standards that are appropriate (for EPA) and maximum feasible 
(for NHTSA), given the discretion that both agencies have under our 
respective statutes. Therefore, the agencies have presented different 
options and raised specific questions throughout the proposed rule, 
focusing in particular on better understanding the perspectives on the 
feasible adoption rates of different technologies, considering 
associated costs and necessary lead time.
     Setting standards for trailers for the first time. In 
addition to retaining the vehicle and engine categories covered in the 
Phase 1 program, which include semi tractors, heavy-duty pickup trucks 
and work vans, vocational vehicles, and separate standards for heavy-
duty engines, the Phase 2 standards propose fuel efficiency and GHG 
emission standards for trailers used in combination with tractors. 
Although the agencies are not proposing standards for all trailer 
types, the majority of new trailers would be covered.
     Encouraging technological innovation while providing 
flexibility and options for manufacturers. For each category of HDVs, 
the standards would set performance targets that allow manufacturers to 
achieve reductions through a mix of different technologies and leave 
manufacturers free to choose any means of compliance. For tractors and 
vocational vehicles, enhanced test procedures and an expanded and 
improved compliance simulation model enable the proposed vehicle 
standards to encompass more of the complete vehicle and to account for 
engine, transmission and driveline improvements than the Phase 1 
program. With the addition of the powertrain and driveline to the 
compliance model, representative drive cycles and vehicle baseline 
configurations become critically important to assure the standards 
promote technologies that improve real world fuel efficiency and GHG 
emissions. This proposal updates drive cycles and vehicle 
configurations to better reflect real world operation. For tractor 
standards, for example, different combinations of improvements like 
advanced aerodynamics, engine improvements and waste-heat recovery, 
automated transmission, and lower rolling resistance tires and 
automatic tire inflation can be used to meet standards. Additionally, 
the agencies' analyses indicate that this proposal should have no 
adverse impact on vehicle or engine safety.
     Providing flexibilities to help minimize effect on small 
businesses. All small businesses are exempt from the Phase 1 standards. 
The agencies are proposing to regulate small business entities under 
Phase 2 (notably certain trailer manufacturers), but have conducted 
extensive proceedings pursuant to Section 609 of the Regulatory 
Flexibility Act, and otherwise have engaged in extensive consultation 
with stakeholders, and developed a proposed approach to provide 
targeted flexibilities geared toward helping small businesses comply 
with the Phase 2 standards. Specifically, the agencies are proposing to 
delay all new requirements by one year and simplify certification 
requirements for small businesses, and are further proposing additional 
specific flexibilities adapted to particular types of trailers.

   Summary of the Proposed Phase 2 Medium- and Heavy-Duty Vehicle Rule
 Impacts to Fuel Consumption, GHG Emissions, Benefits and Costs Over the
  Lifetime of Model Years 2018-2029, Based on Analysis Method A \a\ \b\
                                   \c\
------------------------------------------------------------------------
                                                3%              7%
------------------------------------------------------------------------
Fuel Reductions (billion gallons).......               72-77
GHG Reductions (MMT, CO2eq).............             974-1034
------------------------------------------------------------------------
Pre-Tax Fuel Savings ($billion).........         165-175           89-94
Discounted Technology Costs ($billion)..         25-25.4      16.8 -17.1
Value of reduced emissions ($billion)...       70.1-73.7       52.9-55.6
Total Costs ($billion)..................       30.5-31.1       20.0-20.5
Total Benefits ($billion)...............         261-276         156-165
Net Benefits ($billion).................         231-245         136-144
------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.
\b\ Range reflects two reference case assumptions, one that projects
  very little improvement in new vehicle fuel efficiency absent new
  standards, and the second that projects more significant improvements
  in vehicle fuel efficiency absent new standards.
\c\ Benefits and net benefits (including those in the 7% discount rate
  column) use the 3 percent average SCC-CO2 value applied only to CO2
  emissions; GHG reductions include CO2, CH4, N2O and HFC reductions.

  Summary of the Proposed Phase 2 Medium- and Heavy-Duty Vehicle Annual
  Fuel and GHG Reductions, Program Costs, Benefits and Net Benefits in
      Calendar Years 2035 and 2050, Based on Analysis Method B \a\
------------------------------------------------------------------------
                                               2035            2050
------------------------------------------------------------------------
Fuel Reductions (Billion Gallons).......             9.3            13.4
GHG Reduction (MMT, CO2eq)..............           127.1           183.4
Vehicle Program Costs (including                   -$6.0           -$7.1
 Maintenance; Billions of 2012$)........
Fuel Savings (Pre-Tax; Billions of                 $37.2           $57.5
 2012$).................................
Benefits (Billions of 2012$)............           $20.5           $32.9

[[Page 40144]]

 
Net Benefits (Billions of 2012$)........           $51.7           $83.2
------------------------------------------------------------------------
Note:
\a\ Benefits and net benefits use the 3 percent average SCC-CO2 value
  applied only to CO2 emissions; GHG reductions include CO2, CH4, N2O
  and HFC reductions; values reflect the preferred alternative relative
  to the less dynamic baseline (a reference case that projects very
  little improvement in new vehicle fuel economy absent new standards.

  Summary of the Proposed Phase 2 Medium- and Heavy-Duty Vehicle Program Expected Per-Vehicle Fuel Savings, GHG
            Emission Reductions, and Cost for Key Vehicle Categories, Based on Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                            MY 2021                    MY 2024                   MY 2027
----------------------------------------------------------------------------------------------------------------
Maximum Vehicle Fuel Savings and
 Tailpipe GHG Reduction (%)
    Tractors.....................  13                         20                        24
    Trailers \b\.................  4                          6                         8
    Vocational Vehicles..........  7                          11                        16
    Pickups/Vans.................  2.5                        10                        16
Per Vehicle Cost ($) \c\ (%
 Increase in Typical Vehicle
 Price) \d\
    Tractors.....................  $6,710 (7%)                $9,940 (10%)              $11,680 (12%)
    Trailers.....................  $900 (4%)                  $1,010 (4%)               $1,170 (5%)
    Vocational Vehicles..........  $1,150 (2%)                $1,770 (3%)               $3,380 (5%)
    Pickups/Vans.................  $520 (1%)                  $950 (2%)                 $1,340 (3%)
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Note that the proposed EPA standards for some categories of box trailers begin in model year 2018; values
  reflect the preferred alternative relative to the less dynamic baseline (a reference case that projects very
  little improvement in new vehicle fuel economy absent new standards.
\b\ All engine costs are included.
\c\ For this table, we use a minimum vehicle price today of $100,000 for tractors, $25,000 for trailers, $70,000
  for vocational vehicles and $40,000 for HD pickups/vans.

 Payback Periods for MY2027 Vehicles Under the Proposed Standards, Based
                          on Analysis Method B
        [Payback occurs in the year shown; using 7% discounting]
------------------------------------------------------------------------
                                                             Proposed
                                                             standards
------------------------------------------------------------------------
Tractors/Trailers.......................................             2nd
Vocational Vehicles.....................................             6th
Pickups/Vans............................................             3rd
------------------------------------------------------------------------

(4) Issues Addressed in This Proposed Rule

    This proposed rule contains extensive discussion of the background, 
elements, and implications of the proposed Phase 2 program. Section I 
includes information on the MDV and HDV industry, related regulatory 
and non-regulatory programs, summaries of Phase 1 and Phase 2 programs, 
costs and benefits of the proposed standards, and relevant statutory 
authority for EPA and NHTSA. Section II discusses vehicle simulation, 
engine standards, and test procedures. Sections III, IV, V, and VI 
detail the proposed standards for combination tractors, trailers, 
vocational vehicles, and heavy-duty pickup trucks and vans. Sections 
VII and VIII discuss aggregate GHG impacts, fuel consumption impacts, 
climate impacts, and impacts on non-GHG emissions. Section IX evaluates 
the economic impacts of the proposed standards. Sections X, XI, and XII 
present the alternatives analyses, consideration of natural gas 
vehicles, and the agencies' initial response to recommendations from 
the Academy of Sciences. Finally, Sections XIII and XIV discuss the 
changes that the proposed Phase 2 rules would have on Phase 1 standards 
and other regulatory provisions. In addition to this preamble, the 
agencies have also prepared a joint Draft Regulatory Impact Analysis 
(DRIA) which is available on our respective Web sites and in the public 
docket for this rulemaking which provides additional data, analysis and 
discussion of the proposed standards and the alternatives analyzed by 
the agencies. We request comment on all aspects of this proposed 
rulemaking, including the DRIA.

Table of Contents

    A. Does this action apply to me?
    B. Public Participation
    C. Did EPA conduct a peer review before issuing this notice?
    D. Executive Summary
I. Overview
    A. Background
    B. Summary of Phase 1 Program
    C. Summary of the Proposed Phase 2 Standards and Requirements
    D. Summary of the Costs and Benefits of the Proposed Rule
    E. EPA and NHTSA Statutory Authorities
    F. Other Issues
II. Vehicle Simulation, Engine Standards and Test Procedures
    A. Introduction and Summary of Phase 1 and Phase 2 Regulatory 
Structures
    B. Phase 2 Proposed Regulatory Structure
    C. Proposed Vehicle Simulation Model--Phase 2 GEM
    D. Proposed Engine Test Procedures and Engine Standards
III. Class 7 and 8 Combination Tractors
    A. Summary of the Phase 1 Tractor Program
    B. Overview of the Proposed Phase 2 Tractor Program
    C. Proposed Phase 2 Tractor Standards
    D. Feasibility of the Proposed Tractor Standards
    E. Proposed Compliance Provisions for Tractors
    F. Flexibility Provisions
IV. Trailers
    A. Summary of Trailer Consideration in Phase 1
    B. The Trailer Industry
    C. Proposed Phase 2 Trailer Standards
    D. Feasibility of the Proposed Trailer Standards
    E. Alternative Standards and Feasibility Considered
    F. Trailer Standards: Compliance and Flexibilities
V. Class 2b-8 Vocational Vehicles
    A. Summary of Phase 1 Vocational Vehicle Standards

[[Page 40145]]

    B. Proposed Phase 2 Standards for Vocational Vehicles
    C. Feasibility of the Proposed Vocational Vehicle Standards
    D. Alternative Vocational Vehicle Standards Considered
    E. Compliance Provisions for Vocational Vehicles
VI. Heavy-Duty Pickups and Vans
    A. Introduction and Summary of Phase 1 HD Pickup and Van 
Standards
    B. Proposed HD Pickup and Van Standards
    C. Feasibility of Pickup and Van Standards
    D. DOT CAFE Model Analysis of the Regulatory Alternatives for HD 
Pickups and Vans
    E. Compliance and Flexibility for HD Pickup and Van Standards
VII. Aggregate GHG, Fuel Consumption, and Climate Impacts
    A. What methodologies did the agencies use to project GHG 
emissions and fuel consumption impacts?
    B. Analysis of Fuel Consumption and GHG Emissions Impacts 
Resulting From Proposed Standards and Alternative 4
    C. What are the projected reductions in fuel consumption and GHG 
emissions?
VIII. How will this proposed action impact non-GHG emissions and 
their associated effects?
    A. Emissions Inventory Impacts
    B. Health Effects of Non-GHG Pollutants
    C. Environmental Effects of Non-GHG Pollutants
    D. Air Quality Impacts of Non-GHG Pollutants
IX. Economic and Other Impacts
    A. Conceptual Framework
    B. Vehicle-Related Costs Associated With the Program
    C. Changes in Fuel Consumption and Expenditures
    D. Maintenance Expenditures
    E. Analysis of the Rebound Effect
    F. Impact on Class Shifting, Fleet Turnover, and Sales
    G. Monetized GHG Impacts
    H. Monetized Non-GHG Health Impacts
    I. Energy Security Impacts
    J. Other Impacts
    K. Summary of Benefits and Costs
    L. Employment Impacts
    M. Cost of Ownership and Payback Analysis
    N. Safety Impacts
X. Analysis of the Alternatives
    A. What are the alternatives that the agencies considered?
    B. How do these alternatives compare in overall fuel consumption 
and GHG emissions reductions and in benefits and costs?
XI. Natural Gas Vehicles and Engines
    A. Natural Gas Engine and Vehicle Technology
    B. GHG Lifecycle Analysis for Natural Gas Vehicles
    C. Projected Use of LNG and CNG
    D. Natural Gas Emission Control Measures
    E. Dimethyl Ether
XII. Agencies' Response to Recommendations From the National Academy 
of Sciences
    A. Overview
    B. Major Findings and Recommendations of the NAS Phase 2 First 
Report
XIII. Amendments to Phase 1 Standards
    A. EPA Amendments
    B. Other Compliance Provisions for NHTSA
XIV. Other Proposed Regulatory Provisions
    A. Proposed Amendments Related to Heavy-Duty Highway Engines and 
Vehicles
    B. Amendments Affecting Gliders and Glider Kits
    C. Applying the General Compliance Provisions of 40 CFR Part 
1068 to Light-Duty Vehicles, Light-Duty Trucks, Chassis-Certified 
Class 2B and 3 Heavy-Duty Vehicles and Highway Motorcycles
    D. Amendments to General Compliance Provisions in 40 CFR Part 
1068
    E. Amendments to Light-Duty Greenhouse Gas Program Requirements
    F. Amendments to Highway and Nonroad Test Procedures and 
Certification Requirements
    G. Amendments Related to Nonroad Diesel Engines in 40 CFR Part 
1039
    H. Amendments Related to Marine Diesel Engines in 40 CFR Parts 
1042 and 1043
    I. Amendments Related to Locomotives in 40 CFR Part 1033
    J. Miscellaneous EPA Amendments
    K. Amending 49 CFR Parts 512 and 537 To Allow Electronic 
Submissions and Defining Data Formats for Light-Duty Vehicle 
Corporate Average Fuel Economy (CAFE) Reports
XV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. National Environmental Policy Act
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act
    E. Unfunded Mandates Reform Act
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act and 1 CFR 
Part 51
    K. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    L. Endangered Species Act
XVI. EPA and NHTSA Statutory Authorities
    A. EPA
    B. NHTSA
    C. List of Subjects

I. Overview

A. Background

    This background and summary of the proposed Phase 2 GHG emissions 
and fuel efficiency standards includes an overview of the heavy-duty 
truck industry and related regulatory and non-regulatory programs, a 
summary of the Phase 1 GHG emissions and fuel efficiency program, a 
summary of the proposed Phase 2 standards and requirements, a summary 
of the costs and benefits of the proposed Phase 2 standards, discussion 
of EPA and NHTSA statutory authorities, and other issues.
    For purposes of this preamble, the terms ``heavy-duty'' or ``HD'' 
are used to apply to all highway vehicles and engines that are not 
within the range of light-duty passenger cars, light-duty trucks, and 
medium-duty passenger vehicles (MDPV) covered by separate GHG and 
Corporate Average Fuel Economy (CAFE) standards.\16\ They do not 
include motorcycles. Thus, in this rulemaking, unless specified 
otherwise, the heavy-duty category incorporates all vehicles with a 
gross vehicle weight rating above 8,500 lbs, and the engines that power 
them, except for MDPVs.17 18
---------------------------------------------------------------------------

    \16\ 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas 
Emissions and Corporate Average Fuel Economy Standards; Final Rule, 
77 FR 62623, October 15, 2012.
    \17\ The CAA defines heavy-duty as a truck, bus or other motor 
vehicles with a gross vehicle weight rating exceeding 6,000 lbs (CAA 
section 202(b)(3)). The term HD as used in this action refers to a 
subset of these vehicles and engines.
    \18\ The Energy Independence and Security Act of 2007 requires 
NHTSA to set standards for commercial medium- and heavy-duty on-
highway vehicles, defined as on-highway vehicles with a GVWR of 
10,000 lbs or more, and work trucks, defined as vehicles with a GVWR 
between 8,500 and 10,000 lbs and excluding medium duty passenger 
vehicles.
---------------------------------------------------------------------------

    Consistent with the President's direction, over the past two years 
as we have developed this proposal, the agencies have met on an on-
going basis with a very large number of diverse stakeholders. This 
includes meetings, and in many cases site visits, with truck, trailer, 
and engine manufacturers; technology supplier companies and their trade 
associations (e.g., transmissions, drive lines, fuel systems, 
turbochargers, tires, catalysts, and many others); line haul and 
vocational trucking firms and trucking associations; the trucking 
industries owner-operator association; truck dealerships and dealers 
associations; trailer manufacturers and their trade association; non-
governmental organizations (NGOs, including environmental NGOs, 
national security NGOs, and consumer advocacy NGOs); state air quality 
agencies; manufacturing labor unions; and many other stakeholders. In 
particular, NHTSA and EPA have consulted on an on-going basis with the 
California Air Resources Board (CARB) over the past two years as we 
have developed the Phase 2 proposal. In addition, CARB staff and 
managers have also participated with EPA and NHTSA in meetings with

[[Page 40146]]

many external stakeholders, in particular with vehicle OEMs and 
technology suppliers.\19\
---------------------------------------------------------------------------

    \19\ Vehicle chassis manufacturers are known in this industry as 
original equipment manufacturers or OEMs.
---------------------------------------------------------------------------

    NHTSA and EPA staff also participated in a large number of 
technical and policy conferences over the past two years related to the 
technological, economic, and environmental aspects of the heavy-duty 
trucking industry. The agencies also met with regulatory counterparts 
from several other nations who either have already or are considering 
establishing fuel consumption or GHG requirements, including outreach 
with representatives from the governments of Canada, the European 
Commission, Japan, and China.
    These comprehensive outreach actions by the agencies provided us 
with information to assist in our identification of potential 
technologies that can be used to reduce heavy-duty GHG emissions and 
improve fuel efficiency. The outreach has also helped the agencies to 
identify and understand the opportunities and challenges involved with 
the proposed standards for the heavy-duty trucks, trailers, and engines 
detailed in this preamble, including time needed for implementation of 
various technologies and potential costs and fuel savings. The scope of 
this outreach effort to gather input for the proposal included well 
over 200 meetings with stakeholders. These meetings and conferences 
have been invaluable to the agencies. We believe they have enabled us 
to develop this proposal in such a way as to appropriately balance all 
of the potential impacts, to minimize the possibility of unintended 
consequences, and to ensure that we are requesting comment on a wide 
range of issues that can inform the final rule.
(1) Brief Overview of the Heavy-Duty Truck Industry
    The heavy-duty sector is diverse in several respects, including the 
types of manufacturing companies involved, the range of sizes of trucks 
and engines they produce, the types of work for which the trucks are 
designed, and the regulatory history of different subcategories of 
vehicles and engines. The current heavy-duty fleet encompasses vehicles 
from the ``18-wheeler'' combination tractors one sees on the highway to 
the largest pickup trucks and vans, as well as vocational vehicles 
covering a range between these extremes. Together, the HD sector spans 
a wide range of vehicles with often specialized form and function. A 
primary indicator of the diversity among heavy-duty trucks is the range 
of load-carrying capability across the industry. The heavy-duty truck 
sector is often subdivided by vehicle weight classifications, as 
defined by the vehicle's gross vehicle weight rating (GVWR), which is a 
measure of the combined curb (empty) weight and cargo carrying capacity 
of the truck.\20\ Table I-1 below outlines the vehicle weight 
classifications commonly used for many years for a variety of purposes 
by businesses and by several Federal agencies, including the Department 
of Transportation, the Environmental Protection Agency, the Department 
of Commerce, and the Internal Revenue Service.
---------------------------------------------------------------------------

    \20\ GVWR describes the maximum load that can be carried by a 
vehicle, including the weight of the vehicle itself. Heavy-duty 
vehicles (including those designed for primary purposes other than 
towing) also have a gross combined weight rating (GCWR), which 
describes the maximum load that the vehicle can haul, including the 
weight of a loaded trailer and the vehicle itself.

                                                        Table I-1--Vehicle Weight Classification
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  Class                         2b               3               4               5               6               7               8
--------------------------------------------------------------------------------------------------------------------------------------------------------
GVWR (lb)...............................    8,501-10,000   10,001-14,000   14,001-16,000   16,001-19,500   19,501-26,000   26,001-33,000         >33,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

In the framework of these vehicle weight classifications, the heavy-
duty truck sector refers to ``Class 2b'' through ``Class 8'' vehicles 
and the engines that power those vehicles.\21\
---------------------------------------------------------------------------

    \21\ Class 2b vehicles manufactured as passenger vehicles 
(Medium Duty Passenger Vehicles, MDPVs) are covered by the light-
duty GHG and fuel economy standards and therefore are not addressed 
in this rulemaking.
---------------------------------------------------------------------------

    Unlike light-duty vehicles, which are primarily used for 
transporting passengers for personal travel, heavy-duty vehicles fill 
much more diverse operator needs. Heavy-duty pickup trucks and vans 
(Classes 2b and 3) are used chiefly as work trucks and vans, and as 
shuttle vans, as well as for personal transportation, with an average 
annual mileage in the range of 15,000 miles. The rest of the heavy-duty 
sector is used for carrying cargo and/or performing specialized tasks. 
``Vocational'' vehicles, which may span Classes 2b through 8, vary 
widely in size, including smaller and larger van trucks, utility 
``bucket'' trucks, tank trucks, refuse trucks, urban and over-the-road 
buses, fire trucks, flat-bed trucks, and dump trucks, among others. The 
annual mileage of these vehicles is as varied as their uses, but for 
the most part tends to fall in between heavy-duty pickups/vans and the 
large combination tractors, typically from 15,000 to 150,000 miles per 
year.
    Class 7 and 8 combination tractor-trailers--some equipped with 
sleeper cabs and some not--are primarily used for freight 
transportation. They are sold as tractors and operate with one or more 
trailers that can carry up to 50,000 lbs or more of payload, consuming 
significant quantities of fuel and producing significant amounts of GHG 
emissions. Together, Class 7 and 8 tractors and trailers account for 
approximately two-thirds of the heavy-duty sector's total 
CO2 emissions and fuel consumption. Trailer designs vary 
significantly, reflecting the wide variety of cargo types. However, the 
most common types of trailers are box vans (dry and refrigerated), 
which are a focus of this Phase 2 rulemaking. The tractor-trailers used 
in combination applications can and frequently do travel more than 
150,000 miles per year and can operate for 20-30 years.
    EPA and NHTSA have designed our respective proposed standards in 
careful consideration of the diversity and complexity of the heavy-duty 
truck industry, as discussed in Section I.B.
(2) Related Regulatory and Non-Regulatory Programs
(a) History of EPA's Heavy-Duty Regulatory Program and Impacts of 
Greenhouse Gases on Climate Change
    This subsection provides an overview of the history of EPA's heavy-
duty regulatory program and impacts of greenhouse gases on climate 
change.
(i) History of EPA's Heavy-Duty Regulatory Program
    Since the 1980s, EPA has acted several times to address tailpipe 
emissions of criteria pollutants and air toxics from heavy-duty 
vehicles and engines. During the last two decades these programs have 
primarily

[[Page 40147]]

addressed emissions of particulate matter (PM) and the primary ozone 
precursors, hydrocarbons (HC) and oxides of nitrogen (NOX). 
These programs, which have successfully achieved significant and cost-
effective reductions in emissions and associated health and welfare 
benefits to the nation, were an important basis of the Phase 1 program. 
See e.g. 66 FR 5002, 5008, and 5011-5012 (January 18, 2001) (detailing 
substantial public health benefits of controls of criteria pollutants 
from heavy-duty diesel engines, including bringing areas into 
attainment with primary (public health) PM NAAQS, or contributing 
substantially to such attainment); National Petrochemical Refiners 
Association v. EPA, 287 F.3d 1130, 1134 (D.C. Cir. 2002) (referring to 
the ``dramatic reductions'' in criteria pollutant emissions resulting 
from those on-highway heavy-duty engine standards, and upholding all of 
the standards).
    As required by the Clean Air Act (CAA), the emission standards 
implemented by these programs include standards that apply at the time 
that the vehicle or engine is sold and continue to apply in actual use. 
EPA's overall program goal has always been to achieve emissions 
reductions from the complete vehicles that operate on our roads. The 
agency has often accomplished this goal for many heavy-duty truck 
categories by regulating heavy-duty engine emissions. A key part of 
this success has been the development over many years of a well-
established, representative, and robust set of engine test procedures 
that industry and EPA now use routinely to measure emissions and 
determine compliance with emission standards. These test procedures in 
turn serve the overall compliance program that EPA implements to help 
ensure that emissions reductions are being achieved. By isolating the 
engine from the many variables involved when the engine is installed 
and operated in a HD vehicle, EPA has been able to accurately address 
the contribution of the engine alone to overall emissions.
(ii) Impacts of Greenhouse Gases on Climate Change
    In 2009, the EPA Administrator issued the document known as the 
Endangerment Finding under CAA Section 202(a)(1).\22\ In the 
Endangerment Finding, which focused on public health and public welfare 
impacts within the United States, the Administrator found that elevated 
concentrations of GHG emissions in the atmosphere may reasonably be 
anticipated to endanger public health and welfare of current and future 
generations. See also Coalition for Responsible Regulation v. EPA, 684 
F.3d 102, 117-123 (D.C. Cir. 2012) (upholding the endangerment finding 
in all respects). The following sections summarize the key information 
included in the Endangerment Finding.
---------------------------------------------------------------------------

    \22\ ``Endangerment and Cause or Contribute Findings for 
Greenhouse Gases Under Section 202(a) of the Clean Air Act,'' 74 FR 
66496 (December 15, 2009) (``Endangerment Finding'').
---------------------------------------------------------------------------

    Climate change caused by human emissions of GHGs threatens public 
health in multiple ways. By raising average temperatures, climate 
change increases the likelihood of heat waves, which are associated 
with increased deaths and illnesses. 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. Compared to 
a future without climate change, climate change is expected to increase 
ozone pollution over broad areas of the U.S., including in the largest 
metropolitan areas with the worst ozone problems, and thereby increase 
the risk of morbidity and mortality. Other public health threats also 
stem from projected increases in intensity or frequency of extreme 
weather associated with climate change, such as increased hurricane 
intensity, increased frequency of intense storms and heavy 
precipitation. Increased coastal storms and storm surges due to rising 
sea levels are expected to cause increased drownings and other adverse 
health impacts. Children, the elderly, and the poor are among the most 
vulnerable to these climate-related health effects. See also 79 FR 
75242 (December 17, 2014) (climate change, and temperature increases in 
particular, likely to increase O3 (Ozone) pollution ``over broad areas 
of the U.S., including the largest metropolitan areas with the worst O3 
problems, increas[ing] the risk of morbidity and mortality'').
    Climate change caused by human emissions of GHGs also threatens 
public welfare in multiple ways. Climate changes are expected to place 
large areas of the country at serious risk of reduced water supplies, 
increased water pollution, and increased occurrence of extreme events 
such as floods and droughts. Coastal areas are expected to face 
increased risks from storm and flooding damage to property, as well as 
adverse impacts from rising sea level, such as land loss due to 
inundation, erosion, wetland submergence and habitat loss. Climate 
change is expected to result in an increase in peak electricity demand, 
and extreme weather from climate change threatens energy, 
transportation, and water resource infrastructure. Climate change may 
exacerbate ongoing environmental pressures in certain settlements, 
particularly in Alaskan indigenous communities. Climate change also is 
very likely to fundamentally rearrange U.S. ecosystems over the 21st 
century. Though some benefits may balance adverse effects on 
agriculture and forestry in the next few decades, the body of evidence 
points towards increasing risks of net adverse impacts on U.S. food 
production, agriculture and forest productivity as temperature 
continues to rise. These impacts are global and may exacerbate problems 
outside the U.S. that raise humanitarian, trade, and national security 
issues for the U.S. See also 79 FR 75382 (December 17, 2014) (welfare 
effects of O3 increases due to climate change, with emphasis on 
increased wildfires).
    As outlined in Section VIII.A. of the 2009 Endangerment Finding, 
EPA's approach to providing the technical and scientific information to 
inform the Administrator's judgment regarding the question of whether 
GHGs endanger public health and welfare was to rely primarily upon the 
recent, major assessments by the U.S. Global Change Research Program 
(USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the 
National Research Council (NRC) of the National Academies. These 
assessments addressed the scientific issues that EPA was required to 
examine, were comprehensive in their coverage of the GHG and climate 
change issues, and underwent rigorous and exacting peer review by the 
expert community, as well as rigorous levels of U.S. government review. 
Since the administrative record concerning the Endangerment Finding 
closed following EPA's 2010 Reconsideration Denial, a number of such 
assessments have been released. These assessments include the IPCC's 
2012 ``Special Report on Managing the Risks of Extreme Events and 
Disasters to Advance Climate Change Adaptation'' (SREX) and the 2013-
2014 Fifth Assessment Report (AR5), the USGCRP's 2014 ``Climate Change 
Impacts in the United States'' (Climate Change Impacts), and the NRC's 
2010 ``Ocean Acidification: A National Strategy to Meet the Challenges 
of a Changing Ocean'' (Ocean Acidification), 2011 ``Report on Climate 
Stabilization Targets: Emissions, Concentrations, and Impacts over 
Decades to Millennia'' (Climate Stabilization Targets), 2011 ``National 
Security Implications for U.S. Naval

[[Page 40148]]

Forces'' (National Security Implications), 2011 ``Understanding Earth's 
Deep Past: Lessons for Our Climate Future'' (Understanding Earth's Deep 
Past), 2012 ``Sea Level Rise for the Coasts of California, Oregon, and 
Washington: Past, Present, and Future'', 2012 ``Climate and Social 
Stress: Implications for Security Analysis'' (Climate and Social 
Stress), and 2013 ``Abrupt Impacts of Climate Change'' (Abrupt Impacts) 
assessments.
    EPA has reviewed these new assessments and finds that the improved 
understanding of the climate system they present strengthens the case 
that GHG emissions endanger public health and welfare.
    In addition, these assessments highlight the urgency of the 
situation as the concentration of CO2 in the atmosphere 
continues to rise. Absent a reduction in emissions, a recent National 
Research Council of the National Academies assessment projected that 
concentrations by the end of the century would increase to levels that 
the Earth has not experienced for millions of years.\23\ In fact, that 
assessment stated that ``the magnitude and rate of the present 
greenhouse gas increase place the climate system in what could be one 
of the most severe increases in radiative forcing of the global climate 
system in Earth history.'' \24\ What this means, as stated in another 
NRC assessment, is that:
---------------------------------------------------------------------------

    \23\ National Research Council, Understanding Earth's Deep Past, 
p. 1
    \24\ Id., p.138.

    Emissions of carbon dioxide from the burning of fossil fuels 
have ushered in a new epoch where human activities will largely 
determine the evolution of Earth's climate. Because carbon dioxide 
in the atmosphere is long lived, it can effectively lock Earth and 
future generations into a range of impacts, some of which could 
become very severe. Therefore, emission reductions choices made 
today matter in determining impacts experienced not just over the 
next few decades, but in the coming centuries and millennia.\25\
---------------------------------------------------------------------------

    \25\ National Research Council, Climate Stabilization Targets, 
p. 3.

    Moreover, due to the time-lags inherent in the Earth's climate, the 
Climate Stabilization Targets assessment notes that the full warming 
from any given concentration of CO2 reached will not be 
realized for several centuries.
    The recently released USGCRP ``National Climate Assessment'' \26\ 
emphasizes that climate change is already happening now and it is 
happening in the United States. The assessment documents the increases 
in some extreme weather and climate events in recent decades, the 
damage and disruption to infrastructure and agriculture, and projects 
continued increases in impacts across a wide range of peoples, sectors, 
and ecosystems.
---------------------------------------------------------------------------

    \26\ U.S. Global Change Research Program, Climate Change Impacts 
in the United States: The Third National Climate Assessment, May 
2014 Available at http://nca2014.globalchange.gov/.
---------------------------------------------------------------------------

    These assessments underscore the urgency of reducing emissions now: 
Today's emissions will otherwise lead to raised atmospheric 
concentrations for thousands of years, and raised Earth system 
temperatures for even longer. Emission reductions today will benefit 
the public health and public welfare of current and future generations.
    Finally, it should be noted that the concentration of carbon 
dioxide in the atmosphere continues to rise dramatically. In 2009, the 
year of the Endangerment Finding, the average concentration of carbon 
dioxide as measured on top of Mauna Loa was 387 parts per million.\27\ 
The average concentration in 2013 was 396 parts per million. And the 
monthly concentration in April of 2014 was 401 parts per million, the 
first time a monthly average has exceeded 400 parts per million since 
record keeping began at Mauna Loa in 1958, and for at least the past 
800,000 years according to ice core records.\28\
---------------------------------------------------------------------------

    \27\ ftp://aftp.cmdl.noaa.gov/products/trends/co2/co2_annmean_mlo.txt.
    \28\ http://www.esrl.noaa.gov/gmd/ccgg/trends/.
---------------------------------------------------------------------------

(b) The NHTSA and EPA Light-Duty National GHG and Fuel Economy Program
    On May 7, 2010, EPA and NHTSA finalized the first-ever National 
Program for light-duty cars and trucks, which set GHG emissions and 
fuel economy standards for model years 2012-2016 (see 75 FR 25324). 
More recently, the agencies adopted even stricter standards for model 
years 2017 and later (77 FR 62624, October 15, 2012). The agencies have 
used the light-duty National Program as a model for the HD National 
Program in several respects. This is most apparent in the case of 
heavy-duty pickups and vans, which are similar to the light-duty trucks 
addressed in the light-duty National Program both technologically as 
well as in terms of how they are manufactured (i.e., the same company 
often makes both the vehicle and the engine, and several light-duty 
manufacturers also manufacture HD pickups and vans).\29\ For HD pickups 
and vans, there are close parallels to the light-duty program in how 
the agencies have developed our respective heavy-duty standards and 
compliance structures. However, HD pickups and vans are true work 
vehicles that are designed for much higher towing and payload 
capabilities than are light-duty pickups and vans. The technologies 
applied to light-duty trucks are not all applicable to heavy-duty 
pickups and vans at the same adoption rates, and the technologies often 
produce a lower percent reduction in CO2 emissions and fuel 
consumption when used in heavy-duty vehicles. Another difference 
between the light-duty and the heavy-duty standards is that each agency 
adopts heavy-duty standards based on attributes other than vehicle 
footprint, as discussed below.
---------------------------------------------------------------------------

    \29\ This is more broadly true for heavy-duty pickup trucks than 
vans because every manufacturer of heavy-duty pickup trucks also 
makes light-duty pickup trucks, while only some heavy-duty van 
manufacturers also make light-duty vans.
---------------------------------------------------------------------------

    Due to the diversity of the remaining HD vehicles, there are fewer 
parallels with the structure of the light-duty program. However, the 
agencies have maintained the same collaboration and coordination that 
characterized the development of the light-duty program throughout the 
Phase 1 rulemaking and the continued efforts for Phase 2. Most notably, 
as with the light-duty program, manufacturers would continue to be able 
to design and build vehicles to meet a closely coordinated, harmonized 
national program, and to avoid unnecessarily duplicative testing and 
compliance burdens. In addition, the averaging, banking, and trading 
provisions in the HD program, although structurally different from 
those of the light-duty program, serve the same purpose, which is to 
allow manufacturers to achieve large reductions in fuel consumption and 
emissions while providing a broad mix of products to their customers. 
The agencies have also worked closely with CARB to provide harmonized 
national standards.
(c) EPA's SmartWay Program
    EPA's voluntary SmartWay Transport Partnership program encourages 
businesses to take actions that reduce fuel consumption and 
CO2 emissions while cutting costs by working with the 
shipping, logistics, and carrier communities to identify low carbon 
strategies and technologies across their transportation supply chains. 
SmartWay provides technical information, benchmarking and tracking 
tools, market incentives, and partner recognition to facilitate and 
accelerate the adoption of these strategies. Through the SmartWay 
program and its related technology assessment center, EPA has worked 
closely with truck and trailer manufacturers and truck fleets over the 
last ten years to develop test

[[Page 40149]]

procedures to evaluate vehicle and component performance in reducing 
fuel consumption and has conducted testing and has established test 
programs to verify technologies that can achieve these reductions. 
SmartWay partners have demonstrated these new and emerging technologies 
in their business operations, adding to the body of technical data and 
information that EPA can disseminate to industry, researchers and other 
stakeholders. Over the last several years, EPA has developed hands-on 
experience testing the largest heavy-duty trucks and trailers and 
evaluating improvements in tire and vehicle aerodynamic performance. In 
developing the Phase 1 program, the agencies drew from this testing and 
from the SmartWay experience. In the same way, the agencies benefitted 
from SmartWay in developing the proposed Phase 2 trailer program.
(d) The State of California
    California has established ambitious goals for reducing GHG 
emissions from heavy-duty vehicles and engines as part of an overall 
plan to reduce GHG emissions from the transportation sector in 
California.\30\ Heavy-duty vehicles are responsible for one-fifth of 
the total GHG emissions from transportation sources in California. In 
the past several years the California Air Resources Board (CARB) has 
taken a number of actions to reduce GHG emissions from heavy-duty 
vehicles and engines. For example, in 2008, the CARB adopted 
regulations to reduce GHG emissions from heavy-duty tractors that pull 
box-type trailers through improvements in tractor and trailer 
aerodynamics and the use of low rolling resistance tires.\31\ The 
tractors and trailers subject to the CARB regulation are required to 
use SmartWay certified tractors and trailers, or retrofit their 
existing fleet with SmartWay verified technologies, consistent with 
California's state authority to regulate both new and in-use vehicles. 
Recently, in December 2013, CARB adopted regulations that establish its 
own parallel Phase 1 program with standards consistent with EPA Phase 1 
standards. On December 5, 2014, California's Office of Administrative 
Law approved CARB's adoption of the Phase 1 standards, with an 
effective date of December 5, 2014.\32\ Complementary to its regulatory 
efforts, CARB and other California agencies are investing significant 
public capital through various incentive programs to accelerate fleet 
turnover and stimulate technology innovation within the heavy-duty 
vehicle market (e.g., Air Quality Improvement, Carl Moyer, Loan 
Incentives, Lower-Emission School Bus and Goods Movement Emission 
Reduction Programs).\33\ And, recently, California Governor Jerry Brown 
established a target of up to 50 percent petroleum reduction by 2030.
---------------------------------------------------------------------------

    \30\ See http://www.arb.ca.gov/cc/cc.htm for details on the 
California Air Resources Board climate change actions, including a 
discussion of Assembly Bill 32, and the Climate Change Scoping Plan 
developed by CARB, which includes details regarding CARB's future 
goals for reducing GHG emissions from heavy-duty vehicles.
    \31\ See http://www.arb.ca.gov/msprog/truckstop/trailers/trailers.htm for a summary of CARB's ``Tractor-Trailer Greenhouse 
Gas Regulation''.
    \32\ See http://www.arb.ca.gov/regact/2013/hdghg2013/hdghg2013.htm for details regarding CARB's adoption of the Phase 1 
standards.
    \33\ See http://www.arb.ca.gov/ba/fininfo.htm for detailed 
descriptions of CARB's mobile source incentive programs. Note that 
EPA works to support CARB's heavy-duty incentive programs through 
the West Coast Collaborative (http://westcoastcollaborative.org/) 
and the Clean Air Technology Initiative (http://www.epa.gov/region09/cleantech/).
---------------------------------------------------------------------------

    In addition to California's efforts to reduce GHG emissions that 
contribute to climate change, California also faces unique air quality 
challenges as compared to many other regions of the United States. Many 
areas of the state are classified as non-attainment for both the ozone 
and particulate matter National Ambient Air Quality Standards (NAAQS) 
with California having the nation's only two ``Extreme'' ozone non-
attainment airsheds (the San Joaquin Valley and South Coast Air 
Basins).\34\ By 2016, California must submit to EPA its Clean Air Act 
State Implementation Plans (SIPs) that demonstrate how the 2008 ozone 
and 2006 PM2.5 NAAQS will be met by Clean Air Act deadlines. 
Extreme ozone areas must attain the 2008 ozone NAAQS by no later than 
2032 and PM2.5 moderate areas must attain the 2006 
PM2.5 standard by 2021 or, if reclassified to serious, by 
2025.
---------------------------------------------------------------------------

    \34\ See http://www.epa.gov/airquality/greenbk/index.html for 
more information on EPA's nonattainment designations.
---------------------------------------------------------------------------

    Heavy-duty vehicles are responsible today for one-third of the 
state's oxides of nitrogen (NOX) emissions. California has 
estimated that the state's South Coast Air Basin will need nearly a 90 
percent reduction in heavy-duty vehicle NOX emissions by 
2032 from 2010 levels to attain the 2008 NAAQS for ozone. Additionally, 
on November 25, 2014, EPA issued a proposal to strengthen the ozone 
NAAQS. If a change to the ozone NAAQS is finalized, California and 
other areas of the country will need to identify and implement measures 
to reduce NOX as needed to complement Federal emission 
reduction measures. While this section is focused on California's 
regulatory programs and air quality needs, EPA recognizes that other 
states and local areas are concerned about the challenges of reducing 
NOX and attaining, as well as maintaining, the ozone NAAQS 
(further discussed in Section VIII.D.1 below).
    In order to encourage the use of lower NOX emitting new 
heavy-duty vehicles in California, in 2013 CARB adopted a voluntary low 
NOX emission standard for heavy-duty engines.\35\ In 
addition, in 2013 CARB awarded a major new research contract to 
Southwest Research Institute to investigate advanced technologies that 
could reduce heavy-duty vehicle NOX emissions well below the 
current EPA and CARB standards.
---------------------------------------------------------------------------

    \35\ See http://www.arb.ca.gov/regact/2013/hdghg2013/hdghg2013.htm for a description of the CARB optional reduced 
NOX emission standards for on-road heavy-duty engines.
---------------------------------------------------------------------------

    California has long had the unique ability among states to adopt 
its own separate new motor vehicle standards per Section 209 of the 
Clean Air Act (CAA). Although section 209(a) of the CAA expressly 
preempts states from adopting and enforcing standards relating to the 
control of emissions from new motor vehicles or new motor vehicle 
engines (such as state controls for new heavy-duty engines and 
vehicles) CAA section 209(b) directs EPA to waive this preemption under 
certain conditions. Under the waiver process set out in CAA Section 
209(b), EPA has granted CARB a waiver for its initial heavy-duty 
vehicle GHG regulation.\36\ Even with California's ability under the 
CAA to establish its own emission standards, EPA and CARB have worked 
closely together over the past several decades to largely harmonize new 
vehicle criteria pollutant standard programs for heavy-duty engines and 
heavy-duty vehicles. In the past several years EPA and NHTSA also 
consulted with CARB in the development of the Federal light-duty 
vehicle GHG and CAFE rulemakings for the 2012-2016 and 2017-2025 model 
years.
---------------------------------------------------------------------------

    \36\ See EPA's waiver of CARB's heavy-duty tractor-trailer 
greenhouse gas regulation applicable to new 2011 through 2013 model 
year Class 8 tractors equipped with integrated sleeper berths 
(sleeper-cab tractors) and 2011 and subsequent model year dry-can 
and refrigerated-van trailers that are pulled by such tractors on 
California highways at 79 FR 46256 (August 7, 2014).
---------------------------------------------------------------------------

    As discussed above, California operates under state authority to 
establish its own new heavy-duty vehicle and engine emission standards, 
including standards for CO2, methane, N2O, and 
hydrofluorocarbons. EPA recognizes this independent authority, and we 
also recognize the potential

[[Page 40150]]

benefits for the regulated industry if the Federal Phase 2 standards 
could result in a single, National Program that would meet the NHTSA 
and EPA's statutory requirements to set appropriate and maximum 
feasible standards, and also be equivalent to potential future new 
heavy-duty vehicle and engine GHG standards established by CARB 
(addressing the same model years as addressed by the final Federal 
Phase 2 program and requiring the same technologies).
    Similarly, CARB has expressed support in the past for a Federal 
heavy-duty Phase 2 program that would produce significant GHG 
reductions both at the Federal level and in California that could 
enable CARB to adopt the same standards at the state level. This is 
similar to CARB's approach for the Federal heavy-duty Phase 1 program, 
and with past EPA criteria pollutant standards for heavy-duty vehicles 
and engines. In order to further the opportunity for maintaining 
coordinated Federal and California standards in the Phase 2 timeframe 
(as well as to benefit from different technical expertise and 
perspective), NHTSA and EPA have consulted on an on-going basis with 
CARB over the past two years as we have developed the Phase 2 proposal. 
The agencies' technical staff have shared information on technology 
cost, technology effectiveness, and feasibility with the CARB staff. We 
have also received information from CARB on these same topics. EPA and 
NHTSA have also shared preliminary results from several of our modeling 
exercises with CARB as we examined different potential levels of 
stringency for the Phase 2 program. In addition, CARB staff and 
managers have also participated with EPA and NHTSA in meetings with 
many external stakeholders, in particular with vehicle OEMs and 
technology suppliers.
    In addition to information on GHG emissions, CARB has also kept EPA 
and NHTSA informed of the state's need to consider opportunities for 
additional NOX emission reductions from heavy-duty vehicles. 
CARB has asked the agencies to consider opportunities in the Heavy-Duty 
Phase 2 rulemaking to encourage or incentivize further NOX 
emission reductions, in addition to the petroleum and GHG reductions 
which would come from the Phase 2 standards. When combined with the 
Phase 1 standards, the technologies the agencies are projecting to be 
used to meet the proposed GHG emission and fuel efficiency standards 
would be expected to reduce NOX emissions by over 450,000 
tons in 2050 (see Section VIII).
    EPA and NHTSA believe that through this information sharing and 
dialog we will enhance the potential for the Phase 2 program to result 
in a National Program that can be adopted not only by the Federal 
agencies, but also by the State of California, given the strong 
interest from the regulated industry for a harmonized State and Federal 
program.
    The agencies will continue to seek input from CARB, and from all 
stakeholders, throughout this rulemaking.
(e) Environment Canada
    On March 13, 2013, Environment Canada (EPA's Canadian counterpart) 
published its own regulations to control GHG emissions from heavy-duty 
vehicles and engines, beginning with MY 2014. These regulations are 
closely aligned with EPA's Phase 1 program to achieve a common set of 
North American standards. Environment Canada has expressed its 
intention to amend these regulations to further limit emissions of 
greenhouse gases from new on-road heavy-duty vehicles and their engines 
for post-2018 MYs. As with the development of the current regulations, 
Environment Canada is committed to continuing to work closely with EPA 
to maintain a common Canada-United States approach to regulating GHG 
emissions for post-2018 MY vehicles and engines. This approach will 
build on the long history of regulatory alignment between the two 
countries on vehicle emissions pursuant to the Canada-United States Air 
Quality Agreement.\37\ Environment Canada has also been of great 
assistance during the development of this Phase 2 proposal. In 
particular, Environment Canada supported aerodynamic testing, and 
conducted chassis dynamometer emissions testing.
---------------------------------------------------------------------------

    \37\ http://www.ijc.org/en_/Air_Quality__Agreement.
---------------------------------------------------------------------------

(f) Recommendations of the National Academy of Sciences
    In April 2010 as mandated by Congress in the Energy Independence 
and Security Act of 2007 (EISA), the National Research Council (NRC) 
under the National Academy of Sciences (NAS) issued a report to NHTSA 
and to Congress evaluating medium- and heavy-duty truck fuel efficiency 
improvement opportunities, titled ``Technologies and Approaches to 
Reducing the Fuel Consumption of Medium- and Heavy-duty Vehicles.'' 
That NAS report was far reaching in its review of the technologies that 
were available and that might become available in the future to reduce 
fuel consumption from medium- and heavy-duty vehicles. In presenting 
the full range of technical opportunities, the report included 
technologies that may not be available until 2020 or even further into 
the future. The report provided not only a valuable list of off the 
shelf technologies from which the agencies drew in developing the Phase 
1 program, but also provided useful information the agencies have 
considered when developing this second phase of regulations.
    In April 2014, the NAS issued another report: ``Reducing the Fuel 
Consumption and Greenhouse Gas Emissions of Medium and Heavy-Duty 
Vehicles, Phase Two, First Report.'' This study outlines a number of 
recommendations to the U.S. Department of Transportation and NHTSA on 
technical and policy matters to consider when addressing the fuel 
efficiency of our nation's medium- and heavy-duty vehicles. In 
particular, this report provided recommendations with respect to:

 The Greenhouse Gas Emission Model (GEM) simulation tool used 
by the agencies to assess compliance with vehicle standards
 Regulation of trailers
 Natural gas-fueled engines and vehicles
 Data collection on in-use operation

    As described in Sections II, IV, and XII, the agencies are 
proposing to incorporate many of these recommendations into this 
proposed Phase 2 program, especially those recommendations relating to 
the GEM simulation tool and to trailers.

B. Summary of Phase 1 Program

(1) EPA Phase 1 GHG Emission Standards and NHTSA Phase 1 Fuel 
Consumption Standards
    The EPA Phase 1 GHG mandatory standards commenced in MY 2014 and 
include increased stringency for standards applicable to MY 2017 and 
later MY vehicles and engines. NHTSA's fuel consumption standards are 
voluntary for MYs 2014 and 2015, due to lead time requirements in EISA, 
and apply on a mandatory basis thereafter. They also increase in 
stringency for MY 2017. Both agencies have allowed voluntary early 
compliance starting in MY 2013 and encouraged manufacturers' 
participation through credit incentives.
    Given the complexity of the heavy-duty industry, the agencies 
divided the industry into three discrete categories for purposes of 
setting our respective Phase 1 standards--combination

[[Page 40151]]

tractors, heavy-duty pickups and vans, and vocational vehicles--based 
on the relative degree of homogeneity among trucks within each 
category. The Phase 1 rule also include separate standards for the 
engines that power combination tractors and vocational vehicles. For 
each regulatory category, the agencies adopted related but distinct 
program approaches reflecting the specific challenges in these 
segments. In the following paragraphs, we summarize briefly EPA's final 
GHG emission standards and NHTSA's final fuel consumption standards for 
the three regulatory categories of heavy-duty vehicles and for the 
engines powering vocational vehicles and tractors. See Sections III, V, 
and VI for additional details on the Phase 1 standards. To respect 
differences in design and typical uses that drive different technology 
solutions, the agencies segmented each regulatory class into 
subcategories. The category-specific structure enabled the agencies to 
set standards that appropriately reflect the technology available for 
each regulatory subcategory of vehicles and the engines for use in each 
type of vehicle. The Phase 1 program also provided several 
flexibilities, as summarized in Section I.B(3).
    The agencies are proposing to base the Phase 2 standards on test 
procedures that differ from those used for Phase 1, including the 
revised GEM simulation tool. Significant revisions to GEM are discussed 
in Section II and the draft RIA Chapter 4, and other test procedures 
are discussed further in the draft RIA Chapter 3. It is important to 
note that due to these test procedure changes, the Phase 1 standards 
and the proposed Phase 2 standards are not directly comparable in an 
absolute sense. In particular, the proposed revisions to the 55 mph and 
65 mph highway cruise cycles for tractors and vocational vehicles have 
the effect of making the cycles more challenging (albeit more 
representative of actual driving conditions). We are not proposing to 
apply these revisions to the Phase 1 program because doing so would 
significantly change the stringency of the Phase 1 standards, for which 
manufacturers have already developed engineering plans and are now 
producing products to meet. Moreover, the agencies intend such changes 
to address a broader range of technologies not part of the projected 
compliance path for use in Phase 1.
(a) Class 7 and 8 Combination Tractors
    Class 7 and 8 combination tractors and their engines contribute the 
largest portion of the total GHG emissions and fuel consumption of the 
heavy-duty sector, approximately two-thirds, due to their large 
payloads, their high annual miles traveled, and their major role in 
national freight transport. These vehicles consist of a cab and engine 
(tractor or combination tractor) and a detachable trailer. The primary 
manufacturers of combination tractors in the United States are Daimler 
Trucks North America, Navistar, Volvo/Mack, and PACCAR. Each of the 
tractor manufacturers and Cummins (an independent engine manufacturer) 
also produce heavy-duty engines used in tractors. The Phase 1 standards 
require manufacturers to reduce GHG emissions and fuel consumption for 
these vehicles and engines, which we expect them to do through 
improvements in aerodynamics and tires, reductions in tractor weight, 
reduction in idle operation, as well as engine-based efficiency 
improvements.\38\
---------------------------------------------------------------------------

    \38\ We note although the standards' stringency is predicated on 
use of certain technologies, and the agencies' assessed the cost of 
the rule based on the cost of use of those technologies, the 
standards can be met by any means. Put another way, the rules create 
a performance standard, and do not mandate any particular means of 
achieving that level of performance.
---------------------------------------------------------------------------

    The Phase 1 tractor standards differ depending on gross vehicle 
weight rating (GVWR) (i.e., whether the truck is Class 7 or Class 8), 
the height of the roof of the cab, and whether it is a ``day cab'' or a 
``sleeper cab.'' The agencies created nine subcategories within the 
Class 7 and 8 combination tractor category reflecting combinations of 
these attributes. The agencies set Phase 1 standards for each of these 
subcategories beginning in MY 2014, with more stringent standards 
following in MY 2017. The standards represent an overall fuel 
consumption and CO2 emissions reduction up to 23 percent 
from the tractors and the engines installed in them when compared to a 
baseline MY 2010 tractor and engine.
    For Phase 1, manufacturers demonstrate compliance with the tractor 
CO2 and fuel consumption standards using a vehicle 
simulation tool described in Section II. The tractor inputs to the 
simulation tool in Phase 1 are the aerodynamic performance, tire 
rolling resistance, vehicle speed limiter, automatic engine shutdown, 
and weight reduction. The agencies have verified, through our own 
confirmatory testing, that the values inputs into the model by 
manufacturers are generally correct. Prior to and after adopting the 
Phase 1 standards, the agencies worked with manufacturers to minimize 
impacts of this process on their normal business practices.
    In addition to the final Phase 1 tractor-based standards for 
CO2, EPA adopted a separate standard to reduce leakage of 
hydrofluorocarbon (HFC) refrigerant from cabin air conditioning (A/C) 
systems from combination tractors, to apply to the tractor 
manufacturer. This HFC leakage standard is independent of the 
CO2 tractor standard. Manufacturers can choose technologies 
from a menu of leak-reducing technologies sufficient to comply with the 
standard, as opposed to using a test to measure performance. Given that 
HFC leakage does not relate to fuel efficiency, NHTSA did not adopt 
corresponding HFC standards.
(b) Heavy-Duty Pickup Trucks and Vans (Class 2b and 3)
    Heavy-duty vehicles with a GVWR between 8,501 and 10,000 lb are 
classified as Class 2b motor vehicles. Heavy-duty vehicles with a GVWR 
between 10,001 and 14,000 lb are classified as Class 3 motor vehicles. 
Class 2b and Class 3 heavy-duty vehicles (referred to in these rules as 
``HD pickups and vans'') together emit about 15 percent of today's GHG 
emissions from the heavy-duty vehicle sector.\39\
---------------------------------------------------------------------------

    \39\ EPA MOVES Model, http://www.epa.gov/otaq/models/moves/index.htm.
---------------------------------------------------------------------------

    The majority of HD pickups and vans are \3/4\-ton and 1-ton pickup 
trucks, 12- and 15-passenger vans,\40\ and large work vans that are 
sold by vehicle manufacturers as complete vehicles, with no secondary 
manufacturer making substantial modifications prior to registration and 
use. These vehicles can also be sold as cab-complete vehicles (i.e., 
incomplete vehicles that include complete or nearly complete cabs that 
are sold to secondary manufacturers). The majority of heavy-duty 
pickups and vans are produced by companies with major light-duty 
markets in the United States. Furthermore, the technologies available 
to reduce fuel consumption and GHG emissions from this segment are 
similar to the technologies used on light-duty pickup trucks, including 
both engine efficiency improvements (for gasoline and diesel engines) 
and vehicle efficiency improvements. For these reasons, EPA and NHTSA 
concluded that it was appropriate to adopt GHG standards, expressed as 
grams per mile, and fuel consumption standards, expressed as gallons 
per 100 miles, for HD pickups and vans based on the whole vehicle 
(including the engine), consistent with the way these vehicles

[[Page 40152]]

have been regulated by EPA for criteria pollutants and also consistent 
with the way their light-duty counterpart vehicles are regulated by 
NHTSA and EPA. This complete vehicle approach adopted by both agencies 
for HD pickups and vans was consistent with the recommendations of the 
NAS Committee in its 2010 Report.
---------------------------------------------------------------------------

    \40\ Note that 12-passenger vans are subject to the light-duty 
standards as medium-duty passenger vehicles (MDPVs) and are not 
subject to this proposal.
---------------------------------------------------------------------------

    For the light-duty GHG and fuel economy standards, the agencies 
based the emissions and fuel economy targets on vehicle footprint (the 
wheelbase times the average track width). For those standards, 
passenger cars and light trucks with larger footprints are assigned 
higher GHG and lower fuel economy target levels reflecting their 
inherent tendency to consume more fuel and emit more GHGs per mile. For 
HD pickups and vans, the agencies believe that setting standards based 
on vehicle attributes is appropriate, but have found that a work-based 
metric would be a more appropriate attribute than the footprint 
attribute utilized in the light-duty vehicle rulemaking, given that 
work-based measures such as towing and payload capacities are critical 
elements of these vehicles' functionality. EPA and NHTSA therefore 
adopted standards for HD pickups and vans based on a ``work factor'' 
attribute that combines their payload and towing capabilities, with an 
added adjustment for 4-wheel drive vehicles.
    Each manufacturer's fleet average Phase 1 standard is based on 
production volume-weighting of target standards for all vehicles, which 
in turn are based on each vehicle's work factor. These target standards 
are taken from a set of curves (mathematical functions), with separate 
curves for gasoline and diesel.\41\ However, both gasoline and diesel 
vehicles in this category are included in a single averaging set. EPA 
phased in the CO2 standards gradually starting in the 2014 
MY, at 15-20-40-60-100 percent of the MY 2018 standards stringency 
level in MYs 2014-2015-2016-2017-2018, respectively. The phase-in takes 
the form of a set of target curves, with increasing stringency in each 
MY.
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    \41\ As explained in Section XII, EPA is proposing to recodify 
the Phase 1 requirements for pickups and vans from 40 CFR 1037.104 
into 40 CFR part 86, which is also the regulatory part that applies 
for light-duty vehicles.
---------------------------------------------------------------------------

    NHTSA allowed manufacturers to select one of two fuel consumption 
standard alternatives for MYs 2016 and later. The first alternative 
defined individual gasoline vehicle and diesel vehicle fuel consumption 
target curves that will not change for MYs 2016-2018, and are 
equivalent to EPA's 67-67-67-100 percent target curves in MYs 2016-
2017-2018-2019, respectively. The second alternative defined target 
curves that are equivalent to EPA's 40-60-100 percent target curves in 
MYs 2016-2017-2018, respectively. NHTSA allowed manufacturers to opt 
voluntarily into the NHTSA HD pickup and van program in MYs 2014 or 
2015 at target curves equivalent to EPA's target curves. If a 
manufacturer chose to opt in for one category, they would be required 
to opt in for all categories. In other words a manufacturer would be 
unable to opt in for Class 2b vehicles, but opt out for Class 3 
vehicles.
    EPA also adopted an alternative phase-in schedule for manufacturers 
wanting to have stable standards for model years 2016-2018. The 
standards for heavy-duty pickups and vans, like those for light-duty 
vehicles, are expressed as set of target standard curves, with 
increasing stringency in each model year. The final EPA standards for 
2018 (including a separate standard to control air conditioning system 
leakage) represent an average per-vehicle reduction in GHG emissions of 
17 percent for diesel vehicles and 12 percent for gasoline vehicles 
(relative to pre-control baseline vehicles). The NHTSA standard will 
require these vehicles to achieve up to about 15 percent reduction in 
fuel consumption and greenhouse gas emissions by MY 2018 (relative to 
pre-control baseline vehicles). Manufacturers demonstrate compliance 
based on entire vehicle chassis certification using the same duty 
cycles used to demonstrate compliance with criteria pollutant 
standards.
(c) Class 2b-8 Vocational Vehicles
    Class 2b-8 vocational vehicles include a wide variety of vehicle 
types, and serve a vast range of functions. Some examples include 
service for urban delivery, refuse hauling, utility service, dump, 
concrete mixing, transit service, shuttle service, school bus, 
emergency, motor homes, and tow trucks. In Phase 1, we defined Class 
2b-8 vocational vehicles as all heavy-duty vehicles that are not 
included in either the heavy-duty pickup and van category or the Class 
7 and 8 tractor category. EPA's and NHTSA's Phase 1 standards for this 
vocational vehicle category generally apply at the chassis manufacturer 
level. Class 2b-8 vocational vehicles and their engines emit 
approximately 20 percent of the GHG emissions and burn approximately 21 
percent of the fuel consumed by today's heavy-duty truck sector.\42\
---------------------------------------------------------------------------

    \42\ EPA MOVES model, http://www.epa.gov/otaq/models/moves/index.htm.
---------------------------------------------------------------------------

    The Phase 1 program for vocational vehicles has vehicle standards 
and separate engine standards, both of which differ based on the weight 
class of the vehicle into which the engine will be installed. The 
vehicle weight class groups mirror those used for the engine 
standards--Classes 2b-5 (light heavy-duty or LHD in EPA regulations), 
Classes 6 & 7 (medium heavy-duty or MHD in EPA regulations) and Class 8 
(heavy heavy-duty or HHD in EPA regulations). Manufacturers demonstrate 
compliance with the Phase 1 vocational vehicle CO2 and fuel 
consumption standards using a vehicle simulation tool described in 
Section II. The Phase 1 program for vocational vehicles limited the 
simulation tool inputs to tire rolling resistance. The model assumes 
the use of a typical representative, compliant engine in the 
simulation, resulting in one overall value for CO2 emissions 
and one for fuel consumption.
    Engines used in vocational vehicles are subject to separate Phase 1 
engine-based standards. Optional certification paths, for EPA and 
NHTSA, are also provided to enhance the flexibilities for vocational 
vehicles. Manufacturers producing spark-ignition (or gasoline) cab-
complete or incomplete vehicles weighing over 14,000 lbs GVWR and below 
26,001 lbs GVWR have the option to certify to the complete vehicle 
standards for heavy-duty pickup trucks and vans rather than using the 
separate engine and chassis standards for vocational vehicles.
(d) Engine Standards
    The agencies established separate Phase 1 performance standards for 
the engines manufactured for use in vocational vehicles and Class 7 and 
8 tractors.\43\ These engine standards vary depending on engine size 
linked to intended vehicle service class. EPA's engine-based 
CO2 standards and NHTSA's engine-based fuel consumption 
standards are being implemented using EPA's existing test procedures 
and regulatory structure for criteria pollutant emissions from heavy-
duty engines.
---------------------------------------------------------------------------

    \43\ See 76 FR 57114 explaining why NHTSA's authority under the 
Energy Independence and Safety Act includes authority to establish 
separate engine standards.
---------------------------------------------------------------------------

    The agencies also finalized a regulatory alternative whereby a 
manufacturer, for an interim period of the 2014-2016 MYs, would have 
the option to comply with a unique standard based on a three percent 
reduction from an individual engine model's own 2011 MY baseline 
level.\44\
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    \44\ See 76 FR 57144.

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[[Page 40153]]

(e) Manufacturers Excluded From the Phase 1 Standards
    Phase 1 temporarily deferred greenhouse gas emissions and fuel 
consumption standards for any manufacturers of heavy-duty engines, 
manufacturers of combination tractors, and chassis manufacturers for 
vocational vehicles that meet the ``small business'' size criteria set 
by the Small Business Administration (SBA). 13 CFR 121.201 defines a 
small business by the maximum number of employees; for example, this is 
currently 1,000 for heavy-duty vehicle manufacturing and 750 for engine 
manufacturing. In order to utilize this exemption, qualifying small 
businesses must submit a declaration to the agencies. See Section 
I.F.(1)(b) for a summary of how Phase 2 would apply for small 
businesses.
    The agencies stated that they would consider appropriate GHG and 
fuel consumption standards for these entities as part of a future 
regulatory action. This includes both U.S.-based and foreign small-
volume heavy-duty manufacturers.
(2) Costs and Benefits of the Phase 1 Program
    Overall, EPA and NHTSA estimated that the Phase 1 HD National 
Program will cost the affected industry about $8 billion, while saving 
vehicle owners fuel costs of nearly $50 billion over the lifetimes of 
MY 2014-2018 vehicles. The agencies also estimated that the combined 
standards will reduce CO2 emissions by about 270 million 
metric tons and save about 530 million barrels of oil over the life of 
MY 2014 to 2018 vehicles. The agencies estimated additional monetized 
benefits from CO2 reductions, improved energy security, 
reduced time spent refueling, as well as possible disbenefits from 
increased driving accidents, traffic congestion, and noise. When 
considering all these factors, we estimated that Phase 1 of the HD 
National Program will yield $49 billion in net benefits to society over 
the lifetimes of MY 2014-2018 vehicles.
    EPA estimated the benefits of reduced ambient concentrations of 
particulate matter and ozone resulting from the Phase 1 program to 
range from $1.3 to $4.2 billion in 2030.\45\
---------------------------------------------------------------------------

    \45\ Note: These calendar year benefits do not represent the 
same time frame as the model year lifetime benefits described above, 
so they are not additive.
---------------------------------------------------------------------------

    In total, we estimated the combined Phase 1 standards will reduce 
GHG emissions from the U.S. heavy-duty fleet by approximately 76 
million metric tons of CO2-equivalent annually by 2030. In 
its Environmental Impact Statement for the Phase 1 rule, NHTSA also 
quantified and/or discussed other potential impacts of the program, 
such as the health and environmental impacts associated with changes in 
ambient exposures to toxic air pollutants and the benefits associated 
with avoided non-CO2 GHGs (methane, nitrous oxide, and 
HFCs).
(3) Phase 1 Program Flexibilities
    As noted above, the agencies adopted numerous provisions designed 
to give manufacturers a degree of flexibility in complying with the 
Phase 1 standards. These provisions, which are essentially identical in 
structure and function in NHTSA's and EPA's regulations, enabled the 
agencies to consider overall standards that are more stringent and that 
will become effective sooner than we could consider with a more rigid 
program, one in which all of a manufacturer's similar vehicles or 
engines would be required to achieve the same emissions or fuel 
consumption levels, and at the same time.\46\
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    \46\ NHTSA explained that it has greater flexibility in the HD 
program to include consideration of credits and other flexibilities 
in determining appropriate and feasible levels of stringency than it 
does in the light-duty CAFE program. Cf. 49 U.S.C. 32902(h), which 
applies to light-duty CAFE but not heavy-duty fuel efficiency under 
49 U.S.C. 32902(k).
---------------------------------------------------------------------------

    Phase 1 included four primary types of flexibility: Averaging, 
banking, and trading (ABT) provisions; early credits; advanced 
technology credits (including hybrid powertrains); and innovative 
technology credit provisions. The ABT provisions were patterned on 
existing EPA and NHTSA ABT programs (including the light-duty GHG and 
fuel economy standards) and will allow a vehicle manufacturer to reduce 
CO2 emission and fuel consumption levels further than the 
level of the standard for one or more vehicles to generate ABT credits. 
The manufacturer can use those credits to offset higher emission or 
fuel consumption levels in the same averaging set, ``bank'' the credits 
for later use, or ``trade'' the credits to another manufacturer. As 
also noted above, for HD pickups and vans, we adopted a fleet averaging 
system very similar to the light-duty GHG and CAFE fleet averaging 
system. In both programs, manufacturers are allowed to carry-forward 
deficits for up to three years without penalty.
    The agencies provided in the ABT programs flexibility for 
situations in which a manufacturer is unable to avoid a negative credit 
balance at the end of the year. In such cases, manufacturers are not 
considered to be out of compliance unless they are unable to make up 
the difference in credits by the end of the third subsequent model 
year.
    In total, the Phase 1 program divides the heavy-duty sector into 19 
subcategories of vehicles. These subcategories are grouped into 9 
averaging sets to provide greater opportunities in leveraging 
compliance. For tractors and vocational vehicles, the fleet averaging 
sets are Classes 2b through 5, Classes 6 and 7, and Class 8 weight 
classes. For engines, the fleet averaging sets are gasoline engines, 
light heavy-duty diesel engines, medium heavy-duty diesel engines, and 
heavy heavy-duty diesel engines. Complete HD pickups and vans (both 
spark-ignition and compression-ignition) are the final fleet averaging 
set.
    As noted above, the agencies included a restriction on averaging, 
banking, and trading of credits between the various regulatory 
subcategories by defining three HD vehicle averaging sets: Light heavy-
duty (Classes 2b-5); medium heavy-duty (Class 6-7); and heavy heavy-
duty (Class 8). This allows the use of credits between vehicles within 
the same weight class. This means that a Class 8 day cab tractor can 
exchange credits with a Class 8 high roof sleeper tractor but not with 
a smaller Class 7 tractor. Also, a Class 8 vocational vehicle can 
exchange credits with a Class 8 tractor. However, we did not allow 
trading between engines and chassis. We similarly allowed for trading 
among engine categories only within an averaging set, of which there 
are four: Spark-ignition engines, compression-ignition light heavy-duty 
engines, compression-ignition medium heavy-duty engines, and 
compression-ignition heavy heavy-duty engines.
    In addition to ABT, the other primary flexibility provisions in the 
Phase 1 program involve opportunities to generate early credits, 
advanced technology credits (including for use of hybrid powertrains), 
and innovative technology credits.\47\ For the early credits and 
advanced technology credits, the agencies adopted a 1.5 x multiplier, 
meaning that manufacturers would get 1.5 credits for each early credit 
and each advanced technology credit. In addition, advanced technology 
credits for Phase 1 can be used anywhere within the heavy-duty sector 
(including both vehicles and engines). Put another way, as a means of 
promoting this promising technology,

[[Page 40154]]

the Phase 1 rule does not restrict averaging or trading by averaging 
set in this instance.
---------------------------------------------------------------------------

    \47\ Early credits are for engines and vehicles certified before 
EPA standards became mandatory, advanced technology credits are for 
hybrids and/or Rankine cycle engines, and innovative technology 
credits are for other technologies not in the 2010 fleet whose 
benefits are not reflected using the Phase 1 test procedures.
---------------------------------------------------------------------------

    For other vehicle or engine technologies that can reduce 
CO2 and fuel consumption, but for which there do not yet 
exist established methods for quantifying reductions, the agencies 
wanted to encourage the development of such innovative technologies, 
and therefore adopted special ``innovative technology'' credits. These 
innovative technology credits apply to technologies that are shown to 
produce emission and fuel consumption reductions that are not 
adequately recognized on the Phase 1 test procedures and that were not 
yet in widespread use in the heavy-duty sector before MY 2010. 
Manufacturers need to quantify the reductions in fuel consumption and 
CO2 emissions that the technology is expected to achieve, 
above and beyond those achieved on the existing test procedures. As 
with ABT, the use of innovative technology credits is allowed only 
among vehicles and engines of the same defined averaging set generating 
the credit, as described above. The credit multiplier likewise does not 
apply for innovative technology credits.
(4) Implementation of Phase 1
    Manufacturers have already begun complying with the Phase 1 
standards. In some cases manufacturers voluntarily chose to comply 
early, before compliance was mandatory. The Phase 1 rule allows 
manufacturers to generate credits for such early compliance. The market 
appears to be very accepting of the new technology, and the agencies 
have seen no evidence of ``pre-buy'' effects in response to the 
standards. In fact sales have been higher in recent years than they 
were before Phase 1 began. Moreover, manufacturers' compliance plans 
are taking advantage of the Phase 1 flexibilities, and we have yet to 
see significant non-compliance with the standards.
(5) Litigation on Phase 1 Rule
    The D.C. Circuit recently rejected all challenges to the agencies' 
Phase 1 regulations. The court did not reach the merits of the 
challenges, holding that none of the petitioners had standing to bring 
their actions, and that a challenge to NHTSA's denial of a rulemaking 
petition could only be brought in District Court. See Delta 
Construction Co. v. EPA, 783 F. 3d 1291 (D.C. Cir. 2015), U.S. App. 
LEXIS 6780, F.3d (D.C. Cir. April 24, 2015).

C. Summary of the Proposed Phase 2 Standards and Requirements

    The agencies are proposing new standards that build on and enhance 
existing Phase 1 standards, as well as proposing the first ever 
standards for certain trailers used in combination with heavy-duty 
tractors. Taken together, the proposed Phase 2 program would comprise a 
set of largely technology-advancing standards that would achieve 
greater GHG and fuel consumption savings than the Phase 1 program. As 
described in more detail in the following sections, the agencies are 
proposing these standards because, based on the information available 
at this time, we believe they would best match our respective statutory 
authorities when considered in the context of available technology, 
feasible reductions of emissions and fuel consumption, costs, lead 
time, safety, and other relevant factors. The agencies request comment 
on all aspects of our feasibility analysis including projections of 
feasible market adoption rates and technological effectiveness for each 
technology.
    The proposed Phase 2 standards would represent a more technology-
forcing \48\ approach than the Phase 1 approach, predicated on use of 
both off-the-shelf technologies and emerging technologies that are not 
yet in widespread use. The agencies are proposing standards for MY 2027 
that would likely require manufacturers to make extensive use of these 
technologies. For existing technologies and technologies in the final 
stages of development, we project that manufacturers would likely apply 
them to nearly all vehicles, excluding those specific vehicles with 
applications or uses that would prevent the technology from functioning 
properly. We also project as one possible compliance pathway that 
manufacturers could apply other more advanced technologies such as 
hybrids and waste engine heat recovery systems, although at lower 
application rates.
---------------------------------------------------------------------------

    \48\ In this context, the term ``technology-forcing'' is used to 
distinguish standards that will effectively require manufacturers to 
develop new technologies (or to significantly improve technologies) 
from standards that can be met using off-the-shelf technology alone. 
Technology-forcing standards do not require manufacturers to use any 
specific technologies.
---------------------------------------------------------------------------

    Under Alternative 3, the preferred alternative, the agencies 
propose to provide ten years of lead time for manufacturers to meet 
these 2027 standards, which the agencies believe is adequate to 
implement the technologies industry could use to meet the proposed 
standards. For some of the more advanced technologies production 
prototype parts are not yet available, though they are in the research 
stage with some demonstrations in actual vehicles.\49\ Additionally, 
even for the more developed technologies, phasing in more stringent 
standards over a longer timeframe may help manufacturers to ensure 
better reliability of the technology and to develop packages to work in 
a wide range of applications. Moving more quickly, however, as in 
Alternative 4, would lead to earlier and greater cumulative fuel 
savings and greenhouse gas reductions.
---------------------------------------------------------------------------

    \49\ ``Prototype'' as it is used here refers to technologies 
that have a potentially production-feasible design that is expected 
to meet all performance, functional, reliability, safety, 
manufacturing, cost and other requirements and objectives that is 
being tested in laboratories and on highways under a full range of 
operating conditions, but is not yet available in production 
vehicles already for sale in the market.
---------------------------------------------------------------------------

    As discussed later, the agencies are also proposing new standards 
in MYs 2018 (trailers only), 2021, and 2024 to ensure manufacturers 
make steady progress toward the 2027 standards, thereby achieving 
steady and feasible reductions in GHG emissions and fuel consumption in 
the years leading up to the MY 2027 standards. Moving more quickly, 
however, as in Alternative 4, would lead to earlier and greater 
cumulative fuel and greenhouse gas savings.
    Providing additional lead time can often enable manufacturers to 
resolve technological challenges or to find lower cost means of meeting 
new regulatory standards, effectively making them more feasible in 
either case. See generally NRDC v. EPA, 655 F. 2d 318, 329 (D.C. Cir. 
1981). On the other hand, manufacturers and/or operators may incur 
additional costs if regulations require them to make changes to their 
products with less lead time than manufacturers would normally have 
when bringing a new technology to the market or expanding the 
application of existing technologies. After developing a new 
technology, manufacturers typically conduct extensive field tests to 
ensure its durability and reliability in actual use. Standards that 
accelerate technology deployment can lead to manufacturers incurring 
additional costs to accelerate this development work, or can lead to 
manufacturers beginning production before such testing can be 
completed. Some industry stakeholders have informed EPA that when 
manufacturers introduced new emission control technologies (primarily 
diesel particulate filters) in response to the 2007 heavy-duty engine 
standards

[[Page 40155]]

they did not perform sufficient product development validation, which 
led to additional costs for operators when the technologies required 
repairs or other resulted in other operational issues in use. Thus, the 
issues of costs, lead time, and reliability are intertwined for the 
agencies' determination of whether standards are reasonable.
    Another important consideration is the possibility of disrupting 
the market, such as might happen if we were to adopt standards that 
manufacturers respond to by applying a new technology too suddenly. 
Several of the heavy-duty vehicle manufacturers, fleets, and commercial 
truck dealerships informed the agencies that for fleet purchases that 
are planned more than a year in advance, expectations of reduced 
reliability, increased operating costs, reduced residual value, or of 
large increases in purchase prices can lead the fleets to pull-ahead by 
several months planned future vehicle purchases by pre-buying vehicles 
without the newer technology. In the context of the Class 8 tractor 
market, where a relatively small number of large fleets typically 
purchase very large volumes of tractors, such actions by a small number 
of firms can result in large swings in sales volumes. Such market 
impacts would be followed by some period of reduced purchases that can 
lead to temporary layoffs at the factories producing the engines and 
vehicles, as well as at supplier factories, and disruptions at 
dealerships. Such market impacts also can reduce the overall 
environmental and fuel consumption benefits of the standards by 
delaying the rate at which the fleet turns over. See International 
Harvester v. EPA, 478 F. 2d 615, 634 (D.C. Cir. 1973). A number of 
industry stakeholders have informed EPA that the 2007 EPA heavy-duty 
engine criteria pollutant standard resulted in this pull-ahead 
phenomenon for the Class 8 tractor market. The agencies understand the 
potential impact that a pull-ahead can have on American manufacturing 
and labor, dealerships, truck purchasers, and on the program's 
environmental and fuel savings goals, and have taken steps in the 
design of the proposed program to avoid such disruption. These steps 
include the following:

 Providing considerable lead time, including two to three 
additional years for the preferred alternative compared to Alternative 
4
 The standards will result in significantly lower operating 
costs for vehicle owners (unlike the 2007 standard, which increased 
operating costs)
 Phasing in the standards
 Structuring the program so the industry will have a 
significant range of technology choices to be considered for 
compliance, rather than the one or two new technologies the OEMs 
pursued in 2007
 Allowing manufacturers to use emissions averaging, banking and 
trading to phase in the technology even further

    We request comment on the sufficiency of the proposed Phase 2 
structure, lead time, and stringency to avoid market disruptions. We 
note an important difference, however, between standards for criteria 
pollutants, with generally no attendant fuel savings, and the fuel 
consumption/GHG emission standards proposed today, which provide 
immediate and direct financial benefits to vehicle purchasers, who will 
begin saving money on fuel costs as soon as they begin operating the 
vehicles. It would seem logical, therefore, that vehicle purchasers 
(and manufacturers) would weigh those significant fuel savings against 
the potential for increased costs that could result from applying fuel-
saving technologies sooner than they might otherwise choose in the 
absence of the standards.
    As discussed in the Phase 1 final rule, NHTSA has certain statutory 
considerations to take into account when determining feasibility of the 
preferred alternative.\50\ The Energy Independence and Security Act 
(EISA) states that NHTSA (in consultation with EPA and the Secretary of 
Energy) shall develop a commercial medium- and heavy-duty fuel 
efficiency program designed ``to achieve the maximum feasible 
improvement.'' \51\ Although there is no definition of maximum feasible 
standards in EISA, NHTSA is directed to consider three factors when 
determining what the maximum feasible standards are. Those factors are, 
appropriateness, cost-effectiveness, and technological feasibility,\52\ 
which modify ``feasible'' beyond its plain meaning.
---------------------------------------------------------------------------

    \50\ 75 FR 57198.
    \51\ 49 U.S.C. 32902(k).
    \52\ Id.
---------------------------------------------------------------------------

    NHTSA has the broad discretion to weigh and balance the 
aforementioned factors in order to accomplish EISA's mandate of 
determining maximum feasible standards. The fact that the factors may 
often be at odds gives NHTSA significant discretion to decide what 
weight to give each of the competing factors, policies and concerns and 
then determine how to balance them--as long as NHTSA's balancing does 
not undermine the fundamental purpose of the EISA: Energy conservation, 
and as long as that balancing reasonably accommodates ``conflicting 
policies that were committed to the agency's care by the statute.'' 
\53\
---------------------------------------------------------------------------

    \53\ Center for Biological Diversity v. National Highway Traffic 
Safety Admin., 538 F.3d 1172, 1195 (9th Cir. 2008).
---------------------------------------------------------------------------

    EPA also has significant discretion in assessing, weighing, and 
balancing the relevant statutory criteria. Section 202(a)(2) of the 
Clean Air Act requires that the standards ``take effect 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.'' This 
language affords EPA considerable discretion in how to weight the 
critical statutory factors of emission reductions, cost, and lead time 
(76 FR 57129-57130). Section 202(a) also allows (although it does not 
compel) EPA to adopt technology-forcing standards. Id. at 57130.
    Giving due consideration to the agencies' respective statutory 
criteria discussed above, the agencies are proposing these technology-
forcing standards for MY 2027. The agencies nevertheless recognize that 
there is some uncertainty in projecting costs and effectiveness, 
especially for those technologies not yet widely available, but believe 
that the thresholds proposed for consideration account for realistic 
projections of technological development discussed throughout this 
notice and in the draft RIA. The agencies are requesting comment on the 
alternatives described in Section X below. These alternatives range 
from Alternative 1 (which is a no-action alternative that serves as the 
baseline for our cost and benefit analyses) to Alternative 5 (which 
includes the most stringent of the alternative standards analyzed by 
the agencies). The assessment of these different alternatives considers 
the importance of allowing manufacturers sufficient flexibility and 
discretion while achieving meaningful fuel consumption and GHG 
emissions reductions across vehicle types. The agencies look forward to 
receiving comments on questions of feasibility and long-term 
projections of costs and effectiveness.
    As discussed throughout this document, the agencies believe 
Alternative 4 has potential to be the maximum feasible alternative, 
however, based on the evidence currently before us, the agencies have 
outstanding questions regarding relative risks and

[[Page 40156]]

benefits of that option in the timeframe envisioned. We are seeking 
comment on these relative risks and benefits. Alternative 3 is 
generally designed to achieve the vehicle levels of fuel consumption 
and GHG reduction that Alternative 4 would achieve, but with two to 
three years of additional lead-time--i.e., the Alternative 3 standards 
would end up in the same place as the Alternative 4 standards, but two 
to three years later, meaning that manufacturers could, in theory, 
apply new technology at a more gradual pace and with greater 
flexibility as discussed above. However, Alternative 4 would lead to 
earlier and greater cumulative fuel savings and greenhouse gas 
reductions.
    In the sections that follow, the agencies have closely examined the 
potential feasibility of Alternative 4 for each subcategory. The 
agencies may consider establishing final fuel efficiency and GHG 
standards in whole or in part in the Alternative 4 timeframe if we deem 
them to be maximum feasible and reasonable for NHTSA and EPA, 
respectively. The agencies seek comment on the feasibility of 
Alternative 4, whether for some or for all segments, including 
empirical data on its appropriateness, cost-effectiveness, and 
technological feasibility. The agencies also note the possibility of 
adoption in MY 2024 of a standard reflecting deployment of some, rather 
than all, of the technologies on which Alternative 4 is predicated. It 
is also possible that the agencies could adopt some or all of the 
proposal (Alternative 3) earlier than MY 2027, but later than MY 2024, 
based especially on lead time considerations. Any such choices would 
involve a considered weighing of the issues of feasibility of projected 
technology penetration rates, associated costs, and necessary lead 
time, and would consider the information on available technologies, 
their level of performance and costs set out in the administrative 
record to this proposal.
    Sections II through VI of this notice explain the consideration 
that the agencies took into account in considering options and 
proposing a preferred alternative based on balancing of the statutory 
factors under 42 U.S.C. 7521(a)(1) and (2), and under 49 U.S.C. 
32902(k).
(1) Carryover From Phase 1 Program and Proposed Compliance Changes
    Phase 2 will carry over many of the compliance approaches developed 
for Phase 1, with certain changes as described below. Readers are 
referred to the proposed regulatory text for much more detail. Note 
that some of these provisions are being carried over with revisions or 
additions (such as those needed to address trailers).
(a) Certification
    EPA and NHTSA are proposing to apply the same general certification 
procedures for Phase 2 as are currently being used for certifying to 
the Phase 1 standards. The agencies, however, are proposing changes to 
the simulation tool used for the vocational vehicle, tractor and 
trailer standards that would allow the simulation tool to more 
specifically reflect improvements to transmissions and drivetrains.\54\ 
Rather than the model using default values for transmissions and 
drivetrains, manufacturers would enter measured or tested values as 
inputs reflecting performance of their actual transmission and 
drivetrain technologies.
---------------------------------------------------------------------------

    \54\ As described in Section IV, although the proposed trailer 
standards were developed using the simulation tool, the agencies are 
proposing a compliance structure that does not require trailer 
manufacturers to actually use the compliance tool.
---------------------------------------------------------------------------

    The agencies apply essentially the same process for certifying 
tractors and vocational vehicles, and propose largely to apply it to 
trailers as well. The Phase 1 certification process for engines used in 
tractors and vocational vehicles was based on EPA's process for showing 
compliance with the heavy-duty engine criteria pollutant standards, and 
the agencies propose to continue it for Phase 2. Finally, we also 
propose to continue certifying HD pickups and vans using the Phase 1 
vehicle certification process, which is very similar to the light-duty 
vehicle certification process.
    EPA and NHTSA are also proposing to clarify provisions related to 
confirming a manufacturer's test data during certification (i.e., 
confirmatory testing) and verifying a manufacturer's vehicles are being 
produced to perform as described in the application for certification 
(i.e., selective enforcement audits or SEAs). The EPA confirmatory 
testing provisions for engines and vehicles are in 40 CFR 1036.235 and 
1037.235. The SEA provisions are in 40 CFR 1036.301 and 1037.301. The 
NHTSA provisions are in 49 CFR 535.9(a). Note that these clarifications 
would also apply for Phase 1 engines and vehicles. The agencies welcome 
suggestions for alternative approaches that would offer the same degree 
of compliance assurance for GHGs and fuel consumption as these programs 
offer with respect to EPA's criteria pollutants.
(b) Averaging, Banking and Trading (ABT)
    The Phase 1 ABT provisions were patterned on established EPA ABT 
programs that have proven to work well. In Phase 1, the agencies 
determined this flexibility would provide an opportunity for 
manufacturers to make necessary technological improvements and reduce 
the overall cost of the program without compromising overall 
environmental and fuel economy objectives. We propose to generally 
continue this Phase 1 approach with few revisions for vehicles 
regulated in Phase 1. As described in Section IV, we are proposing a 
more limited averaging program for trailers. The agencies see the ABT 
program as playing an important role in making the proposed technology-
advancing standards feasible, by helping to address many issues of 
technological challenges in the context of lead time and costs. It 
provides manufacturers flexibilities that assist the efficient 
development and implementation of new technologies and therefore enable 
new technologies to be implemented at a more aggressive pace than 
without ABT.
    ABT programs are more than just add-on provisions included to help 
reduce costs, and can be, as in EPA's Title II programs generally, an 
integral part of the standard setting itself. A well-designed ABT 
program can also provide important environmental and energy security 
benefits by increasing the speed at which new technologies can be 
implemented (which means that more benefits accrue over time than with 
later-commencing standards) and at the same time increase flexibility 
for, and reduce costs to, the regulated industry and ultimately 
consumers. Without ABT provisions (and other related flexibilities), 
standards would typically have to be numerically less stringent since 
the numerical standard would have to be adjusted to accommodate issues 
of feasibility and available lead time. See 75 FR 25412-25413. By 
offering ABT credits and additional flexibilities the agencies can 
offer progressively more stringent standards that help meet our fuel 
consumption reduction and GHG emission goals at a faster and more cost-
effective pace.\55\
---------------------------------------------------------------------------

    \55\ See NRDC v. Thomas, 805 F. 2d 410, 425 (D.C. Cir. 1986) 
(upholding averaging as a reasonable and permissible means of 
implementing a statutory provision requiring technology-forcing 
standards).
---------------------------------------------------------------------------

(i) Carryover of Phase 1 Credits and Credit Life
    The agencies propose to continue the five-year credit life 
provisions from Phase 1, and are not proposing any

[[Page 40157]]

additional restriction on the use of banked Phase 1 credits in Phase 2. 
In other words, Phase 1 credits in MY2019 could be used in Phase 1 or 
in Phase 2 in MYs 2021-2024. Although, as we have already noted, the 
numerical values of proposed Phase 2 standards are not directly 
comparable in an absolute sense to the existing Phase 1 standards (in 
other words, a given vehicle would have a different g/ton-mile emission 
rate when evaluated using Phase 1 GEM than it would when evaluated 
using Phase 2 GEM), we believe that the Phase 1 and Phase 2 credits are 
largely equivalent. Because the standards and emission levels are 
included in a relative sense (as a difference), it is not necessary for 
the Phase 1 and Phase 2 standards to be directly equivalent in an 
absolute sense in order for the credits to be equivalent.
    This is best understood by examining the way in which credits are 
calculated. For example, the credit equations in 40 CFR 1037.705 and 49 
CFR 535.7 calculate credits as the product of the difference between 
the standard and the vehicle's emission level (g/ton-mile or gallon/
1,000 ton-mile), the regulatory payload (tons), production volume, and 
regulatory useful life (miles). Phase 2 would not change payloads, 
production volumes, or useful lives for tractors, medium and heavy 
heavy-duty engines, or medium and heavy heavy-duty vocational vehicles. 
However, EPA is proposing to change the regulatory useful lives of HD 
pickups and vans, light heavy-duty vocational vehicles, spark-ignited 
engines, and light heavy-duty compression-ignition engines. Because 
useful life is a factor in determining the value of a credit, the 
agencies are proposing interim adjustment factors to ensure banked 
credits maintain their value in the transition from Phase 1 to Phase 2.
    For Phase 1, EPA aligned the useful life for GHG emissions with the 
useful life already in place for criteria pollutants. After the Phase 1 
rules were finalized, EPA updated the useful life for criteria 
pollutants as part of the Tier 3 rulemaking.\56\ The new useful life 
implemented for Tier 3 is 150,000 miles or 15 years, whichever occurs 
first. This is the same useful life proposed in Phase 2 for HD pickups 
and vans, light heavy-duty vocational vehicles, spark-ignited engines, 
and light heavy-duty compression-ignition engines.\57\ The numerical 
value of the adjustment factor for each of these regulatory categories 
depends on the Phase 1 useful life. These are described in detail below 
in this preamble in Sections II, V, and VI. Without these adjustment 
factors the proposed changes in useful life would effectively result in 
a discount of banked credits that are carried forward from Phase 1 to 
Phase 2, which is not the intent of the changes in the useful life. 
With the relatively flat deterioration generally associated with 
CO2, EPA does not believe the proposed changes in useful 
life would significantly affect the feasibility of the proposed Phase 2 
standards. EPA requests comments on the proposed changes to useful 
life. We note that the primary purpose of allowing manufacturers to 
bank credits is to provide flexibility in managing transitions to new 
standards. The five-year credit life is substantial, and would allow 
credits generated in either Phase 1 or early in Phase 2 to be used for 
the intended purpose. The agencies believe longer credit life is not 
necessary to accomplish this transition. Restrictions on credit life 
serve to reduce the likelihood that any manufacturer would be able to 
use banked credits to disrupt the heavy-duty vehicle market in any 
given year by effectively limiting the amount of credits that can be 
held. Without this limit, one manufacturer that saved enough credits 
over many years could achieve a significant cost advantage by using all 
the credits in a single year. The agencies believe, subject to 
consideration of public comment, that allowing a five year credit life 
for all credits, and as a consequence allowing use of Phase 1 credits 
in Phase 2, creates appropriate flexibility and appropriately 
facilitates a smooth transition to each new level of standards.
---------------------------------------------------------------------------

    \56\ 79 FR 23492, April 28, 2014 and 40 CFR 86.1805-17.
    \57\ NHTSA's useful life is based on mileage and years of 
duration.
---------------------------------------------------------------------------

    Although we are not proposing any additional restrictions on the 
use of Phase 1 credits, we are requesting comment on this issue. Early 
indications suggest that positive market reception to the Phase 1 
technologies could lead to manufacturers accumulating credit surpluses 
that could be quite large at the beginning of the proposed Phase 2 
program. This appears especially likely for tractors. The agencies are 
specifically requesting comment on the likelihood of this happening, 
and whether any regulatory changes would be appropriate in response. 
For example, should the agencies limit the amount of credits that could 
be carried over from Phase1 or limit them to the first year or two of 
the Phase 2 program? Also, if we determine that large surpluses are 
likely, how should that factor into our decision on the feasibility of 
more stringent standards in MY 2021?
(ii) Averaging Sets
    EPA has historically restricted averaging to some extent for its HD 
emission standards to avoid creating unfair competitive advantages or 
environmental risks due to credits being inconsistent. Under Phase 1, 
averaging, banking and trading can only occur within and between 
specified ``averaging sets'' (with the exception of credits generated 
through use of specified advanced technologies). We propose to continue 
this regime in Phase 2, to retain the existing vehicle and engine 
averaging sets, and create new trailer averaging sets. We also propose 
to continue the averaging set restrictions from Phase 1 in Phase 2. 
These averaging sets for vehicles are:

 Complete pickups and vans
 Other light heavy-duty vehicles (Classes 2b-5)
 Medium heavy-duty vehicles (Class 6-7)
 Heavy heavy-duty vehicles (Class 8)
 Long dry van trailers
 Short dry van trailers
 Long refrigerated trailers
 Short refrigerated trailers

    We also propose not to allow trading between engines and chassis, 
even within the same vehicle class. Such trading would essentially 
result in double counting of emission credits, because the same engine 
technology would likely generate credits relative to both standards. We 
similarly would limit trading among engine categories to trades within 
the designated averaging sets:

 Spark-ignition engines
 Compression-ignition light heavy-duty engines
 Compression-ignition medium heavy-duty engines
 Compression-ignition heavy heavy-duty engines

    The agencies continue to believe that restricting trading to within 
the same eight classes would provide adequate opportunities for 
manufacturers to make necessary technological improvements and to 
reduce the overall cost of the program without compromising overall 
environmental and fuel efficiency objectives, and is therefore 
appropriate and reasonable under EPA's authority and maximum feasible 
under NHTSA's authority, respectively. We do not expect emissions from 
engines and vehicles--when restricted by weight class--to be 
dissimilar. We therefore expect that the lifetime vehicle performance 
and emissions levels will be very similar across these defined

[[Page 40158]]

categories, and the estimated credit calculations will fairly ensure 
the expected fuel consumption and GHG emission reductions.
    We continue to believe, subject to consideration of public comment, 
that the Phase 1 averaging sets create the most flexibility that is 
appropriate without creating an unfair advantage for manufacturers with 
erratically integrated portfolios, including engines and vehicles. See 
76 FR 57240. The agencies committed in Phase 1 to seek public comment 
after credit trading begins with manufacturers certifying in 2014 on 
whether broader credit trading is more appropriate in developing the 
next phase of HD regulations (76 FR 57128, September 15, 2011). The 
2014 model year end of year reports will become available to the 
agencies in mid-2015. Therefore, the agencies will provide information 
at that point. We welcome comment on averaging set restrictions. The 
agencies propose to continue this carry forward provision for phase 2 
for the same reasons.
(iii) Credit Deficits
    The Phase 1 regulations allow manufacturers to carry-forward 
deficits for up to three years without penalty. This is an important 
flexibility because the program is designed to address the diversity of 
the heavy-duty industry by allowing manufacturers to sell a mix of 
engines or vehicles that have very different emission levels and fuel 
efficiencies. Under this construct, manufacturers can offset sales of 
engines or vehicles not meeting the standards by selling others (within 
the same averaging set) that are much better than required. However, in 
any given year it is possible that the actual sales mix will not 
balance out and the manufacturer may be short of credits for that model 
year. The three year provision allows for this possibility and creates 
additional compliance flexibility to accommodate it.
(iv) Advanced Technology Credits
    At this time, the agencies believe it is no longer appropriate to 
provide extra credit for the technologies identified as advanced 
technologies for Phase 1, although we are requesting comment on this 
issue. The Phase 1 advanced technology credits were adopted to promote 
the implementation of advanced technologies, such as hybrid 
powertrains, Rankine cycle engines, all-electric vehicles, and fuel 
cell vehicles (see 40 CFR 1037.150(i)). As the agencies stated in the 
Phase 1 final rule, the Phase 1 standards were not premised on the use 
of advanced technologies but we expected these advanced technologies to 
be an important part of the Phase 2 rulemaking (76 FR 57133, September 
15, 2011). The proposed Phase 2 heavy-duty engine and vehicles 
standards are premised on the use of some advanced technologies, making 
them equivalent to other fuel-saving technologies in this context. We 
believe the Phase 2 standards themselves would provide sufficient 
incentive to develop them.
    We request comment on this issue, especially with respect to 
electric vehicle, plug-in hybrid, and fuel cell technologies. Although 
the proposed standards are premised on some use of Rankine cycle 
engines and hybrid powertrains, none of the proposed standards are 
based on projected utilization of the use of the other advanced 
technologies. (Note that the most stringent alternative is based on 
some use of these technologies). Commenters are encouraged to consider 
the recently adopted light-duty program, which includes temporary 
incentives for these technologies.
(c) Innovative Technology and Off-Cycle Credits
    The agencies propose to largely continue the Phase 1 innovative 
technology program but to redesignate it as an off-cycle program for 
Phase 2. In other words, beginning in MY 2021 technologies that are not 
fully accounted for in the GEM simulation tool, or by compliance 
dynamometer testing would be considered ``off-cycle'', including those 
technologies that may no longer be considered innovative technologies. 
However, we are not proposing to apply this flexibility to trailers 
(which were not part of Phase 1) in order to simplify the program for 
trailer manufacturers.
    The agencies propose to maintain that, in order for a manufacturer 
to receive credits for Phase 2, the off-cycle technology would still 
need to meet the requirement that it was not in common use prior to MY 
2010. Although, we have not identified specific off-cycle technologies 
at this time that should be excluded, we believe it may be prudent to 
continue this requirement to avoid the potential for manufacturers to 
receive windfall credits for technologies that they were already using 
before MY 2010. Nevertheless, the agencies seek comment on whether off-
cycle technologies in the Phase 2 program should be limited in this 
way. In particular, the agencies are concerned that because the 
proposed Phase 2 program would be implemented MY 2021 and may extend 
beyond 2027, the agencies and manufacturers may have difficulty in the 
future determining whether an off-cycle technology was in common use 
prior to MY 2010. Moreover, because we have not identified a single 
off-cycle technology that should be excluded by this provision at this 
time, we are concerned that this approach may create an unnecessary 
hindrance to the off-cycle program.
    Manufacturers would be able to carry over an innovative technology 
credits from Phase 1 into Phase 2, subject to the same restrictions as 
other credits. Manufacturers would also be able to carry over the 
improvement factor (not the credit value) of a technology, if certain 
criteria were met. The agencies would require documentation for all 
off-cycle requests similar to those required by EPA for its light-duty 
GHG program.
    Additionally, NHTSA would not grant any off-cycle credits for crash 
avoidance technologies. NHTSA would also require manufacturers to 
consider the safety of off-cycle technologies and would request a 
safety assessment from the manufacturer for all off-cycle technologies.
    The agencies seek comment on these proposed changes, as well as the 
possibility of adopting aspects of the light-duty off-cycle program.
(d) Alternative Fuels
    The agencies are proposing to largely continue the Phase 1 approach 
for engines and vehicles fueled by fuels other than gasoline and 
diesel.\58\ Phase 1 engine emission standards applied uniquely for 
gasoline-fueled and diesel-fueled engines. The regulations in 40 CFR 
part 86 implement these distinctions for alternative fuels by dividing 
engines into Otto-cycle and Diesel-cycle technologies based on the 
combustion cycle of the engine. The agencies are, however, proposing a 
small change that is described in Section II. Under the proposed 
change, we would require manufacturers to divide their natural gas 
engines into primary intended service classes, like the current 
requirement for compression-ignition engines. Any alternative fuel-
engine qualifying as a medium heavy-duty engine or a heavy heavy-duty 
engine would be subject to all the emission standards and other 
requirements that apply to compression-ignition engines. Note that this 
small change in approach would also apply with respect to EPA's 
criteria pollutant program.
---------------------------------------------------------------------------

    \58\ See Section I. F. (1) (a) for a summary of certain specific 
changes we are proposing or considering for natural gas-fueled 
engines and vehicles.
---------------------------------------------------------------------------

    We are also proposing that the Phase 2 standards apply exclusively 
at the

[[Page 40159]]

vehicle tailpipe. That is, compliance is based on vehicle fuel 
consumption and GHG emission reductions, and does not reflect any so-
called lifecycle emission properties. The agencies have explained why 
it is reasonable that the heavy duty standards be fuel neutral in this 
manner. See 76 FR 57123; see also 77 FR 51705 (August 24, 2012) and 77 
FR 51500 (August 27, 2012). In particular, EPA notes that there is a 
separate, statutorily-mandated program under the Clean Air Act which 
encourages use of renewable fuels in transportation fuels, including 
renewable fuel used in heavy-duty diesel engines. This program 
considers lifecycle greenhouse gas emissions compared to petroleum 
fuel. NHTSA notes that the fuel efficiency standards are necessarily 
tailpipe-based, and that a lifecycle approach would likely render it 
impossible to harmonize the fuel efficiency and GHG emission standards, 
to the great detriment of our goal of achieving a coordinated program. 
77 FR 51500-51501; see also 77 FR 51705 (similar finding by EPA); see 
also section I.F. (1) (a) below.
    One consequence of the tailpipe-based approach is that the agencies 
are proposing to treat vehicles powered by electricity the same as in 
Phase 1. In Phase 1, EPA treated all electric vehicles as having zero 
emissions of CO2, CH4, and N2O (see 40 
CFR 1037.150(f)). Similarly, NHTSA adopted regulations in Phase 1 that 
set the fuel consumption standards based on the fuel consumed by the 
vehicle. The agencies also did not require emission testing for 
electric vehicles in Phase 1. The agencies considered the potential 
unintended consequence of not accounting for upstream emissions from 
the charging of heavy-duty electric vehicles. In our reassessment for 
Phase 2, we have not found any all-electric heavy-duty vehicles that 
have certified by 2014. As we look to the future, we project very 
limited adoption of all-electric vehicles into the market. Therefore, 
we believe that this provision is still appropriate. Unlike the 2017-
2025 light-duty rule, which included a cap whereby upstream emissions 
would be counted after a certain volume of sales (see 77 FR 62816-
62822), we believe there is no need to propose a cap for heavy-duty 
vehicles because of the small likelihood of significant production of 
EV technologies in the Phase 2 timeframe. We welcome comments on this 
approach.\59\ Note that we also request comment on upstream emissions 
for natural gas in Section XI.
---------------------------------------------------------------------------

    \59\ See also Section I. C. (1) (b)(iv) above (soliciting 
comment on need for advanced technology incentive credits for heavy 
duty EVs).
---------------------------------------------------------------------------

(e) Phase 1 Interim Provisions
    EPA adopted several flexibilities for the Phase 1 program (40 CFR 
1036.150 and 1037.150) as interim provisions. Because the existing 
regulations do not have an end date for Phase 1, most of these 
provisions did not have an explicit end date. NHTSA adopted similar 
provisions. With few exceptions, the agencies are proposing not to 
apply these provisions to Phase 2. These will generally remain in 
effect for the Phase 1 program. In particular, the agencies note that 
we do not propose to continue the blanket exemption for small 
manufacturers. Instead, the agencies propose to adopt narrower and more 
targeted relief.
(f) In-Use Standards
    Section 202(a)(1) of the CAA specifies that EPA is to adopt 
emissions standards that are applicable for the useful life of the 
vehicle and for the engine. EPA finalized in-use standards for the 
Phase 1 program whereas NHTSA adopted an approach which does not 
include these standards. For the Phase 2 program, EPA will carry-over 
its in-use provisions and NHTSA proposes to adopt EPA's useful life 
requirements for its vehicle and engine fuel consumption standards to 
ensure manufacturers consider in the design process the need for fuel 
efficiency standards to apply for the same duration and mileage as EPA 
standards. If EPA determines a manufacturer fails to meet its in-use 
standards, civil penalties may be assessed. NHTSA seeks comment on the 
appropriateness of seeking civil penalties for failure to comply with 
its fuel efficiency standards in these instances. NHTSA would limit 
such penalties to situations in which it determined that the vehicle or 
engine manufacturer failed to comply with the standards.
(2) Proposed Phase 2 Standards
    This section briefly summarizes the proposed Phase 2 standards for 
each category and identifies the technologies that the agencies project 
would be needed to meet the standards. Given the large number of 
different regulatory categories and model years for which separate 
standards are being proposed, the actual numerical standards are not 
listed. Readers are referred to Sections II through IV for the tables 
of proposed standards.
(a) Summary of the Proposed Engine Standards
    The agencies are proposing to continue the basic Phase 1 structure 
for the Phase 2 engine standards. There would be separate standards and 
test cycles for tractor engines, vocational diesel engines, and 
vocational gasoline engines. However, as described in Section II, we 
are proposing a revised test cycle for tractor engines to better 
reflect actual in-use operation.
    For diesel engines, the agencies are proposing standards for MY 
2027 requiring reduction in CO2 emissions and fuel 
consumption of 4.2 percent better than the 2017 baseline.\60\ We are 
also proposing standards for MY 2021 and MY 2024, requiring reductions 
in CO2 emissions and fuel consumption of 1.5 to 3.7 percent 
better than the 2017 baseline. The agencies project that these 
reductions would be feasible based on technological changes that would 
improve combustion and reduce energy losses. For most of these 
improvements, the agencies project manufacturers will begin applying 
them to about 50 percent of their heavy-duty engines by 2021, and 
ultimately apply them to about 90 percent of their heavy-duty engines 
by 2024. However, for some of these improvements we project more 
limited application rates. In particular, we project a more limited use 
of waste exhaust heat recovery systems in 2027, projecting that about 
10 percent of tractor engines will have turbo-compounding systems, and 
an additional 15 percent of tractor engines would employ Rankine-cycle 
waste heat recovery. We do not project that turbo-compounding or 
Rankine-cycle waste heat recovery technology will be utilized in 
vocational engines. Although we see great potential for waste heat 
recovery systems to achieve significant fuel savings and CO2 
emission reductions, we are not projecting that the technology could be 
available for more wide-spread use in this time frame.
---------------------------------------------------------------------------

    \60\ Phase 1 standards for diesel engines will be fully phased-
in by MY 2017.
---------------------------------------------------------------------------

    For gasoline vocational engines, we are not proposing new more 
stringent engine standards. Gasoline engines used in vocational 
vehicles are generally the same engines as are used in the complete HD 
pickups and vans in the Class 2b and 3 weight categories. Given the 
relatively small sales volumes for gasoline-fueled vocational vehicles, 
manufacturers typically cannot afford to invest significantly in 
developing separate technology for these vocational vehicle engines. 
Thus, we project that vocational gasoline engines would

[[Page 40160]]

include the same technology as would be used to meet the pickup and van 
chassis standards, and this would result in some real world reductions 
in CO2 emissions and fuel consumption. Although it is 
difficult at this time to project how much improvement would be 
observed during certification testing, it seems likely that these 
improvements would reduce measured CO2 emissions and fuel 
consumption by about one percent. Therefore, we are requesting comment 
on finalizing a Phase 2 standard of 621 g/hp-hr for gasoline engines 
(i.e., one percent more stringent than the 2016 Phase 1 standard of 627 
g/hp-hr) in MY 2027. We note that the proposed MY 2027 vehicle 
standards for gasoline-fueled vocational vehicles are predicated in 
part on the use of advanced friction reduction technology with 
effectiveness over the GEM cycles of about one percent. We also request 
comment on whether not proposing more stringent standards for gasoline 
engines would create an incentive for purchasers who would have 
otherwise chosen a diesel vehicle to instead choose a gasoline vehicle.

     Table I-2--Summary of Phase 1 and Proposed Phase 2 Requirements for Engines in Combination Tractors and
                                               Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                 Alternative 3-2027     Alternative 4-2024 (also
                                        Phase 1 program          (proposed standard)      under consideration)
----------------------------------------------------------------------------------------------------------------
Covered in this category.........  Engines installed in tractors and vocational chassis.
----------------------------------------------------------------------------------------------------------------
Share of HDV fuel consumption and  Combination tractors and vocational vehicles account for approximately 85
 GHG emissions.                     percent of fuel use and GHG emissions in the medium and heavy duty truck
                                    sector.
----------------------------------------------------------------------------------------------------------------
Per vehicle fuel consumption and   5%-9% improvement over MY    4% improvement over MY 2017 for diesel engines.
 CO2 improvement.                   2010 baseline, depending    Note that improvements are captured in complete
                                    vehicle application.       vehicle tractor and vocational vehicle standards,
                                    Improvements are in           so that engine improvements and the vehicle
                                    addition to improvements       improvement shown below are not additive.
                                    from tractor and
                                    vocational vehicle
                                    standards.
----------------------------------------------------------------------------------------------------------------
Form of the standard.............  EPA: CO2 grams/horsepower-hour and NHTSA: Gallons of fuel/horsepower-hour.
----------------------------------------------------------------------------------------------------------------
Example technology options         Combustion, air handling,   Further technology improvements and increased use
 available to help manufacturers    friction and emissions        of all Phase 1 technologies, plus waste heat
 meet standards.                    after-treatment            recovery systems for tractor engines (e.g., turbo-
                                    technology improvements.              compound and Rankine-cycle).
----------------------------------------------------------------------------------------------------------------
Flexibilities....................  ABT program which allows   Same as Phase 1, except no advanced technology
                                    emissions and fuel         incentives.
                                    consumption credits to    Adjustment factor of 1.36 proposed for credits
                                    be averaged, banked, or    carried forward from Phase 1 to Phase 2 for SI
                                    traded (five year credit   and LHD CI engines due to proposed change in
                                    life). Manufacturers       useful life.
                                    allowed to carry-forward
                                    credit deficits for up
                                    to three model years.
                                    Interim incentives for
                                    advanced technologies,
                                    recognition of
                                    innovative (off-cycle)
                                    technologies not
                                    accounted for by the HD
                                    Phase 1 test procedures,
                                    and credits for
                                    certifying early.
----------------------------------------------------------------------------------------------------------------

(b) Summary of the Proposed Tractor Standards
    As explained in Section III, the agencies are proposing to largely 
continue the Phase 1 tractor program but to propose new standards. The 
tractor standards proposed for MY 2027 would achieve up to 24 percent 
lower CO2 emissions and fuel consumption than a 2017 model 
year Phase 1 tractor. The agencies project that the proposed 2027 
tractor standards could be met through improvements in the:
     Engine \61\ (including some use of waste heat recovery 
systems)
---------------------------------------------------------------------------

    \61\ Although the agencies are proposing separate engine 
standards and separate engine certification, engine improvements 
would also be reflected in the vehicle certification process. Thus, 
it is appropriate to also consider engine improvements in the 
context of the vehicle standards.
---------------------------------------------------------------------------

     Transmission
     Driveline
     Aerodynamic design
     Tire rolling resistance
     Idle performance
     Other accessories of the tractor.
    The agencies' evaluation shows that some of these technologies are 
available today, but have very low adoption rates on current vehicles, 
while others will require some lead time for development. The agencies 
are proposing to enhance the GEM vehicle simulation tool to recognize 
these technologies, as described in Section II.C.
    We have also determined that there is sufficient lead time to 
introduce many of these tractor and engine technologies into the fleet 
at a reasonable cost starting in the 2021 model year. The proposed 2021 
model year standards for combination tractors and engines would achieve 
up to 13 percent lower CO2 emissions and fuel consumption 
than a 2017 model year Phase 1 tractor, and the 2024 model year 
standards would achieve up to 20 percent lower CO2 emissions 
and fuel consumption.

[[Page 40161]]

  Table I-3--Summary of Phase 1 and Proposed Phase 2 Requirements for Class 7 and Class 8 Combination Tractors
----------------------------------------------------------------------------------------------------------------
                                                                                           Alternative 4--2024
                                        Phase 1 program          Alternative 3--2027           (also under
                                                                 (proposed standard)         consideration)
----------------------------------------------------------------------------------------------------------------
Covered in this category.........          Tractors that are designed to pull trailers and move freight.
----------------------------------------------------------------------------------------------------------------
Share of HDV fuel consumption and   Combination tractors and their engines account for approximately two thirds
 GHG emissions.                       of fuel use and GHG emissions in the medium and heavy duty truck sector.
----------------------------------------------------------------------------------------------------------------
Per vehicle fuel consumption and   10%-23% improvement over       18%-24% improvement over MY 2017 standards.
 CO2 improvement.                   MY 2010 baseline,
                                    depending on tractor
                                    category. Improvements
                                    are in addition to
                                    improvements from engine
                                    standards.
----------------------------------------------------------------------------------------------------------------
Form of the standard.............   EPA: CO2 grams/ton payload mile and NHTSA: Gallons of fuel/1,000 ton payload
                                                                        mile.
----------------------------------------------------------------------------------------------------------------
Example technology options         Aerodynamic drag            Further technology improvements and increased use
 available to help manufacturers    improvements; low               of all Phase 1 technologies, plus engine
 meet standards.                    rolling resistance                improvements, improved and automated
                                    tires; high strength       transmissions and axles, powertrain optimization,
                                    steel and aluminum           tire inflation systems, and predictive cruise
                                    weight reduction;                 control (depending on tractor type).
                                    extended idle reduction;
                                    and speed limiters.
----------------------------------------------------------------------------------------------------------------
Flexibilities....................  ABT program which allows      Same as Phase 1, except no extra credits for
                                    emissions and fuel           advanced technologies or early certification.
                                    consumption credits to
                                    be averaged, banked, or
                                    traded (five year credit
                                    life). Manufacturers
                                    allowed to carry-forward
                                    credit deficits for up
                                    to three model years.
                                    Interim incentives for
                                    advanced technologies,
                                    recognition of
                                    innovative (off-cycle)
                                    technologies not
                                    accounted for by the HD
                                    Phase 1 test procedures,
                                    and credits for
                                    certifying early.
----------------------------------------------------------------------------------------------------------------

(c) Summary of the Proposed Trailer Standards
    This proposed rule is a set of GHG emission and fuel consumption 
standards for manufacturers of new trailers that are used in 
combination with tractors that would significantly reduce 
CO2 and fuel consumption from combination tractor-trailers 
nationwide over a period of several years. As described in Section IV, 
there are numerous aerodynamic and tire technologies available to 
manufacturers to accomplish these proposed standards. For the most 
part, these technologies have already been introduced into the market 
to some extent through EPA's voluntary SmartWay program. However, 
adoption is still somewhat limited.
    The agencies are proposing incremental levels of Phase 2 standards 
that would apply beginning in MY 2018 and be fully phased-in by 2027. 
These standards are predicated on use of aerodynamic and tire 
improvements, with trailer OEMs making incrementally greater 
improvements in MYs 2021 and 2024 as standard stringency increases in 
each of those model years. EPA's GHG emission standards would be 
mandatory beginning in MY 2018, while NHTSA's fuel consumption 
standards would be voluntary beginning in MY 2018, and be mandatory 
beginning in MY 2021.
    As described in Section XV.D and Chapter 12 of the draft RIA, the 
agencies are proposing special provisions to minimize the impacts on 
small trailer manufacturers. These provisions have been informed by and 
are largely consistent with recommendations coming from the SBAR Panel 
that EPA conducted pursuant to Section 609(b) of the Regulatory 
Flexibility Act (RFA). Broadly, these provisions provide additional 
lead time for small manufacturers, as well as simplified testing and 
compliance requirements. The agencies are also requesting comment on 
whether there is a need for additional provisions to address small 
business issues.

                        Table I-4--Summary of Proposed Phase 2 Requirements for Trailers
----------------------------------------------------------------------------------------------------------------
                                                                                           Alternative 4--2024
                                        Phase 1 program          Alternative 3--2027           (also under
                                                                 (proposed standard)         consideration)
----------------------------------------------------------------------------------------------------------------
Covered in this category.........     Trailers hauled by low, mid, and high roof day and sleeper cab tractors,
                                        except those qualified as logging, mining, stationary or heavy-haul.
----------------------------------------------------------------------------------------------------------------
Share of HDV fuel consumption and    Trailers are modeled together with combination tractors and their engines.
 GHG emissions.                        Together, they account for approximately two thirds of fuel use and GHG
                                                emissions in the medium and heavy duty truck sector.
----------------------------------------------------------------------------------------------------------------
Per vehicle fuel consumption and   N/A......................      Between 3% and 8% improvement over MY 2017
 CO2 improvement.                                                   baseline, depending on the trailer type.
----------------------------------------------------------------------------------------------------------------

[[Page 40162]]

 
Form of the standard.............  N/A......................  EPA: CO2 grams/ton payload mile and NHTSA: Gallons/
                                                                            1,000 ton payload mile.
----------------------------------------------------------------------------------------------------------------
Example technology options         N/A......................     Low rolling resistance tires, automatic tire
 available to help manufacturers                                  inflation systems, weight reduction for most
 meet standards.                                                trailers, aerodynamic improvements such as side
                                                                  and rear fairings, gap closing devices, and
                                                                 undercarriage treatment for box-type trailers
                                                                       (e.g., dry and refrigerated vans).
----------------------------------------------------------------------------------------------------------------
Flexibilities....................  N/A......................      One year delay in implementation for small
                                                                 businesses, trailer manufacturers may use pre-
                                                                  approved devices to avoid testing, averaging
                                                               program for manufacturers of dry and refrigerated
                                                                                 box trailers.
----------------------------------------------------------------------------------------------------------------

(d) Summary of the Proposed Vocational Vehicle Standards
    As explained in Section V, the agencies are proposing to revise the 
Phase 1 vocational vehicle program and to propose new standards. These 
proposed standards also reflect further sub-categorization from Phase 
1, with separate proposed standards based on mode of operation: Urban, 
regional, and multi-purpose. The agencies are also proposing 
alternative standards for emergency vehicles.
    The agencies project that the proposed vocational vehicle standards 
could be met through improvements in the engine, transmission, 
driveline, lower rolling resistance tires, workday idle reduction 
technologies, and weight reduction, plus some application of hybrid 
technology. These are described in Section V of this preamble and in 
Chapter 2.9 of the draft RIA. These MY 2027 standards would achieve up 
to 16 percent lower CO2 emissions and fuel consumption than 
MY 2017 Phase 1 standards. The agencies are also proposing revisions to 
the compliance regime for vocational vehicles. These include: The 
addition of an idle cycle that would be weighted along with the other 
drive cycles; and revisions to the vehicle simulation tool to reflect 
specific improvements to the engine, transmission, and driveline.
    Similar to the tractor program, we have determined that there is 
sufficient lead time to introduce many of these new technologies into 
the fleet starting in MY 2021. Therefore, we are proposing new 
standards for MY 2021 and 2024. Based on our analysis, the MY 2021 
standards for vocational vehicles would achieve up to 7 percent lower 
CO2 emissions and fuel consumption than a MY 2017 Phase 1 
vehicle, on average, and the MY 2024 standards would achieve up to 11 
percent lower CO2 emissions and fuel consumption.
    In Phase 1, EPA adopted air conditioning (A/C) refrigerant leakage 
standards for tractors, as well as for heavy-duty pickups and vans, but 
not for vocational vehicles. For Phase 2, EPA believes that it would be 
feasible to apply similar A/C refrigerant leakage standards for 
vocational vehicles, beginning with the 2021 model year. The process 
for certifying that low leakage components are used would follow the 
system currently in place for comparable systems in tractors.

         Table I-5--Summary of Phase 1 and Proposed Phase 2 Requirements for Vocational Vehicle Chassis
----------------------------------------------------------------------------------------------------------------
                                                                                           Alternative 4--2024
                                        Phase 1 program          Alternative 3--2027           (also under
                                                                 (proposed standard)         consideration)
----------------------------------------------------------------------------------------------------------------
Covered in this category.........  Class 2b-8 chassis that are intended for vocational services such as delivery
                                     vehicles, emergency vehicles, dump truck, tow trucks, cement mixer, refuse
                                            trucks, etc., except those qualified as off-highway vehicles.
----------------------------------------------------------------------------------------------------------------
                                     Because of sector diversity, vocational vehicle chassis are segmented into
                                       Light, Medium and Heavy Duty vehicle categories and for Phase 2 each of
                                      these segments are further subdivided using three duty cycles: Regional,
                                                              Multi-purpose, and Urban.
----------------------------------------------------------------------------------------------------------------
Share of HDV fuel consumption and   Vocational vehicles account for approximately 20 percent of fuel use and GHG
 GHG emissions.                            emissions in the medium and heavy duty truck sector categories.
----------------------------------------------------------------------------------------------------------------
Per vehicle fuel consumption and   2% improvement over MY        Up to 16% improvement over MY 2017 standards.
 CO2 improvement.                   2010 baseline.
                                   Improvements are in
                                    addition to improvements
                                    from engine standards.
----------------------------------------------------------------------------------------------------------------
Form of the standard.............   EPA: CO2 grams/ton payload mile and NHTSA: Gallons of fuel/1,000 ton payload
                                                                        mile.
----------------------------------------------------------------------------------------------------------------
Example technology options         Low rolling resistance      Further technology improvements and increased use
 available to help manufacturers    tires.                      of Phase 1 technologies, plus improved engines,
 meet standards.                                               transmissions and axles, powertrain optimization,
                                                                  weight reduction, hybrids, and workday idle
                                                                               reduction systems.
----------------------------------------------------------------------------------------------------------------

[[Page 40163]]

 
Flexibilities....................  ABT program which allows     Same as Phase 1, except no advanced technology
                                    emissions and fuel                            incentives.
                                    consumption credits to
                                    be averaged, banked, or
                                    traded (five year credit
                                    life). Manufacturers
                                    allowed to carry-forward
                                    credit deficits for up
                                    to three model years.
                                    Interim incentives for
                                    advanced technologies,
                                    recognition of
                                    innovative (off-cycle)
                                    technologies not
                                    accounted for by the HD
                                    Phase 1 test procedures,
                                    and credits for
                                    certifying early.
                                   .........................     Chassis intended for emergency vehicles have
                                                                proposed Phase 2 standards based only on Phase 1
                                                               technologies, and may continue to certify using a
                                                                 simplified Phase 1-style GEM tool. Adjustment
                                                                  factor of 1.36 proposed for credits carried
                                                                forward from Phase 1 to Phase 2 due to proposed
                                                                             change in useful life.
----------------------------------------------------------------------------------------------------------------

(e) Summary of the Proposed Heavy-Duty Pickup and Van Standards
    The agencies are proposing to adopt new Phase 2 GHG emission and 
fuel consumption standards for heavy-duty pickups and vans that would 
be applied in largely the same manner as the Phase 1 standards. These 
standards are based on the extensive use of most known and proven 
technologies, and could result in some use of strong hybrid powertrain 
technology. These proposed standards would commence in MY 2021. 
Overall, the proposed standards are 16 percent more stringent by 2027.

             Table I-6--Summary of Phase 1 and Proposed Phase 2 Requirements for HD Pickups and Vans
----------------------------------------------------------------------------------------------------------------
                                                                                           Alternative 4--2025
                                        Phase 1 program          Alternative 3--2027           (also under
                                                                 (proposed standard)         consideration)
----------------------------------------------------------------------------------------------------------------
Covered in this category.........   Class 2b and 3 complete pickup trucks and vans, including all work vans and
                                    15-passenger vans but excluding 12-passenger vans which are subject to light-
                                                                   duty standards.
----------------------------------------------------------------------------------------------------------------
Share of HDV fuel consumption and      HD pickups and vans account for approximately 15% of fuel use and GHG
 GHG emissions.                                 emissions in the medium and heavy duty truck sector.
----------------------------------------------------------------------------------------------------------------
Per vehicle fuel consumption and   15% improvement over MY       16% improvement over MY 2018-2020 standards.
 CO2 improvement.                   2010 baseline for diesel
                                    vehicles, and 10%
                                    improvement for gasoline
                                    vehicles.
----------------------------------------------------------------------------------------------------------------
Form of the standard.............    Phase 1 standards are based upon a ``work factor'' attribute that combines
                                     truck payload and towing capabilities, with an added adjustment for 4-wheel
                                       drive vehicles. There are separate target curves for diesel-powered and
                                    gasoline-powered vehicles. As proposed, the Phase 2 standards would be based
                                                                on the same approach.
----------------------------------------------------------------------------------------------------------------
Example technology options         Engine improvements,        Further technology improvements and increased use
 available to help manufacturers    transmission                 of all Phase 1 technologies, plus engine stop-
 meet standards.                    improvements,                start, and powertrain hybridization (mild and
                                    aerodynamic drag                                strong).
                                    improvements, low
                                    rolling resistance
                                    tires, weight reduction,
                                    and improved accessories.
----------------------------------------------------------------------------------------------------------------

[[Page 40164]]

 
Flexibilities....................  Two optional phase-in         Proposed to be same as Phase 1, with phase-in
                                    schedules; ABT program        schedule based on year-over-year increase in
                                    which allows emissions       stringency. Adjustment factor of 1.25 proposed
                                    and fuel consumption       for credits carried forward from Phase 1 to Phase
                                    credits to be averaged,    2 due to proposed change in useful life. Proposed
                                    banked, or traded (five      cessation of advanced technology incentives in
                                    year credit life).            2021 and continuation of off-cycle credits.
                                    Manufacturers allowed to
                                    carry-forward credit
                                    deficits for up to three
                                    model years. Interim
                                    incentives for advanced
                                    technologies,
                                    recognition of
                                    innovative (off-cycle)
                                    technologies not
                                    accounted for by the HD
                                    Phase 1 test procedures,
                                    and credits for
                                    certifying early.
----------------------------------------------------------------------------------------------------------------

(f) Summary of the Proposed Final Numeric Standards by Regulatory 
Subcategory
    Table I-7 lists the proposed final (i.e., MY 2027) numeric 
standards by regulatory subcategory for tractors, trailers, vocational 
vehicles and engines. Note that these are the same final numeric 
standards for Alternative 4, but for Alternative 4 these would be 
implemented in MY 2024 instead of MY 2027.

                 Table I-7--Proposed Final (MY 2027) Numeric Standards by Regulatory Subcategory
----------------------------------------------------------------------------------------------------------------
                                                                CO2 grams per  ton-mile  Fuel consumption gallon
                                                                 (for engines CO2 grams  per 1,000 ton-mile (for
                    Regulatory subcategory                       per brake horsepower-   engines gallons per 100
                                                                         hour)            brake horsepower-hour)
----------------------------------------------------------------------------------------------------------------
Tractors:.....................................................
    Class 7 Low Roof Day Cab..................................                       87                   8.5462
    Class 7 Mid Roof Day Cab..................................                       96                   9.4303
    Class 7 High Roof Day Cab.................................                       96                   9.4303
    Class 8 Low Roof Day Cab..................................                       70                   6.8762
    Class 8 Mid Roof Day Cab..................................                       76                   7.4656
    Class 8 High Roof Day Cab.................................                       76                   7.4656
    Class 8 Low Roof Sleeper Cab..............................                       62                   6.0904
    Class 8 Mid Roof Sleeper Cab..............................                       69                   6.7780
    Class 8 High Roof Sleeper Cab.............................                       67                   6.5815
Trailers:
    Long Dry Box Trailer......................................                       77                   7.5639
    Short Dry Box Trailer.....................................                      140                  13.7525
    Long Refrigerated Box Trailer.............................                       80                   7.8585
    Short Refrigerated Box Trailer............................                      144                  14.1454
Vocational Diesel:
    LHD Urban.................................................                      272                  26.7191
    LHD Multi-Purpose.........................................                      280                  27.5049
    LHD Regional..............................................                      292                  28.6837
    MHD Urban.................................................                      172                  16.8959
    MHD Multi-Purpose.........................................                      174                  17.0923
    MHD Regional..............................................                      170                  16.6994
    HHD Urban.................................................                      182                  17.8782
    HHD Multi-Purpose.........................................                      183                  17.9764
    HHD Regional..............................................                      174                  17.0923
Vocational Gasoline:
    LHD Urban.................................................                      299                  33.6446
    LHD Multi-Purpose.........................................                      308                  34.6574
    LHD Regional..............................................                      321                  36.1202
    MHD Urban.................................................                      189                  21.2670
    MHD Multi-Purpose.........................................                      191                  21.4921
    MHD Regional..............................................                      187                  21.0420
    HHD Urban.................................................                      196                  22.0547
    HHD Multi-Purpose.........................................                      198                  22.2797
    HHD Regional..............................................                      188                  21.1545
Diesel Engines:
    LHD Vocational............................................                      553                   5.4322
    MHD Vocational............................................                      553                   5.4322
    HHD Vocational............................................                      533                   5.2358
    MHD Tractor...............................................                      466                   4.5776

[[Page 40165]]

 
    HHD Tractor...............................................                      441                   4.3320
----------------------------------------------------------------------------------------------------------------

    Similar to Phase 1 the agencies are proposing for Phase 2 a set of 
continuous equation-based standards for HD pickups and vans. Please 
refer to Section 6, subsection B.1, for a description of these 
standards, including associated tables and figures.

D. Summary of the Costs and Benefits of the Proposed Rule

    This section summarizes the projected costs and benefits of the 
proposed NHTSA fuel consumption and EPA GHG emission standards, along 
with those of Alternative 4. These projections helped to inform the 
agencies' choices among the alternatives considered, along with other 
relevant factors, and NHTSA's Draft Environmental Impact Statement 
(DEIS). See Sections VII through IX and the Draft RIA for additional 
details about these projections.
    For this rule, the agencies conducted coordinated and complementary 
analyses using two analytical methods for the heavy-duty pickup and van 
segment by employing both DOT's CAFE model and EPA's MOVES model. The 
agencies used EPA's MOVES model to estimate fuel consumption and 
emissions impacts for tractor-trailers (including the engine that 
powers the tractor), and vocational vehicles (including the engine that 
powers the vehicle). Additional calculations were performed to 
determine corresponding monetized program costs and benefits. For 
heavy-duty pickups and vans, the agencies performed complementary 
analyses, which we refer to as ``Method A'' and ``Method B.'' In Method 
A, the CAFE model was used to project a pathway the industry could use 
to comply with each regulatory alternative and the estimated effects on 
fuel consumption, emissions, benefits and costs. In Method B, the CAFE 
model was used to project a pathway the industry could use to comply 
with each regulatory alternative, along with resultant impacts on per 
vehicle costs, and the MOVES model was used to calculate corresponding 
changes in total fuel consumption and annual emissions. Additional 
calculations were performed to determine corresponding monetized 
program costs and benefits. NHTSA considered Method A as its central 
analysis and Method B as a supplemental analysis. EPA considered the 
results of both methods. The agencies concluded that both methods led 
the agencies to the same conclusions and the same selection of the 
proposed standards. See Section VII for additional discussion of these 
two methods.
(1) Reference Case Against Which Costs and Benefits Are Calculated
    The No Action Alternative for today's analysis, alternatively 
referred to as the ``baseline'' or ``reference case,'' assumes that the 
agencies would not issue new rules regarding MD/HD fuel efficiency and 
GHG emissions. This is the baseline against which costs and benefits 
for the proposed standards are calculated. The reference case assumes 
that model year 2018 standards would be extended indefinitely and 
without change.
    The agencies recognize that if the proposed rule is not adopted, 
manufacturers will continue to introduce new heavy-duty vehicles in a 
competitive market that responds to a range of factors. Thus 
manufacturers might have continued to improve technologies to reduce 
heavy-duty vehicle fuel consumption. Thus, as described in Section VII, 
both agencies fully analyzed the proposed standards and the regulatory 
alternatives against two reference cases. The first case uses a 
baseline that projects very little improvement in new vehicles in the 
absence of new Phase 2 standards, and the second uses a more dynamic 
baseline that projects more significant improvements in vehicle fuel 
efficiency. NHTSA considered its primary analysis to be based on the 
more dynamic baseline, where certain cost-effective technologies are 
assumed to be applied by manufacturers to improve fuel efficiency 
beyond the Phase 1 requirements in the absence of new Phase 2 
standards. EPA considered both reference cases. The results for all of 
the regulatory alternatives relative to both reference cases, derived 
via the same methodologies discussed in this section, are presented in 
Section X of the preamble.
    The agencies chose to analyze these two different baselines because 
the agencies recognize that there are a number of factors that create 
uncertainty in projecting a baseline against which to compare the 
future effects of the proposed action and the remaining alternatives. 
The composition of the future fleet--such as the relative position of 
individual manufacturers and the mix of products they each offer--
cannot be predicted with certainty at this time. Additionally, the 
heavy-duty vehicle market is diverse, as is the range of vehicle 
purchasers. Heavy-duty vehicle manufacturers have reported that their 
customers' purchasing decisions are influenced by their customers' own 
determinations of minimum total cost of ownership, which can be unique 
to a particular customer's circumstances. For example, some customers 
(e.g., less-than-truckload or package delivery operators) operate their 
vehicles within a limited geographic region and typically own their own 
vehicle maintenance and repair centers within that region. These 
operators tend to own their vehicles for long time periods, and 
sometimes for the entire service life of the vehicle. Their total cost 
of ownership is influenced by their ability to better control their own 
maintenance costs, and thus they can afford to consider fuel efficiency 
technologies that have longer payback periods, outside of the vehicle 
manufacturer's warranty period. Other customers (e.g. truckload or 
long-haul operators) tend to operate cross-country, and thus must 
depend upon truck dealer service centers for repair and maintenance. 
Some of these customers tend to own their vehicles for about four to 
seven years, so that they typically do not have to pay for repair and 
maintenance costs outside of either the manufacturer's warranty period 
or some other extended warranty period. Many of these customers tend to 
require seeing evidence of fuel efficiency technology payback periods 
on the order of 18 to 24 months before seriously considering evaluating 
a new technology for potential adoption within their fleet (NAS 2010, 
Roeth et al. 2013, Klemick et al. 2014). Purchasers of HD pickups and 
vans wanting better fuel efficiency tend to demand that fuel 
consumption improvements pay back within approximately one to three 
years, but some HD pickup and van owners accrue

[[Page 40166]]

relatively few vehicle miles traveled per year, such that they may be 
less likely to adopt new fuel efficiency technologies, while other 
owners who use their vehicle(s) with greater intensity may be even more 
willing to pay for fuel efficiency improvements. Regardless of the type 
of customer, their determination of minimum total cost of ownership 
involves the customer balancing their own unique circumstances with a 
heavy-duty vehicle's initial purchase price, availability of credit and 
lease options, expectations of vehicle reliability, resale value and 
fuel efficiency technology payback periods. The degree of the incentive 
to adopt additional fuel efficiency technologies also depends on 
customer expectations of future fuel prices, which directly impacts 
customer payback periods. Purchasing decisions are not based 
exclusively on payback period, but also include the considerations 
discussed above and in Section X.A.1. For the baseline analysis, the 
agencies use payback period as a proxy for all of these considerations, 
and therefore the payback period for the baseline analysis is shorter 
than the payback period industry uses as a threshold for the further 
consideration of a technology. The agencies request comment on which 
alternative baseline scenarios would be most appropriate for analysis 
in the final rule. Specifically, the agencies request empirical 
evidence to support whether the agencies should use for the final rule 
the central cases used in this proposal, alternative sensitivity cases 
such as those mentioned below, or some other scenarios. See Section 
X.A.1of this Preamble and Chapter 11 of the draft RIA for a more 
detailed discussion of baselines.
    As part of a sensitivity analysis, additional baseline scenarios 
were also evaluated for HD pickups and vans, including baseline payback 
periods of 12, 18 and 24 months. See Section VI of this Preamble and 
Chapter 10 of the draft RIA for a detailed discussion of these 
additional scenarios.
(2) Costs and Benefits Projected for the Standards Being Proposed and 
Alternative 4
    The tables below summarize the benefits and costs for the program 
in two ways: First, from the perspective of a program designed to 
improve the Nation's energy security and to conserve energy by 
improving fuel efficiency and then from the perspective of a program 
designed to reduce GHG emissions. The individual categories of benefits 
and costs presented in the tables below are defined more fully and 
presented in more detail in Chapter 8 of the draft RIA.
    Table I-8 shows benefits and costs for the proposed standards and 
Alternative 4 from the perspective of a program designed to improve the 
Nation's energy security and conserve energy by improving fuel 
efficiency. From this viewpoint, technology costs occur when the 
vehicle is purchased. Fuel savings are counted as benefits that occur 
over the lifetimes of the vehicles produced during the model years 
subject to the Phase 2 standards as they consume less fuel.

  Table I-8--Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for Model Years 2018-2029
                                        Vehicles Using Analysis Method A
                                           [Billions of 2012$] \a\ \b\
----------------------------------------------------------------------------------------------------------------
                                                                        Alternative
                                         -----------------------------------------------------------------------
                Category                              3 Preferred                              4
                                         -----------------------------------------------------------------------
                                          7% Discount rate  3% Discount rate  7% Discount rate  3% Discount rate
----------------------------------------------------------------------------------------------------------------
Fuel Reductions (Billion Gallons).......               72.2-76.7
                                                       81.9-86.7
GHG reductions (MMT CO2 eq).............               974-1,034
                                                      1,102-1,166
                                         -----------------------------------------------------------------------
Vehicle Program: Technology and Indirect         25.0-25.4         16.8-17.1         32.9-34.3         22.5-23.5
 Costs, Normal Profit on Additional
 Investments............................
Additional Routine Maintenance..........           1.0-1.1           0.6-0.6           1.0-1.1           0.6-0.7
Congestion, Accidents, and Noise from              4.5-4.7           2.6-2.8           4.7-4.9           2.7-2.8
 Increased Vehicle Use..................
                                         -----------------------------------------------------------------------
    Total Costs.........................         30.5-31.1         20.0-20.5         38.7-40.8         25.8-27.0
Fuel Savings (valued at pre-tax prices).       165.1-175.1         89.2-94.2       187.4-198.3       102.0-107.5
Savings from Less Frequent Refueling....           2.9-3.1           1.5-1.6           3.4-3.6           1.8-2.0
Economic Benefits from Additional                14.7-15.1           8.2-8.4         15.0-15.4           8.4-8.6
 Vehicle Use............................
Reduced Climate Damages from GHG                 32.9-34.9         32.9-34.9         37.3-39.4         37.3-39.4
 Emissions \c\..........................
Reduced Health Damages from Non-GHG              37.2-38.8           20-20.7         40.9-42.5         22.1-22.8
 Emissions..............................
Increased U.S. Energy Security..........           8.1-8.9           4.3-4.7          9.3-10.2           5.0-5.5
                                         -----------------------------------------------------------------------
    Total Benefits......................           261-276           156-165           293-309           177-186
                                         -----------------------------------------------------------------------
        Net Benefits....................           231-245           136-144           255-269           151-159
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Range reflects two reference case assumptions 1a and 1b.
\c\ Benefits and net benefits use the 3 percent global average SCC value applied only to CO2 emissions; GHG
  reductions include CO2, CH4, N2O and HFC reductions, and include benefits to other nations as well as the U.S.
  See Draft RIA Chapter 8.5 and Preamble Section IX.G for further discussion.

    Table I-9 shows benefits and cost from the perspective of reducing 
GHG.

[[Page 40167]]

  Table I-9--Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for Model Years 2018-2029
                                        Vehicles Using Analysis Method B
                                           [Billions of 2012$] \a\ \b\
----------------------------------------------------------------------------------------------------------------
                                                                  Alternative
                              ----------------------------------------------------------------------------------
           Category                           3 Preferred                                   4
                              ----------------------------------------------------------------------------------
                                 7% Discount rate     3% Discount rate     7% Discount rate    3% Discount rate
----------------------------------------------------------------------------------------------------------------
Fuel Reductions (Billion                     70.2 to 75.8
 Gallons).
                                             79.7 to 85.4
GHG reductions (MMT CO2eq)...                960 to 1,040
                                            1,090 to 1,160
                              ----------------------------------------------------------------------------------
Vehicle Program (e.g.,         -$24.6 to -$25.1     -$16.3 to -$16.6     -$33.1 to -$33.5     -$22.2 to -$22.5
 technology and indirect
 costs, normal profit on
 additional investments).
Additional Routine             -$1.1 to -$1.1       -$0.6 to -$0.6       -$1.1 to -$1.1       -$0.6 to -$0.6
 Maintenance.
Fuel Savings (valued at pre-   $159 to $171         $84.2 to $90.1       $181 to $193         $96.5 to $103
 tax prices).
Energy Security..............  $8.5 to $9.3         $4.4 to $4.8         $9.8 to $10.6        $5.2 to $5.6
Congestion, Accidents, and     -$4.2 to -$4.3       -$2.4 to -$2.4       -$4.2 to -$4.3       -$2.4 to -$2.4
 Noise from Increased Vehicle
 Use.
Savings from Less Frequent     $2.8 to $3.1         $1.4 to $1.6         $3.3 to $3.6         $1.7 to $1.9
 Refueling.
Economic Benefits from         $14.8 to $14.9       $8.2 to $8.2         $14.7 to $14.8       $8.1 to $8.1
 Additional Vehicle Use.
Benefits from Reduced Non-GHG  $37.4 to $39.7       $17.7 to $18.8       $41.2 to $43.5       $19.7 to $20.7
 Emissions \c\.
                              ----------------------------------------------------------------------------------
Reduced Climate Damages from                $31.6 to $34.0
 GHG Emissions \d\.
                                            $35.9 to $38.3
                              ----------------------------------------------------------------------------------
    Net Benefits.............  $224 to $242         $128 to $138         $248 to $265         $142 to $152
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Range reflects two baseline assumptions 1a and 1b.
\c\ Range reflects both the two baseline assumptions 1a and 1b using the mid-point of the low and high $/ton
  estimates for calculating benefits.
\d\ Benefits and net benefits use the 3 percent average SCCO2 value applied only to CO2 emissions; GHG
  reductions include CO2, CH4 and N2O reductions.

    Table I-10 breaks down by vehicle category the benefits and costs 
for the proposed standards and Alternative 4 using the Method A 
analytical approach. For additional detail on per-vehicle break-downs 
of costs and benefits, please see Chapter 10.

  Table I-10--Per Vehicle Category Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for
     Model Years 2018-2029 Vehicles Using Analysis Method A (Billions of 2012$), Relative to Baseline 1b \a\
----------------------------------------------------------------------------------------------------------------
                                                                        Alternative
                                         -----------------------------------------------------------------------
    Key costs and benefits by vehicle                 3 Preferred                              4
                category                 -----------------------------------------------------------------------
                                          7% Discount rate  3% Discount rate  7% Discount rate  3% Discount rate
----------------------------------------------------------------------------------------------------------------
Tractors, Including Engines, and
 Trailers:..............................
    Fuel Reductions (Billion Gallons)...                 56.1
                                                         61.6
    GHG Reductions (MMT CO2 eq).........                 731.1
                                                         803.1
                                         -----------------------------------------------------------------------
        Total Costs.....................              15.2              10.0              17.7              11.9
        Total Benefits..................             177.8             105.4             194.2             115.7
        Net Benefits....................             162.6              95.4             176.5             103.9
Vocational Vehicles, Including Engines:
                                         -----------------------------------------------------------------------
    Fuel Reductions (Billion Gallons)...                  8.3
                                                         10.9
    GHG Reductions (MMT CO2 eq).........                 107.0
                                                         139.8
                                         -----------------------------------------------------------------------
        Total Costs.....................               9.5               6.1              12.8               8.4
        Total Benefits..................              27.7              16.0              35.0              20.6
        Net Benefits....................              18.1               9.9              22.1              12.1
HD Pickups and Vans:
                                         -----------------------------------------------------------------------
    Fuel Reductions (Billion Gallons)...                  7.8
                                                          9.3
    GHG Reductions (MMT CO2 eq).........                 94.1
                                                         112.8
                                         -----------------------------------------------------------------------
        Total Costs.....................               5.5               3.7               7.8               5.3

[[Page 40168]]

 
        Total Benefits..................              23.5              14.1              28.3              17.1
        Net Benefits....................              18.0              10.5              20.4              11.9
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

                              Table I-11--Per Vehicle Costs Relative to Baseline 1a
----------------------------------------------------------------------------------------------------------------
                                               3 Proposed standards                              4
                                 -------------------------------------------------------------------------------
                                      MY 2021         MY 2024         MY 2027         MY 2021         MY 2024
----------------------------------------------------------------------------------------------------------------
Per Vehicle Cost ($) \a\
    Tractors....................          $6,710          $9,940         $11,700         $10,200         $12,400
    Trailers....................             900           1,010           1,170           1,080           1,230
    Vocational Vehicles.........           1,150           1,770           3,380           1,990           3,590
    Pickups/Vans................             520             950           1,340           1,050           1,730
----------------------------------------------------------------------------------------------------------------
Note:
\a\ Per vehicle costs include new engine and vehicle technology only; costs associated with increased insurance,
  taxes and maintenance are included in the payback period values.

    An important metric to vehicle purchasers is the payback period 
that can be expected on any new purchase. In other words, there is 
greater willingness to pay for new technology if that new technology 
``pays back'' within an acceptable period of time. The agencies make no 
effort to define the acceptable period of time, but seek to estimate 
the payback period for others to make the decision themselves. The 
payback period is the point at which reduced fuel expenditures outpace 
increased vehicle costs, including increased maintenance, insurance 
premiums and taxes. The payback periods for vehicles meeting the 
standards considered for the final year of implementation (MY2024 for 
alternative 4 and MY2027 for the proposed standards) are shown in Table 
I-12, and are similar for both Method A and Method B.

   Table I-12--Payback Periods for MY2027 Vehicles Under the Proposed
    Standards and for MY2024 Vehicles Under Alternative 4 Relative to
                               Baseline 1a
        [Payback occurs in the year shown; using 7% discounting]
------------------------------------------------------------------------
                                             Proposed
                                             standards     Alternative 4
------------------------------------------------------------------------
Tractors/Trailers.......................             2nd             2nd
Vocational Vehicles.....................             6th             6th
Pickups/Vans............................             3rd             4th
------------------------------------------------------------------------

(3) Cost Effectiveness
    These proposed regulations implement Section 32902(k) of EISA and 
Section 202(a)(1) and (2) of the Clean Air Act. Through the 2007 EISA, 
Congress directed NHTSA to create a medium- and heavy-duty vehicle fuel 
efficiency program designed to achieve the maximum feasible improvement 
by considering appropriateness, cost-effectiveness, and technological 
feasibility to determine maximum feasible standards.\62\ The Clean Air 
Act requires that any air pollutant emission standards for heavy-duty 
vehicles and engines take into account the costs of any requisite 
technology and the lead time necessary to implement such technology. 
Both agencies considered overall costs, overall benefits and cost 
effectiveness in developing the Phase 1 standards. Although there are 
different ways to evaluate cost effectiveness, the essence is to 
consider some measure of costs relative to some measure of impacts.
---------------------------------------------------------------------------

    \62\ This EISA requirement applies to regulation of medium- and 
heavy-duty vehicles. For many years, and as reaffirmed by Congress 
in 2007, ``economic practicability'' has been among the factors EPCA 
requires NHTSA to consider when setting light-duty fuel economy 
standards at the (required) maximum feasible levels. NHTSA 
interprets ``economic practicability'' as a factor involving 
considerations broader than those likely to be involved in ``cost 
effectiveness''.
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    Considering that Congress enacted EPCA and EISA to, among other 
things, address the need to conserve energy, the agencies have 
evaluated the proposed standards in terms of costs per gallon of fuel 
conserved. As described in the draft RIA, the agencies also evaluated 
the

[[Page 40169]]

proposed standards using the same approaches employed in HD Phase 1. 
Together, the agencies have considered the following three ratios of 
cost effectiveness:
    1. Total costs per gallon of fuel conserved.
    2. Technology costs per ton of GHG emissions reduced.
    3. Technology costs minus fuel savings per ton of GHG emissions 
reduced.
    By all three of these measures, the proposed standards would be 
highly cost effective.
    As discussed below, the agencies estimate that over the lifetime of 
heavy-duty vehicles produced for sale in the U.S. during model years 
2018-2029, the proposed standards would cost about $30 billion and 
conserve about 75 billion gallons of fuel, such that the first measure 
of cost effectiveness would be about 40 cents per gallon. Relative to 
fuel prices underlying the agencies' analysis, the agencies have 
concluded that today's proposed standards would be cost effective.
    With respect to the second measure, which is useful for comparisons 
to other GHG rules, the proposed standards would have overall $/ton 
costs similar to the HD Phase 1 rule. As Chapter 7 of the draft RIA 
shows, technology costs by themselves would amount to less than $50 per 
metric ton of GHG (CO2 eq) for the entire HD Phase 2 
program. This compares well to both the HD Phase 1 rule, which was 
estimated to cost about $30 per metric ton of GHG (without fuel 
savings), and to the agencies' estimates of the social cost of carbon. 
Thus, even without accounting for fuel savings, the proposed standards 
would be cost-effective.
    The third measure deducts fuel savings from technology costs, which 
also is useful for comparisons to other GHG rules. On this basis, net 
costs per ton of GHG emissions reduced would be negative under the 
proposed standards. This means that the value of the fuel savings would 
be greater than the technology costs, and there would be a net cost 
saving for vehicle owners. In other words, the technologies would pay 
for themselves (indeed, more than pay for themselves) in fuel savings.
    In addition, while the net economic benefits (i.e., total benefits 
minus total costs) of the proposed standards is not a traditional 
measure of their cost-effectiveness, the agencies have concluded that 
the total costs of the proposed standards are justified in part by 
their significant economic benefits. As discussed in the previous 
subsection and in Section IX, this rule would provide benefits beyond 
the fuel conserved and GHG emissions avoided. The rule's net benefits 
is a measure that quantifies each of its various benefits in economic 
terms, including the economic value of the fuel it saves and the 
climate-related damages it avoids, and compares their sum to the rule's 
estimated costs. The agencies estimate that the proposed standards 
would result in net economic benefits exceeding $100 billion, making 
this a highly beneficial rule.
    Our current analysis of Alternative 4 also shows that, if 
technologically feasible, it would have similar cost-effectiveness but 
with greater net benefits (see Chapter 11 of the draft RIA). For 
example, the agencies estimate costs under Alternative 4 could be about 
$40 billion and about 85 billion gallons of fuel could be conserved, 
such that the first measure of cost effectiveness would be about 47 
cents per gallon. However, the agencies considered all of the relevant 
factors, not just relative cost-effectiveness, when selecting the 
proposed standards from among the alternatives considered. Relative 
cost-effectiveness was not a limiting factor for the agencies in 
selecting the proposed standards. It is also worth noting that the 
proposed standards and the Alternative 4 standards appear very cost 
effective, regardless of which reference case is used for the baseline, 
such that all of the analyses reinforced the agencies' findings.

E. EPA and NHTSA Statutory Authorities

    This section briefly summarizes the respective statutory authority 
for EPA and NHTSA to promulgate the Phase 1 and proposed Phase 2 
programs. For additional details of the agencies' authority, see 
Section XV of this notice as well as the Phase 1 rule.\63\
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    \63\ 76 FR 57106--57129, September 15, 2011.
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(1) EPA Authority
    Statutory authority for the vehicle controls in this proposal is 
found in CAA section 202(a)(1) and (2) (which requires EPA to establish 
standards for emissions of pollutants from new motor vehicles and 
engines which emissions cause or contribute to air pollution which may 
reasonably be anticipated to endanger public health or welfare), and in 
CAA sections 202(d), 203-209, 216, and 301 (42 U.S.C. 7521 (a)(1) and 
(2), 7521(d), 7522-7543, 7550, and 7601).
    Title II of the CAA provides for comprehensive regulation of mobile 
sources, authorizing EPA to regulate emissions of air pollutants from 
all mobile source categories. When acting under Title II of the CAA, 
EPA considers such issues as technology effectiveness, its cost (both 
per vehicle, per manufacturer, and per consumer), 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 of both GHGs and non-GHG 
emissions; the impacts of standards on oil conservation and energy 
security; the impacts of standards on fuel savings by customers; the 
impacts of standards on the truck industry; other energy impacts; as 
well as other relevant factors such as impacts on safety.
    This proposed action implements a specific provision from Title II, 
Section 202(a). 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.'' With EPA's December 
2009 final findings that certain greenhouse gases may reasonably be 
anticipated to endanger public health and welfare and that emissions of 
GHGs from Section 202(a) sources cause or contribute to that 
endangerment, Section 202(a) requires EPA to issue standards applicable 
to emissions of those pollutants from new motor vehicles. See Coalition 
for Responsible Regulation v. EPA, 684 F. 3d at 116-125, 126-27 cert. 
granted by, in part Util. Air Regulatory Group v. EPA, 134 S. Ct. 418, 
187 L. Ed. 2d 278, 2013 U.S. LEXIS 7380 (U.S., 2013), affirmed in part 
and reversed in part on unrelated grounds by Util. Air Regulatory Group 
v. EPA, 134 S. Ct. 2427, 189 L. Ed. 2d 372, 2014 U.S. LEXIS 4377 (U.S., 
2014) (upholding EPA's endangerment and cause and contribute findings, 
and further affirming EPA's conclusion that it is legally compelled to 
issue standards under Section 202 (a) to address emission of the 
pollutant which endangers after making the endangerment and cause of 
contribute findings); see also id. at 127-29 (upholding EPA's light-
duty GHG emission standards for MYs 2012-2016 in their entirety).
    Other aspects of EPA's legal authority, including it authority 
under Section 202(a), its testing authority under Section 203 of the 
Act, and its enforcement authorities under Section 207 of the Act are 
discussed fully in the Phase 1 rule, and need not be repeated here. See 
76 FR 57129-57130.

[[Page 40170]]

    The proposed rule includes GHG emission and fuel efficiency 
standards applicable to trailers--an essential part of the tractor-
trailer motor vehicle. Class 7/8 heavy-duty vehicles are composed of 
three major components:--The engine, the cab-chassis (i.e. the 
tractor), and the trailer. The fact that the vehicle consists of two 
detachable parts does not mean that either of the parts is not a motor 
vehicle. The trailer's sole purpose is to serve as the cargo-hauling 
part of the vehicle. Without the tractor, the trailer cannot transport 
property. The tractor is likewise incomplete without the trailer. The 
motor vehicle needs both parts, plus the engine, to accomplish its 
intended use. Connected together, a tractor and trailer constitute ``a 
self-propelled vehicle designed for transporting . . . property on a 
street or highway,'' and thus meet the definition of ``motor vehicle'' 
under Section 216(2) of the CAA. Thus, as EPA has previously explained, 
we interpret our authority to regulate motor vehicles to include 
authority to regulate such trailers. See 79 FR 46259 (August 7, 
2014).\64\
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    \64\ Indeed, an argument that a trailer is not a motor vehicle 
because, considered (artificially) as a separate piece of equipment 
it is not self-propelled, applies equally to the cab-chassis--the 
tractor. No entity has suggested that tractors are not motor 
vehicles; nor is such an argument plausible.
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    This analysis is consistent with definitions in the Federal 
regulations issued under the CAA at 40 CFR 86.1803-01, where a heavy-
duty vehicle ``that has the primary load carrying device or container 
attached'' is referred to as a ``[c]omplete heavy-duty vehicle,'' while 
a heavy-duty vehicle or truck ``which does not have the primary load 
carrying device or container attached'' is referred to as an 
``[i]ncomplete heavy- duty vehicle'' or ``[i]ncomplete truck.'' The 
trailers that would be covered by this proposal are properly considered 
``the primary load carrying device or container'' for the heavy-duty 
vehicles to which they become attached for use. Therefore, under these 
definitions, such trailers are implicitly part of a ``complete heavy-
duty vehicle,'' and thus part of a ``motor vehicle.'' 
65 66 67
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    \65\ We note further, however, that certain hauled items, for 
example a boat, would not be considered to be a trailer under the 
proposal. See proposed section 1037.801, proposing to define 
``trailer' as being ``designed for cargo and for being drawn by a 
tractor.''
    \66\ This concept is likewise reflected in the definition of 
``tractor'' in the parallel Department of Transportation 
regulations: ``a truck designed primarily for drawing other motor 
vehicles and not so constructed as to carry a load other than a part 
of the weight of the vehicle and the load so drawn.'' See 49 CFR 
571.3.
    \67\ EPA's proposed definition of ``vehicle'' in 40 CFR 1037.801 
makes clear that an incomplete trailer becomes a vehicle (and thus 
subject to the prohibition against introduction into commerce 
without a certificate) when it has a frame with axles attached. 
Complete trailers are also vehicles.
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    The argument that trailers do not themselves emit pollutants and so 
are not subject to emission standards is also unfounded. First, the 
argument lacks a factual predicate. Trailers indisputably contribute to 
the motor vehicle's CO2 emissions by increasing engine load, 
and these emissions can be reduced through various means such as 
trailer aerodynamic and tire rolling resistance improvements. See 
Section IV below. The argument also lacks a legal predicate. Section 
202(a)(1) authorizes standards applicable to emissions of air 
pollutants ``from'' either the motor vehicle or the engine. There is no 
requirement that pollutants be emitted from a specified part of the 
motor vehicle or engine. And indeed, the argument proves too much, 
since tractors and vocational vehicle chassis likewise contribute to 
emissions (including contributing by the same mechanisms that trailers 
do) but do not themselves directly emit pollutants. The fact that 
Section 202(a)(1) applies explicitly to both motor vehicles and engines 
likewise indicates that EPA has unquestionable authority to interpret 
pollutant emission caused by the vehicle component to be ``from'' the 
motor vehicle and so within its regulatory authority under Section 
202(a)(1).\68\
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    \68\ This argument applies equally to emissions of criteria 
pollutants, whose rate of emission is likewise affected by vehicle 
characteristics. It is for this reason that EPA's implementing rules 
for criteria pollutants from heavy duty vehicles and engines specify 
a test weight for certification testing, since that weight 
influences the amount of pollution emission.
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(2) NHTSA Authority
    The Energy Policy and Conservation Act (EPCA) of 1975 mandates a 
regulatory program for motor vehicle fuel economy to meet the various 
facets of the need to conserve energy. In December 2007, Congress 
enacted the Energy Independence and Security Act (EISA), amending EPCA 
to require, among other things, the creation of a medium- and heavy-
duty fuel efficiency program for the first time.
    Statutory authority for the fuel consumption standards in this 
proposed rule is found in EISA section 103, 49 U.S.C. 32902(k). This 
section authorizes a fuel efficiency improvement program, designed to 
achieve the maximum feasible improvement to be created for commercial 
medium- and heavy-duty on-highway vehicles and work trucks, to include 
appropriate test methods, measurement metrics, standards, and 
compliance and enforcement protocols that are appropriate, cost-
effective and technologically feasible.
    NHTSA has responsibility for fuel economy and consumption 
standards, and assures compliance with EISA through rulemaking, 
including standard-setting; technical reviews, audits and studies; 
investigations; and enforcement of implementing regulations including 
penalty actions. This proposed rule would continue to fulfill the 
requirements of Section 103 of EISA, which instructs NHTSA to create a 
fuel efficiency improvement program for ``commercial medium- and heavy-
duty on-highway vehicles and work trucks'' by rulemaking, which is to 
include standards, test methods, measurement metrics, and enforcement 
protocols. See 49 U.S.C. 32902(k)(2).
    Congress directed that the standards, test methods, measurement 
metrics, and compliance and enforcement protocols be ``appropriate, 
cost-effective, and technologically feasible'' for the vehicles to be 
regulated, while achieving the ``maximum feasible improvement'' in fuel 
efficiency. NHTSA has broad discretion to balance the statutory factors 
in Section 103 in developing fuel consumption standards to achieve the 
maximum feasible improvement.
    As discussed in the Phase 1 final rule notice, NHTSA has determined 
that the five year statutory limit on average fuel economy standards 
that applies to passengers and light trucks is not applicable to the HD 
vehicle and engine standards. As a result, the Phase 1 HD engine and 
vehicle standards remain in effect indefinitely at their 2018 or 2019 
MY levels until amended by a future rulemaking action. As was 
contemplated in that notice, NHTSA is currently engaging in this Phase 
2 rulemaking action. Therefore, the Phase 1 standards would not remain 
in effect at their 2018 or 2019 MY levels indefinitely; they would 
remain in effect until the MY Phase 2 standards apply. In accordance 
with Section 103 of EISA, NHTSA will ensure that not less than four 
full MYs of regulatory lead-time and three full MYs of regulatory 
stability are provided for in the Phase 2 standards.
(a) Authority To Regulate Trailers
    As contemplated in the Phase 1 proposed and final rules, the 
agencies are proposing standards for trailers in this rulemaking. 
Because Phase 1 did not include standards for trailers, NHTSA did not 
discuss its authority for regulating them in the proposed or final 
rules; that authority is described here.

[[Page 40171]]

    EISA directs NHTSA to ``determine in a rulemaking proceeding how to 
implement a commercial medium- and heavy-duty on-highway vehicle and 
work truck fuel efficiency improvement program designed to achieve the 
maximum feasible improvement. . . .'' EISA defines a commercial medium- 
and heavy-duty on-highway vehicle to mean ``an on-highway vehicle with 
a GVWR of 10,000 lbs or more.'' A ``work truck'' is defined as a 
vehicle between 8,500 and 10,000 lbs GVWR that is not an MDPV. These 
definitions do not explicitly exclude trailers, in contrast to MDPVs. 
Because Congress did not act to exclude trailers when defining GVWRs, 
despite demonstrating the ability to exclude MDPVs, it is reasonable to 
interpret the provision to include them.
    Both commercial medium- and heavy-duty on-highway vehicles and work 
trucks, though, must be vehicles in order to be regulated under this 
program. Although EISA does not define the term ``vehicle,'' NHTSA's 
authority to regulate motor vehicles under its organic statute, the 
Motor Vehicle Safety Act (``Safety Act''), does. The Safety Act defines 
a motor vehicle as ``a vehicle driven or drawn by mechanical power and 
manufactured primarily for use on public streets, roads, and highways. 
. . .'' NHTSA clearly has authority to regulate trailers under this Act 
as vehicles that are drawn and has exercised that authority numerous 
times. Given the absence of any apparent contrary intent on the part of 
Congress in EISA, NHTSA believes it is reasonable to interpret the term 
``vehicle'' as used in the EISA definitions to have a similar meaning 
that includes trailers.
    Furthermore, the general definition of a vehicle is something used 
to transport goods or persons from one location to another. A tractor-
trailer is designed for the purpose of transporting goods. Therefore it 
is reasonable to consider all of its parts--the engine, the cab-
chassis, and the trailer--as parts of a whole. As such they are all 
parts of a vehicle, and are captured within the definition of vehicle. 
As EPA describes above, the tractor and trailer are both incomplete 
without the other. Neither can fulfill the function of the vehicle 
without the other. For this reason, and the other reasons stated above, 
NHTSA interprets its authority to regulate commercial medium- and 
heavy-duty on-highway vehicles, including tractor-trailers, as 
encompassing both tractors and trailers.
(b) Authority To Regulate Recreational Vehicles
    NHTSA did not regulate recreational vehicles as part of the Phase 1 
medium- and heavy-duty fuel consumption standards, although EPA did 
regulate them as vocational vehicles for GHG emissions.\69\ In the 
Phase 1 proposed rule, NHTSA interpreted ``commercial medium- and heavy 
duty'' to mean that recreational vehicles, such as motor homes, were 
not to be included within the program because recreational vehicles are 
not commercial. Oshkosh Corporation submitted a comment on the agency's 
interpretation stating that it did not match the statutory definition 
of ``commercial medium- and heavy-duty on-highway vehicle,'' which 
defines the phrase by GVWR and on-highway use. In the Phase 1 final 
rule NHTSA agreed with Oshkosh Corporation that the agency had 
effectively read words into the statutory definition. However, because 
recreational vehicles were not proposed in the Phase 1 proposed rule, 
they were not within the scope of the rulemaking and were excluded from 
NHTSA's standards.\70\ NHTSA expressed that it would address 
recreational vehicles in its next rulemaking.
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    \69\ EPA did not give special consideration to recreational 
vehicles because the CAA applies to heavy-duty motor vehicle 
generally.
    \70\ Motor homes are still subject to EPA's Phase 1 
CO2 standards for vocational vehicles.
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    NHTSA is proposing that recreational vehicles be included in the 
Phase 2 fuel consumption standards. As discussed above, EISA prescribes 
that NHTSA shall set average fuel economy standards for work trucks and 
commercial medium-duty or heavy-duty on-highway vehicles. ``Work 
truck'' means a vehicle that is rated between 8,500 and 10,000 lbs GVWR 
and is not an MDPV. ``Commercial medium- and heavy-duty on-road highway 
vehicle'' means an on-highway vehicle with a gross vehicle weight 
rating of 10,000 lbs or more.\71\ Based on the definitions in EISA, 
recreational vehicles would be regulated as class 2b-8 vocational 
vehicles. Excluding recreational vehicles from the NHTSA standards in 
Phase 2 could create illogical results, including treating similar 
vehicles differently. Moreover, including recreational vehicles under 
NHTSA regulations furthers the agencies' goal of one national program, 
as EPA regulations already cover recreational vehicles.
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    \71\ 49 U.S.C. 32901(a)(7).
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    NHTSA is proposing that recreational vehicles be included in the 
Phase 2 fuel consumption standards and that early compliance be allowed 
for manufacturers who want to certify during the Phase 1 period.\72\
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    \72\ NHTSA did not allow early compliance for one RV 
manufacturer in MY 2014 that is currently complying EPA's GHG 
standards.
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F. Other Issues

    In addition to the standards being proposed, this notice discusses 
several other issues related to those standards. It also proposes some 
regulatory provisions related to the Phase 1 program, as well as 
amendments related to other EPA and NHTSA regulations. These other 
issues are summarized briefly here and discussed in greater detail in 
later sections.
(1) Issues Related to Phase 2
(a) Natural Gas Engines and Vehicles
    This combined rulemaking by EPA and NHTSA is designed to regulate 
two separate characteristics of heavy duty vehicles: GHGs and fuel 
consumption. In the case of diesel or gasoline powered vehicles, there 
is a one-to-one relationship between these two characteristics. For 
alternatively fueled vehicles, which use no petroleum, the situation is 
different. For example, a natural gas vehicle that achieves 
approximately the same fuel efficiency as a diesel powered vehicle 
would emit 20 percent less CO2; and a natural gas vehicle 
with the same fuel efficiency as a gasoline vehicle would emit 30 
percent less CO2. Yet natural gas vehicles consume no 
petroleum. In Phase 1, the agencies balanced these facts by applying 
the gasoline and diesel CO2 standards to natural gas engines 
based on the engine type of the natural gas engine. Fuel consumption 
for these vehicles is then calculated according to their tailpipe 
CO2 emissions. In essence, this applies a one-to-one 
relationship between fuel efficiency and tailpipe CO2 
emissions for all vehicles, including natural gas vehicles. The 
agencies determined that this approach would likely create a small 
balanced incentive for natural gas use. In other words, it created a 
small incentive for the use of natural gas engines that appropriately 
balanced concerns about the climate impact methane emissions against 
other factors such as the energy security benefits of using domestic 
natural gas. See 76 FR 57123. We propose to maintain this approach for 
Phase 2. Note that EPA is also considering natural gas in a broader 
context of life cycle emissions, as described in Section XI.
(b) Alternative Refrigerants
    In addition to use of leak-tight components in air conditioning 
system

[[Page 40172]]

design, manufacturers could also decrease the global warming impact of 
refrigerant leakage emissions by adopting systems that use alternative, 
lower global warming potential (GWP) refrigerants, to replace the 
refrigerant most commonly used today, HFC-134a (R-134a). HFC-134a is a 
potent greenhouse gas with a GWP 1,430 times greater than that of 
CO2.
    Under EPA's Significant New Alternatives Policy (SNAP) Program,\73\ 
EPA has found acceptable, subject to use conditions, three alternative 
refrigerants that have significantly lower GWPs than HFC-134a for use 
in A/C systems in newly manufactured light-duty vehicles: HFC-152a, 
CO2 (R-744), and HFO-1234yf.\74\ HFC-152a has a GWP of 124, 
HFO-1234yf has a GWP of 4, and CO2 (by definition) has a GWP 
of 1, as compared to HFC-134a which has a GWP of 1,430.\75\ 
CO2 is nonflammable, while HFO-1234yf and HFC-152a are 
flammable. All three are subject to use conditions requiring labeling 
and the use of unique fittings, and where appropriate, mitigating 
flammability and toxicity. Currently, the SNAP listing for HFO-1234yf 
is limited to newly manufactured A/C systems in LD vehicles, whereas 
HFC-152a and CO2 have been found acceptable for all motor 
vehicle air conditioning applications, including heavy-duty vehicles.
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    \73\ Section 612(c) of the Clean Air Act requires EPA to review 
substitutes for class I and class II ozone-depleting substances and 
to determine whether such substitutes pose lower risk than other 
available alternatives. EPA is also required to publish lists of 
substitutes that it determines are acceptable and those it 
determines are unacceptable. See http://www.epa.gov/ozone/snap/refrigerants/lists/index.html, last accessed on March 5, 2015.
    \74\ Listed at 40 CFR part 82, subpart G.
    \75\ GWP values cited in this proposal are from the IPCC Fourth 
Assessment Report (AR4) unless stated otherwise. Where no GWP is 
listed in AR4, GWP values shall be determined consistent with the 
calculations and analysis presented in AR4 and referenced materials.
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    None of these alternative refrigerants can simply be ``dropped'' 
into existing HFC-134a air conditioning systems. In order to account 
for the unique properties of each refrigerant and address use 
conditions required under SNAP, changes to the systems will be 
necessary. Typically these changes will need to occur during a vehicle 
redesign cycle but could also occur during a refresh. For example, 
because CO2, when used as a refrigerant, is physically and 
thermodynamically very different from HFC-134a and operates at much 
higher pressures, a transition to this refrigerant would require 
significant hardware changes. A transition to A/C systems designed for 
HFO-1234yf, which is more thermodynamically similar to HFC-134a than is 
CO2, requires less significant hardware changes that 
typically include installation of a thermal expansion valve and could 
potentially require resized condensers and evaporators, as well as 
changes in other components. In addition, vehicle assembly plants 
require re-tooling in order to handle new refrigerants safely. Thus a 
change in A/C refrigerants requires significant engineering, planning, 
and manufacturing investments.
    EPA is not aware of any significant development of A/C systems 
designed to use alternative refrigerants in heavy-duty vehicles; \76\ 
however, all three lower GWP alternatives are in use or under various 
stages of development for use in LD vehicles. Of these three 
refrigerants, most manufacturers of LD vehicles have identified HFO-
1234yf as the most likely refrigerant to be used in that application. 
For that reason, EPA would anticipate that HFO-1234yf could be a 
primary candidate for refrigerant substitution in the HD market in the 
future if it is listed as an acceptable substitute under SNAP for HD A/
C applications. EPA has begun, but has not yet completed, our 
evaluation of the use of HFO-1234yf in HD vehicles. After EPA has 
conducted a full evaluation based on the SNAP program's comparative 
risk framework, EPA will list this alternative as either a) acceptable 
subject to use conditions or b) unacceptable if the risk of use in HD 
A/C systems is determined to be greater than that of the other 
currently or potentially available alternatives. EPA is also 
considering and evaluating additional refrigerant substitutes for use 
in motor vehicle A/C systems under the SNAP program. EPA welcomes 
comments related to industry development of HD A/C systems using lower-
GWP refrigerants.
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    \76\ To the extent that some manufacturers produce HD pickups 
and vans on the same production lines or in the same facilities as 
LD vehicles, some A/C system technology commonality between the two 
vehicle classes may be developing.
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    LD vehicle manufacturers are currently making investments in 
systems designed for lower-GWP refrigerants, both domestically and on a 
global basis. In support of the LD GHG rule, EPA projected a full 
transition of LD vehicles to lower-GWP alternatives in the United 
States by MY 2021. We expect the investment required to transition to 
ease over time as alternative refrigerants are adopted across all LD 
vehicles and trucks. This may occur in part due to increased 
availability of components and the continuing increases in refrigerant 
production capacity, as well as knowledge gained through experience. As 
lower-GWP alternatives become widely used in LD vehicles, some 
manufacturers may wish to also transition their HD vehicles. 
Transitioning could be advantageous for a variety of reasons including 
platform standardization and company environmental stewardship 
policies.
    Although manufacturers of HD vehicles may begin to transition to 
alternative refrigerants in the future, there is great uncertainty 
about when significant adoption of alternative refrigerants for HD 
vehicles might begin, on what timeline adoption might become 
widespread, and which refrigerants might be involved. Another factor is 
that the most likely candidate, HFO-1234yf, remains under evaluation 
and has not yet been listed under SNAP. For these reasons, EPA has not 
attempted to project any specific hypothetical scenarios of transition 
for analytical purposes in this proposed rule.
    Because future introduction of and transition to lower-GWP 
alternative refrigerants for HD vehicles may occur, EPA is proposing 
regulatory provisions that would be in place if and when such 
alternatives become available and manufacturers of HD vehicles choose 
to use them. These proposed provisions would also have the effect of 
easing the burden associated with complying with the lower-leakage 
requirements when a lower-GWP refrigerant is used instead of HFC-134a. 
These provisions would recognize that leakage of refrigerants would be 
relatively less damaging from a climate perspective if one of the 
lower-GWP alternatives is used. Specifically, EPA is proposing to allow 
a manufacturer to be ``deemed to comply'' with the leakage standard by 
using a lower-GWP alternative refrigerant. In order to be ``deemed to 
comply'' the vehicle manufacturer would need to use a refrigerant other 
than HFC-134a that is listed as an acceptable substitute refrigerant 
for heavy-duty A/C systems under SNAP, and defined under the LD GHG 
regulations at 40 CFR 86.1867-12(e). The refrigerants currently defined 
at 40 CFR 86.1867-12(e), besides HFC-134a, are HFC-152a, HFO-1234yf, 
and CO2. If a manufacturer chooses to use a lower-GWP 
refrigerant that is listed in the future as acceptable in 40 CFR part 
82, subpart G, but that is not identified in 40 CFR 86.1867-12(e), then 
the manufacturer could contact EPA about how to appropriately determine 
compliance with the leakage standard.
    EPA encourages comment on all aspects of our proposed approach to 
HD

[[Page 40173]]

vehicle refrigerant leakage and the potential future use of alternative 
refrigerants for HD applications. We specifically request comment on 
whether there should be additional provisions that could prevent or 
discourage manufacturers that transition to an alternative refrigerant 
from discontinuing existing, low-leak A/C system components and instead 
reverting to higher-leakage components.
    Recently, EPA proposed to change the SNAP listing for the 
refrigerant HFC-134a from acceptable (subject to use conditions) to 
unacceptable for use in A/C systems in new LD vehicles.\77\ EPA expects 
to take final action on this proposed change in listing status for HFC-
134a for use in new, light-duty vehicles in 2015. If the final action 
changes the status of HFC-134a to unacceptable, it would establish a 
future compliance date by which HFC-134a could no longer be used in A/C 
systems in newly manufactured LD vehicles; instead, all A/C systems in 
new LD vehicles would be required to use HFC-152a, HFO-1234yf, 
CO2, or any other alternative listed as acceptable for this 
use in the future. The current proposed rule does not address the use 
of HFC-134a in heavy-duty vehicles; however, EPA could consider a 
change of listing status for HFC-134a use in HD vehicles in the future 
if EPA determines that other alternatives are currently or potentially 
available that pose lower overall risk to human health and the 
environment.
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    \77\ See 79 FR 46126, August 6, 2014.
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(c) Small Business Issues
    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. See generally 5 U.S.C. Sections 601-612. The 
RFA analysis is discussed in Section XIV.
    Pursuant to Section 609(b) of the RFA, as amended by the Small 
Business Regulatory Enforcement Fairness Act (SBREFA), EPA also 
conducted outreach to small entities and convened a Small Business 
Advocacy Review Panel to obtain advice and recommendations of 
representatives of the small entities that potentially would be subject 
to the rule's requirements. Consistent with the RFA/SBREFA 
requirements, the Panel evaluated the assembled materials and small-
entity comments on issues related to elements of the IRFA. A copy of 
the Panel Report is included in the docket for this proposed rule.
    The agencies determined that the proposed Phase 2 regulations could 
have a significant economic impact on small entities. Specifically, the 
agencies identified four categories of directly regulated small 
businesses that could be impacted:

 Trailer Manufacturers
 Alternative Fuel Converters
 Vocational Chassis Manufacturers
 Glider Vehicle \78\ Assemblers

    \78\ Vehicles produced by installing a used engine into a new 
chassis are commonly referred to as ``gliders,'' ``glider kits,'' or 
``glider vehicles,''
---------------------------------------------------------------------------

    To minimize these impacts the agencies are proposing certain 
regulatory flexibilities--both general and category-specific. In 
general, we are proposing to delay new requirements for EPA GHG 
emission standards by one year and simplify certification requirements 
for small businesses. For the proposed trailers standards, small 
businesses would be required to comply with EPA's standards before 
NHTSA's fuel efficiency standards would begin. NHTSA does not believe 
that providing small businesses trailer manufacturers with an 
additional year of delay to comply with those fuel efficiency standards 
would provide beneficial flexibility. The agencies are also proposing 
the following specific relief:
     Trailers: Proposing simpler requirements for non-box 
trailers, which are more likely to be manufactured by small businesses; 
and making third-party testing easier for certification.
     Alternative Fuel Converters: Omitting recertification of a 
converted vehicle when the engine is converted and certified; reduced 
N2O testing; and simplified onboard diagnostics and delaying 
required compliance with each new standard by one model year.
     Vocational Chassis: Less stringent standards for certain 
vehicle categories.
     Glider Vehicle Assemblers: \79\ Exempt existing small 
businesses, but limit the small business exemption to a capped level of 
annual production (production in excess of the capped amount would be 
allowed, but subject to all otherwise applicable requirements including 
the Phase 2 standards).

    \79\ EPA is proposing to amend its rules applicable to engines 
installed in glider kits, a proposal which would affect emission 
standards not only for GHGs but for criteria pollutants as well. EPA 
is also proposing to clarify its requirements for certification and 
revise its definitions for glider manufacturers. NHTSA is also 
considering including gliders under its Phase 2 standards.
---------------------------------------------------------------------------

These flexibilities are described in more detail in Section XIV and in 
the Panel Report. The agencies look forward to comments and to feedback 
from the small business community before finalizing the rule and 
associated flexibilities to protect small businesses.
(d) Confidentiality of Test Results and GEM Inputs
    In accordance with Federal statutes, EPA does not release 
information from certification applications (or other compliance 
reports) that we determine to be confidential business information 
(CBI) under 40 CFR part 2. Consistent with the CAA, EPA does not 
consider emission test results to be CBI after introduction into 
commerce of the certified engine or vehicle. (However, we have 
generally treated test results as protected before the introduction 
into commerce date). For Phase 2, we expect to continue this policy and 
thus would not treat any test results or other GEM inputs as CBI after 
the introduction into commerce date as identified by the manufacturer. 
We request comment on this approach.
    We consider this issue to be especially relevant for tire rolling 
resistance measurements. Our understanding is that tire manufacturers 
typically consider such results as proprietary. However, under EPA's 
policy, tire rolling resistance measurements are not considered to be 
CBI and can be released to the public after the introduction into 
commerce date identified by the manufacturer. We request comment on 
whether EPA should release such data on a regular basis to make it 
easier for operators to find proper replacement tires for their 
vehicles.
    With regard to NHTSA's treatment of confidential business 
information, manufacturers must submit a request for confidentiality 
with each electronic submission specifying any part of the information 
or data in a report that it believes should be withheld from public 
disclosure as trade secret or other confidential business information. 
A form will be available through the NHTSA Web site to request 
confidentiality. NHTSA does not consider manufacturers to continue to 
have a business case for protecting pre-model report data after the 
vehicles contained within that report have been introduced into 
commerce.
(e) Delegated Assembly
    In EPA's existing regulations (40 CFR 1068.261), we allow engine 
manufacturers to sell or ship engines that are missing certain 
emission-related components if those components will be installed by 
the vehicle manufacturer. EPA has found this provision to work well for 
engine manufacturers and is proposing a new provision in 40 CFR

[[Page 40174]]

1037.621 that would provide a similar allowance for vehicle 
manufacturers to sell or ship vehicles that are missing certain 
emission-related components if those components will be installed by a 
secondary vehicle manufacturer. As conditions of this allowance 
manufacturers would be required to:
     Have a contractual obligation with the secondary 
manufacturer to complete the assembly properly and provide instructions 
about how to do so.
     Keep records to demonstrate compliance.
     Apply a temporary label to the incomplete vehicles.
     Take other reasonable steps to ensure the assembly is 
completed properly.
     Describe in its application for certification how it will 
use this allowance.
    We request comment on this allowance.
(2) Proposed Amendments to Phase 1 Program
    The agencies are proposing revisions to test procedures and 
compliance provisions used for Phase 1. These changes are described in 
Section XII. As a drafting matter, EPA notes that we are proposing to 
migrate the GHG standards for Class 2b and 3 pickups and vans from 40 
CFR 1037.104 to 40 CFR 86.1819-14. NHTSA is also proposing to amend 49 
CFR part 535 to make technical corrections to its Phase 1 program to 
better align with EPA's compliance approach, standards and 
CO2 performance results. In general, these changes are 
intended to improve the regulatory experience for regulated parties and 
also reduce agency administrative burden. More specifically, NHTSA 
proposes to change the rounding of its standards and performance values 
to have more significant digits. Increasing the number of significant 
digits for values used for compliance with NHTSA standards reduces 
differences in credits generated and overall credit balances for the 
NHTSA and EPA programs. NHTSA is also proposing to remove the 
petitioning process for off-road vehicles, clarify requirements for the 
documentation needed for submitting innovative technology requests in 
accordance with 40 CFR 1037.610 and 49 CFR 535.7, and add further 
detail to requirements for submitting credit allocation plans as 
specified in 49 CFR 535.9. Finally, NHTSA is adding the same record 
requirements that EPA currently requires to facilitate in-use 
compliance inspections. These changes are intended to improve the 
regulatory experience for regulated parties and also reduce agency 
administrative burden.
(3) Other Proposed Amendments to EPA Regulations
    EPA is proposing several amendments to regulations not directly 
related to the HD Phase 1 or Phase 2 programs, as detailed in Section 
XIII. For these amendments, there would not be corresponding changes in 
NHTSA regulations (since there are no such regulations relevant to 
those programs). Some of these relate directly to heavy-duty highway 
engines, but not to the GHG programs. Others relate to nonroad engines. 
This latter category reflects the regulatory structure EPA uses for its 
mobile source regulations, in which regulatory provisions applying 
broadly to different types of mobile sources are codified in common 
regulatory parts such as 40 CFR part 1068. This approach creates a 
broad regulatory structure that regulates highway and nonroad engines, 
vehicles, and equipment collectively in a common program. Thus, it is 
appropriate to include some proposed amendments to nonroad regulations 
in addition to the changes proposed only for highway engines and 
vehicles.
(a) Standards for Engines Used In Glider Kits
    EPA regulations currently allow used pre-2013 engines to be 
installed into new glider kits without meeting currently applicable 
standards. As described in Section XIV, EPA is proposing to amend our 
regulations to allow only engines that have been certified to meet 
current standards to be installed in new glider kits, with two 
exceptions. First, engines certified to earlier MY standards that were 
identical to the current model year standards may be used. Second, the 
small manufacturer allowance described in Section I.F.(1)(c) for glider 
vehicles would also apply for the engines used in the exempted glider 
kits.
(b) Re-Proposal of Nonconformance Penalty Process Changes
    Nonconformance penalties (NCPs) are monetary penalties established 
by regulation that allow a vehicle or engine manufacturer to sell 
engines that do not meet the emission standards. Manufacturers unable 
to comply with the applicable standard pay penalties, which are 
assessed on a per-engine basis.
    On September 5, 2012, EPA adopted final NCPs for heavy heavy-duty 
diesel engines that could be used by manufacturers of heavy-duty diesel 
engines unable to meet the current oxides of nitrogen (NOX) 
emission standard. On December 11, 2013 the U.S. Court of Appeals for 
the District of Columbia Circuit issued an opinion vacating that Final 
Rule. It issued its mandate for this decision on April 16, 2014, ending 
the availability of the NCPs for the current NOX standard, 
as well as vacating certain amendments to the NCP regulations due to 
concerns about inadequate notice. In particular, the amendments revise 
the text explaining how EPA determines when NCP should be made 
available. In this action, EPA is re-proposing most of these amendments 
to provide fuller notice and additional opportunity for public comment. 
They are discussed in Section XIV.
(c) Updates to Heavy-Duty Engine Manufacturer In-Use Testing 
Requirements
    EPA and manufacturers have gained substantial experience with in-
use testing over the last four or five years. This has led to important 
insights in ways that the test protocol can be adjusted to be more 
effective. We are accordingly proposing to make changes to the 
regulations in 40 CFR part 86, subparts N and T.
(d) Extension of Certain 40 CFR Part 1068 Provisions to Highway 
Vehicles and Engines
    As part of the Phase 1 GHG standards, we applied the exemption and 
importation provisions from 40 CFR part 1068, subparts C and D, to 
heavy-duty highway engines and vehicles. We also specified that the 
defect reporting provisions of 40 CFR 1068.501 were optional. In an 
earlier rulemaking, we applied the selective enforcement auditing under 
40 CFR part 1068, subpart E (75 FR 22896, April 30, 2010). We are 
proposing in this rule to adopt the rest of 40 CFR part 1068 for heavy-
duty highway engines and vehicles, with certain exceptions and special 
provisions.
    As described above, we are proposing to apply all the general 
compliance provisions of 40 CFR part 1068 to heavy-duty engines and 
vehicles. We propose to also apply the recall provisions and the 
hearing procedures from 40 CFR part 1068 for highway motorcycles and 
for all vehicles subject to standards under 40 CFR part 86, subpart S. 
We also request comment on applying the rest of the provisions from 40 
CFR part 1068 to highway motorcycles and to all vehicles subject to 
standards under 40 CFR part 86, subpart S.
    EPA is proposing to update and consolidate the regulations related 
to

[[Page 40175]]

formal and informal hearings in 40 CFR part 1068, subpart G. This would 
allow us to rely on a single set of regulations for all the different 
categories of vehicles, engines, and equipment that are subject to 
emission standards. We also made an effort to write these regulations 
for improved readability.
    We are also proposing to make a number of changes to part 1068 to 
correct errors, to add clarification, and to make adjustments based on 
lessons learned from implementing these regulatory provisions.
(e) Amendments to Engine and Vehicle Test Procedures in 40 CFR Parts 
1065 and 1066
    EPA is proposing several changes to our engine testing procedures 
specified in 40 CFR part 1065. None of these changes would 
significantly impact the stringency of any standards.
(f) Amendments Related to Marine Diesel Engines in 40 CFR Parts 1042 
and 1043
    EPA's emission standards and certification requirements for marine 
diesel engines under the Clean Air Act and the act to Prevent Pollution 
from Ships are identified in 40 CFR parts 1042 and 1043, respectively. 
EPA is proposing to amend these regulations with respect to continuous 
NOX monitoring and auxiliary engines, as well as making 
several other minor revisions.
(g) Amendments Related to Locomotives in 40 CFR Part 1033
    EPA's emission standards and certification requirements for 
locomotives under the Clean Air Act are identified in 40 CFR part 1033. 
EPA is proposing to make several minor revisions to these regulations.
(4) Other Proposed Amendments to NHTSA Regulations
    NHTSA is proposing to amend 49 CFR parts 512 and 537 to allow 
manufacturers to submit required compliance data for the Corporate 
Average Fuel Economy program electronically, rather than submitting 
some reports to NHTSA via paper and CDs and some reports to EPA through 
its VERIFY database system. The agencies are coordinating on an 
information technology project which will allow manufacturers to submit 
pre-model, mid-model and final model year reports through a single 
electronic entry point. The agencies anticipate that this would reduce 
the reporting burden on manufacturers by up to fifty percent. The 
amendments to 49 CFR part 537 would allow reporting to an electronic 
database (i.e. EPA's VERIFY system), and the amendments to 49 CFR part 
512 would ensure that manufacturer's confidential business information 
would be protected through that process. This proposal is discussed 
further in Section XIII.

II. Vehicle Simulation, Engine Standards and Test Procedures

A. Introduction and Summary of Phase 1 and Phase 2 Regulatory 
Structures

    This Section II. A. gives an overview of our vehicle simulation 
approach in Phase 1 and our proposed approach for Phase 2; our separate 
engine standards for tractor and vocational chassis in Phase 1 and our 
proposed separate engine standards in Phase 2; and it describes our 
engine and vehicle test procedures that are common among the tractor 
and vocational chassis standards. Section II. B. discusses in more 
detail how the Phase 2 proposed regulatory structure would approach 
vehicle simulation, separate engine standards, and test procedures. 
Section II. C. discusses the proposed vehicle simulation computer 
program, GEM, in further detail and Section II. D. discusses the 
proposed separate engine standards and engine test procedure. See 
Sections III through VI for discussions of the proposed test procedures 
that are unique for tractors, trailers, vocational chassis, and HD 
pickup trucks and vans.
    In Phase 1 the agencies adopted a regulatory structure that 
included a vehicle simulation procedure for certifying tractors and the 
chassis of vocational vehicles. In contrast, the agencies adopted a 
full vehicle chassis dynamometer test procedure for certifying complete 
heavy-duty pickups and vans. The Phase 1 vehicle simulation procedure 
for tractors and vocational chassis requires regulated entities to use 
GEM to simulate and certify tractors and vocational vehicle chassis. 
This program is provided free of charge for unlimited use and may be 
downloaded by anyone from EPA's Web site: http://www.epa.gov/otaq/climate/gem.htm. This computer program mathematically combines vehicle 
component test results with other pre-determined vehicle attributes to 
determine a vehicle's levels of fuel consumption and CO2 
emissions for certification purposes. For Phase 1, the required inputs 
to this computer program include, for tractors, vehicle aerodynamics 
information, tire rolling resistance, and whether or not a vehicle is 
equipped with certain lightweight high-strength steel or aluminum 
components, a tamper-proof speed limiter, or tamper-proof idle 
reduction technologies. The sole input for vocational vehicles, was 
tire rolling resistance. For Phase 1 the computer program's inputs did 
not include engine test results or attributes related to a vehicle's 
powertrain, namely, its transmission, drive axle(s), or tire 
revolutions per mile. Instead, for Phase 1 the agencies specified a 
generic engine and powertrain within the computer program, and for 
Phase 1 these cannot be changed by a program user.\80\
---------------------------------------------------------------------------

    \80\ These attributes are recognized in Phase 1 innovative 
technology provisions at 40 CFR 1037.610.
---------------------------------------------------------------------------

    The full vehicle chassis dynamometer test procedure for heavy-duty 
pickups and vans substantially mirrors EPA's existing light-duty 
vehicle test procedure. EPA also set separate engine so-called cap 
standards for methane (CH4) and nitrous oxide 
(N2O) (essentially capping current emission levels). 
Compliance with the CH4 and N2O standards is 
measured by an engine dynamometer test procedure, which EPA based on 
our existing heavy-duty engine emissions test procedure with small 
adaptations. EPA also set hydro-fluorocarbon refrigerant leakage design 
standards for cabin air conditioning systems in tractors, pickups, and 
vans, which are evaluated by design rather than a test procedure.
    In this action the agencies are proposing a similar regulatory 
structure for Phase 2, along with a number of revisions that are 
intended to more accurately evaluate vehicle and engine technologies' 
impact on real-world fuel efficiency and GHG emissions. Thus, we are 
proposing to continue the same certification test regime for heavy duty 
pickups and vans, and for the CH4 and N2O) 
standards, as well as tractor and pickup and van air conditioning 
leakage standards. EPA is also proposing to control vocational vehicle 
air conditioning leakage and to use that same certification procedure.
    We are proposing to continue the vehicle simulation procedure for 
certifying tractors and vocational chassis, and we are proposing a new 
regulatory program to regulate some of the trailers hauled by tractors. 
The agencies are proposing the use of an equation based on the vehicle 
simulation procedure for trailer certification. In addition, we are 
proposing a simplified option for trailer certification that would not 
require testing to be undertaken by manufacturers to generate inputs 
for the equation. We are also proposing to continue separate fuel 
consumption and CO2 standards for the engines installed

[[Page 40176]]

in tractors and vocational chassis, and we are proposing to continue to 
require a full vehicle chassis dynamometer test procedure for 
certifying complete heavy-duty pickups and vans. As described in 
Section II.B.(2)(b), the agencies see important advantages to 
maintaining separate engines standards, such as improved compliance 
assurance and better control during transient engine operation.
    The vehicle simulation procedure necessitates some testing of 
engines and vehicle components to generate the inputs for the 
simulation tool; that is, to generate the inputs to the model which is 
used to certify tractors and vocational chassis. For trailers, some 
testing may be performed in order to generate values that are input 
into the simulation-based compliance equations. In addition to the 
testing needed for this purpose for the inputs used in the Phase 1 
standards, the agencies are proposing in Phase 2 that manufacturers 
conduct additional required and optional engine and vehicle component 
tests, and proposing the additional procedures for conducting these 
input tests. These include a new required engine test procedure that 
provides steady-state engine fuel consumption and CO2 inputs 
to represent the actual engine in a vehicle. In addition, we are 
seeking comment on a newly developed engine test procedure that 
captures transient engine performance for use in the vehicle simulation 
computer program. As described in detail in the draft RIA Chapter 4, we 
are proposing to require entering attributes that describe the 
vehicle's transmission type, and its number of gears and gear ratios. 
We are proposing an optional powertrain test procedure that would 
provide inputs to override the agencies' simulated engine and 
transmission in the vehicle simulation computer program. We are 
proposing to require entering attributes that describe the vehicle's 
drive axle(s) type and axle ratio. We are also seeking comment on an 
optional axle efficiency test procedure that would override the 
agencies' simulated axle in the vehicle simulation computer program. To 
improve the measurement of aerodynamic components performance, we are 
proposing a number of improvements to the aerodynamic coast-down test 
procedure and data analysis, and we are seeking comment on a newly 
developed constant speed aerodynamic test procedure. We are proposing 
that the aerodynamic test procedures for tractors be applicable to 
trailers when a regulated entity opts to use the GEM-based compliance 
equation. Additional details about all these test procedures are found 
in the draft RIA Chapter 3.
    We are further proposing to significantly expand the number of 
technologies that are recognized in the vehicle simulation computer 
program. These include recognizing lightweight thermoplastic materials, 
automatic tire inflation systems, advanced cruise control systems, 
workday idle reduction systems, and axle configurations that decrease 
the number of drive axles. We are seeking comment on recognizing 
additional technologies such as high efficiency glass and low global 
warming potential air conditioning refrigerants as post-process 
adjustments to the simulation results.
    To better reflect real-world operation, we are also proposing to 
revise the vehicle simulation computer program's urban (55 mph) and 
rural (65 mph) highway duty cycles to include changes in road grade. We 
are seeking comment on whether or not these duty cycles should also 
simulate driver behavior in response to varying traffic patterns. We 
are proposing a new duty cycle to capture the performance of 
technologies that reduce the amount of time a vehicle's engine is at 
idle during a workday when the vehicle is not moving. And to better 
recognize that vocational vehicle powertrains are configured for 
particular applications, we are proposing to further subdivide the 
vocational chassis category into three different vehicle speed 
categories. This is in addition to the Phase 1 subdivision by three 
weight categories. The result is nine proposed vocational vehicle 
subcategories for Phase 2. The agencies are also proposing to subdivide 
the highest weight class of tractors into two separate categories to 
recognize the unique configurations and technology applicability to 
``heavy-haul'' tractors.
    Even though we are proposing to include engine test results as 
inputs into the vehicle simulation computer model, we are also 
proposing to continue the Phase 1 separate engine standard regulatory 
structure by proposing separate engine fuel consumption and 
CO2 standards for engines installed in tractors and 
vocational chassis. For these separate engine standards, we are 
proposing to continue to use the Phase 1 engine dynamometer test 
procedure, which was adapted substantially from EPA's existing heavy-
duty engine emissions test procedure. However, we are proposing to 
modify the weighting factors of the tractor engine's 13-point steady-
state duty cycle to better reflect real-world engine operation and to 
reflect the trend toward operating engines at lower engine speeds 
during tractor cruise speed operation. Further details on the proposed 
Phase 2 separate engine standards are provided below in Section II. D. 
In today's action EPA is proposing to continue the separate engine cap 
standards for methane (CH4) and nitrous oxide 
(N2O) emissions.
(1) Phase 1 Vehicle Simulation Computer Program (GEM)
    For Phase 1 EPA developed a vehicle simulation computer program 
called, ``Greenhouse gas Emissions Model'' or ``GEM.'' GEM was created 
for Phase 1 for the exclusive purpose of certifying tractors and 
vocational vehicle chassis. GEM is similar in concept to a number of 
other commercially available vehicle simulation computer programs. See 
76 FR 57116, 57146, and 57156-57157. However, GEM is also unique in a 
number of ways.
    Similar to other vehicle simulation computer programs, GEM combines 
various vehicle inputs with known physical laws and justified 
assumptions to predict vehicle performance for a given period of 
vehicle operation. For Phase 1 GEM's vehicle inputs include vehicle 
aerodynamics information (for tractors), tire rolling resistance, and 
whether or not a vehicle is equipped with lightweight materials, a 
tamper-proof speed limiter, or tamper-proof idle reduction 
technologies. Other vehicle and engine characteristics were fixed as 
defaults that cannot be altered by the user. These defaults included 
tabulated data of engine fuel rate as a function of engine speed and 
torque (i.e. ``engine fuel maps''), transmissions, axle ratios, and 
vehicle payloads. For tractors, Phase 1 GEM models the vehicle pulling 
a standard trailer. For vocational vehicles, Phase 1 GEM includes a 
fixed aerodynamic drag coefficient and vehicle frontal area.
    GEM uses the same physical principles as many other existing 
vehicle simulation models to derive governing equations which describe 
driveline components, engine, and vehicle. These equations are then 
integrated in time to calculate transient speed and torque. Some of the 
justified assumptions in GEM include average energy losses due to 
friction between moving parts of a vehicle's powertrain; the logical 
behavior of an average driver shifting from one transmission gear to 
the next; ad speed limit assumptions such as 55 miles per hour for 
urban highway driving and 65 miles per hour for rural interstate 
highway driving. The sequence of the GEM vehicle simulation can be 
visualized by imagining a human driver initially sitting in a parked 
running tractor or vocational vehicle. The driver then proceeds to 
drive the vehicle over a prescribed route that

[[Page 40177]]

includes three distinct patterns of driving: Stop-and-go city driving, 
urban highway driving, and rural interstate highway driving. The driver 
then exits the highway and brings the vehicle to a stop. This concludes 
the vehicle simulation.
    Over each of the three driving patterns or ``duty cycles,'' GEM 
simulates the driver's behavior of pressing the accelerator, coasting, 
or applying the brakes. GEM also simulates how the engine operates as 
the gears in the vehicle's transmission are shifted and how the 
vehicle's weight, aerodynamics, and tires resist the forward motion of 
the vehicle. GEM combines the driver behavior over the duty cycles with 
the various vehicle inputs and other assumptions to determine how much 
fuel must be consumed to move the vehicle forward at each point during 
the simulation. For each of the three duty cycles, GEM totals the 
amount of fuel consumed and then divides that amount by the product of 
the miles travelled and tons of payload carried. The tons of payload 
carried are specified by the agencies for each vehicle type and weight 
class. For each regulatory subcategory of tractor and vocational 
vehicle (e.g., sleeper cab tractor, day cab tractor, small vocational 
vehicle, large vocational vehicle, etc.), GEM applies prescribed 
weighting factors to each of the three duty cycles to represent the 
fraction of city, urban highway, and rural highway driving that would 
be typical of each subcategory. After completing all the cycles, GEM 
outputs a single composite result for the vehicle, expressed as both 
fuel consumed in gallon per 1,000 ton-miles (for NHTSA standards) and 
an equivalent amount of CO2 emitted in grams per ton-mile 
(for EPA standards). These are the vehicle's GEM results that are used 
along with other information to demonstrate the vehicle complies with 
the applicable standards. This other information includes the annual 
sales volume of the vehicle (family) simulated in GEM, plus information 
on emissions credits that may be generated or used as part of that 
vehicle family's certification.
    While GEM is similar to other vehicle simulation computer programs, 
GEM is also unique in a number of ways. First, GEM was designed 
exclusively for regulated entities to certify tractor and vocational 
vehicle chassis to the agencies' respective fuel consumption and 
CO2 emissions standards. For GEM to be effective for this 
purpose, the inputs to GEM include only information related to vehicle 
components and attributes that significantly impact vehicle fuel 
efficiency and CO2 emissions. For example, these include 
vehicle aerodynamics, tire rolling resistance, and whether or not a 
vehicle is equipped with lightweight materials, a tamper-proof speed 
limiter, or tamper-proof idle reduction technologies. On the other 
hand, other attributes such as those related to a vehicle's suspension, 
frame strength, or interior features are not included, where these 
might be included in other commercially available vehicle simulation 
programs for other purposes. Furthermore, the simulated driver behavior 
and the duty cycles cannot be changed in the GEM executable program. 
This helps to ensure that all vehicles are simulated and certified in 
the same way, but this does preclude GEM from being of much use as a 
research tool for exploring the effects of driver behavior and of 
different duty cycles.
    To allow for public comment, GEM is available free of charge for 
unlimited use, and the GEM source code is open source. That is, the 
programming source code of GEM is freely available upon request for 
anyone to examine, manipulate, and generally use without restriction. 
In contrast commercially available vehicle simulation programs are 
generally not free and open source. Additional details of GEM are 
included in Chapter 4 of the RIA.
    As part of Phase 1, the agencies conducted a peer review of GEM 
version 1.0, which was the version released for the Phase 1 
proposal.81 82 In response to this peer review and comments 
from stakeholders, EPA has made changes to GEM. The current version of 
GEM is v2.0.1, which is the version applicable for the Phase 1 
standards.\83\
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    \81\ See 76 FR 57146-57147.
    \82\ U.S. Environmental Protection Agency. ``Peer Review of the 
Greenhouse Gas Emissions Model (GEM) and EPA's Response to 
Comments.'' EPA-420-R-11-007. Last access on November 24, 2014 at 
http://www.epa.gov/otaq/climate/documents/420r11007.pdf.
    \83\ See EPA's Web site at http://www.epa.gov/otaq/climate/gem.htm for the Phase 1 GEM revision dated May 2013, made to 
accommodate a revision to 49 CFR 535.6(b)(3).
---------------------------------------------------------------------------

(2) Phase 1 Engine Standards and Engine Test Procedure
    For Phase 1 the agencies set separate engine fuel consumption and 
CO2 standards for engines installed in tractors and 
vocational vehicle chassis. EPA also set separate engine cap standards 
for methane (CH4) and nitrous oxide (N2O) 
emissions. These Phase 1 engine standards are specified in terms of 
brake-specific (g/hp-hr) fuel, CO2, CH4 and 
N2O emissions limits. For these separate engine standards, 
the agencies adopted an engine dynamometer test procedure, which was 
built substantially from EPA's existing heavy-duty engine emissions 
test procedure. Since the test procedure already specified how to 
measure fuel consumption, CO2 and CH4, few 
changes were needed to employ the test procedure for purposes of the 
Phase 1 standards. For Phase 1 the test procedure was modified to 
specify how to measure N2O.
    The duty cycles from EPA's existing heavy-duty emissions test 
procedure were used in a somewhat unique way for Phase 1. In EPA's non-
GHG engine emissions standards, heavy-duty engines must meet brake-
specific standards for emissions of total oxides of nitrogen 
(NOX), particulate mass (PM), non-methane hydrocarbon 
(NMHC), and carbon monoxide (CO). These standards must be met by all 
engines both over a 13-mode steady-state duty cycle called the 
``Supplemental Emissions Test'' (SET) and over a composite of a cold-
start and a hot-start transient duty cycle called the ``Federal Test 
Procedure'' (FTP). In contrast, for Phase 1 the agencies require that 
engines specifically installed in tractors meet fuel efficiency and 
CO2 standards over only the SET but not the FTP. This 
requirement was intended to reflect that tractor engines typically 
operate near steady-state conditions versus transient conditions. See 
76 FR 57159. The agencies adopted the converse for engines installed in 
vocational vehicles. That is, these engines must meet fuel efficiency 
and CO2 standards over only the hot-start FTP but not the 
SET. This requirement was intended to reflect that vocational vehicle 
engines typically operate under transient conditions versus steady-
state conditions (76 FR 57178). For both tractor and vocational vehicle 
engines in Phase 1, EPA set CH4 and N2O emissions 
cap standards over the cold-start and hot-start FTP only and not over 
the SET duty cycle. See Section II. D. for details on how we propose to 
modify the engine test procedure for Phase 2.

B. Phase 2 Proposed Regulatory Structure

    For Phase 2, the agencies are proposing to modify the regulatory 
structure used for Phase 1. Note that we are not proposing to apply the 
new Phase 2 regulatory structure for compliance with the Phase 1 
standards. The structure used to demonstrate compliance with the Phase 
1 standards will remain as finalized in the Phase 1 regulation. The 
modifications we are proposing are consistent with the agencies' Phase 
1 commitments to consider a range of regulatory approaches during the 
development of

[[Page 40178]]

future regulatory efforts (76 FR 57133), especially for vehicles not 
already subject to full vehicle chassis dynamometer testing. For 
example, we committed to consider a more sophisticated approach to 
vehicle testing to more completely capture the complex interactions 
within the total vehicle, including the engine and powertrain 
performance. We also intended to consider the potential for full 
vehicle certification of complete tractors and vocational chassis using 
a chassis dynamometer test procedure. We also considered chassis 
dynamometer testing of complete tractors and vocational chassis as a 
complementary approach for validating a more complex vehicle simulation 
approach. We also committed to consider the potential for a regulatory 
program for some of the trailers hauled by tractors. After considering 
these various approaches, the agencies are proposing a structure in 
which regulated tractor and vocational chassis manufacturers would 
additionally enter engine and powertrain-related inputs into GEM, which 
was not allowed in Phase 1.
    For trailer manufacturers, which would be subject to first-time 
standards under the proposal, we are also proposing GEM-based 
certification. However, we are proposing a simplified structure that 
would allow certification without the manufacturers actually running 
GEM. More specifically, the agencies have developed a simple equation 
that uses the same trailer inputs as GEM to represent the emission 
impacts of aerodynamic improvements, tire improvements, and weight 
reduction. As described in Chapter 2.10.6 of the draft RIA, these 
equations have nearly perfect correlation with GEM so that they can be 
used instead of GEM without impacting stringency.
    We are proposing both required and optional test procedures to 
provide these additional GEM inputs. We are also proposing to 
significantly expand the number of technologies recognized in GEM. 
Further, we are proposing to modify the GEM duty cycles and to further 
subdivide the vocational vehicle subcategory to better represent real-
world vehicle operation. In contrast to these changes, we are proposing 
to maintain essentially the same chassis dynamometer test procedure for 
certifying complete heavy-duty pickups and vans.
(1) Other Structures Considered
    To follow-up on the commitment to consider other approaches, the 
agencies spent significant time and resources in evaluating six 
different options for demonstrating compliance with the proposed Phase 
2 standards. These six options include full vehicle chassis dynamometer 
testing, full vehicle simulation, and vehicle simulation in combination 
with powertrain testing, engine testing, engine electronic controller 
and/or transmission electronic controller testing. The agencies 
evaluated these options in terms of the capital investment required of 
regulated manufacturers to conduct the testing and/or simulation, the 
cost per test, the accuracy of the simulation, and the challenges of 
validating the results. Other considerations included the 
representativeness to the real world behavior, maintaining existing 
Phase 1 certification approaches that are known to work well, enhancing 
the Phase 1 approaches that could use improvements, the alignment of 
test procedures for determining GHG and non-GHG emissions compliance, 
and the potential to circumvent the intent of the test procedures.
    Chassis dynamometer testing is used extensively in the development 
and certification of light-duty vehicles. It also is used in Phase 1 
for complete Class 2b/3 pickups and vans, as well as for certain 
incomplete vehicles (at the manufacturer's option). The agencies 
considered chassis dynamometer testing more broadly as a heavy-duty 
fuel efficiency and GHG certification option because chassis 
dynamometer testing has the ability to evaluate a vehicle's performance 
in a manner that most closely resembles the vehicle's in-use 
performance. Nearly all of the fuel efficiency technologies can be 
evaluated on a chassis dynamometer, including the vehicle systems' 
interactions that depend on the behavior of the engine, transmission, 
and other vehicle electronic controllers. One challenge associated with 
application of wide-spread heavy-duty chassis testing is the small 
number of heavy-duty chassis test sites that are available in North 
America. As discussed in draft RIA Chapter 3, the agencies were only 
able to locate 11 heavy-duty chassis test sites. However, we have seen 
an increased interest in building new sites since issuing the Phase 1 
Final Rule. For example, EPA is currently building a heavy-duty chassis 
dynamometer with the ability to test up to 80,000 pound vehicles at the 
National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan.
    Nevertheless, the agencies continue to be concerned about proposing 
a chassis test procedure for certifying tractors or vocational chassis 
due to the initial cost of a new test facility and the large number of 
heavy duty tractor and vocational chassis variants that could require 
testing. We have also concluded that for heavy-duty tractors and 
vocational chassis, there can be increased test-to-test variability 
under chassis dynamometer test conditions. First, the agencies 
recognize that such testing requires expensive, specialized equipment 
that is not widely available. The agencies estimate that it would vary 
from about $1.3 to $4.0 million per new test site depending on existing 
facilities.\84\ In addition, the large number of heavy-duty vehicle 
configurations would require significant amounts of testing to cover 
the sector. For example, for Phase 1 tractor manufacturers typically 
certified several thousand variants of one single tractor model. 
Finally, EPA's evaluation of heavy-duty chassis dynamometer testing has 
shown that the variation of chassis test results is greater than light-
duty testing, up to 3 percent worse, based on our sponsored testing at 
Southwest Research Institute.\85\ Although the agencies are not 
proposing chassis dynamometer certification of tractors and vocational 
chassis, we believe such an approach could be appropriate in the future 
for some heavy duty vehicles if more test facilities become available 
and if the agencies are able to address the large number of vehicle 
variants that might require testing. We request comment on whether or 
not a chassis dynamometer test procedure should be required in lieu of 
the vehicle simulation approach we are proposing. Note, as discussed in 
Section II. C. (4) (b) that we are also proposing a modest complete 
tractor heavy-duty chassis dynamometer test program only for monitoring 
complete tractor fuel efficiency trends over the implementation 
timeframe of the Phase 1 and proposed Phase 2 standards.
---------------------------------------------------------------------------

    \84\ 03-19034 TASK 2 Report-Paper 03-Class8_hil_DRAFT, September 
30, 2013.
    \85\ GEM Validation, Technical Research Workshop, San Antonio, 
December 10-11, 2014.
---------------------------------------------------------------------------

    Another option considered for certification involves testing a 
vehicle's powertrain in a modified engine dynamometer test facility. In 
this case the engine and transmission are installed in a laboratory 
test facility and a dynamometer is connected to the output shaft of the 
transmission. GEM or an equivalent vehicle simulation computer program 
is then used to control the dynamometer to simulate vehicle speeds and 
loads. The step-by-step test procedure considered for this option was 
initially developed as an option for hybrid powertrain testing for 
Phase 1. A key advantage of the powertrain test approach is that it

[[Page 40179]]

directly measures the effectiveness of the engine, the transmission, 
and the integration of the two. Engines and transmissions are 
particularly challenging to simulate within a computer program like GEM 
because engines and transmissions installed in vehicles today are 
actively and interactively controlled by their own sophisticated 
electronic controls. These controls already contain essentially their 
own vehicle simulation programs that GEM would then have to otherwise 
simulate.
    We believe that the capital investment impact for powertrain 
testing on manufacturers could be manageable for those that already 
have heavy-duty engine dynamometer test cells. We have found that in 
general medium-duty powertrains can be tested in heavy-duty engine test 
cells. EPA has successfully completed such a test facility conversion 
at the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, 
Michigan. Southwest Research Institute (SwRI) in San Antonio, Texas has 
completed a similar test cell conversion. Oak Ridge National Laboratory 
in Oak Ridge, Tennessee recently completed construction of a new and 
specialized heavy heavy-duty powertrain dynamometer facility. EPA also 
contracted SwRI to evaluate North America's current capabilities for 
powertrain testing in the heavy-duty sector and the cost of installing 
a new powertrain cell that would meet agency requirements.\86\ Results 
indicated that one supplier currently has this capability. We estimate 
that the upgrade costs to an existing engine test facility are on the 
order of $1.2 million, and a new test facility in an existing building 
are on the order of $1.9 million. We also estimate that current 
powertrain test cells that could be upgraded to measure CO2 
emissions would cost approximately $600,000. For manufacturers or 
suppliers wishing to contract out such testing, SwRI estimated that a 
cost of $150,000 would provide about one month of powertrain testing 
services. Once a powertrain test cell is fully operational, we estimate 
that for a nominal powertrain family (i.e. one engine family tested 
with one transmission family), the cost for powertrain installation, 
testing, and data analysis would be $68,972.
---------------------------------------------------------------------------

    \86\ 03-19034 TASK 2 Report-Paper 03-Class8_hil_DRAFT, September 
30, 2013.
---------------------------------------------------------------------------

    Since the Phase 1 Final Rule, the agencies and other stakeholders 
have completed significant new work toward refining the powertrain test 
procedure itself. The proposed regulations provide details of the 
refined powertrain test procedure. See 40 CFR 1037.550.
    Furthermore, the agencies have worked with key transmission 
suppliers to develop an approach to define transmission families. 
Coupled with the agencies existing definitions of engine families (40 
CFR 1036.230 and 1037.230), we are proposing an approach to define a 
powertrain family in 40 CFR 1037.231. We request comment on what key 
attributes should be considered when defining a transmission family.
    We believe that a combination of a robust powertrain family 
definition, a refined powertrain test procedure and a refined GEM could 
become an optimal certification path that leverages the accuracy of 
powertrain testing along with the versatility of GEM, which alleviates 
the need to test a large number of vehicle or powertrain variants. To 
balance the potential advantages of this approach with the fact that it 
has never been used for vehicle certification in the past, we are 
proposing to allow this approach as an optional certification path, as 
described in Section II.B.(2)(b). To be clear, we are not proposing to 
require powertrain testing at this time, but because this testing would 
recognize additional technologies that are not recognized directly in 
GEM (even as proposed to be amended), we are factoring its use into our 
stringency considerations for vocational chassis. We request comment on 
whether the agencies should consider requiring powertrain testing more 
broadly.
    Another regulatory structure option considered was engine-only 
testing over the GEM duty cycles over a range of simulated vehicle 
configurations. This approach would use GEM to generate engine duty 
cycles by simulating a range of transmissions and other vehicle 
variations. These engine duty cycles then would be programmed into a 
separate controller of a dynamometer connected to an engine's output 
shaft. Unlike the chassis dynamometer or powertrain dynamometer 
approaches, which could have significant test facility construction or 
modification costs, this approach has little capital investment impact 
on manufacturers because the majority already have engine test 
facilities to both develop engines and to certify engines to meet both 
the non-GHG standards and the Phase 1 fuel efficiency and GHG 
standards. The agencies also have been investigating this approach as 
an alternative way to generate data that could be used to represent an 
engine in GEM. Because this approach captures engine performance under 
transient conditions, this approach could be an improvement over our 
proposed Phase 2 approach of representing an engine in GEM with only 
steady-state operating data. Details of this alternative are described 
in draft RIA. Because this approach is new and has never been used for 
vehicle development or certification, we are not proposing requiring 
its use as part of the Phase 2 certification process. However, we 
encourage others to investigate this new approach in detail, and we 
request comment on whether or not the agencies should replace our 
proposed steady-state operation representation of the engine in GEM 
with this alternative approach.
    Additional certification options considered included simulating the 
engine, transmission, and vehicle using a computer program while having 
the actual transmission electronic controller connected to the computer 
running the vehicle simulation program. The output of the simulation 
would be an engine cycle that would be used to test the engine in an 
engine test facility. Just as in the engine-only test procedure, this 
procedure would not require significant capital investment in new test 
facilities. An additional benefit of this approach would be that the 
actual transmission controller would be determining the transmission 
gear shift points during the test, without a transmission manufacturer 
having to reveal their proprietary transmission control logic. This 
approach comes with some technical challenges, however. The model would 
have to become more complex and tailored to each transmission and 
controller to make sure that the controller would operate properly when 
it is connected to a computer instead of a transmission. Some examples 
of the transmission specific requirements would be simulating all the 
Controller Area Network (CAN) communication to and from the 
transmission controller and the specific sensor responses both through 
simulation and hardware. The vehicle manufacturer would have to be 
responsible for connecting the transmission controller to the computer, 
which would require a detailed verification process to ensure it is 
operating properly. Determining full compliance with this test 
procedure would be a significant challenge for the regulatory agencies 
because the agencies would have to be able to replicate each of the 
manufacturer's unique interfaces between the transmission controller 
and computer running GEM.
    Finally, the agencies considered full vehicle simulation plus 
separate engine standards, which is the proposed

[[Page 40180]]

approach for Phase 2. These are discussed in more detail in the 
following sections.
(2) Proposed Regulatory Structure
    Under the proposed structure, tractor and vocational chassis 
manufacturers would be required to provide engine, transmission, drive 
axle(s) and tire radius inputs into GEM. For Phase 1, GEM used default 
values for all of these, which limited the types of technologies that 
could be recognized by GEM to show compliance with the standards. We 
are proposing to significantly expand GEM to account for a wider range 
of technological improvements that would otherwise need to be 
recognized through some off-cycle crediting approach. These include 
improvements to the driver controller (i.e., the simulation of the 
driver), engines, transmissions, and axles. Additional technologies 
that would now be recognized in GEM also include lightweight 
thermoplastic materials, automatic tire inflation systems, advanced 
cruise control systems, engine stop-start idle reduction systems, and 
axle configurations that decrease the number of drive axles. The 
agencies are also proposing to maintain separate engine standards. As 
described below, we see advantages to having both engine-based and 
vehicle-based standards. Moreover, the advantages described here for 
full vehicle simulation do not necessarily correspond to disadvantages 
for engine testing or vice versa.
(a) Advantages of Full Vehicle Simulation
    The agencies' primary purpose in developing fuel efficiency and GHG 
emissions standards is to increase the use of vehicle technologies that 
improve fuel efficiency and decrease GHG emissions. Under the Phase 1 
tractor and vocational chassis standards, there is no regulatory 
incentive for manufacturers to adopt new engine, transmission or axle 
technologies because GEM was not configured to recognize these 
technologies uniquely. By recognizing such technologies in GEM under 
Phase 2, the agencies would be creating a regulatory incentive to 
improve engine, transmission, and axle technologies to improve fuel 
efficiency and decrease GHG emissions. In its 2014 report, NAS also 
recognized the benefits of full vehicle simulation and recommended that 
Phase 2 incorporate such an approach.
    We anticipate that the proposed Phase 2 approach would create three 
new specific regulatory incentives. First, vehicle manufacturers would 
have an incentive to use the most efficient engines. Since GEM would no 
longer use the agency default engine in simulation manufacturers would 
have their own more efficient engines recognized in GEM. Under Phase 1, 
engine manufacturers have a regulatory incentive to design efficient 
engines, but vehicle manufacturers do not have a similar regulatory 
incentive to use efficient engines in their vehicles. Second, the 
proposed approach would create incentives for both engine and vehicle 
manufacturers to design engines and vehicles to work together to ensure 
that engines actually operate as much as possible near their most 
efficient points. This is because Phase 2 GEM would allow the vehicle 
manufactures to use specific transmission, axle, and tire 
characteristics as inputs, thus having the ability to directly 
recognize many powertrain integration benefits, such as downspeeding, 
and different transmission architectures and technologies, such as 
automated manual transmissions, automatic transmissions,, and different 
numbers of transmission gears, transmission gear ratios, axle ratios 
and tire revolutions per mile. No matter how well designed, all engines 
have speed and load operation points with differing fuel efficiency and 
GHG emissions. The speed and load point with the best fuel efficiency 
(i.e., peak thermal efficiency) is commonly known as the engine's 
``sweet spot''. The more frequently an engine operates near its sweet 
spot, the better the vehicle's fuel efficiency will be. In Phase 1, a 
vehicle manufacturer receives no regulatory credit for designing its 
vehicle to operate closer to the sweet spot because Phase 1 GEM does 
not model the actual engine, transmission, axle, or tire revolutions 
per mile. Third, the proposed approach would recognize improvements to 
the overall efficiency of the drivetrain including the axle. The 
proposed version of GEM would recognize the benefits of different axle 
technologies including axle lubricants, and reducing axle losses such 
as by enabling three-axle vehicles to deliver power to only one rear 
axle through the proposed post-simulation adjustment approach (see 
Chapter 4.5 of the Draft RIA).
    In addition to providing regulatory incentives to use more fuel 
efficient technologies, expanding GEM to recognize engine and other 
powertrain component improvements would also provide important 
flexibility to vehicle manufacturers. The flexibility to effectively 
trade engine and other component improvements against other vehicle 
improvements would allow vehicle manufacturers to better optimize their 
vehicles to achieve the lowest cost for specific customers. Vehicle 
manufacturers could use this flexibility to reduce overall compliance 
costs and/or address special applications where certain vehicle 
technologies are not practical. The agencies considered in Phase 1 
allowing the exchange of emission certification credits generated 
relative to the separate brake-specific (g/hp-hr) engine standards and 
credits generated relative to the vehicle standards (g/ton-mile). 
However, we did not allow this in Phase 1 due in part to concerns about 
the equivalency of credits generated relative to different standards, 
with different units of measure and different test procedures. The 
proposed approach for Phase 2 would eliminate these concerns because 
engine and other vehicle component improvements would be evaluated 
relative to the same vehicle standard in GEM. This also means that 
under the proposed Phase 2 approach there is no need to consider 
allowing emissions credit trading between engine-generated and vehicle-
generated credits because vehicle manufacturers are directly credited 
by the combination of engine and vehicle technologies they choose to 
install in each vehicle. Therefore, this approach eliminates one of the 
concerns about continuing separate engine standards, which was that a 
separate engine standard and a full vehicle standard were somehow 
mutually exclusive. That is not the case. In fact, in the next section 
we describe how we propose to continue the separate engine standard 
along with recognizing engine performance at the vehicle level. The 
agencies acknowledge that maintaining a separate engine standard would 
limit flexibility in cases where a vehicle manufacturer wanted to use 
less efficient engines and make up for them using more efficient 
vehicle technologies. However, as described below, we see important 
advantages to maintaining a separate engine standard, and we believe 
they more than justify the reduced flexibility.
    There could be disadvantages to the proposed approach, however. As 
is discussed in Section II.B.(2)(b), some of the disadvantages can be 
addressed by maintaining separate engine standards, which we are 
proposing to do. We request comment on other disadvantages such as 
those discussed below.
    One disadvantage of the proposed approach is that it would increase 
complexity for the vehicle standards. For example, vehicle 
manufacturers would be required to conduct additional engine tests and 
track additional GEM

[[Page 40181]]

inputs for compliance purposes. However, we believe that most of the 
burden associated with this increased complexity would be an infrequent 
burden of engine testing and updating information systems to track 
these inputs.
    Because GEM measures performance over specific duty cycles intended 
to represent average operation of vehicles in-use, the proposed 
approach might also create an incentive to optimize powertrains and 
drivetrains for the best GEM performance rather than the best in-use 
performance for a particular application. This is always a concern when 
selecting duty cycles for certification. There will always be 
instances, however infrequent, where specific vehicle applications will 
operate differently than the duty cycles used for certification. The 
question is would these differences force manufacturers to optimize 
vehicles to the certification duty cycles in a way that decreases fuel 
efficiency and increases GHG emissions in-use? We believe that the 
certification duty cycles would not prevent manufacturers from properly 
optimizing vehicles for customer fuel efficiency. First, the impact of 
the certification duty cycles would be relatively small because they 
affect only a small fraction of all vehicle technologies. Second, the 
emission averaging and fleet average provisions mean that the proposed 
regulations would not require all vehicles to meet the standards. 
Vehicles exceeding a standard over the duty cycles because they are 
optimized for different in-use operation can be offset by other 
vehicles that perform better over the certification duty cycles. Third, 
vehicle manufacturers would also have the ability to lower such a 
vehicle's measured GHG emissions by adding technology that would 
improve fuel efficiency both over the certification duty cycles and in-
use. The proposed standards are not intended to be at a stringency 
where manufacturers would be expected to apply all technologies to all 
vehicles. Thus, there should be technologies available to add to 
vehicle configurations that initially fail to meet the Phase 2 proposed 
standards. Fourth, we are proposing further sub-categorization of the 
vocational vehicle segment, tripling the number of subcategories within 
this segment from 3 to 9. These 9 subcategories would divide each of 
the 3 Phase 1 weight categories into 3 additional vehicle speed 
categories. Each of the 3 speed categories would have unique duty cycle 
weighting factors to recognize that different vocational chassis are 
configured for different vehicle speed applications. Furthermore, we 
are proposing 9 unique standards for each of the subcategories. This 
further subdivision better recognizes technologies' performance under 
the conditions for which the vocational chassis was configured to 
operate. This further decreases the potential of the certification duty 
cycles to encourage manufacturers to configure vocational chassis 
differently than the optimum configuration for specific customers' 
applications. Finally, as required by Section 202 (a) (1) and 202 (d) 
of the CAA, EPA is proposing specific GHG standards which would have to 
be met in-use.
    One disadvantage of our proposed full vehicle simulation approach 
is the potential requirement for engine manufacturers to disclose 
otherwise proprietary information to vehicle manufacturers who install 
their engines. Under the proposed approach, vehicle manufacturers would 
need to know details about engine performance long before production, 
both for compliance planning purposes, as well as for the actual 
submission of applications for certification. Moreover, vehicle 
manufacturers would need to know details about the engine's performance 
that are generally not publicly available--specifically the detailed 
fuel consumption of an engine over many steady-state operating points. 
We request comment on whether or not such information could be used to 
``reverse engineer'' intellectual property related to the proprietary 
design of engines, and what steps the agencies could take to address 
this.
    The agencies also generally request comment on the advantages and 
disadvantages of the proposed structure that would require vehicle 
manufacturers to provide additional inputs into GEM to represent the 
engine, transmission, drive axle(s), and loaded tire radius.
(b) Advantages of Separate Engine Standards
    For engines installed in tractors and vocational vehicle chassis, 
we are proposing to maintain separate engine standards for fuel 
consumption and GHG emissions in Phase 2 for both SI and CI engines. 
Moreover, we are proposing new more stringent engine standards for CI 
engines. While the vehicle standards alone are intended to provide 
sufficient incentive for improvements in engine efficiency, we continue 
to see important advantages to maintaining separate engine standards 
for both SI and CI engines. The agencies believe the advantages 
described below are critical to fully achieve the goals of the NHTSA 
and EPA standards.
    First, EPA has a robust compliance program based on engine testing. 
For the Phase 1 standards, we applied the existing criteria pollutant 
compliance program to ensure that engine efficiency in actual use 
reflected the improvements manufacturers claimed during certification. 
With engine-based standards, it is straightforward to hold engine 
manufacturers accountable by testing in-use engines. If the engines 
exceed the standards, they can be required to correct the problem or 
perform other remedial actions. Without separate engine standards in 
Phase 2, addressing in-use compliance becomes more subjective. Having 
clearly defined compliance responsibilities is important to both the 
agencies and to the market.
    Second, engine standards for CO2 and fuel efficiency 
force engine manufacturers to optimize engines for both fuel efficiency 
and control of non-CO2 emissions at the same engine 
operating points. This is of special concern for NOX 
emissions, given the strong counter-dependency between engine-out 
NOX emissions and fuel consumption. By requiring engine 
manufacturers to comply with both NOX and CO2 
standards using the same test procedures, the agencies ensure that 
manufacturers include technologies that can be optimized for both 
rather than alternate calibrations that would trade NOX 
emissions against fuel consumption depending how the engine or vehicle 
is tested. In the past, when there was no CO2 engine 
standard and no steady-state NOX standard, some 
manufacturers chose this dual calibration approach instead of investing 
in technology that would allow them to simultaneously reduce both 
CO2 and NOX.
    Third, engine fuel consumption can vary significantly between 
transient operation and steady-state operation, and we are proposing 
only steady-state engine operating data as the required engine input 
into GEM for both tractor and vocational chassis certification. Because 
vocational vehicles can spend significant operation under transient 
engine operation, the separate engine standard for engines installed in 
vocational vehicles is a transient test. Therefore, the separate engine 
standard for vocational engines provides the only measure of engine 
fuel consumption and CO2 emissions under transient 
conditions. Without a transient engine test we would not be able to 
ensure control of fuel consumption and CO2 emissions under 
transient engine conditions.

[[Page 40182]]

    It is worth noting that these first three advantages are also 
beneficial for the marketplace. In these respects, the separate engine 
standards allow each manufacturer to be confident that its competitors 
are playing by the same rules. The agencies believe that the absence of 
a separate engine standard would leave open the possibility that a 
manufacturer might choose to cut corners with respect to in-use 
compliance margins, the NOX-CO2 tradeoff, or 
transient controls. Concerns that competitors might take advantage of 
this can put a manufacturer in a difficult situation. On the other hand 
knowing that the agencies are ensuring all manufacturers are complying 
fully can eliminate these concerns.
    Finally, the existence of meaningful separate engine standards 
allows the agencies to exempt certain vehicles from some or all of the 
vehicle standards and requirements without forgoing the engine 
improvements. A good example of this is the off-road vehicle exemption 
in 40 CFR 1037.631 and 49 CFR 535.3, which exempts vehicles ``intended 
to be used extensively in off-road environments'' from the vehicle 
requirements. The engines used in such vehicles must still meet the 
engine standards of 40 CFR 1036.108 and 49 CFR 535.5(d). The agencies 
see no reason why efficient engines cannot be used in such vehicles. 
However, without separate engine standards, there would be no way to 
require them to be efficient.
    In the past there has been some confusion about the Phase 1 
separate engine standards somehow preventing the recognition of engine-
vehicle optimization that vehicle manufacturers perform to minimize a 
vehicle's overall fuel consumption. It was not the existence of 
separate engine standards that prevented recognition of this 
optimization. Rather it was that the agencies did not allow 
manufacturers to enter inputs into GEM that characterized unique engine 
performance. For Phase 2 we are proposing to require that manufacturers 
input such data because we intend for GEM to recognize this engine-
vehicle optimization. The continuation of separate engine standards in 
Phase 2 does not undermine in any way the recognition of this 
optimization in GEM.
    The agencies request comment on the advantages and disadvantages of 
the proposal to maintain separate engine standards and to increase the 
stringency of the CI engine standards. We would also welcome suggested 
alternative approaches that would achieve the same goals. It is 
important to emphasize that the agencies see the advantages of separate 
engine standards as fundamental to the success of the program and do 
not expect to adopt alternative approaches that fall short of these 
goals.
    Note that commenters opposing separate engine standards should also 
be careful distinguish between concerns related to the stringency of 
the proposed engine standards, from concerns inherent to any separate 
engine standards whatsoever. When meeting with manufacturers prior to 
this proposal, the agencies heard many concerns about the potential 
problems with separate engines standards that were actually concerns 
about separate engine standards that are too stringent. However, we see 
these as two different issues. The agencies do recognize that setting 
engine standards at a high stringency could increase the cost to comply 
with the vehicle standard, if lower-cost vehicle technologies are 
available. Additionally, the agencies recognize that setting engine 
standards at a high stringency may promote the use of large-
displacement engines, which have inherent heat transfer and efficiency 
advantages over smaller displacement engines over the engine test 
cycles, though a smaller engine may be more efficient for a given 
vehicle application. Thus we encourage commenters supporting the 
separate engine standards to address the possibility of unintended 
consequences such as these.

C. Proposed Vehicle Simulation Model--Phase 2 GEM 87
---------------------------------------------------------------------------

    \87\ The specific version of GEM used to develop the proposed 
standards, and which we propose to use for compliance purposes is 
also known as GEM 3.0.
---------------------------------------------------------------------------

    For tractors and vocational vehicle chassis, the agencies propose 
that manufacturers would be required to meet vehicle-based standards, 
and certification to these standards would be facilitated by the 
required use of the vehicle simulation computer program called, 
``Greenhouse gas Emissions Model'' or ``GEM.'' GEM was created for 
Phase 1 for the exclusive purpose of certifying tractors and vocational 
chassis. The agencies are proposing to modify GEM and to require 
vehicle manufacturers to provide additional inputs into GEM to 
represent the engine, transmission, drive axle(s), and loaded tire 
radius. For Phase 1, GEM used agency default values for all of these 
parameters. Under the proposed approach for Phase 2, vehicle 
manufacturers would be able to use these technologies, plus additional 
technologies to demonstrate compliance with the applicable standards. 
The additional technologies include lightweight thermoplastic 
materials, automatic tire inflation systems, advanced cruise control 
systems, engine stop-start idle reduction systems, and axle 
configurations that decrease the number of drive axles to comply with 
the standards.
(1) Description of the Proposed Modifications to GEM
    As explained above, GEM is a computer program that was originally 
developed by EPA specifically for manufacturers to use to certify to 
the Phase 1 tractor and vocational chassis standards. GEM 
mathematically combines the results of vehicle component test 
procedures with other vehicle attributes to determine a vehicle's 
certified levels of fuel consumption and CO2 emissions. For 
Phase 1 the required inputs to GEM include vehicle aerodynamics 
information, tire rolling resistance, and whether or not a vehicle is 
equipped with certain lightweight high-strength steel or aluminum 
components, a tamper-proof speed limiter, or tamper-proof idle 
reduction technologies for tractors. The vocational vehicle inputs to 
GEM for Phase 1 only included tire rolling resistance. For Phase 1 the 
GEM's inputs did not include engine test results or attributes related 
to a vehicle's powertrain; namely, its transmission, drive axle(s), or 
loaded tire radius. Instead, for Phase 1 the agencies specified a 
generic engine and powertrain within GEM, and for Phase 1 these cannot 
be changed in GEM.
    For this proposal GEM has been modified and validated against a set 
of experimental data that represents over 130 unique vehicle variants. 
EPA believes this new version of GEM is an accurate and cost-effective 
alternative to measuring fuel consumption and CO2 over a 
chassis dynamometer test procedure. Some of the key proposed 
modifications would necessitate required and optional vehicle component 
test procedures to generate additional GEM inputs. The results of which 
would provide additional inputs into GEM. These include a new required 
engine test procedure to provide steady-state engine fuel consumption 
and CO2 inputs into GEM. We are also seeking comment on a 
newly developed engine test procedure that also captures transient 
engine performance for use in GEM. We are proposing to require inputs 
that describe the vehicle's transmission type, and its number of gears 
and gear ratios. We are proposing an optional powertrain test procedure 
that would provide inputs to override

[[Page 40183]]

the agencies' simulated engine and transmission in GEM. We are 
proposing to require inputs that describe the vehicle's drive axle(s) 
type (e.g., 6x4 or 6x2) and axle ratio. We are also seeking comment on 
an optional axle efficiency test procedure to override the agencies' 
simulated axle in GEM. We are proposing to significantly expand the 
number of technologies that are recognized in GEM. These include 
recognizing lightweight thermoplastic materials, automatic tire 
inflation systems, advanced cruise control systems, engine stop-start 
idle reduction systems, and axle configurations that decrease the 
number of drive axles. We are seeking comment on recognizing (outside 
of the GEM simulation) additional technologies such as high efficiency 
glass and low global warming potential air conditioning refrigerants. 
To better reflect real-world operation, we are also proposing to revise 
the vehicle simulation computer program's urban and rural highway duty 
cycles to include changes in road grade. We are seeking comment on 
whether or not these duty cycles should also simulate driver behavior 
in response to varying traffic patterns. We are proposing a new duty 
cycle to capture the performance of technologies that reduce the amount 
of time a vehicle's engine is at idle during a workday when the vehicle 
is not moving. And to better recognize that vocational vehicle 
powertrains are configured for particular applications, we are 
proposing to further subdivide the vocational chassis category into 
three different vehicle speed categories, where GEM weights the 
individual duty cycles' results of each of the speed categories 
differently. Section 4.2 of the RIA details all these modifications. 
This section briefly describes some of the key proposed modifications 
to GEM.
(a) Simulating Engines for Vehicle Certification
    Before describing the proposed approach for Phase 2, this section 
first reviews how engines are simulated for vehicle certification in 
Phase 1. GEM for Phase 1 simulates the same generic engine for any 
vehicle in a given regulatory subcategory with a data table of steady-
state engine fuel consumption mass rates (g/s) versus a series of 
steady-state engine output shaft speeds (revolutions per minute, rpm) 
and loads (torque, N-m). This data table is also sometimes called a 
``fuel map'' or an ``engine map'', although the term ``engine map'' can 
mean other kinds of data in different contexts. The engine speeds in 
this map range from idle to maximum governed speed and the loads range 
from engine motoring (negative load) to the maximum load of an engine. 
When GEM runs over a vehicle duty cycle, this data table is linearly 
interpolated to find a corresponding fuel consumption mass rate at each 
engine speed and load that is demanded by the simulated vehicle 
operating over the duty cycle. The fuel consumption mass rate of the 
engine is then integrated over each duty cycle in GEM to arrive at the 
total mass of fuel consumed for the specific vehicle and duty cycle. 
Under Phase 1, manufacturers were not allowed to input their own engine 
fuel maps to represent their specific engines in the vehicle being 
simulated in GEM. Because GEM was programmed with fixed engine fuel 
maps for Phase 1 that all manufacturers had to use, interpolation of 
the tables themselves over each of the three different GEM duty cycles 
did not have to closely represent how an actual engine might operate 
over these three different duty cycles.
    In contrast, for Phase 2 we are proposing a new and required 
steady-state engine dynamometer test procedure for manufacturers to use 
to generate their own engine fuel maps to represent each of their 
engine families in GEM. The proposed Phase 2 approach is consistent 
with the 2014 NAS Phase 2 First Report recommendation.\88\ To validate 
this approach we compared the results from 28 individual engine 
dynamometer tests. Three different engines were used to generate this 
data, and these engines were produced by two different engine 
manufacturers. One engine was tested at three different power ratings 
(13 liters at 410, 450 & 475 hp) and one engine was tested at two 
ratings (6.7 liters at 240 and 300 hp), and other engine with one 
rating (15 liters 455 hp) service classes. For each engine and rating 
our proposed steady-state engine dynamometer test procedure was 
conducted to generate an engine fuel map to represent that particular 
engine in GEM. Next, with GEM we simulated various vehicles in which 
the engine could be installed. For each of the GEM duty cycles we are 
proposing, namely the urban local (ARB Transient), urban highway with 
road grade (55 mph), and rural highway with road grade (65 mph) duty 
cycles, we determined the GEM result for each vehicle configuration, 
and we saved the engine output shaft speed and torque information that 
GEM created to interpolate the steady-state engine map for each vehicle 
configuration. We then had this same engine output shaft speed and 
torque information programmed into an engine dynamometer controller, 
and we had each engine perform the same duty cycles that GEM demanded 
of the simulated version of the engine. We then compared the GEM 
results based on GEM's linear interpolation of the engine maps to the 
measured engine dynamometer results. We concluded that for the 55 mph 
and 65 mph duty cycles, GEM's interpolation of the steady-state data 
tables was sufficiently accurate versus the measured results. This is 
an outcome one would reasonably expect because even with changes in 
road grade, the 55 mph and 65 mph duty cycles do not demand rapid 
changes in engine speed or load. The 55 mph and 65 mph duty cycles are 
nearly steady-state, as far as engine operation is concerned, just like 
the engine maps themselves. However, for the ARB Transient cycle, we 
observed a consistent bias, where GEM consistently under-predicted fuel 
consumption and CO2 emissions. This low bias over the 28 
engine tests ranged from 4.2 percent low to 7.8 percent low. The mean 
was 5.9 percent low and the 90th percentile value was 7.1 percent low. 
These observations are consistent with the fact that engines generally 
operate less efficiently under transient conditions than under steady-
state conditions.
---------------------------------------------------------------------------

    \88\ National Academy of Science. ``Reducing the Fuel 
Consumption and GHG Emissions of Medium- and Heavy-Duty Vehicles, 
Phase Two, First Report.'' 2014. Recommendation 3.8.
---------------------------------------------------------------------------

    A number of reasons explain this consistent trend. For example, 
under rapidly changing engine conditions, it is generally more 
challenging to program an engine electronic controller to respond with 
optimum fuel injection rate and timing, exhaust gas recirculation valve 
position, variable nozzle turbo-charger vane position and other set 
points than it is to do so under steady-state conditions. Transient 
heat and mass transfer within the intake, exhaust, and combustion 
chambers also tend to increase turbulence and enhance energy loss to 
engine coolant during transient operation. Furthermore, because exhaust 
emissions control is more challenging under transient engine operation, 
engineering tradeoffs sometimes need to be made between fuel efficiency 
and transient emissions control. Special calibrations are typically 
also required to control smoke and manage exhaust temperatures during 
transient operation for a transient cycle. We are confident that this 
low bias in GEM would continue to exist well into the future if we were 
to test additional engines. However, with the range of the results that 
we have generated so far we are somewhat less confident in proposing a 
single numerical value to correct for this effect

[[Page 40184]]

over the ARB Transient duty cycle. Based on the data we have collected 
so far, we are conservatively proposing to apply a 5.0 percent 
correction factor to GEM's ARB Transient results. Note that adjustment 
would be applied internal to GEM, and no manufacturer input or action 
would be needed. This means that for GEM fuel consumption and 
CO2 emissions results that were generated using the steady-
state engine map representation of an engine in GEM, a 1.05 multiplier 
would be applied to only the ARB Transient result. If a manufacturer 
chooses to perform the optional powertrain test procedure we are 
proposing, then this 1.05 multiplier to the ARB Transient would not 
apply (since we know of no bias in that optional powertrain test). For 
the same reason, if we were to replace the proposed steady-state engine 
map in GEM with the alternative approach detailed in draft RIA, then 
this 1.05 multiplier would not apply. We request comment on whether or 
not this single value multiplier is an appropriate way to correct 
between steady-state and transient engine fuel consumption and 
CO2 emissions, specifically over the ARB Transient duty 
cycle. We also request comment on the magnitude of the multiplier 
itself. For example, for the proposal we have chosen a 1.05 multiplier 
correction value because it is conservative but still near the mean 
bias we observed. However, for the tests we have conducted on current 
technology engines, a 1.05 multiplier would mean that about one half of 
these engines would be penalized by powertrain testing (or if we 
utilized the alternative engine approach) because the actual measured 
transient impact would be slightly higher than 5 percent. While these 
tests were performed on current technology powertrains rather than the 
kind of optimized powertrains we project for Phase 2, these results 
raise still some concerns for us. Because we intend to incentivize 
powertrain testing and not penalize it, and because we also encourage 
constructive comments on the alternative approach, we also request 
comment on increasing the magnitude of this ARB Transient multiplier 
toward the higher end of the biases we observed. For example, we 
request comment on increasing the proposed multiplier from 1.05 to 
1.07, which is close to the 90th percentile of the results we have 
collected so far. Using this higher multiplier would imply that only 
about 10 percent of engines powertrain tested or tested under the 
alternative approach would show worse fuel consumption over the ARB 
Transient than its respective representation in a steady-state data 
table in GEM. This would mean that the remaining 90 percent of engines 
powertrain tested would receive additional credit in GEM. Using 1.07 
would essentially guarantee that any powertrain that was significantly 
more efficient than current powertrains would receive meaningful credit 
for the improvement. However, this value would also provide credits for 
many current powertrain designs.
    We also request comment as to whether or not there might be certain 
vehicle sub-categories or certain small volume vocational chassis, 
where using the Phase 1 approach of using a generic engine table might 
be more appropriate. We also request comment as to whether or not the 
agencies should provide default generic engine maps in GEM for Phase 2 
and allow manufacturers to optionally override these generic maps with 
their own maps, which would be generated according to our proposed 
engine dynamometer steady-state test procedure.
(b) Simulating Human Driver Behavior and Transmissions for Vehicle 
Certification
    GEM for Phase 1 simulates the same generic human driver behavior 
and manual transmission for all vehicles. The simulated driver responds 
to changes in the target vehicle speed of the duty cycles by changing 
the simulated positions of the vehicle's accelerator pedal, brake 
pedal, clutch pedal, and gear shift lever. For simplicity in Phase 1 
the GEM driver shifted at ideal points for maximum fuel efficiency and 
the manual transmission was simulated as an ideal transmission that did 
not have any delay time (i.e., torque interruption) between gear shifts 
and did not have any energy losses associated with clutch slip during 
gear shifts.
    In GEM for Phase 2 we are proposing to allow manufacturers to 
select one of three types of transmissions to represent the 
transmission in the vehicle they are certifying: manual transmission, 
automated manual transmission, and automatic transmission. We are 
currently in the process of developing a dual-clutch transmission type 
in GEM, but we are not proposing to allow its use in Phase 2 at this 
time. Because production of heavy-duty dual clutch transmissions has 
only begun in the past few months, we do not yet have any experimental 
data to validate our GEM simulation of this transmission type. 
Therefore, we are requesting comment on whether or not there is 
additional data available for such validation. Should such data be 
provided in comments, we may finalize GEM for Phase 2 with a fourth 
transmission types for dual clutch transmissions. We are also 
considering an option to address dual clutch transmissions through a 
post-simulation adjustment as discussed in Chapter 4 of the draft RIA.
    In the proposed modifications to GEM, the driver behavior and the 
three different transmission types are simulated in the same basic 
manner as in Phase 1, but each transmission type features a unique 
combination of driver behavior and transmission responses that match 
both the driver behavior and the transmission responses we measured 
during vehicle testing of these three transmission types. In general 
the transmission gear shifting strategy for all of the transmissions is 
designed to shift the transmission so that it is always in the most 
efficient gear for the current vehicle demand, while staying within 
certain limits to prevent unrealistically high frequency shifting. Some 
examples of these limits are torque reserve limits (which vary as 
function of engine speed), minimum time-in-gear and minimum fuel 
efficiency benefit to shift to the next gear. Some of the differences 
between the three transmission types include a driver ``double-
clutching'' during gear shifts of the manual transmission only, and 
``power shifts'' and torque converter torque multiplication, slip, and 
lock-up in automatic transmissions only. Refer to Chapter 4 of the 
draft RIA for a more detailed description of these different simulated 
driver behaviors and transmission types.
    We considered an alternative approach where transmission 
manufacturers would provide vehicle manufacturers with detailed 
information about their automated transmissions' proprietary shift 
strategies for representation in GEM. NAS also recommended this 
approach.\89\ The advantages of this approach include a more realistic 
representation of a transmission in GEM and potentially the recognition 
of additional fuel efficiency improving strategies to achieve 
additional fuel consumption and CO2 emissions reductions. 
However, there are a number of technical and policy disadvantages of 
this approach. One disadvantage is that it would require the

[[Page 40185]]

disclosure of proprietary information between competing companies 
because some vehicle manufacturers produce their own transmissions and 
also use other suppliers' transmissions. There are technical challenges 
too. For example, some transmission manufacturers have upwards of 40 
different shift strategies programmed into their transmission 
controllers. Depending on in-use driving conditions, some of which are 
not simulated in GEM (e.g., changing payloads, changing tire traction) 
a transmission controller can change its shift strategy. Representing 
dynamic switching between multiple proprietary shift strategies would 
be extremely complex to simulate in GEM. Furthermore, if the agencies 
were to propose requiring transmission manufacturers to provide shift 
strategy inputs for use in GEM, then the agencies would have to devise 
a compliance strategy to monitor in-use shift strategies, including a 
driver behavior model that could be implemented as part of an in-use 
shift strategy test. This too would be very complex. If manufacturers 
were subject to in-use compliance requirements of their transmission 
shift strategies, this could lead to restricting the use of certain 
shift strategies in the heavy-duty sector, which would in turn 
potentially lead to sub-optimal vehicle configurations that do not 
improve fuel efficiency or adequately serve the wide range of customer 
needs; especially in the vocational vehicle segment. For example, if 
the agencies were to restrict the use of more aggressive and less fuel 
efficient in-use shift strategies that are used only under heavy loads 
and steep grades, then certain vehicle applications would need to 
compensate for this loss of capability through the installation of 
over-sized and over-powered engines that are subsequently poorly 
matched and less efficient under lighter load conditions. Therefore, as 
a policy consideration to preserve vehicle configuration choice and to 
preserve the full capability of heavy-duty vehicles today, the agencies 
are intentionally not requiring transmission manufacturers to submit 
detailed proprietary shift strategy information to vehicle 
manufacturers to input into GEM. This is not unlike Phase 1, where 
unique transmission and axle attributes were not recognized at all in 
GEM. Instead, the agencies are proposing that vehicle manufacturers 
choose from among the three transmission types that the agencies have 
already developed, validated, and programmed into GEM. The vehicle 
manufacturers would then enter into GEM their particular transmission's 
number of gears and gear ratios. The agencies recognize that designing 
GEM like this would exclude a potentially significant reduction from 
the GEM simulation. However, if a manufacturer chooses to use the 
optional powertrain test procedure, then the agencies' transmission 
types in GEM would be overridden by the actual data collected during 
the powertrain test, which would recognize the actual benefit of the 
transmission. Note that the optional powertrain test procedure is only 
advantageous to a vehicle manufacturer if an actual transmission is 
more efficient and has a superior shift strategy compared to its 
respective transmission type simulated in GEM.
---------------------------------------------------------------------------

    \89\ Transportation Research Board 2014. ``Reducing the Fuel 
Consumption and Greenhouse Gas Emissions of Medium- and Heavy-Duty 
Vehicles, Phase Two.'' (``Phase 2 First Report'') Washington, DC, 
The National Academies Press. Cooperative Agreement DTNH22-12-00389. 
Available electronically from the National Academy Press Web site at 
http://www.nap.edu/catalog.php?record_id=12845 (last accessed 
December 2, 2014). Recommendation 3.7.
---------------------------------------------------------------------------

(c) Simulating Axles for Vehicle Certification
    In GEM for Phase 1 the axle ratio of the primary drive axle and the 
energy losses assumed in the simulated axle itself were the same for 
all vehicles. For Phase 2 we are proposing that the vehicle 
manufacturer input into GEM the axle ratio of the primary drive axle. 
This input would recognize the intent to operate the engine at a 
particular engine speed when the transmission is operating in its 
highest transmission gear; especially for the 55 mph and 65 mph duty 
cycles in GEM. This input facilitates GEM's recognition of vehicle 
designs that take advantage of operating the engine at the lowest 
possible engine speeds. This is commonly known as ``engine down-
speeding'', and the general rule-of-thumb for heavy-duty engines is 
that for every 100 rpm decrease in engine speed, there can be about a 1 
percent decrease in fuel consumption and CO2 emissions. 
Therefore, it is important that GEM allow this value to be input by the 
vehicle manufacturer. Axle ratio is also straightforward to verify 
during any in-use compliance audit.
    We are proposing a fixed axle ratio energy efficiency of 95.5 
percent at all speeds and loads, but are requesting comment on whether 
this pre-specified efficiency is reasonable. However, we know that this 
efficiency actually varies as a function of axle speed and axle input 
torque. Therefore, as an exploratory test we have created a modified 
version of GEM that has as an input a data table of axle efficiency as 
a function of axle speed and axle torque. The modified version of GEM 
subsequently interpolates this table over each of the duty cycles to 
represent a more realistic axle efficiency at each point of each duty 
cycle. We have also created a draft axle ratio efficiency test 
procedure that requires the use of a dynamometer test facility. This 
procedure includes the use of a baseline fuel-efficient synthetic gear 
lubricant manufactured by BASF.\90\ This baseline will be used to gauge 
improvements in axle design and lubricants. The draft test procedure 
includes initial feedback that we have received from axle manufacturers 
and our own engineering judgment. Refer to 40 CFR 1037.560 of the Phase 
2 proposed regulations, which contain this draft test procedure. This 
test procedure could be used to generate the results needed to create 
the axle efficiency data table for input into GEM. However, the 
agencies have not yet conducted experimental tests of axles using this 
draft test procedure so we are reluctant to propose this test procedure 
as either mandatory or even optional at this time. Rather we request 
comment as to whether or not we should finalize this test procedure and 
either require its use or allow its use optionally to determine an axle 
efficiency data table as an input to GEM, which would override the 
fixed axle efficiency we are proposing at this time. We also request 
comment on improving or otherwise refining the test procedure itself. 
Note that the agencies believe that allowing the GEM default axle 
efficiency to be replaced by manufacturer inputs only makes sense if 
the manufacturer inputs is are the results of a specified test 
procedure that we could verify by our own independent testing of the 
axle.
---------------------------------------------------------------------------

    \90\ BASF TI/EVO 0137 e, Emgard[supreg] FE 75W-90 Fuel Efficient 
Synthetic Gear Lubricant.
---------------------------------------------------------------------------

    In addition to proposing to require the primary drive axle ratio 
input into GEM (and potentially an option to input an actual axle 
efficiency data table), we are also proposing that the vehicle 
manufacturer input into GEM whether or not one or two drive axles are 
driven by the engine. When a heavy-duty vehicle is equipped with two 
rear axles where both are driven by the engine, this is called a 
``6x4'' configuration. ``6'' refers to the total number of wheel hubs 
on the vehicle. In the 6x4 configuration there are two front wheel hubs 
for the two steer wheels and tires plus four rear wheel hubs for the 
four rear wheels and tires (or more commonly four sets of rear dual 
wheels and tires). ``4'' refers to the number of wheel hubs driven by 
the engine. These are the two rear axles that have two wheel hubs each. 
Compared to a 6x4 configuration a 6x2 configuration decreases axle 
energy loss due to friction and oil pumping in two driven axles, by 
driving only one axle. The decrease in fuel consumption and 
CO2 emissions associated with a 6x2 versus 6x4 axle 
configuration is estimated to be

[[Page 40186]]

2.5 percent.\91\ Therefore, in the proposed Phase 2 version of GEM, if 
a manufacturer simulates a 6x2 axle configuration, GEM decreases the 
overall GEM result by 2.5 percent. Note that GEM will similarly 
decrease the overall GEM result by 2.5 percent for a 4x2 tractor or 
Class 8 vocational chassis configuration if it has only two wheel hubs 
driven. Note that we are not proposing that GEM have an option to 
increase the overall GEM result by some percentage by selecting, say, a 
6x6 or 8x8 option if the front axle(s) are driven. Because these 
configurations are only manufactured for specialized vehicles that 
require extra traction for off-road applications, they are very low 
volume sales and their increased fuel consumption and CO2 
emissions are not significant in comparison to the overall reductions 
of the proposed Phase 2 program. Note that 40 CFR 1037.631 (for off-
road vocational vehicles), which is being continued from the Phase 1 
program, would likely exempt many of these vehicles from the vehicle 
standards.
---------------------------------------------------------------------------

    \91\ NACFE. Executive Report--6x2 (Dead Axle) Tractors. November 
2010. See Docket EPA-HQ-OAR-2014-0827.
---------------------------------------------------------------------------

    Instead of directly modeling 6x4 or 6x2 axle configuration, we are 
proposing use of a post-simulation adjustment approach discussed in 
Chapter 4 of the drat RIA to model benefits of different axle 
configuration.
(d) Simulating Accessories for Vehicle Certification
    Phase 1 GEM uses a fixed power consumption value to simulate the 
fuel consumed for powering accessories such as power steering pumps and 
alternators. While the agencies are not proposing any changes to this 
approach for Phase 2, we are requesting comment on whether or not we 
should allow some manufacturer input to reflect the installation of 
accessory components that result in lower accessory loads. For example, 
we could consider an accessory load reduction GEM input based on 
installing a number of qualifying advanced accessory components that 
could be in production during Phase 2. We request comment on 
identifying such advanced accessory components, and we request comment 
on defining these components in such a way that they can be 
unambiguously distinguished from other similar components that do not 
decrease accessory loads. We also request comment on how much of a 
decrease in accessory load should be programmed into GEM if qualifying 
advanced accessory components are installed.
(e) Aerodynamics for Tractor, Vocational Vehicle, and Trailer 
Certification
    For GEM in Phase 2 the agencies propose to simulate aerodynamic 
drag in largely the same manner as in Phase 1. For vocational chassis 
we propose to continue to use the same prescribed products of drag 
coefficient times vehicle frontal area (Cd*A) that were predefined for 
each of the vocational subcategories in Phase 1. For tractors we 
propose to continue to use an aerodynamic bin approach similar to the 
one that exists in Phase 1 today. This approach requires tractor 
manufacturers to conduct a certain amount of coast-down vehicle 
testing, although manufacturers have the option to conduct scaled wind 
tunnel testing and/or computational fluid dynamics modeling. The 
results of these tests determine into which bin a vehicle is assigned. 
Then in GEM the aerodynamic drag coefficient for each vehicle in the 
same bin is the same. This approach helps to account for limits in the 
repeatability of aerodynamic testing and it creates a compliance margin 
since any test result which keeps the vehicle in the same aerodynamic 
bin is considered compliant. However, for Phase 2 we are proposing new 
boundary values for the bins themselves and we are adding two 
additional bins in order to recognize further advances in aerodynamic 
drag reduction beyond what was recognized in Phase 1. Furthermore, 
while Phase 1 GEM used predefined frontal areas for tractors while the 
manufacturers input a Cd value, the agencies propose that manufacturers 
would use a measured drag area (CdA) value for each tractor 
configuration for Phase 2. See 40 CFR 1037.525.
    In addition to these proposed changes we are proposing a number of 
aerodynamic drag test procedure improvements. One proposed improvement 
is to update the so-called standard trailer that is prescribed for use 
during aerodynamic drag testing of a tractor--that is, the hypothetical 
trailer modeled in GEM to represent a trailer paired with the tractor 
in actual use. In Phase 1 a non-aerodynamic 53-foot long box-shaped dry 
van trailer was specified as the standard trailer for tractor 
aerodynamic testing (see 40 CFR 1037.501(g)). For Phase 2 we are 
proposing to modify this standard trailer for tractor testing to make 
it more similar to the trailers we would require to be produced during 
the Phase 2 timeframe. More specifically, we would prescribe the 
installation of aerodynamic trailer skirts (and low rolling resistance 
tires as applied in Phase 1) on the reference trailer, as discussed in 
further in Section III.E.2. As explained more fully in Sections III and 
IV below, the agencies believe that tractor-trailer pairings will be 
optimized aerodynamically to a significant extent in-use (such as using 
high-roof cabs when pulling box trailers), and that this real-world 
optimization should be reflected in the certification testing. We also 
request comment on whether or not the Phase 2 standard trailer should 
include the installation of other aerodynamic devices such as a nose 
fairing, an under tray, or a boat tail or trailer tail. Would a 
standard trailer including these additional components make the tractor 
program better?
    Another proposed aerodynamic test procedure improvement is intended 
to better account for average wind yaw angle to better reflect the true 
impact of aerodynamic features on the in-use fuel consumption and 
CO2 emissions of tractors. Refer to the proposed test 
procedures in 40 CFR 1037.525 for further details of these aerodynamic 
test procedures.
    For trailer certification, the agencies are proposing to use GEM in 
a different way than GEM is used for tractor certification in Phase 1 
and Phase 2. As described in Section IV, the proposed trailer standards 
are based on GEM simulation, but trailer manufacturers would not run 
GEM for certification. Instead, manufacturers would use a simple 
equation to replicate GEM performance from the inputs. As with GEM, the 
only technologies recognized by this GEM-based equation for trailer 
certification are aerodynamic technologies, tire technologies 
(including tire rolling resistance and automatic tire inflation 
systems), and some weight reduction technologies. Note that since the 
purpose of this equation is to measure GEM performance, it can be 
considered as simply another form of the model using a different input 
interface. Thus, for simplicity, the remainder of this Section II. C. 
sometimes discusses GEM as being used for trailers, without regard to 
how manufacturers will actually input GEM variables.
    Similar to tractor certification, we propose that trailer 
manufacturers may at their option conduct some amount of aerodynamic 
testing (e.g., coast-down testing, scale wind tunnel testing, 
computational fluid dynamics modeling, or possibly aerodynamic 
component testing) and use this information with the equation.\92\ In 
this

[[Page 40187]]

case the agencies propose the configuration of a reference tractor for 
conducting trailer testing. Refer to Section IV of this preamble and to 
40 CFR 1037.501 of the proposed regulations for details on the proposed 
reference tractor configuration for trailer test procedures.
---------------------------------------------------------------------------

    \92\ The agencies project that more than enough aerodynamic 
component vendors would take advantage of proposed optional pre-
approval process to make trailer manufacturer testing optional.
---------------------------------------------------------------------------

(f) Tires and Tire Inflation Systems for Truck and Trailer 
Certification
    For GEM in Phase 1 vehicle manufacturers input the tire rolling 
resistance of steer and drive tires directly into GEM. The agencies 
prescribed an internationally recognized tire rolling resistance test 
procedure, ISO 28580, for determining the tire rolling resistance value 
that is input into GEM, as described in 40 CFR 1037.520(c). For Phase 2 
we are proposing to continue this same approach and the use of ISO 
28580, and we propose to expand these requirements to trailer tires as 
well. We request comment on whether specific modifications to this test 
procedure would improve its accuracy, repeatability or its test lab to 
test lab variability.
    In addition to tire rolling resistance, we are proposing that for 
Phase 2 vehicle manufacturers enter into GEM the tire manufacturer's 
specified tire loaded radius for the vehicle's drive tires. This value 
is commonly reported by tire manufacturers already so that vehicle 
speedometers can be adjusted appropriately. This input value is needed 
so that GEM can accurately convert simulated vehicle speed into axle 
speed, transmission speed, and ultimately engine speed. We request 
comment on whether the proposed test procedure should be modified to 
measure the tire's revolutions per distance directly, as opposed to 
using the loaded radius to calculate the drive axle rotational speed 
from vehicle speed.
    For tractors and trailers, we propose to allow manufacturers to 
specify whether or not an automatic tire inflation system is installed. 
If one is installed, GEM, or in the case of trailers, the equations 
based on GEM, would assign a 1 percent decrease in the overall fuel 
consumption and CO2 emissions simulation results for 
tractors, and a 1.5 percent decrease for trailers. This would be done 
through post-simulation adjustments discussed in Chapter 4 of the draft 
RIA. In contrast, we are not proposing to assign any decrease in fuel 
consumption and CO2 emissions for tire pressure monitoring 
systems. We do recognize that some drivers would respond to a warning 
indication from a tire pressure monitoring system, but we are unsure 
how to assign a fixed decrease in fuel consumption and CO2 
emissions for tire pressure monitoring systems. We would estimate that 
the value would be less than any value we would assign for an automatic 
tire inflation system. We request comment on whether or not we should 
assign a fixed decrease in fuel consumption and CO2 
emissions for tire pressure monitoring systems, and if so, we request 
comment on what would be an appropriate assigned fixed value.
(g) Weight Reduction for Tractor, Vocational Chassis and Trailer 
Certification
    We propose for Phase 2 that GEM continues the weight reduction 
recognition approach in Phase 1, where the agencies prescribe fixed 
weight reductions, or ``deltas'', for using certain lightweight 
materials for certain vehicle components. In Phase 1 the agencies 
published a list of weight reductions for using high-strength steel and 
aluminum materials on a part by part basis. For Phase 2 we propose to 
use these same values for high-strength steel and aluminum parts for 
tractors and for trailers and we have scaled these values for use in 
certifying the different weight classes of vocational chassis. In 
addition we are proposing a similar part by part weight reduction list 
for tractor parts made from thermoplastic material. We are also 
proposing to assign a fixed weight increase to natural gas fueled 
vehicles to reflect the weight increase of natural gas fuel tanks 
versus gasoline or diesel tanks. This increase would be allocated 
partly to the chassis and from the payload using the same allocation as 
weight reductions for the given vehicle type. For tractors we are 
proposing to continue the same mathematical approach in GEM to assign 
1/3 of a total weight decrease to a payload increase and 2/3 of the 
total weight decrease to a vehicle mass decrease. For Phase 1 these 
ratios were based on the average frequency that a tractor operates at 
its gross combined weight rating. Therefore, we propose to use these 
ratios for trailers in Phase 2. However, as with the other fuel 
consumption and GHG reducing technologies manufacturers use for 
compliance, reductions associated with weight reduction would be 
calculated using the trailer compliance equation rather than GEM. For 
vocational chassis, for which Phase 1 did not address weight reduction, 
we propose a 50/50 ratio. In other words, for vocational chassis in GEM 
we propose to assign 1/2 of a total weight decrease to a payload 
increase and 1/2 of the total weight decrease to a vehicle mass 
decrease. We request comment on all aspects of applying weight 
reductions in GEM, including proposed weight increases for alternate 
fuel vehicles and whether a 50/50 ratio is appropriate for vocational 
chassis.
(h) GEM Duty Cycles for Tractor, Vocational Chassis and Trailer 
Certification
---------------------------------------------------------------------------

    \93\ SwRI road grade testing and GEM validation report, 2014.
---------------------------------------------------------------------------

    In Phase 1, there are three GEM vehicle duty cycles that 
represented stop-and-go city driving (ARB Transient), urban highway 
driving (55 mph), and rural interstate highway driving (65 mph). In 
Phase 1 these cycles were time-based. That is, they were specified as a 
function of simulated time and the duty cycles ended once the specified 
time elapsed in simulation. The agencies propose to use these three 
drive cycles in Phase 2, but with some revisions. First the agencies 
propose that GEM would simulate these cycles on a distance-based 
specification, rather than on a time-based specification. A distance-
based specification ensures that even if a vehicle in simulation does 
not always achieve the target vehicle speed, the vehicle will have to 
continue in simulation for a longer period of time to complete the duty 
cycle. This ensures that vehicles are evaluated over the complete 
distance of the duty cycle and not just the portion of the duty cycle 
that a vehicle completes in a given time period. A distance-based duty 
cycle specification also facilitates a straightforward specification of 
road grade as a function of distance along the duty cycle. For Phase 2 
the agencies are proposing to enhance the 55 mph and 65 mph duty cycles 
by adding representative road grade to exercise the simulated vehicle's 
engine, transmission, axle, and tires in a more realistic way. A flat 
road grade profile over a constant speed test does not present many 
opportunities for a transmission to shift gears, and may have the 
unintended consequence of enabling underpowered vehicles or excessively 
downsped drivetrains to generate credits. The road grade profile 
proposed is the same for both the 55 mph and 65 mph duty cycles, and 
the profile was based on real over-the-road testing the agencies 
directed under an agency-funded contract with Southwest Research 
Institute.\93\ See Section III.E for more details on development of the 
proposed road grade profile. The agencies are continuing to evaluate

[[Page 40188]]

alternate road grade profiles including actual sections of restricted 
access highway with road grades that are statistically similar to the 
national road grade profile as well as purely synthetic road grade 
profiles.\94\ We request comments on the proposed road grade profile, 
and would welcome additional statistical evaluations of this road grade 
profile and other road grade profiles for comparison. We believe that 
the enhancement of the 55 mph and 65 mph duty cycles with road grade is 
consistent with the NAS recommendation regarding road grade.\95\
---------------------------------------------------------------------------

    \94\ See National Renewable Energy Laboratory report ``EPA GHG 
Certification of Medium- and Heavy-Duty Vehicles: Development of 
Road Grade Profiles Representative of US Controlled Access 
Highways'' dated May 2015 and EPA memorandum ``Development of an 
Alternative, Nationally Representative, Activity Weighted Road Grade 
Profile for Use in EPA GHG Certification of Medium- and Heavy-Duty 
Vehicles'' dated May 13, 2015, both available in Docket EPA-HQ-OAR-
2014-0827. This docket also includes file 
NREL_SyntheticAndLocalGradeProfiles.xlsx which contains numerical 
representations of all road grade profiles described in the NREL 
report.
    \95\ NAS 2010 Report. Page 189. ``A fundamental concern raised 
by the committee and those who testified during our public sessions 
was the tension between the need to set a uniform test cycle for 
regulatory purposes, and existing industry practices of seeking to 
minimize the fuel consumption of medium and heavy-duty vehicles 
designed for specific routes that may include grades, loads, work 
tasks or speeds inconsistent with the regulatory test cycle. This 
highlights the critical importance of achieving fidelity between 
certification values and real-world results to avoid decisions that 
hurt rather than help real-world fuel consumption.''
---------------------------------------------------------------------------

    We recognize that even with the proposed road grade profile, GEM 
may continue to under predict the number of transmission shifts of 
vehicles on restricted access highways if the model simulates constant 
speeds. We request comment on other ways in which the proposed 55 mph 
and 65 mph duty cycles could be enhanced. For example, we request 
comment on whether a more aggressive road grade profile would induce a 
more realistic and representative number of transmission gear shifts. 
We also request comment on whether we should consider varying the 
vehicle target speed over the 55 mph and/or 65 mph duty cycles to 
simulate human driver behavior reacting to traffic congestion. This 
would increase the number of shifts during the 55 mph and 65 mph duty 
cycles, though it may be possible for an equivalent effect to be 
achieved by assigning a greater weighting to the transient cycle in the 
GEM composite test score.
(i) Workday Idle Operation for Vocational Vehicle Certification
    In the Phase 1 program, reduction in idle emissions was recognized 
only for sleeper cab tractors, and only with respect to hotelling idle, 
where a driver needs power to operate heating, ventilation, air 
conditioning and other electrical equipment in order to use the sleeper 
cab to eat, rest, or conduct other business. As described in Section V, 
the agencies are now proposing to recognize in GEM technologies that 
reduce workday idle emissions, such as automatic stop-start systems and 
automatic transmissions that shift to neutral at idle. Many vocational 
vehicle applications operate on patterns implicating workday idle 
cycles, and the agencies are proposing test procedures in GEM to 
account specifically for these cycles and potential controls. GEM would 
recognize these idle controls in two ways. For technologies like 
neutral-idle that address idle that occurs during the transient cycle 
(representing the type of operation that would occur when the vehicle 
is stopped at a stop light), GEM would interpolate lower fuel rates 
from the engine map. For technologies like start-stop and auto-shutdown 
that eliminate some of the idle that occurs when a vehicle is stopped 
or parked, GEM would assign a value of zero fuel rate for what we are 
proposing as an ``idle cycle''. This idle cycle would be weighted along 
with the 65 mph, 55 mph, and ARB Transient duty cycles according to the 
vocational chassis duty cycle weighting factors that we are proposing 
for Phase 2. These weighting factors are different for each of the 
three vocational chassis speed categories that we are proposing for 
Phase 2. While we are not proposing to apply this idle cycle for 
tractors, we do request comment on whether or not we should consider a 
applying this idle cycle to certain tractor types, like day cabs that 
could experience more significant amounts of time stopped or parked as 
part of an urban delivery route. We also request comment on whether or 
not start-stop or auto-shutdown technologies are being developed for 
tractors; especially for Class 7 and 8 day cabs that could experience 
more frequent stops and more time parked for deliveries.
(2) Validation of the Proposed GEM
    After making the proposed changes to GEM, the agencies validated 
the model in comparison to over 130 vehicle variants, consistent with 
the recommendation made by the NAS in their Phase 2-First Report.\96\ 
As is described in Chapter 4 of the Draft RIA, good agreement was 
observed between GEM simulations and test data over a wide range of 
vehicles. In general, the model simulations agreed with the test 
results within 5 percent on an absolute basis. As pointed 
out in Chapter 4.3.2 of the RIA, relative accuracy is more relevant to 
this rulemaking. This is because all of the numeric standards proposed 
for tractors, trailers and vocational chassis are derived from running 
GEM first with Phase 1 ``baseline'' technology packages and then with 
various candidate Phase 2 technology packages. The differences between 
these GEM results are examined to select stringencies. In other words, 
the agencies used the same version of GEM to establish the standards as 
was used to evaluate baseline performance for this rulemaking. 
Therefore, it is most important that GEM accurately reflects relative 
changes in emissions for each added technology. For vehicle 
certification purposes it is less important that GEM's absolute value 
of the fuel consumption or CO2 emissions are accurate 
compared to laboratory testing of the same vehicle. The ultimate 
purpose of this new version of GEM will be to evaluate changes or 
additions in technology, and compliance is demonstrated on a relative 
basis to the numerically standards that were also derived from GEM. 
Nevertheless, the agencies concluded that the absolute accuracy of GEM 
is generally within 5 percent, as shown in Figure II-1. 
Chapter 4.3.2 of the draft RIA shows that relative accuracy is even 
better, 2-3 percent.
---------------------------------------------------------------------------

    \96\ National Academy of Science. ``Reducing the Fuel 
Consumption and GHG Emissions of Medium- and Heavy-Duty Vehicles, 
Phase Two, First Report.'' 2014. Recommendation1.2.

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[[Page 40189]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.000

    In addition to this successful validation against experimental 
results, the agencies have also initiated a peer review of the proposed 
GEM source code. This peer review has been submitted to Docket # EPA-
HQ-OAR-2014-0827.
(3) Supplements to GEM Simulation
    As in Phase 1, for most tractors and vocational vehicles, 
compliance with the Phase 2 g/ton-mile vehicle standards could be 
evaluated by directly comparing the GEM result to the standard. 
However, in Phase 1, manufacturers incorporating innovative or advanced 
technologies could apply improvement factors to lower the GEM result 
slightly before comparing to the standard.\97\ For example, a 
manufacturer incorporating a launch-assist mild hybrid that was 
approved for a 5 percent benefit would apply a 0.95 improvement factor 
to its GEM results for such vehicles. In this example, a GEM result of 
300 g/ton-mile would be reduced to 285 g/ton-mile.
---------------------------------------------------------------------------

    \97\ 40 CFR 1036.610, 1036.615, 1037.610, and 1037.615
---------------------------------------------------------------------------

    For Phase 2, the agencies are proposing to largely continue the 
existing Phase 1 innovative technology approach. We are also proposing 
to create a parallel option specifically related to innovative 
powertrain designs. These proposals are discussed below.
(a) Innovative/Off-Cycle Technology Procedures
    In Phase 1 the agencies adopted an emissions credit generating 
opportunity that applied to new and innovative technologies that reduce 
fuel consumption and CO2 emissions, that were not in common 
use with heavy-duty vehicles before model year 2010 and are not 
reflected over the test procedures or GEM (i.e., the benefits are 
``off-cycle''). See 76 FR 57253. As was the case in the development of 
Phase 1, the agencies are proposing to continue this approach for 
technologies and concepts with CO2 emissions and fuel 
consumption reduction potential that might not be adequately captured 
over the proposed Phase 2 duty cycles or are not proposed inputs to 
GEM. Note, however, that the agencies are proposing to refer to these 
technologies as off-cycle rather than innovative. See Section I for 
more discussion of innovative and off-cycle technologies.
    We recognize that the Phase 1 testing burden associated with the 
innovative technology credit provisions discouraged some manufacturers 
from applying. To streamline recognition of many technologies, default 
values have been integrated directly into GEM. For example, automatic 
tire inflation systems and 6x2 axles both have fixed default values, 
recognized through a post-simulation adjustment approach discussed in 
Chapter 4 of the draft RIA. This is similar to the technology ``pick 
list'' from our light-duty programs. See 77 FR 62833-62835 (October 15, 
2012). If manufacturers wish to receive additional credit beyond these 
fixed values, then the innovative/off-cycle technology credit 
provisions would provide the regulatory path toward that additional 
recognition.
    Beyond the additional technologies that the agencies have added to 
GEM, the agencies also believe there are several emerging technologies 
that are being developed today, but would not be accounted for in GEM 
as we are proposing it because we do not have enough information about 
these technologies to assign fixed values to them in GEM. Any credits 
for these technologies would need to be based on the off-cycle 
technology credit generation provisions. These require the assessment 
of real-world fuel consumption and GHG reductions that can be measured 
with verifiable test methods using representative operating conditions 
typical of the engine or vehicle application.
    As in Phase 1, the agencies are proposing to continue to provide 
two

[[Page 40190]]

paths for approval of the test procedure to measure the CO2 
emissions and fuel consumption reductions of an off-cycle technology 
used in the HD tractor. See 40 CFR 1037.610 and 49 CFR 535.7. The first 
path would not require a public approval process of the test method. A 
manufacturer can use ``pre-approved'' test methods for HD vehicles 
including the A-to-B chassis testing, powerpack testing or on-road 
testing. A manufacturer may also use any developed test procedure which 
has known quantifiable benefits. A test plan detailing the testing 
methodology is required to be approved prior to collecting any test 
data. The agencies are also proposing to continue the second path which 
includes a public approval process of any testing method which could 
have questionable benefits (i.e., an unknown usage rate for a 
technology). Furthermore, the agencies are proposing to modify its 
provisions to better clarify the documentation required to be submitted 
for approval aligning them with provisions in 40 CFR 86.1869-12, and 
NHTSA is separately proposing to prohibit credits from technologies 
addressed by any of its crash avoidance safety rulemakings (i.e., 
congestion management systems). We welcome recommendations on how to 
improve or streamline the off-cycle technology approval process.
    Sections III and V describe tractor and vocational vehicle 
technologies, respectively, that the agencies anticipate may qualify 
for these off-cycle credit provisions.
(b) Powertrain Testing
    The agencies are proposing a powertrain test option to allow for a 
robust way to quantify the benefits of CO2 reducing 
technologies that are a part of the powertrain (conventional or hybrid) 
that are not captured in the GEM simulation. Powertrain testing and 
certification was included as one of the NAS recommendations in the 
Phase 2 -First Report.\98\ Some of these improvements are transient 
fuel control, engine and transmission control integration and hybrid 
systems. To limit the amount of testing, the powertrain would be 
divided into families and powertrains would be tested in a limited 
number of simulated vehicles that cover the range of vehicles in which 
the powertrain would be installed. The powertrain test results would 
then be used to override the engine and transmission simulation portion 
of GEM.
---------------------------------------------------------------------------

    \98\ National Academy of Science. ``Reducing the Fuel 
Consumption and GHG Emissions of Medium- and Heavy-Duty Vehicles, 
Phase Two, First Report.'' 2014. Recommendation 1.6. However, the 
agencies are not proposing to allow for the use of manufacturer 
derived and verified models of the powertrain within GEM.
---------------------------------------------------------------------------

    The largest proposed change from the Phase 1 powertrain procedure 
is that only the advanced powertrain would need to be tested (as 
opposed to the Phase 1 requirement where both the advanced powertrain 
and the conventional powertrain had to be tested). This change is 
possible because the proposed GEM simulation uses the engine fuel map 
and torque curve from the actual engine in the vehicle to be certified. 
For the powertrain results to be used broadly across all the vehicles 
that the powertrain would go into, a matrix of 8 to 9 tests would be 
needed per vehicle cycle. These tests would cover the range of 
coefficient of drag, coefficient of rolling resistance, vehicle mass 
and axle ratio of the vehicles that the powertrain will be installed 
in. The main output of this matrix of tests would be fuel mass as a 
function of positive work and average transmission output speed over 
average vehicle speed. This matrix of test results would then be used 
to calculate the vehicle's CO2 emissions by taking the work 
per ton-mile from the GEM simulation and multiplying it by the 
interpolated work specific fuel mass from the powertrain test and mass 
of CO2 to mass of fuel ratio.
    Along with proposing changes to how the powertrain results are 
used, the agencies are also proposing changes to the procedures that 
describe how to carry out a powertrain test. The changes are to give 
additional guidance on controlling the temperature of the powertrains 
intake-air, oil, coolant, block, head, transmission, battery, and power 
electronics so that they are within their expected ranges for normal 
operation. The equations that describe the vehicle model are proposed 
to be changed to allow for input of the axle's efficiency, driveline 
rotational inertia, as well as the mechanical and electrical accessory 
loads.
    The determine the positive work and average transmission output 
speed over average vehicle speed in GEM for the vehicle that will be 
certified, the agencies have defined a generic powertrain for each 
vehicle category. The agencies are requesting comment on if the generic 
powertrains should be modified according to specific aspects of the 
actual powertrain. For example using the engine's rated power to scale 
the generic engine's torque curve. Similarly, the transmission gear 
ratios could be scaled by the axle ratio of the drive axle, to make 
sure the generic engine is operated in GEM at the correct engine speed.
(4) Production Vehicle Testing for Comparison to GEM
    The agencies are is proposing to require tractor and vocational 
vehicle manufacturers to annually chassis test 5 production vehicles 
over the GEM cycles to verify that relative reductions simulated in GEM 
are being achieved in actual production. See 40 CFR 1037.665. We would 
not expect absolute correlation between GEM results and chassis 
testing. GEM makes many simplifying assumptions that do not compromise 
its usefulness for certification, but do cause it to produce emission 
rates different from what would be measured during a chassis 
dynamometer test. Given the limits of correlation possible between GEM 
and chassis testing, we would not expect such testing to accurately 
reflect whether a vehicle was compliant with the GEM standards. 
Therefore, we are proposing to not apply compliance liability to such 
testing. Rather, this testing would be for informational purposes only. 
However, we do expect there to be correlation in a relative sense. 
Vehicle to vehicle differences showing a 10 percent improvement in GEM 
should show a similar percent improvement with chassis dynamometer 
testing. Nevertheless, manufacturers would not be subject to recall or 
other compliance actions if chassis testing did not agree with the GEM 
results on a relative basis. Rather, the agencies would continue 
evaluate in-use compliance by verifying GEM inputs and testing in-use 
engines.
    EPA believes this chassis test program is necessary because of our 
experience implementing regulations for heavy-duty engines. In the 
past, manufacturers have designed engines that have much lower 
emissions on the duty cycles than occur during actual use. By proposing 
this simple test program, we hope to be able to identify such issues 
earlier and to dissuade any attempts to design solely to the 
certification test. We also expect the results of this testing to help 
inform the need for any further changes to GEM.
    As already noted in Section II.B.(1), it can be expensive to build 
chassis test cells for certification. However, EPA is proposing to 
structure this pilot-scale program to minimize the costs. First, we are 
proposing that this chassis testing would not need to comply with the 
same requirements as would apply for official certification testing. 
This would allow testing to be performed in developmental test cells 
with simple portable analyzers. Second, since the proposed program 
would require only 5 tests per year, manufacturers without

[[Page 40191]]

their own chassis testing facility would be able to contract with a 
third party to perform the testing. Finally, EPA proposes to apply this 
testing to only those manufacturers with annual production in excess of 
20,000 vehicles.
    We request comment on this proposed testing requirement. Commenters 
are encouraged to suggest alternate approaches that could achieve the 
assurance that the projected emissions reductions would occur in actual 
use.
(5) Use of GEM in Establishing Proposed Numerical Standards
    Just like in Phase 1, the agencies are proposing specific numerical 
standards against which tractors and vocational vehicles would be 
evaluated using GEM (We propose that trailers use a simplified 
equation-based approach that was derived from GEM). Although the 
proposed standards are performance-based standards, which do not 
specifically require the use of any particular technologies, the 
agencies established the proposed standards by evaluating specific 
vehicle technology packages using a prepublication version of the Phase 
2 GEM. This prepublication version was an intermediate version of the 
GEM source code, rather than the executable file version of GEM, which 
is being docketed for this proposal and is available on EPA's GEM Web 
page. Both the GEM source code and the GEM executable file are 
generally functionally equivalent.
    The agencies determined the proposed numerical standards 
essentially by evaluating certain specific technology packages 
representing the packages we are projecting to be feasible in the Phase 
2 time frame. For each technology package, GEM was used determine a 
cycle-weighted g/ton-mile emission rate and a gal/1,000 ton-mile fuel 
consumption rate. These GEM results were then essentially averaged 
together, weighted by the adoption rates the agencies are projecting 
for each technology package and for each model year of standards. 
Consider as an oversimplified example of two technology packages for 
Class 8 low-roof sleepers cabs: one package that resulted in 60 g/ton-
mile and a second that resulted in 80 g/ton-mile. If we project that 
the first package could be applied to 50 percent of the Class 8 low-
roof sleeper cab fleet in MY 2027, and that the rest of the fleet could 
do no better than the second technology package, then we would set the 
fleet average standard at 70 g/ton-mile (0.5 [middot] 60 + 0.5 [middot] 
80 = 70).
    Formal external peer review and expert external user review was 
then conducted on the version of the GEM source code that was used to 
calculate the numerical values of the proposed standards. It was 
discovered via these external review processes that the GEM source code 
contained some minor software ``bugs.'' These bugs were then corrected 
by EPA and the Phase 2 proposed GEM executable file was derived from 
this corrected version of the GEM source code. Moreover, we expect to 
also receive technical comments during the comment period that could 
potentially identify additional GEM software bugs, which would lead EPA 
to make additional changes to GEM before the Final Rule. Nevertheless, 
EPA has repeated the analysis described above using the corrected 
version of the GEM source code that was used to create the proposed GEM 
executable file. The results of this analysis are available in the 
docket to this proposal.\99\
---------------------------------------------------------------------------

    \99\ See Memorandum to the Docket ``Numerical Standards for 
Tractors, Trailers, and Vocational Vehicles Based on the June 2015 
GEM Executable Code.
---------------------------------------------------------------------------

    Thus, even without the agencies making any changes in our 
projections of technology effectiveness or market adoption rates, it is 
likely that further revisions to GEM could result in us finalizing 
different numerical values for the standards. It is important to note 
that the agencies would not necessarily consider such GEM-based 
numerical changes by themselves to be changes in the stringency of the 
standards. Rather, we believe that stringency is more appropriately 
evaluated in technological terms; namely, by evaluating technology 
effectiveness and the market adoption rates of technologies. 
Nevertheless, the agencies will docket any updates and supporting 
information in a timely manner.

D. Proposed Engine Test Procedures and Engine Standards

    For the most part, the proposed Phase 2 engine standards are a 
continuation of the Phase 1 program, but with more stringent standards 
for compression-ignition engines. Nevertheless, the agencies are 
proposing important changes related to the test procedures and 
compliance provisions. These changes are described below.
    As already discussed in Section II.B. the agencies are proposing a 
regulatory structure in which engine technologies are evaluated using 
engine-specific test procedures as well using GEM, which is vehicle-
based. We are proposing separate standards for each procedure. The 
proposed engine standards described in Section II.D.(2) and the 
proposed vehicle standards described in Sections III and V are based on 
the same engine technology, which is described in Section II.D.(2). We 
request comment on whether the engine and vehicle standards should be 
based on the same projected technology. As described below, while the 
agencies projected the same engine technology for engine standards and 
for vehicle standards, we separately projected the technology that 
would be appropriate for:

 Gasoline vocational engines and vehicles
 Diesel vocational engines and vehicles
 Tractor engines and vehicles

    Before addressing the engine standards and engine technology in 
Section II.D.(2), the agencies describe the test procedures that would 
be used to evaluate these technologies in Section II.D.(1) below. We 
believe that without first understanding the test procedures, the 
numerical engine standards would not have the proper context.
(1) Engine Test Procedures
    The Phase 1 engine standards relied on the engine test procedures 
specified in 40 CFR part 1065. These procedures were previously used by 
EPA to regulate criteria pollutants such as NOX and PM, and 
few changes were needed to employ them for purposes of the Phase 1 
standards. The agencies are proposing significant changes to two areas 
for Phase 2: (1) cycle weighting; and (2) GEM inputs. (Note that EPA is 
also proposing some minor changes to the basic part 1065 test 
procedures, as described in Section XIII).
    The diesel (i.e., compression-ignition) engine test procedure 
relies on two separate engine test cycles. The first is the Heavy-duty 
Federal Test Procedure (Heavy-duty FTP) that includes transient 
operation typified by frequent accelerations and decelerations, similar 
to urban or suburban driving. The second is the Supplemental Engine 
Test (SET) which includes 13 steady-state test points. The SET was 
adopted by EPA to address highway cruise operation and other nominally 
steady-state operation. However, it is important to note that it was 
intended as a supplemental test cycle and not necessarily to replicate 
precisely any specific in-use operation.
    The gasoline (i.e., spark-ignition) engine test procedure relies on 
a single engine test cycle: a gasoline version of Heavy-duty FTP. The 
agencies are not proposing changes to the gasoline engine test 
procedures.
    It is worth noting that EPA sees great value in using the same test 
procedures for measuring GHG emissions as is used

[[Page 40192]]

for measuring criteria pollutants. From the manufacturers' perspective, 
using the same procedures minimizes their test burden. However, EPA 
sees additional benefits. First, as already noted in Section(b), 
requiring engine manufacturers to comply with both NOX and 
CO2 standards using the same test procedures discourages 
alternate calibrations that would trade NOX emissions 
against fuel consumption depending how the engine or vehicle is tested. 
Second, this approach leverages the work that went into developing the 
criteria pollutant cycles. Taken together, these factors support our 
decision to continue to rely on the 40 CFR part 1065 test procedures 
with only minor adjustments, such as those described in Section 
II.D.(1)(a). Nevertheless, EPA would consider more substantial changes 
if they were necessary to incentivize meaningful technology changes, 
similar to the changes being made to GEM for Phase 2 to address 
additional technologies.
(a) SET Cycle Weighting
    The SET cycle was adopted by EPA in 2000 and modified in 2005 from 
a discrete-mode test to a ramped-modal cycle to broadly cover the most 
significant part of the speed and torque map for heavy-duty engines, 
defined by three non-idle speeds and three relative torques. The low 
speed is often called the ``A speed'', the intermediate speed is often 
called the ``B speed'', and the high speed is often called the ``C 
speed.'' As is shown in Table II-1, the SET weights these three speeds 
at 23 percent, 39 percent, and 23 percent.

            Table II-1--SET Modes Weighting Factor in Phase 1
------------------------------------------------------------------------
                                                             Weighting
                      Speed, % load                          factor in
                                                           Phase 1  (%)
------------------------------------------------------------------------
Idle....................................................              15
A, 100..................................................               8
B, 50...................................................              10
B, 75...................................................              10
A, 50...................................................               5
A, 75...................................................               5
A, 25...................................................               5
B, 100..................................................               9
B, 25...................................................              10
C, 100..................................................               8
C, 25...................................................               5
C, 75...................................................               5
C, 50...................................................               5
Total...................................................             100
Total A Speed...........................................              23
Total B Speed...........................................              39
Total C Speed...........................................              23
------------------------------------------------------------------------

    The C speed is typically in the range of 1800 rpm for current HHD 
engine designs. However, it is becoming less common for engines to 
operate often in such a high speed in real world driving condition, and 
especially not during cruise vehicle speed between 55 and 65 mph. The 
agencies receive confidential business information from a few vehicle 
manufacturers that support this observation. Thus, although the current 
SET represents highway operation better than the FTP cycle, it is not 
an ideal cycle to represent future highway operation. Furthermore, 
given the recent trend configure drivetrains to operate engines at 
speeds down to a range of 1150-1200 rpm at vehicle speed of 65mph. This 
trend would make the typical highway engine speeds even further away 
from C speed.
    To address this issue, the agencies are proposing new weighting 
factors for the Phase 2 GHG and fuel consumption standards. The 
proposed new SET mode weightings move most of C weighting to ``A'' 
speed, as shown in Table II-2. It would also slightly reduce the 
weighting factor on the idle speed.
    The agencies request comment on the proposed reweighting.

       Table II-2--Proposed SET Modes Weighting Factor in Phase 2
------------------------------------------------------------------------
                                                             Proposed
                                                             weighting
                      Speed, % load                          factor in
                                                           Phase 2  (%)
------------------------------------------------------------------------
Idle....................................................              12
A, 100..................................................               9
B, 50...................................................              10
B, 75...................................................              10
A, 50...................................................              12
A, 75...................................................              12
A, 25...................................................              12
B, 100..................................................               9
B, 25...................................................               9
C, 100..................................................               2
C, 25...................................................               1
C, 75...................................................               1
C, 50...................................................               1
Total...................................................             100
Total A Speed...........................................              45
Total B Speed...........................................              38
Total C Speed...........................................               5
------------------------------------------------------------------------

(b) Measuring GEM Engine Inputs
    Although GEM does not apply directly to engine certification, 
implementing the Phase 2 GEM would impact engine manufacturers. To 
recognize the contribution of the engine in GEM the engine fuel map, 
full load torque curve and motoring torque curve have to be input into 
GEM. To insure the robustness of each of those inputs, a standard 
procedure has to be followed. Both the full load and motoring torque 
curve procedures are already defined in 40 CFR part 1065 for engine 
testing. However, the fuel mapping procedure being proposed would be 
new. The agencies have compared the proposed procedure against other 
accepted engine mapping procedures with a number of engines at various 
labs including EPA's NVFEL, Southwest Research Institute sponsored by 
the agencies, and Environment Canada's laboratory.\100\ The proposed 
procedure was selected because it proved to be accurate and repeatable, 
while limiting the test burden to create the fuel map. This proposed 
provision is consistent with NAS's recommendation (3.8).
---------------------------------------------------------------------------

    \100\ US EPA, ``Technical Research Workshop supporting EPA and 
NHTSA Phase 2 Standards for MD/HD Greenhouse Gas and Fuel 
Efficiency-- December 10 and 11, 2014,'' http://www.epa.gov/otaq/climate/regs-heavy-duty.htm.
---------------------------------------------------------------------------

    One important consideration is the need to correct measured fuel 
consumption rates for the carbon and energy content of the test fuel. 
For engine tests, we propose to continue the Phase 1 approach, which is 
specified in 40 CFR 1036.530. We propose a similar approach to GEM fuel 
maps in Phase 2.
    The agencies are proposing that engine manufacturers must certify 
fuel maps as part of their certification to the engine standards, and 
that they be required to provide those maps to vehicle manufacturers 
beginning with MY 2020.\101\ The one exception to this requirement 
would be for cases in which the engine manufacturer certifies based on 
powertrain testing, as described in Section (c). In such cases, engine 
manufacturers would not be required to also certify the otherwise 
applicable fuel maps. We are not proposing that vehicle manufacturers 
be allowed to develop their own fuel maps for engines they do not 
manufacture.
---------------------------------------------------------------------------

    \101\ Current normal vehicle manufacturing processes generally 
result in many vehicles being produced with prior model year 
engines. For example, we expect that some MY 2021 vehicles will be 
produced with MY 2020 engines. Thus, we are proposing to require 
engine manufacturers to begin providing fuel maps in 2020 so that 
vehicle manufacturers could run GEM to certify MY 2021 vehicles with 
MY 2020 engines.
---------------------------------------------------------------------------

    The current engine test procedures also require the development of 
regeneration emission rate and frequency factors to account for the 
emission changes for criteria pollutants during a regeneration event. 
In Phase 1, the agencies adopted provisions to exclude CO2 
emissions and fuel consumption due to regeneration. However, for Phase 
2, we propose to include CO2 emissions and fuel consumption 
due to regeneration over the FTP and RMC cycles as determined using the 
infrequently regenerating aftertreatment devices (IRAF) provisions in 
40 CFR 1065.680. We do not believe this would significantly impact the 
stringency of the proposed standards

[[Page 40193]]

because manufacturers have already made great progress in reducing the 
impact of regeneration emissions since 2007. Nevertheless, we believe 
it would be prudent to begin accounting for regeneration emissions to 
discourage manufacturers from adopting compliance strategies that would 
reverse this trend. We request comment on this requirement.
    We are not proposing, however, to include fuel consumption due to 
regeneration in the creation of the fuel map used in GEM for vehicle 
compliance. We believe that the proposed requirements for the duty-
cycle standards, along with market forces that already exist, would 
create sufficient incentives to reduce fuel consumption during 
regeneration over the entire fuel map.
(c) Engine Test Procedures for Replicating Powertrain Tests
    As described in Section II.B.(2)(b), the agencies are proposing a 
powertrain test option to quantify the benefits of CO2 
reducing powertrain technologies. These powertrain test results would 
then be used to override the engine and transmission simulation portion 
of GEM. The agencies are proposing to require that any manufacturer 
choosing to use this option also measure engine speed and engine torque 
during the powertrain test so that the engine's performance during the 
powertrain test could be replicated in a non-powertrain engine test 
cell. Subsequent engine testing would be conducted using the normal 
part 1065 engine test procedures, and g/hp-hr CO2 results 
would be compared to the levels the manufacturer reported during 
certification. Such testing would apply for both confirmatory and 
selective enforcement audit testing.
    Under the proposed regulations, engine manufacturers certifying 
powertrain performance (instead of or in addition to the multi-point 
fuel maps) would be held responsible for powertrain test results. If 
the engine manufacturer does not certify powertrain performance and 
instead certifies only the multi-point fuel maps, it would held 
responsible for fuel map performance rather than the powertrain test 
results. Engine manufacturers certifying both would be responsible for 
both.
(d) CO2 From Urea SCR Systems
    For diesel engines utilizing urea SCR emission control systems for 
NOX reduction, the agencies are proposing to allow 
correction of the final engine fuel map and powertrain duty cycle 
CO2 emission results to account for the contribution of 
CO2 from the urea injected into the exhaust. This urea could 
contribute up to 1 percent of the total CO2 emissions from 
the engine. Since current urea production methods use gaseous 
CO2 captured from the atmosphere (along with 
NH3), CO2 from urea consumption does not 
represent a net carbon emission. This adjustment is necessary so that 
fuel maps developed from CO2 measurements would be 
consistent with fuel maps from direct measurements of fuel flow rates. 
Thus, we are only proposing to allow this correction for emission tests 
where CO2 emissions are determined from direct measurement 
of CO2 and not from fuel flow measurement, which would not 
be impacted by CO2 from urea.
    We note that this correction would be voluntary for manufacturers, 
and expect that some manufacturers may determine that the correction is 
too small to be of concern. The agencies will use this correction with 
any engines for which the engine manufacturer applied the correction 
for its fuel maps during certification.
    We are not proposing this correction for engine test results with 
respect to the engine CO2 standards. Both the Phase 1 
standards and the proposed standards for CO2 from diesel 
engines are based on test results that included CO2 from 
urea. In other words, these standards are consistent with using a test 
procedure that does not correct for CO2 from urea. We 
request comment on whether it would be appropriate to allow this 
correction for the Phase 2 engine CO2 standards, but also 
adjust the standards to reflect the correction. At this time, we 
believe that reducing the numerical value of the CO2 
standards by 1 g/hp-hr would make the standards consistent with 
measurement that are corrected for CO2 from urea. However, 
we also request comment on the appropriateness of applying a 2 g/hp-hr 
adjustment should we determine it would better reflect the urea 
contribution for current engines.
(e) Potential Alternative Certification Approach
    In Section II.B.(2)(b), we explained that although GEM does not 
apply directly to engine certification, implementing the Phase 2 GEM 
would impact engine manufacturers by requiring that they measure engine 
fuel maps. In Section II.B.(2), the agencies noted that some 
stakeholders may have concerns about the proposed regulatory structure 
that would require engine manufacturers to provide detailed fuel 
consumption maps for GEM. Given such concerns, the agencies are 
requesting comment on an approach that could mitigate the concerns by 
allowing both vehicle and engine to use the same driving cycles for 
certification. The detailed description of this alternative 
certification approach can be seen in the draft RIA. We are requesting 
comment on allowing this approach as an option, or as a replacement to 
the proposed approach. Commenters supporting this approach should 
address possible impacts on the stringency of the proposed standards.
    This approach utilizes GEM with a default engine fuel map pre-
defined by the agency to run a number of pre-defined vehicle 
configurations over three certification cycles. Engine torque and speed 
profile would be obtained from the simulations, and would be used to 
specify engine dynamometer commands for engine testing. The results of 
this testing would be a CO2 map as function of the 
integrated work and the ratio of averaged engine speed (N) to averaged 
vehicle speed (V) defined as (N/V) over each certification cycle. In 
vehicle certification, vehicle manufacturers would run GEM with the to-
be-certified vehicle configuration and the agency default engine fuel 
map separately for each GEM cycle. Applying the total work and N/V 
resulted from the GEM simulations to the CO2 map obtained 
from engine tests would determine CO2 consumption for 
vehicle certification. For engine certification, we are considering 
allowing the engine to be certified based on one of the points 
conducted during engine alternative CO2 map tests mentioned 
above rather than based on the FTP and SET cycle testing.
(2) Proposed Engine Standards for CO2 and Fuel Consumption
    We are proposing to maintain the existing Phase 1 regulatory 
structure for engine standards, which had separate standards for spark-
ignition engines (such as gasoline engines) and compression-ignition 
engines (such as diesel engines), but we are proposing changes to how 
these standards would apply to natural gas fueled engines. As discussed 
in Section II.B.(2)(b), the agencies see important advantages to 
maintaining separate engines standards, such as improved compliance 
assurance and better control during transient engine operation.
    Phase 1 also applied different test cycles depending on whether the 
engine is used for tractors, vocational vehicles, or both, and we 
propose to continue this as well.\102\ We assume that CO2 at 
the

[[Page 40194]]

end of Phase 1 is the baseline of Phase 2. Table II-3 shows the Phase 1 
CO2 standards for diesel engines, which serve as the 
baseline for our analysis of the proposed Phase 2 standards.
---------------------------------------------------------------------------

    \102\ Engine classification is set forth in 40 CFR 1036.801. 
Spark-ignition means relating to a gasoline-fueled engine or any 
other type of engine with a spark plug (or other sparking device) 
and with operating characteristics similar to the Otto combustion 
cycle. However, engines that meet the definition of spark-ignition 
per 1036.801, but are regulated as diesel engines under 40 CFR part 
86 (for criteria pollutants) are treated as compression-ignition 
engines for GHG standards. Compression-ignition means relating to a 
type of reciprocating, internal-combustion engine that is not a 
spark-ignition engine, however, engines that meet the definition of 
compression-ignition per 1036.801, but are regulated as Otto-cycle 
engines under 40 CFR part 86 are treated as spark-ignition engines 
for GHG standards.

                                  Table II-3--Phase 2 Baseline CO2 Performance
                                                   (g/bhp-hr)
----------------------------------------------------------------------------------------------------------------
       LHDD-FTP               MHDD-FTP               HHDD-FTP               MHDD-SET              HHDD-SET
----------------------------------------------------------------------------------------------------------------
              576                    576                    555                    487                    460
----------------------------------------------------------------------------------------------------------------

    The gasoline engine baseline CO2 is 627 (g/bhp-hr). The 
agencies used the baseline engine to assess the potential of the 
technologies described in the following sections. As described below, 
the agencies are proposing new compression-ignition engine standards 
for Phase 2 that would require additional reductions in CO2 
emissions and fuel consumption beyond the baseline. However, as also 
described below in Section II.B.(2)(b), we are not proposing more 
stringent CO2 or fuel consumption standards for new heavy-
duty gasoline engines. Note, however, that we are projecting some small 
improvement in gasoline engine performance that would be recognized 
over the vehicle cycles.
    For heavy-heavy-duty diesel engines to be installed in Class 7 and 
8 combination tractors, the agencies are proposing the standards shown 
in Table II-4.\103\ The proposed MY 2027 standards for engines 
installed in tractors would require engine manufacturers to achieve, on 
average, a 4.2 percent reduction in fuel consumption and CO2 
emissions beyond the Phase 1 standard. We propose to adopt interim 
engine standards in MY 2021 and MY 2024 that would require diesel 
engine manufacturers to achieve, on average, 1.5 percent and 3.7 
percent reductions in fuel consumption and CO2 emissions, 
respectively.
---------------------------------------------------------------------------

    \103\ The agencies note that the CO2 and fuel 
consumption standards for Class 7 and 8 combination tractors do not 
cover gasoline or LHDD engines, as those are not used in Class 7 and 
8 combination tractors.

      Table II-4--Proposed Phase 2 Heavy-Duty Tractor Engine Standards for Engines\104\ Over the SET Cycle
----------------------------------------------------------------------------------------------------------------
                                                                                   Medium heavy-   Heavy heavy-
                 Model year                                Standard                 duty diesel     duty diesel
----------------------------------------------------------------------------------------------------------------
2021-2023..................................  CO2 (g/bhp-hr).....................        479             453
                                             Fuel Consumption (gallon/100 bhp-            4.7053          4.4499
                                              hr).
2024-2026..................................  CO2 (g/bhp-hr).....................        469             443
                                             Fuel Consumption (gallon/100 bhp-            4.6071          4.3517
                                              hr).
2027 and Later.............................  CO2 (g/bhp-hr).....................        466             441
                                             Fuel Consumption (gallon/100 bhp-            4.5776          4.3320
                                              hr).
----------------------------------------------------------------------------------------------------------------

    Forcompression-ignition engines fitted into vocational vehicles, 
the agencies are proposing MY 2027 standards that would require engine 
manufacturers to achieve, on average, a 4.0 percent reduction in fuel 
consumption and CO2 emissions beyond the Phase 1 standard. 
We propose to adopt interim engine standards in MY 2021 and MY 2024 
that would require diesel engine manufacturers to achieve, on average, 
2.0 percent and 3.5 percent reductions in fuel consumption and 
CO2 emissions, respectively.
---------------------------------------------------------------------------

    \104\ Tractor engine standards apply to all engines, without 
regard to the engine-cycle classification.
---------------------------------------------------------------------------

    Table II-5 presents the CO2 and fuel consumption 
standards the agencies propose for compression-ignition engines to be 
installed in vocational vehicles. The first set of standards would take 
effect with MY 2021, and the second set would take effect with MY 2024.

              Table II-5--Proposed Vocational Diesel Engine Standards Over the Heavy-Duty FTP Cycle
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-    Medium heavy-   Heavy heavy-
             Model year                        Standard             duty diesel     duty diesel     duty diesel
----------------------------------------------------------------------------------------------------------------
2021-2023..........................  CO2 Standard (g/bhp-hr)....        565             565             544
                                     Fuel Consumption Standard            5.5501          5.5501          5.3438
                                      (gallon/100 bhp-hr).
2024-2026..........................  CO2 Standard (g/bhp-hr)....        556             556             536
                                     Fuel Consumption (gallon/            5.4617          5.4617          5.2652
                                      100 bhp-hr).
2027 and Later.....................  CO2 Standard (g/bhp-hr)....        553             553             533
                                     Fuel Consumption (gallon/            5.4322          5.4322          5.2358
                                      100 bhp-hr).
----------------------------------------------------------------------------------------------------------------

    Although both EPA and NHTSA are proposing to begin the Phase 2 
engine standards, EPA considered proposing Phase 2 standards that would 
begin before MY 2021--that is with less lead time. NHTSA is required by 
statute to

[[Page 40195]]

provide four models years of lead time, while EPA is required only to 
provide lead time ``necessary to permit the development and application 
of the requisite technology'' (CAA Section 202(a)(2)). However, as 
noted in Section I, lead time cannot be separated for other relevant 
factors such as costs, reliability, and stringency. Proposing these 
standards before 2021 could increase the risk of reliability issues in 
the early years. Given the limited number of engine models that each 
manufacturer produces, managing that many new standards would be 
problematic (i.e., new Phase 1 standards in 2017, new Phase 2 EPA 
standards in 2018, 2019, or 2020, new standards in 2021, 2024, and 
again in 2027). Considering these challenges, EPA determined that 
earlier model year standards would not be appropriate, especially given 
the value of harmonizing the NHTSA and EPA standards.
(a) Feasibility of the Diesel (Compression-Ignition) Engine Standards
    In this section, the agencies discuss our assessment of the 
feasibility of the proposed engine standards and the extent to which 
they would conform to our respective statutory authority and 
responsibilities. More details on the technologies discussed here can 
be found in the Draft RIA Chapter 2.3. The feasibility of these 
technologies is further discussed in draft RIA Chapter 2.7 for tractor 
and vocational vehicle engines. Note also, that the agencies are 
considering adopting engine standards with less lead time, and may do 
so in the Final Rules. These standards are discussed in Section (e).
    Based on the technology analysis described below, the agencies can 
project a technology path exists to allow manufacturers to meet the 
proposed final Phase 2 standards by 2027, as well as meeting the 
intermediate 2021 and 2024 standards. The agencies also project that 
manufacturers would be able to meet these standards at a reasonable 
cost and without adverse impacts on in-use reliability. Note that the 
agencies are still evaluating whether these same standards could be met 
sooner, as was analyzed in Alternative 4.
    In general, engine performance for CO2 emissions and 
fuel consumption can be improved by improving combustion and reducing 
energy losses. More specifically, the agencies have identified the 
following key areas where fuel efficiency can be improved:

 Combustion optimization
 Turbocharging system
 Engine friction and other parasitic losses
 Exhaust aftertreatment
 Engine breathing system
 Engine downsizing
 Waste heat recovery
 Transient control for vocational engines only

    The agencies are proposing to phase-in the standards from 2021 
through 2027 so that manufacturers could gradually introduce these 
technologies. For most of these improvements, the agencies project 
manufacturers could begin applying them to about 45-50 percent of their 
heavy-duty engines by 2021, 90-95 percent by 2024, and ultimately apply 
them to 100 percent of their heavy-duty engines by 2027. However, for 
some of these improvements (such as waste heat recovery and engine 
downsizing) we project lower application rates in the Phase 2 time 
frame. This phase-in structure is consistent with the normal manner in 
which manufacturers introduce new technology to manage limited R&D 
budgets and well as to allow them to work with fleets to fully evaluate 
in-use reliability before a technology is applied fleet-wide. The 
agencies believe the proposed phase-in schedule would allow 
manufacturers to complete these normal processes. As described in 
Section (e), the agencies are also requesting comment on whether 
manufacturers could complete these development steps more quickly so 
that they could meet these standards sooner.
    Based on our technology assessment described below, the proposed 
engine standards appear to be consistent with the agencies' respective 
statutory authorities. All of the technologies with high penetration 
rates above 50 percent have already been demonstrated to some extent in 
the field or in research laboratories, although some development work 
remains to be completed. We note that our feasibility analysis for 
these engine standards is not based on projecting 100 percent 
application for any technology until 2027. We believe that projecting 
less than 100 percent application is appropriate and gives us 
additional confidence that the interim standards would be feasible.
    Because this analysis considers reductions from engines meeting the 
Phase 1 standards, it assumes manufacturers would continue to include 
the same compliance margins as Phase 1. In other words, a manufacturer 
currently declaring FCLs 10 g/hp-hr above its measured emission rates 
(in order to account for production and test-to-test variability) would 
continue to do the same in Phase 2. We request comment on this 
assumption.
    The agencies have carefully considered the costs of applying these 
technologies, which are summarized in Section II.D.(2) (d). These costs 
appear to be reasonable on both a per engine basis, and when 
considering payback periods.\105\ The engine technologies are discussed 
in more detail below. Readers are encouraged to see the draft RIA 
Chapter 2 for additional details (and underlying references) about our 
feasibility analysis.
---------------------------------------------------------------------------

    \105\ See Section IX.M for additional information about payback 
periods.
---------------------------------------------------------------------------

(i) Combustion Optimization
    Although manufacturers are making significant improvements in 
combustion to meet the Phase 1 engine standards, the agencies project 
that even more improvement would be possible after 2018. For example, 
improvements to fuel injection systems would allow more flexible fuel 
injection capability with higher injection pressure, which can provide 
more opportunities to improve engine fuel efficiency. Further 
optimization of piston bowls and injector tips would also improve 
engine performance and fuel efficiency. We project that a reduction of 
up to 1.0 percent is feasible in the 2024 model year through the use of 
these technologies, although it would likely apply to only 95 percent 
of engines until 2027.
    Another important area of potential improvement is advanced engine 
control incorporating model based calibration to reduce losses of 
control during transient operation. Improvements in computing power and 
speed would make it possible to use much more sophisticated algorithms 
that are more predictive than today's controls. Because such controls 
are only beneficial during transient operation, they would reduce 
emission over the FTP cycle, and during in-use operation, they would 
not reduce emissions over the SET cycle. Thus the agencies are 
projecting model based control reductions only for vocational engines. 
Although this control concept is not currently available, we project 
model based controls achieving a 2 percent improvement in transient 
emissions could be in production for some engine models by 2021. By 
2027, we project over one-third of all vocational diesel engines would 
incorporate model-based controls.
(ii) Turbocharging System
    Many advanced turbocharger technologies can be potentially added

[[Page 40196]]

into production in the time frame between 2021 and 2027, and some of 
them are already in production, such as mechanical or electric turbo-
compound, more efficient variable geometry turbine, and Detroit 
Diesel's patented asymmetric turbocharger. A turbo compound system 
extracts energy from the exhaust to provide additional power. 
Mechanical turbo-compounding includes a power turbine located 
downstream of the turbine which in turn is connected to the crankshaft 
to supply additional power. On-highway demonstrations of this 
technology began in the early 1980s. It was used first in heavy duty 
production by Detroit Diesel for their DD15 and DD16 engines and 
reportedly provided a 3 to 5 percent fuel consumption reduction. 
Results are duty cycle dependent, and require significant time at high 
load to see a fuel efficiency improvement. Light load factor vehicles 
can expect little or no benefit. Volvo reports two to four percent fuel 
consumption improvement in line haul applications, which could be in 
production even by 2020.
(iii) Engine Friction and Parasitic Losses
    The friction associated with each moving part in an engine results 
in a small loss of engine power. For example, frictional losses occur 
at bearings, in the valvetrain, and at the piston-cylinder interface. 
Taken together such losses represent a large fraction of all energy 
lost in an engine. For Phase 1, the agencies projected a 1-2 percent 
reduction in fuel consumption due to friction reduction. However, new 
information leads us to project that an additional 1.4 percent 
reduction would be possible for some engines by 2021 and all engines by 
2027. These reductions would be possible due to improvements in bearing 
materials, lubricants, and new accessory designs such as variable-speed 
pumps.
(iv) Aftertreatment Optimization
    All diesel engines manufacturers are already using diesel 
particulate filter (DPF) to reduce particulate matter (PM) and 
selective catalytic reduction (SCR) to reduce NOX emissions. 
The agencies see two areas in which improved aftertreatment systems can 
also result in lower fuel consumption. First, increased SCR efficiency 
could allow re-optimization of combustion for better fuel consumption 
because the SCR would be capable of reducing higher engine-out 
NOX emissions. Second, improved designs could reduce 
backpressure on the engine to lower pumping losses. The agencies 
project the combined impact of such improvements could be 0.6 percent 
or more.
(v) Engine Breathing System
    Various high efficiency air handling (for both intake air and 
exhaust) processes could be produced in the 2020 and 2024 time frame. 
To maximize the efficiency of such processes, induction systems may be 
improved by manufacturing more efficiently designed flow paths 
(including those associated with air cleaners, chambers, conduit, mass 
air flow sensors and intake manifolds) and by designing such systems 
for improved thermal control. Improved turbocharging and air handling 
systems would likely include higher efficiency EGR systems and 
intercoolers that reduce frictional pressure loss while maximizing the 
ability to thermally control induction air and EGR. EGR systems that 
often rely upon an adverse pressure gradient (exhaust manifold 
pressures greater than intake manifold pressures) must be reconsidered 
and their adverse pressure gradients minimized. Other components that 
offer opportunities for improved flow efficiency include cylinder 
heads, ports and exhaust manifolds to further reduce pumping losses by 
about 1 percent.
(vi) Engine Downsizing
    Proper sizing of an engine is an important component of optimizing 
a vehicle for best fuel consumption. This Phase 2 rule would improve 
overall vehicle efficiency, which would result in a drop in the vehicle 
power demand for most operation. This drop moves the vehicle operating 
points down to a lower load zone, which can move the engine away from 
the sweet spot. Engine downsizing combined with engine downspeeding can 
allow the engine to move back to higher loads and lower speed zone, 
thus achieving slightly better fuel economy in the real world. However, 
because of the way engines are tested, little of the benefit of engine 
downsizing would be detected during engine testing (if power density 
remains the same) because the engine test cycles are normalized based 
on the full torque curve. Thus the current engine test is not the best 
way to measure the true effectiveness of engine downsizing. 
Nevertheless, we project that some small benefit would be measured over 
the engine test cycles--perhaps up to a one-quarter percent improvement 
in fuel consumption. Note that a bigger benefit would be observed 
during GEM simulation, better reflecting real world improvements. This 
is factored into the vehicle standards. Thus, the agencies see no 
reason to fundamentally revise the engine test procedure at this time.
(vii) Waste Heat Recovery
    More than 40 percent of all energy loss in an engine is lost as 
heat to the exhaust and engine coolant. For many years, manufacturers 
have been using turbochargers to convert some of the waste heat in the 
exhaust into usable mechanical power than is used to compress the 
intake air. Manufacturers have also been working to use a Rankine 
cycle-based system to extract additional heat energy from the engine. 
Such systems are often called waste heat recovery (WHR) systems. The 
possible sources of energy include the exhaust, recirculated exhaust 
gases, compressed charge air, and engine coolant. The basic approach 
with WHR is to use waste heat from one or more of these sources to 
evaporate a working fluid, which is passed through a turbine or 
equivalent expander to create mechanical or electrical power, then re-
condensed.
    Prior to the Phase 1 Final Rule, the NAS estimated the potential 
for WHR to reduce fuel consumption by up to 10 percent.\106\ However, 
the agencies do not believe such levels would be achievable within the 
Phase 2 time frame. There currently are no commercially available WHR 
systems for diesel engines, although research prototype systems are 
being tested by some manufacturers. The agencies believe it is likely a 
commercially-viable WHR capable of reducing fuel consumption by over 
three percent would be available in the 2021 to 2024 time frame. Cost 
and complexity may remain high enough to limit the use of such systems 
in this time frame. Moreover, packaging constraints and transient 
response challenges would limit the application of WHR systems to line-
haul tractors. Refer to RIA Chapter 2 for a detailed description of 
these systems and their applicability. The agencies project that WHR 
recovery could be used on 1 percent of all tractor engines by 2021, on 
5 percent by 2024, and 15 percent by 2027.
---------------------------------------------------------------------------

    \106\ See 2010 NAS Report, page 57.
---------------------------------------------------------------------------

    The net cost and effectiveness of future WHR systems would depend 
on the sources of waste heat. Systems that extract heat from EGR gases 
may provide the side benefit of reducing the size of EGR coolers or 
eliminating them altogether. To the extent that WHR systems use exhaust 
heat, they would increase the overall cooling system heat rejection 
requirement and likely require larger radiators. This could have 
negative impacts on cooling fan power

[[Page 40197]]

needs and vehicle aerodynamics. Limited engine compartment space under 
hood could leave insufficient room for additional radiator size 
increasing. On the other hand, WHR systems that extract heat from the 
engine coolant, could actually improve overall cooling.
(viii) Technology Packages for Diesel Engines Installed in Tractors
    Typical technology packaged for diesel engines installed in 
tractors basically includes most technologies mentioned above, which 
includes combustion optimization, turbocharging system, engine friction 
and other parasitic losses, exhaust aftertreatment, engine breathing 
system, and engine downsizing. Depending on the technology maturity of 
WHR and market demands, a small number of tractors could install waste 
heat recovery device with Rankine cycle technology. During the 
stringency development, the agencies received strong support from 
various stakeholders, where they graciously provided many confidential 
business information (CBI) including both technology reduction 
potentials and estimated market penetrations. Combining those CBI data 
with the agencies' engineering judgment, Table II-4 lists those 
potential technologies together with the agencies' estimated market 
penetration for tractor engine. Those reduction values shown as ``SET 
reduction'' are relative to Phase 1 engine, which is shown in Table II-
6. It should be pointed out that the stringency in Table II-6 are 
developed based on the proposed SET reweighting factors l shown in 
Table II-2. The agencies welcome comment on the market penetration 
rates listed below.

                         Table II-6--Projected Tractor Engine Technologies and Reduction
----------------------------------------------------------------------------------------------------------------
                                                   SET weighted       Market          Market          Market
                    SET mode                       reduction (%)    penetration     penetration     penetration
                                                     2020-2027       (2021) %        (2024) %        (2027) %
----------------------------------------------------------------------------------------------------------------
Turbo compound with clutch......................             1.8               5              10              10
WHR (Rankine cycle).............................             3.6               1               5              15
Parasitic/Friction (Cyl Kits, pumps, FIE),                   1.4              45              95             100
 lubrication....................................
Aftertreatment (lower dP).......................             0.6              45              95             100
EGR/Intake & exhaust manifolds/Turbo/VVT/Ports..             1.1              45              95             100
Combustion/FI/Control...........................             1.1              45              95             100
Downsizing......................................             0.3              10              20              30
Weighted reduction (%)..........................  ..............             1.5             3.7             4.2
----------------------------------------------------------------------------------------------------------------

(ix) Technology Packages for Diesel Engines Installed in Vocational 
Vehicles
    For compression-ignition engines fitted into vocational vehicles, 
the agencies are proposing MY 2021 standards that would require engine 
manufacturers to achieve, on average, a 2.0 percent reduction in fuel 
consumption and CO2 emissions beyond the baseline that is 
the Phase 1 standard. Beginning in MY 2024, the agencies are proposing 
engine standards that would require diesel engine manufacturers to 
achieve, on average, a 3.5 percent reduction in fuel consumption and 
CO2 emissions beyond the Phase 1 baseline standards for all 
diesel engines including LHD, MHD, and HHD. The agencies are proposing 
these standards based on the performance of reduced parasitics and 
friction, improved aftertreatment, combustion optimization, 
superchargers with VGT and bypass, model-based controls, improved EGR 
cooling/transport, and variable valve timing (only in LHD and MHD 
engines). The percent reduction for the MY2021, MY2024, and MY2027 
standards is based on the combination of technology effectiveness and 
market adoption rate projected.
    Most of the potential engine related technologies discussed 
previously can be applied here. However, neither the waste heat 
technologies with the Rankine cycle concept nor turbo-compound would be 
applied into vocational sector due to the inefficient use of waste heat 
energy with duty cycles and applications with more transient operation 
than highway operation. Given the projected cost and complexity of such 
systems, we believe that for the Phase 2 time frame manufacturers will 
focus their development work on tractor applications (which would have 
better payback for operators) rather than vocational applications. In 
addition, the benefits due to engine downsizing, which can be seen in 
tractor engines, may not be clearly seen in vocational sector, again 
because this control technology produces few benefits in transient 
operation.
    One of the most effective technologies for vocational engines is 
the optimization of transient control. It would be expected that more 
advanced transient control including different levels of model based 
control and neural network control package could provide substantial 
benefits in vocational engines due to the extensive transient operation 
of these vehicles. For this technology, the use of the FTP cycle would 
drive engine manufacturers to invest more in transient control to 
improve engine efficiency. Other effective technologies would be 
parasitic/friction reduction, as well as improvements to combustion, 
air handling systems, turbochargers, and aftertreatment systems. Table 
II-7 below lists those potential technologies together with the 
agencies' projected market penetration for vocational engines. Again, 
similar to tractor engine, the technology reduction and market 
penetration are estimated by combining the CBI data together with the 
agencies' engineering judgment. Those reduction values shown as ``FTP 
reduction'' are relative to a Phase 2 baseline engine, which is shown 
in Table II-3. The weighted reductions combine the emission reduction 
values weighted by the market penetration of each technology).

[[Page 40198]]

                       Table II-7--Projected Vocational Engine Technologies and Reduction
----------------------------------------------------------------------------------------------------------------
                                                   GHG emissions      Market          Market          Market
                   Technology                     reduction 2020-   penetration     penetration     penetration
                                                      2027 %          2021 %          2024 %          2027 %
----------------------------------------------------------------------------------------------------------------
Model based control.............................             2.0              25              30              40
Parasitic/Friction..............................             1.5              60              90             100
EGR/Air/VVT/Turbo...............................             1.0              50              90             100
Improved AT.....................................             0.5              50              90             100
Combustion Optimization.........................             1.0              50              90             100
Weighted reduction (%)-L/M/HHD..................  ..............             2.0             3.5             4.0
----------------------------------------------------------------------------------------------------------------

(x) Summary of the Agencies' Analysis of the Feasibility of the 
Proposed Diesel Engine Standards
    The proposed HD Phase 2 standards are based on adoption rates for 
technologies that the agencies regard, subject to consideration of 
public comment, as the maximum feasible for purposes of EISA Section 
32902(k) and appropriate under CAA Section 202(a) for the reasons given 
above. The agencies believe these technologies can be adopted at the 
estimated rates for these standards within the lead time provided, as 
discussed in draft RIA Chapter 2. The 2021 and 2024 MY standards are 
phase-in standards on the path to the 2027 MY standards and were 
developed using less aggressive application rates and therefore have 
lower technology package costs than the 2027 MY standards.
    As described in Section II.D.(2)(d) below, the cost of the proposed 
standards is estimated to range from $270 to $1,698 per engine. This is 
slightly higher than the costs for Phase 1, which were estimated to be 
$234 to $1,091 per engine. Although the agencies did not separately 
determine fuel savings or emission reductions due to the engine 
standards apart from the vehicle program, it is expected that the fuel 
savings would be significantly larger than these costs, and the 
emission reductions would be roughly proportional to the technology 
costs when compared to the corresponding vehicle program reductions and 
costs. Thus, we regard these standards as cost-effective. This is true 
even without considering payback period. The proposed phase-in 2021 and 
2024 MY standards are less stringent and less costly than the proposed 
2027 MY standards. Given that the agencies believe the proposed 
standards are technologically feasible, are highly cost effective, and 
highly cost effective when accounting for the fuel savings, and have no 
apparent adverse potential impacts (e.g., there are no projected 
negative impacts on safety or vehicle utility), the proposed standards 
appear to represent a reasonable choice under Section 202(a) of the CAA 
and the maximum feasible under NHTSA's EISA authority at 49 U.S.C. 
32902(k)(2).
(b) Basis for Continuing the Phase 1 Spark-Ignited Engine Standard
    Today most SI-powered vocational vehicles are sold as incomplete 
vehicles by a vertically integrated chassis manufacturer, where the 
incomplete chassis shares most of the same technology as equivalent 
complete pickups or vans, including the powertrain. The number of such 
incomplete SI-powered vehicles is small compared to the number of 
completes. Another, even less common way that SI-powered vocational 
vehicles are built is by a non-integrated chassis manufacturer 
purchasing an engine from a company that also produces complete and/or 
incomplete HD pickup trucks and vans. The resulting market structure 
leads manufacturers of heavy-duty SI engines to have little market 
incentive to develop separate technology for vocational engines that 
are engine-certified. Moreover, the agencies have not identified a 
single SI engine technology that we believe belongs on engine-certified 
vocational engines that we do not also project to be used on complete 
heavy-duty pickups and vans.
    In light of this market structure, when the agencies considered the 
feasibility of more stringent Phase 2 standards for SI vocational 
engines, we identified the following key questions:
    1. Will there be technologies available that could reduce in-use 
emissions from vocational SI engines?
    2. Would these technologies be applied to complete vehicles and 
carried-over to engine certified engines without a new standard?
    3. Would these technologies be applied to meet the vehicle-based 
standards described in Section V?
    4. What are the drawbacks associated with setting a technology-
forcing Phase 2 standard for SI engines?
    With respect to the first and second questions, as noted in Chapter 
2.6 of the draft RIA, the agencies have identified improved lubricants, 
friction reduction, and cylinder deactivation as technologies that 
could potentially reduce in-use emissions from vocational engines; and 
the agencies have further determined that to the extent these 
technologies would be viable for complete vehicles, they would also be 
applied to engine-certified engines. Nevertheless, significant 
uncertainty remains about how much benefit would be provided by these 
technologies. It is possible that the combined impact of these 
technologies would be one percent or less. With respect to the third 
question, we believe that to the extent these technologies are viable 
and effective, they would be applied to meet the vehicle-based 
standards for vocational vehicles.
    At this time, it appears the fourth question regarding drawbacks is 
the most important. The agencies could propose a technology forcing 
standard for vocational SI engines based on a projection of each of 
these technologies being effective for these engines. However, as 
already noted in Section I, the agencies see value in setting the 
standards at levels that would not require every projected technology 
to work as projected. Effectively requiring technologies to match our 
current projections would create the risk that the standards would not 
be feasible if even a single one of technologies failed to match our 
projections. This risk is amplified for SI engines because of the very 
limited product offerings, which provide far fewer opportunities for 
averaging than exist for CI engines. Given the relatively small 
improvement projected, and the likelihood that most or all of this 
improvement would result anyway from the complete pickup and van 
standards and the vocational vehicle-based standards, we do not believe 
such risk is justified or needed. The approach the agencies are 
proposing accomplishes the same objective without the attendant

[[Page 40199]]

potential risk. With this approach, the Phase 1 SI engine standard for 
these engines would remain in place, and engine improvements would be 
reflected in the stringency of the vehicle standard for the vehicle in 
which the engine would be installed. Nevertheless, we request comment 
on the merits of adopting a more stringent SI engine standard in the 
2024 to 2027 time frame, including comment on technologies, adoption 
rates, and effectiveness over the engine cycle that could support 
adoption of a more stringent standard. Please see Section V.C of this 
preamble for a description of the SI engine technologies that have been 
considered in developing the proposed vocational vehicle standards. 
Please see Section VI.C of this preamble for a description of the SI 
engine technologies that have been considered in developing the 
proposed HD pickup truck and van standards.
(c) Engine Improvements Projected for Vehicles over the GEM Duty Cycles
    Because we are proposing that tractor and vocational vehicle 
manufacturers represent their vehicles' actual engines in GEM for 
vehicle certification, the agencies aligned our engine technology 
effectiveness assessments for both the separate engine standards and 
the tractor and vocational vehicle standards for each of the regulatory 
alternatives considered. This was an important step because we are 
proposing to recognize the same engine technologies in both the 
separate engine standards and the vehicle standards, which each have 
different test procedures for demonstrating compliance. As explained 
earlier in Section II. D. (1), compliance with the tractor separate 
engine standards is determined from a composite of the Supplemental 
Engine Test (SET) procedure's 13 steady-state operating points. 
Compliance with the vocational vehicle separate engine standards is 
determined over the Federal Test Procedure's (FTP) transient engine 
duty cycle. In contrast, compliance with the vehicle standards is 
determined using GEM, which calculates composite results over a 
combination of 55 mph and 65 mph steady-state vehicle cycles and the 
ARB Transient vehicle cycle. Note that we are also proposing a new 
workday idle cycle for vocational vehicles. Each of these duty cycles 
emphasizes different engine operating points; therefore, they can each 
recognize certain technologies differently.
    Our first step in aligning our engine technology assessment at both 
the engine and vehicle levels was to start with an analysis of how we 
project each technology to impact performance at each of the 13 
individual test points of the SET steady-state engine duty cycle. For 
example, engine friction reduction technology would be expected to have 
the greatest impact at the highest engine speeds, where frictional 
energy losses are the greatest. As another example, turbocharger 
technology is generally optimized for best efficiency at steady-state 
cruise vehicle speed. For an engine this is near its lower peak-torque 
speed and at a moderately high load that still offers sufficient torque 
reserve to climb modest road grades without frequent transmission gear 
shifting. The agencies also considered the combination of certain 
technologies causing synergies and dis-synergies with respect to engine 
efficiency at each of these test points. See RIA Chapter 2 for further 
details.
    Next we estimated unique brake-specific fuel consumption values for 
each of the 13 SET test points for two hypothetical MY2018 tractor 
engines that would be compliant with the Phase 1 standards. These were 
a 15 liter displacement 455 horsepower engine and an 11 liter 350 
horsepower engine. We then added technologies to these engines that we 
determined were feasible for MY2021, MY2024, and MY 2027, and we 
determined unique improvements at each of the 13 SET points. We then 
calculated composite SET values for these hypothetical engines and 
determined the SET improvements that we could use to propose more 
stringent separate tractor engine standards for MY2021, MY2024, and MY 
2027.
    To align our engine technology analysis for vehicles to the SET 
engine analysis described above, we then fit a surface equation through 
each engine's SET points versus engine speed and load to approximate 
their analogous fuel maps that would represent these same engines in 
GEM. Because the 13 SET test points do not fully cover an engine's wide 
range of possible operation, we also determined improvements for an 
additional 6 points of engine operation to improve the creation of GEM 
fuel maps for these engines. Then for each of these 8 tractor engines 
(two each for MY2018, MY2021, MY2024, and MY2027) we ran GEM 
simulations to represent low-, mid-, and high-roof sleeper cabs and 
low-, mid-, and high-roof day cabs. Class 8 tractors were assumed for 
the 455 horsepower engine and Class 7 tractors (day cabs only) were 
assumed for the 350 horsepower engine. Each GEM simulation calculated 
results for the 55 mph, 65 mph, and ARB Transient cycles, as well as 
the composite GEM value associated with each of the tractor types. 
After factoring in our Alternative 3 projected market penetrations of 
the engine technologies, we then compared the percent improvements that 
the same sets of engine technology caused over the separate engines' 
SET composites and the various vehicles' GEM composites. Compared to 
their respective MY2018 baseline engines, the two engines of different 
horsepower showed the same percent improvements. All of the tractor cab 
types showed nearly the same relative improvements too. For example, 
for the MY2021 Alternative 3 engine technology package in a high roof 
sleeper tractor, the SET engine composites showed a 1.5 percent 
improvement and the GEM composites a 1.6 percent improvement. For the 
MY2024 Alternative 3 engine technology packages, the SET engine 
composites showed a 3.7 percent improvement and the GEM composites a 
3.7 percent improvement. For MY2027 Alternative 3 engine technology 
packages, the SET engine composites showed a 4.2 percent improvement 
and the GEM composites a 4.2 percent improvement. We therefore 
concluded that tractor engine technologies will improve engines and 
tractors proportionally, even though the separate engine and vehicle 
certification test procedures have different duty cycles.
    We then repeated this same process for the FTP engine transient 
cycle and the GEM vocational vehicle types. For the vocational engine 
analysis we investigated four engines: 15 liter displacement engine at 
455 horsepower rating, 11 liter displacement engine at 345 horsepower 
rating, a 7 liter displacement engine at a 200 horsepower rating and a 
270 horsepower rating. These engines were then used in GEM over the 
light-heavy, medium-heavy, and heavy-heavy vocational vehicle 
configurations. Because the technologies were assumed to impact each 
point of the FTP in the same way, the results for all engines and 
vehicles were 2.0 percent improvement in MY2021, 3.5 percent 
improvement in MY2024, and 4.0 percent improvement in MY2027. 
Therefore, we arrived at the same conclusion that vocational vehicle 
engine technologies are recognized at the same percent improvement over 
the FTP as the GEM cycles. We request comment on our approach to arrive 
at this conclusion.
(d) Engine Technology Package Costs for Tractor and Vocational Engines 
(and Vehicles)
    As described in Chapters 2 and 7 of the draft RIA, the agencies 
estimated costs for each of the engines technologies discussed here. 
All costs

[[Page 40200]]

are presented relative to engines projected to comply with the model 
year 2017 standards--i.e., relative to our baseline engines. Note that 
we are not presenting any costs for gasoline engines (SI engines) 
because we are not proposing to change the standards.
    Our engine cost estimates include a separate analysis of the 
incremental part costs, research and development activities, and 
additional equipment. Our general approach used elsewhere in this 
action (for HD pickup trucks, gasoline engines, Class 7 and 8 tractors, 
and Class 2b-8 vocational vehicles) estimates a direct manufacturing 
cost for a part and marks it up based on a factor to account for 
indirect costs. See also 75 FR 25376. We believe that approach is 
appropriate when compliance with proposed standards is achieved 
generally by installing new parts and systems purchased from a 
supplier. In such a case, the supplier is conducting the bulk of the 
research and development on the new parts and systems and including 
those costs in the purchase price paid by the original equipment 
manufacturer. The indirect costs incurred by the original equipment 
manufacturer need not include much cost to cover research and 
development since the bulk of that effort is already done. For the MHD 
and HHD diesel engine segment, however, the agencies believe that OEMs 
will incur costs not associated with the purchase of parts or systems 
from suppliers or even the production of the parts and systems, but 
rather the development of the new technology by the original equipment 
manufacturer itself. Therefore, the agencies have directly estimated 
additional indirect costs to account for these development costs. The 
agencies used the same approach in the Phase 1 HD rule. EPA commonly 
uses this approach in cases where significant investments in research 
and development can lead to an emission control approach that requires 
no new hardware. For example, combustion optimization may significantly 
reduce emissions and cost a manufacturer millions of dollars to develop 
but would lead to an engine that is no more expensive to produce. Using 
a bill of materials approach would suggest that the cost of the 
emissions control was zero reflecting no new hardware and ignoring the 
millions of dollars spent to develop the improved combustion system. 
Details of the cost analysis are included in the draft RIA Chapter 2. 
To reiterate, we have used this different approach because the MHD and 
HHD diesel engines are expected to comply in part via technology 
changes that are not reflected in new hardware but rather reflect 
knowledge gained through laboratory and real world testing that allows 
for improvements in control system calibrations--changes that are more 
difficult to reflect through direct costs with indirect cost 
multipliers. Note that these engines are also expected to incur new 
hardware costs as shown in Table II-8 through Table II-11. EPA also 
developed the incremental piece cost for the components to meet each of 
the 2021 and 2024 standards. The costs shown in Table II-12 include a 
low complexity ICM of 1.15 and assume the flat-portion of the learning 
curve is applicable to each technology.
(i) Tractor Engine Package Costs

    Table II-8--Proposed MY2021 Tractor Diesel Engine Component Costs
      Inclusive of Indirect Cost Markups and Adoption Rates (2012$)
------------------------------------------------------------------------
                                             Medium HD       Heavy HD
------------------------------------------------------------------------
Aftertreatment system (improved                       $7              $7
 effectiveness SCR, dosing, DPF)........
Valve Actuation.........................              82              82
Cylinder Head (flow optimized, increased               3               3
 firing pressure, improved thermal
 management)............................
Turbocharger (improved efficiency)......               9               9
Turbo Compounding.......................              50              50
EGR Cooler (improved efficiency)........               2               2
Water Pump (optimized, variable vane,                 43              43
 variable speed)........................
Oil Pump (optimized)....................               2               2
Fuel Pump (higher working pressure,                    2               2
 increased efficiency, improved pressure
 regulation)............................
Fuel Rail (higher working pressure).....               5               5
Fuel Injector (optimized, improved                     5               5
 multiple event control, higher working
 pressure)..............................
Piston (reduced friction skirt, ring and               1               1
 pin)...................................
Valvetrain (reduced friction, roller                  39              39
 tappet)................................
Waste Heat Recovery.....................             105             105
``Right sized'' engine..................             -40             -40
                                         -------------------------------
    Total...............................             314             314
------------------------------------------------------------------------
Note: ``Right sized'' diesel engine is a smaller, less costly engine
  than the engine it replaces.

    Table II-9--Proposed MY2024 Tractor Diesel Engine Component Costs
      Inclusive of Indirect Cost Markups and Adoption Rates (2012$)
------------------------------------------------------------------------
                                             Medium HD       Heavy HD
------------------------------------------------------------------------
Aftertreatment system (improved                      $14             $14
 effectiveness SCR, dosing, DPF)........
Valve Actuation.........................             166             166
Cylinder Head (flow optimized, increased               6               6
 firing pressure, improved thermal
 management)............................
Turbocharger (improved efficiency)......              17              17
Turbo Compounding.......................              92              92
EGR Cooler (improved efficiency)........               3               3
Water Pump (optimized, variable vane,                 84              84
 variable speed)........................
Oil Pump (optimized)....................               4               4
Fuel Pump (higher working pressure,                    4               4
 increased efficiency, improved pressure
 regulation)............................
Fuel Rail (higher working pressure).....               9               9
Fuel Injector (optimized, improved                    10              10
 multiple event control, higher working
 pressure)..............................
Piston (reduced friction skirt, ring and               3               3
 pin)...................................
Valvetrain (reduced friction, roller                  75              75
 tappet)................................

[[Page 40201]]

 
Waste Heat Recovery.....................             502             502
``Right sized'' engine..................             -85             -85
                                         -------------------------------
    Total...............................             904             904
------------------------------------------------------------------------
Note: ``Right sized'' diesel engine is a smaller, less costly engine
  than the engine it replaces.

   Table II-10--Proposed MY2027 Tractor Diesel Engine Component Costs
      Inclusive of Indirect Cost Markups and Adoption Rates (2012$)
------------------------------------------------------------------------
                                             Medium HD       Heavy HD
------------------------------------------------------------------------
Aftertreatment system (improved                      $14             $14
 effectiveness SCR, dosing, DPF)........
Valve Actuation.........................             169             169
Cylinder Head (flow optimized, increased               6               6
 firing pressure, improved thermal
 management)............................
Turbocharger (improved efficiency)......              17              17
Turbo Compounding.......................              87              87
EGR Cooler (improved efficiency)........               3               3
Water Pump (optimized, variable vane,                 84              84
 variable speed)........................
Oil Pump (optimized)....................               4               4
Fuel Pump (higher working pressure,                    4               4
 increased efficiency, improved pressure
 regulation)............................
Fuel Rail (higher working pressure).....               9               9
Fuel Injector (optimized, improved                    10              10
 multiple event control, higher working
 pressure)..............................
Piston (reduced friction skirt, ring and               3               3
 pin)...................................
Valvetrain (reduced friction, roller                  75              75
 tappet)................................
Waste Heat Recovery.....................           1,340           1,340
``Right sized'' engine..................            -127            -127
                                         -------------------------------
Total...................................           1,698           1,698
------------------------------------------------------------------------
Note: ``Right sized'' diesel engine is a smaller, less costly engine
  than the engine it replaces.

(ii) Vocational Diesel Engine Package Costs

  Table II-11--Proposed MY2021 Vocational Diesel Engine Component Costs Inclusive of Indirect Cost Markups and
                                             Adoption Rates (2012$)
----------------------------------------------------------------------------------------------------------------
                                                                     Light HD        Medium HD       Heavy HD
----------------------------------------------------------------------------------------------------------------
Aftertreatment system (improved effectiveness SCR, dosing, DPF).              $8              $8              $8
Valve Actuation.................................................              91              91              91
Cylinder Head (flow optimized, increased firing pressure,                      6               3               3
 improved thermal management)...................................
Turbocharger (improved efficiency)..............................              10              10              10
EGR Cooler (improved efficiency)................................               2               2               2
Water Pump (optimized, variable vane, variable speed)...........              57              57              57
Oil Pump (optimized)............................................               3               3               3
Fuel Pump (higher working pressure, increased efficiency,                      3               3               3
 improved pressure regulation)..................................
Fuel Rail (higher working pressure).............................               7               6               6
Fuel Injector (optimized, improved multiple event control,                     8               6               6
 higher working pressure).......................................
Piston (reduced friction skirt, ring and pin)...................               1               1               1
Valvetrain (reduced friction, roller tappet)....................              69              52              52
Model Based Controls............................................              28              28              28
                                                                 -----------------------------------------------
    Total.......................................................             293             270             270
----------------------------------------------------------------------------------------------------------------

  Table II-12--Proposed MY2024 Vocational Diesel Engine Component Costs Inclusive of Indirect Cost Markups and
                                             Adoption Rates (2012$)
----------------------------------------------------------------------------------------------------------------
                                                                     Light HD        Medium HD       Heavy HD
----------------------------------------------------------------------------------------------------------------
Aftertreatment system (improved effectiveness SCR, dosing, DPF).             $13             $13             $13
Valve Actuation.................................................             157             157             157
Cylinder Head (flow optimized, increased firing pressure,                     10               6               6
 improved thermal management)...................................
Turbocharger (improved efficiency)..............................              16              16              16
EGR Cooler (improved efficiency)................................               3               3               3
Water Pump (optimized, variable vane, variable speed)...........              79              79              79
Oil Pump (optimized)............................................               4               4               4

[[Page 40202]]

 
Fuel Pump (higher working pressure, increased efficiency,                      4               4               4
 improved pressure regulation)..................................
Fuel Rail (higher working pressure).............................              10               9               9
Fuel Injector (optimized, improved multiple event control,                    13              10              10
 higher working pressure).......................................
Piston (reduced friction skirt, ring and pin)...................               2               2               2
Valvetrain (reduced friction, roller tappet)....................              95              71              71
Model Based Controls............................................              31              31              31
                                                                 -----------------------------------------------
    Total.......................................................             437             405             405
----------------------------------------------------------------------------------------------------------------

  Table II-13--Proposed MY2027 Vocational Diesel Engine Component Costs Inclusive of Indirect Cost Markups and
                                             Adoption Rates (2012$)
----------------------------------------------------------------------------------------------------------------
                                                                     Light HD        Medium HD       Heavy HD
----------------------------------------------------------------------------------------------------------------
Aftertreatment system (improved effectiveness SCR, dosing, DPF).             $14             $14             $14
Valve Actuation.................................................             169             169             169
Cylinder Head (flow optimized, increased firing pressure,                     10               6               6
 improved thermal management)...................................
Turbocharger (improved efficiency)..............................              17              17              17
EGR Cooler (improved efficiency)................................               3               3               3
Water Pump (optimized, variable vane, variable speed)...........              84              84              84
Oil Pump (optimized)............................................               4               4               4
Fuel Pump (higher working pressure, increased efficiency,                      4               4               4
 improved pressure regulation)..................................
Fuel Rail (higher working pressure).............................              11               9               9
Fuel Injector (optimized, improved multiple event control,                    13              10              10
 higher working pressure).......................................
Piston (reduced friction skirt, ring and pin)...................               3               3               3
Valvetrain (reduced friction, roller tappet)....................             100              75              75
Model Based Controls............................................              39              39              39
                                                                 -----------------------------------------------
    Total.......................................................             471             437             437
----------------------------------------------------------------------------------------------------------------

(e) Feasibility of Phasing In the CO2 and Fuel Consumption 
Standards Sooner
    The agencies are requesting comment on accelerated standards for 
diesel engines that would achieve the same reductions as the proposed 
standards, but with less lead time. Table II-14 and Table II-15 below 
show a technology path that the agencies project could be used to 
achieve the reductions that would be required within the lead time 
allowed by the alternative standards. As discussed in Sections I and X, 
the agencies are proposing to fully phase in these standards through 
2027. The agencies believe that standards that fully phase in through 
2024 have the potential to be the maximum feasible and appropriate 
option. However, based on the evidence currently before the agencies, 
we have outstanding questions (for which we are seeking comment) 
regarding relative risks and benefits of that option in the timeframe 
envisioned. Commenters are encouraged to address how technologies could 
develop if a shorter lead time is selected. In particular, we request 
comment on the likelihood that WHR systems would be available for 
tractor engines in this time frame, and that WHR systems would achieve 
the projected level of reduction and the necessary reliability. We also 
request comment on whether it would be possible to apply the model 
based controls described in Section II.D.(2) (a)(i) to this many 
vocational engines in this time frame.

          Table II-14--Projected Tractor Engine Technologies and Reduction for Alternative 4 Standards
----------------------------------------------------------------------------------------------------------------
                                                                                      Market          Market
     %-Improvements beyond Phase 1, 2018 engine as baseline        SET reduction  penetration MY  penetration MY
                                                                        (%)          2021 (%)        2024 (%)
----------------------------------------------------------------------------------------------------------------
Turbo compound..................................................            1.82               5              10
WHR (Rankine cycle).............................................            3.58               4              15
Parasitics/Friction (Cyl Kits, pumps, FIE), lubrication.........            1.41              60             100
Aftertreatment..................................................            0.61              60             100
Exhaust Manifold Turbo Efficiency EGR Cooler VVT................            1.14              60             100
Combustion/FI/Control...........................................            1.11              60             100
Downsizing......................................................            0.29              20              30
                                                                                 -------------------------------
Market Penetration Weighted Package.............................................             2.1             4.2
----------------------------------------------------------------------------------------------------------------

[[Page 40203]]

  Table II-15--Projected Vocational Engine Technologies and Reduction for More Stringent Alternative Standards
----------------------------------------------------------------------------------------------------------------
                                                                                      Market          Market
     %-Improvements beyond Phase 1, 2018 engine as baseline        FTP reduction  penetration MY  penetration MY
                                                                        (%)          2021 (%)        2024 (%)
----------------------------------------------------------------------------------------------------------------
Model based control.............................................               2              30              40
Parasitics/Friction.............................................             1.5              70             100
EGR/Air/VVT/Turbo...............................................               1              70             100
Improved AT.....................................................             0.5              70             100
Combustion Optimization.........................................               1              70             100
Weighted reduction (%)-L/MHD/HHD................................  ..............             2.5             4.0
----------------------------------------------------------------------------------------------------------------

    The projected HDD engine package costs for both tractors and 
vocational engines in MYs 2021 and 2024 under Alternative 4 are shown 
in Table II-16. Note that, while the technology application rates in 
MY2024 under Alternative 4 are essentially identical to those for 
MY2027 under the proposal, the costs are about 5 to 11 percent higher 
under Alternative 4 due to learning effects and markup changes that are 
estimated to have occurred by MY2027 under Alternative 3. Note also 
that the agencies did not include any additional costs for accelerating 
technology development or to address potential in-use durability 
issues. We request comment on whether such costs would occur if we 
finalized this alternative. We also request comment on what steps could 
be taken to mitigate such costs.

            Table II-16--Expected Package Costs for HD Diesel Engines under Alternative 4 (2012$) \a\
----------------------------------------------------------------------------------------------------------------
                                                                       LHDD            MHDD            HHDD
           Model year              MHDD tractor    HHDD tractor     vocational      vocational      vocational
----------------------------------------------------------------------------------------------------------------
2021............................            $656            $656            $372            $345            $345
2024............................           1,885           1,885             493             457             457
----------------------------------------------------------------------------------------------------------------
Note:
\a\ Costs presented here include application rates.

    The agencies' analysis shows that, in the absence of additional 
costs for accelerating technology development or to address potential 
in-use durability issues, the costs associated with Alternative 4 would 
be very similar to those we project for the proposed standards. 
Alternative 4 would also have similar payback times and cost-
effectiveness. In other words, Alternative 4 would achieve some 
additional reductions for model years 2021 through 2026, with roughly 
proportional additional costs unless there were additional costs for 
accelerating development or for in-use durability issues. (Note that 
reductions and costs for MY 2027 and later would be equivalent for 
Alternative 4 and the proposed standards). In order to help make this 
assessment, we request comment on the following issues: whether 
manufacturers could meet these standards with three years less lead 
time, what additional expenses would be incurred to meet these 
standards with less lead time, and how reliable would the engines be if 
the manufacturers had to bring them to market three years earlier.
(3) Proposed EPA Engine Standards for N2O
    EPA is proposing to adopt the MY 2021 N2O engine 
standards that were originally proposed for Phase 1. The proposed level 
for Phase 2 would be 0.05 g/hp-hr with a default deterioration factor 
of 0.01 g/hp-hr, which we believe is technologically feasible because a 
number of engines meet this level today. This level of stringency is 
consistent with the agency's Phase 1 approach to set ``cap'' standards 
for N2O. EPA finalized Phase 1 standards for N2O 
as engine-based standards at 0.10 g/hp-hr and a 0.02 g/hp-hr default 
deterioration factor because the agency believes that emissions of this 
GHG are technologically related solely to the engine, fuel, and 
emissions aftertreatment systems, and the agency is not aware of any 
influence of vehicle-based technologies on these emissions. We continue 
to believe this approach is appropriate, but we believe that more 
stringent standards are appropriate to ensure that N2O 
emissions do not increase in the future. Note that NHTSA did not adopt 
standards for N2O because these emissions do not impact fuel 
consumption in a significant way, and is not proposing such standards 
for Phase 2 for the same reason.
    We are proposing this change at no additional cost and no 
additional benefit because manufacturers are generally meeting the 
proposed standard today. The purpose of this standard is to prevent 
increases in N2O emissions absent this proposed increase in 
stringency. We request comment on whether or not we should be 
considering additional costs for compliance. Similarly, we request 
comment on whether or not we should assume N2O increases in 
our ``No Action'' regulatory Alternatives 1a and 1b described in 
Section X.
    Although N2O is emitted in very small amounts, it can 
have a very significant impact on the climate. The global warming 
potential (GWP) of one molecule of N2O is 298 times that of 
one molecule CO2. Because N2O and CO2 
coincidentally have the same molar mass, this means that one gram of 
N2O would have the same impact on the climate as 298 grams 
of CO2. To further put this into perspective, the difference 
between the proposed N2O standard (and deterioration factor) 
and the current Phase 1 standard is 0.40 g/hp-hr of N2O 
emissions. This is equivalent to 11.92 g/hp-hr CO2. Over the 
same certification test cycle (i.e. EPA's HD FTP) the Phase 1 engine 
CO2 emissions standard ranges from 460 to 576 g/hp-hr, 
depending on the service class of the engine. Therefore, absent today's 
proposed action, engine N2O increases equivalent to 2.1 to 
2.6 percent of the Phase 1 CO2 standard could occur.
    We are proposing this lower cap because we have determined that

[[Page 40204]]

manufacturers generally are meeting this level today but in the future 
could increase N2O emissions up to the current Phase 1 cap 
standard. Because we do not believe any manufacturer would need to do 
anything more than recalibrate their SCR systems to comply, the lead 
time being provided would be sufficient. This section later describes 
why manufacturers may increase N2O emissions from SCR-
equipped compression-ignition engines in the absence of a lower 
N2O cap standard. We request comment on this. We also note 
that, as described in Section XI, EPA does not believe there is a 
similar opportunity to lower the pickup and van N2O standard 
because it was set at a more stringent level in Phase 1.
(a) N2O Formation
    N2O formation in modern diesel engines is a by-product 
of the SCR process. It is dependent on the SCR catalyst type, the 
NO2 to NOX ratio, the level of NOX 
reduction required, and the concentration of the reactants in the 
system (NH3 to NOX ratio).
    Two current engine/aftertreatment designs are driving 
N2O emission higher. The first is an increase in engine out 
NOX, which puts a higher NOX reduction burden on 
the SCR NOX emission control system. The second is an 
increase in NO2 formation from the diesel oxidation catalyst 
(DOC) located upstream of the passive catalyzed diesel particulate 
filter (CDPF). This increase in NO2 serves two functions: 
Improving passive CDPF regeneration and optimization of faster SCR 
reaction.\107\
---------------------------------------------------------------------------

    \107\ Hallstrom, K., Voss, K., and Shah, S., ``The Formation of 
N2O on the SCR Catalyst in a Heavy Duty US 2010 Emission 
Control System'', SAE Technical Paper 2013-01-2463.
---------------------------------------------------------------------------

    There are multiple mechanisms through which N2O can form 
in an SCR system:
    1. Low temperature formation of N2O over the DOC prior 
to the SCR catalyst.
    2. Low temperature formation of NH4NO3 with 
subsequent decomposition as exhaust temperatures increase, leading to 
conversion to N2O over the SCR catalyst.
    3. Formation of N2O from NO2 over the SCR 
catalyst at NO2 to NO ratios greater than 1:1. 
N2O formation increases significantly at 300 to 350 [deg]C.
    4. Formation of N2O from NH3 via partial 
oxidation over the ammonia slip catalyst.
    5. High-temperature N2O formation over the SCR catalyst 
due to NH3 oxidation facilitated by high SCR catalyst 
surface coverage of NH3.
    Thus, as discussed below, control of N2O formation 
requires precise optimization of SCR controls including thermal 
management and dosing rates, as well as catalyst composition.
(b) N2O Emission Reduction
    Through on-engine and reactor bench experiments, this same work 
showed that the key to reducing N2O emissions lies in 
intelligent emission control system design and operation, namely:
    1. Selecting the appropriate DOC and/or CDPF catalyst loadings to 
maintain NO2 to NO ratios at or below 1:1.
    2. Avoiding high catalyst surface coverage of NH3 though 
urea dosing management when the system is in the ideal N2O 
formation window.
    3. Utilizing thermal management to push the SCR inlet temperature 
outside of the N2O low-temperature formation window.
    EPA believes that reducing the standard from 0.1 g/hp-hr to 0.05 g/
hp-hr is feasible because most engines have emission rates that would 
meet this standard today and the others could meet it with minor 
calibration changes at no additional cost. Numerous studies have shown 
that diesel engine technologies can be fine-tuned to meet the current 
NOX and proposed N2O standards while still 
providing passive CDPF regeneration even with earlier generations of 
SCR systems. Currently model year 2014 systems have already moved on to 
newer generation systems in which the combined CDPF and SCR functions 
have been further optimized. The result of this is 18 of 24 engines in 
the EPA 2014 certification database emitting N2O at less 
than half of the 2014 standard, and thus below the proposed 
standard.\108\ Given the discussions in the literature, there are still 
additional calibration steps that can be taken to further reduce 
N2O emissions for the higher emitters to afford an adequate 
compliance margin and room to account for deterioration, without having 
an adverse effect on criteria pollutant emissions.
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    \108\ http://www.epa.gov/otaq/crttst.htm.

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[[Page 40205]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.001

    It is important to note, however, that there is a trade off when 
trying to optimize SCR systems to achieve peak NOX reduction 
efficiencies. When transitioning from a <93 percent efficient MY 2011 
system to a 98 percent efficient system of the future, lowering the 
N2O cap to 0.05 g/hp-hr would put constraints on the 
techniques that can be applied to improve efficiency. If system 
designers push the NH3 to NOX ratio higher to try 
and achieve the maximum possible NOX reduction, it could 
increase N2O emissions. If EPA were to adopt a very low 
NOX standard (e.g., 0.02 g/hp-hr) over existing test cycles, 
some reductions would be needed throughout the hot portion of the cycle 
(although most of the reductions would have to come from the cold start 
portion of the test cycle). Thermal management would need to play a key 
role, and reducing catalyst light-off time would move the SCR catalyst 
through the ammonium nitrate formation and decomposition thermal range 
quicker, thus lowering N2O emissions. An increase in the 
NH3 to NOX ratio could also further reduce 
NOX emissions; however this would also adversely affect 
NH3 slip and N2O formation. The inability of 
NH3 slip catalysts to handle the increased NH3 
load and the EPA NH3 slip limit of 10 ppm would guard 
against this NH3 to NOX ratio increase, and thus 
subsequent N2O increase.
    In summary, EPA believes that engine manufacturers would be able to 
respond with highly efficient NOX reducing systems that can 
meet the proposed lower N2O cap of 0.05 g/hp-hr with no 
additional cost or lead time. When optimizing SCR systems for better 
NOX reduction efficiency, that optimization includes 
lowering the emissions of undesirable side reactions, including those 
that form N2O.
(4) EPA Engine Standards for Methane
    EPA is proposing to apply the Phase 1 methane engine standards to 
the Phase 2 program. EPA adopted the cap standards for CH4 
(along with N2O standards) as engine-based standards because 
the agency believes that emissions of this GHG are technologically 
related solely to the engine, fuel, and emissions aftertreatment 
systems, and the agency is not aware of any influence of vehicle-based 
technologies on these emissions. Note that NHTSA did not adopt 
standards for CH4 (or N2O) because these 
emissions do not impact fuel consumption in a significant way, and is 
not proposing CH4 standards for Phase 2 either.
    EPA continues to believe that manufacturers of most engine 
technologies will be able to comply with the Phase 1 CH4 
standard with no technological improvements. We note that we are not 
aware of any new technologies that would allow us to adopt more 
stringent standards at this time. We request comment on this.
(5) Compliance Provisions and Flexibilities for Engine Standards
    The agencies are proposing to continue most of the Phase 1 
compliance provisions and flexibilities for the Phase 2 engine 
standards.
(a) Averaging, Banking, and Trading
    The agencies' general approach to averaging is discussed in Section 
I. We are not proposing to offer any special credits to engine 
manufacturers. Except for early credits and advanced technology 
credits, the agencies propose to retain all Phase 1 credit 
flexibilities and limitations to continue for use in the Phase 2 
program.
    As discussed below, EPA is proposing to change the useful life for 
LHD

[[Page 40206]]

engines for GHG emissions from the current 10 years/110,000 miles to 15 
years/150,000 miles to be consistent with the useful life of criteria 
pollutants recently updated in EPA's Tier 3 rule. In order to ensure 
that banked credits would maintain their value in the transition from 
Phase 1 to Phase 2, NHTSA and EPA propose an adjustment factor of 1.36 
(i.e., 150,000 mile / 110,000 miles) for credits that are carried 
forward from Phase 1 to the MY 2021 and later Phase 2 standards. 
Without this adjustment factor the proposed change in useful life would 
effectively result in a discount of banked credits that are carried 
forward from Phase 1 to Phase 2, which is not the intent of the change 
in the useful life. See Sections V and VI for additional discussion of 
similar adjustments of vehicle-based credits.
(b) Request for Comment on Changing Global Warming Potential Values in 
the Credit Program for CH4 and N2O
    The Phase 1 rule included a compliance alternative allowing heavy-
duty manufacturers and conversion companies to comply with the 
respective methane or nitrous oxide standards by means of over-
complying with CO2 standards (40 CFR 1036.705(d)). The 
heavy-duty rules allow averaging only between vehicles or engines of 
the same designated type (referred to as an ``averaging set'' in the 
rules). Specifically, the phase 1 heavy-duty rulemaking added a 
CO2 credits program which allowed heavy-duty manufacturers 
to average and bank pollutant emissions to comply with the methane and 
nitrous oxide requirements after adjusting the CO2 emission 
credits based on the relative GHG equivalents. To establish the GHG 
equivalents used by the CO2 credits program, the Phase 1 
rule incorporated the IPCC Fourth Assessment Report global warming 
potential (GWP) values of 25 for CH4 and 298 for 
N2O, which are assessed over a 100 year lifetime.
    Since the Phase 1 rule was finalized, a new IPCC report has been 
released (the Fifth Assessment Report), with new GWP estimates. This is 
prompting us to look again at the relative CO2 equivalency 
of methane and nitrous oxide and to seek comment on whether the methane 
and nitrous oxide GWPs used to establish the GHG equivalency value for 
the CO2 Credit program should be updated to those 
established by IPCC in its Fifth Assessment Report. The Fifth 
Assessment Report provides four 100 year GWPs for methane ranging from 
28 to 36 and two 100 year GWPs for nitrous oxide, either 265 or 298. 
Therefore, we not only request comment on whether to update the GWP for 
methane and nitrous oxide to that of the Fifth Assessment Report, but 
also on which value to use from this report.
(c) In-Use Compliance and Useful Life
    Consistent with Section 202(a)(1) and 202 (d) of the CAA, for Phase 
1, EPA established in-use standards for heavy-duty engines. Based on 
our assessment of testing variability and other relevant factors, we 
established in-use standards by adding a 3 percent adjustment factor to 
the full useful life emissions and fuel consumption results measured in 
the EPA certification process to address measurement variability 
inherent in comparing results among different laboratories and 
different engines. See 40 CFR part 1036. The agencies are not proposing 
to change this for Phase 2, but request comment on whether this 
allowance is still necessary.
    We note that in Phase 1, we applied these standards to only certain 
engine configurations in each engine family (often called the parent 
rating). We welcome comment on whether the agencies should set Phase 2 
CO2 and fuel consumption standards for the other ratings 
(often called the child ratings) within an engine family. We are not 
proposing specific engine standards for child ratings in Phase 2 
because we are proposing to include the actual engine's fuel map in the 
vehicle certification. We believe this approach appropriately addresses 
our concern that manufacturers control CO2 emissions and 
fuel consumption from all in-use engine configurations within an engine 
family.
    In Phase 1, EPA set the useful life for engines and vehicles with 
respect to GHG emissions equal to the respective useful life periods 
for criteria pollutants. In April 2014, as part of the Tier 3 light-
duty vehicle final rule, EPA extended the regulatory useful life period 
for criteria pollutants to 150,000 miles or 15 years, whichever comes 
first, for Class 2b and 3 pickup trucks and vans and some light-duty 
trucks (79 FR 23414, April 28, 2014). As described in Section V, EPA is 
proposing that the Phase 2 GHG standards for vocational vehicles at or 
below 19,500 lbs GVWR apply over the same useful life of 150,000 miles 
or 15 years. To be consistent with that proposed change, we are also 
proposing that the Phase 2 GHG standards for engines used in vocational 
vehicles at or below 19,500 lbs GVWR apply over the same useful life of 
150,000 miles or 15 years. NHTSA proposes to use the same useful life 
values as EPA for all vocational vehicles.
    We are proposing to continue regulatory allowance in 40 CFR 
1036.150(g) that allows engine manufacturers to use assigned 
deterioration factors (DFs) for most engines without performing their 
own durability emission tests or engineering analysis. However, the 
engines would still be required to meet the standards in actual use 
without regard to whether the manufacturer used the assigned DFs. This 
allowance is being continued as an interim provision and may be 
discontinued for later phases of standards as more information becomes 
known. Manufacturers are allowed to use an assigned additive DF of 0.0 
g/bhp-hr for CO2 emissions from any conventional engine 
(i.e., an engine not including advance or off-cycle technologies). Upon 
request, we could allow the assigned DF for CO2 emissions 
from engines including advance or off-cycle technologies, but only if 
we determine that it would be consistent with good engineering 
judgment. We believe that we have enough information about in-use 
CO2 emissions from conventional engines to conclude that 
they will not increase as the engines age. However, we lack such 
information about the more advanced technologies.
    We are also requesting comment on how to apply DFs to low level 
measurements where test-to-test variability may be larger than the 
actual deterioration rates being measured, such as might occur with 
N2O. Should we allow statistical analysis to be used to 
identifying trends rather than basing the DF on the highest measured 
value? How would we allow this where emission deterioration is not 
linear, such as saw-tooth deterioration related to maintenance or other 
offsetting emission effects causing emissions to peak before the end of 
the useful life? Finally, EPA requests comment on whether a similar 
allowance would be appropriate for criteria pollutants as well.
(d) Alternate CO2 Standards
    In the Phase 1 rulemaking, the agencies proposed provisions to 
allow certification to alternate CO2 engine standards in 
model years 2014 through 2016. This flexibility was intended to address 
the special case of needed lead time to implement new standards for a 
previously unregulated pollutant. Since that special case does not 
apply for Phase 2, we are not proposing a similar flexibility in this 
rulemaking. We also request comment on whether this allowance should be 
eliminated for Phase 1 engines.

[[Page 40207]]

(e) Proposed Approach to Standards and Compliance Provisions for 
Natural Gas Engines
    EPA is also proposing certain clarifying changes to its rules 
regarding classification of natural gas engines. This proposal relates 
to standards for all emissions, both greenhouse gases and criteria 
pollutants. These clarifying changes are intended to reflect the status 
quo, and therefore should not have any associated costs.
    EPA emission standards have always applied differently for 
gasoline-fueled and diesel-fueled engines. The regulations in 40 CFR 
part 86 implement these distinctions by dividing engines into Otto-
cycle and Diesel-cycle technologies. This approach led EPA to 
categorize natural gas engines according to their design history. A 
diesel engine converted to run on natural gas was classified as a 
diesel-cycle engine; a gasoline engine converted to run on natural gas 
was classified as an Otto-cycle engine.
    The Phase 1 rule described our plan to transition to a different 
approach, consistent with our nonroad programs, in which we divide 
engines into compression-ignition and spark-ignition technologies based 
only on the operating characteristics of the engines.\109\ However, the 
Phase 1 rule included a provision allowing us to continue with the 
historic approach on an interim basis.
---------------------------------------------------------------------------

    \109\ See 40 CFR 1036.108.
---------------------------------------------------------------------------

    Under the existing EPA regulatory definitions of ``compression-
ignition'' and ``spark-ignition'', a natural gas engine would generally 
be considered compression-ignition if it operates with lean air-fuel 
mixtures and uses a pilot injection of diesel fuel to initiate 
combustion, and would generally be considered spark-ignition if it 
operates with stoichiometric air-fuel mixtures and uses a spark plug to 
initiate combustion.
    EPA's basic premise here is that natural gas engines performing 
similar in-use functions should be subject to similar regulatory 
requirements. The compression-ignition emission standards and testing 
requirements reflect the operating characteristics for the full range 
of heavy-duty vehicles, including substantial operation in long-haul 
service characteristic of tractors. The spark-ignition emission 
standards and testing requirements do not include some of those 
provisions related to use in long-haul service or other applications 
where diesel engines predominate, such as steady-state testing, Not-to-
Exceed standards, and extended useful life. We believe it would be 
inappropriate to apply the spark-ignition standards and requirements to 
natural gas engines that would be used in applications mostly served by 
diesel engines today. We are therefore proposing to replace the interim 
provision described above with a differentiated approach to 
certification of natural gas engines across all of the EPA standards--
for both GHGs and criteria pollutants. Under the proposed clarifying 
amendment, we would require manufacturers to divide all their natural 
gas engines into primary intended service classes, as we already 
require for compression-ignition engines, whether or not the engine has 
features that otherwise could (in theory) result in classification as 
SI under the current rules. Any natural gas engine qualifying as a 
medium heavy-duty engine (19,500 to 33,000 lbs GVWR) or a heavy heavy-
duty engine (over 33,000 lbs GVWR) would be subject to all the emission 
standards and other requirements that apply to compression-ignition 
engines.
    Table II-17 describes the provisions that would apply differently 
for compression-ignition and spark-ignition engines:

 Table II-17--Regulatory Provisions That Are Different for Compression-
                   Ignition and Spark-Ignition Engines
------------------------------------------------------------------------
           Provision             Compression-ignition    Spark-ignition
------------------------------------------------------------------------
Transient duty cycle..........  40 CFR part 86,         40 CFR part 86,
                                 Appendix I, paragraph   Appendix I,
                                 (f)(2) cycle; divide    paragraph
                                 by 1.12 to de-          (f)(1) cycle.
                                 normalize.
Ramped-modal test (SET).......  yes...................  no.
NTE standards.................  yes...................  no.
Smoke standard................  yes...................  no.
Manufacturer-run in-use         yes...................  no.
 testing.
ABT--pollutants...............  NOX, PM...............  NOX, NMHC.
ABT-- transient conversion      6.5...................  6.3.
 factor.
ABT--averaging set............  Separate averaging      One averaging
                                 sets for light,         set for all SI
                                 medium, and heavy       engines.
                                 HDDE.
Useful life...................  110,000 miles for       110,000 miles
                                 light HDDE.
                                185,000 miles for
                                 medium HDDE..
                                435,000 miles for
                                 heavy HDDE..
Warranty......................  50,000 miles for light  50,000 miles.
                                 HDDE.
                                100,000 miles for
                                 medium HDDE..
                                100,000 miles for
                                 heavy HDDE..
Detailed AECD description.....  yes...................  no.
Test engine selection.........  highest injected fuel   most likely to
                                 volume.                 exceed emission
                                                         standards.
------------------------------------------------------------------------

    The onboard diagnostic requirements already differentiate 
requirements by fuel type, so there is no need for those provisions to 
change based on the considerations of this section.
    We are not aware of any currently certified engines that would 
change from compression-ignition to spark-ignition under the proposed 
clarified approach. Nonetheless, because these proposed standards 
implicate rules for criteria pollutants (as well as GHGs), the 
provisions of CAA section 202(a)(3)(C) apply (for the criteria 
pollutants), notably the requirement of four years lead time. We are 
therefore proposing to continue to apply the existing interim provision 
through model year 2020.\110\

[[Page 40208]]

Starting in model year 2021, all the provisions would apply as 
described above. Manufacturers would not be permitted to certify any 
engine families using carryover emission data if a particular engine 
model switched from compression-ignition to spark-ignition, or vice 
versa. However, as noted above, in practice these vehicles are already 
being certified as CI engines, so we view these changes as 
clarifications ratifying the current status quo.
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    \110\ Section 202(a)(2), applicable to emissions of greenhouse 
gases, does not mandate a specific period of lead time, but EPA sees 
no reason for a different compliance date here for GHGs and criteria 
pollutants. This is also true with respect to the closed crankcase 
emission discussed in the following subsection.
---------------------------------------------------------------------------

    We are also proposing that these provisions would apply equally to 
engines fueled by any fuel other than gasoline or ethanol, should such 
engines be produced in the future. Given the current and historic 
market for vehicles above 19,500 lbs GVWR, EPA believes any 
alternative-fueled vehicles in this weight range would be competing 
primarily with diesel vehicles and should be subject to the same 
requirements as them. We request comment on all aspects of classifying 
natural-gas and other engines for purposes of applying emission 
standards. See Sections XI and XII for additional discussion of natural 
gas fueled engines.
(f) Crankcase Emissions From Natural Gas Engines
    EPA is proposing one fuel-specific provision for natural gas 
engines, likewise applicable to all pollutant emissions, both GHGs and 
criteria pollutant emissions. Note that we are also proposing other 
vehicle-level emissions controls for the natural gas storage tanks and 
refueling connections. These are presented in Section XIII.
    EPA is proposing to require that all natural gas-fueled engines 
have closed crankcases, rather than continuing the provision that 
allows venting to the atmosphere all crankcase emissions from all 
compression-ignition engines. This has been allowed as long as these 
vented crankcase emissions are measured and accounted for as part of an 
engine's tailpipe emissions. This allowance has historically been in 
place to address the technical limitations related to recirculating 
diesel-fueled engines' crankcase emissions, which have high PM 
emissions, back into the engine's air intake. High PM emissions vented 
into the intake of an engine can foul turbocharger compressors and 
aftercooler heat exchangers. In contrast, historically EPA has mandated 
closed crankcase technology on all gasoline fueled engines and all 
natural gas spark-ignition engines.\111\ The inherently low PM 
emissions from these engines posed no technical barrier to a closed 
crankcase mandate. Because natural gas-fueled compression ignition 
engines also have inherently low PM emissions, there is no 
technological limitation that would prevent manufacturers from closing 
the crankcase and recirculating all crankcase gases into a natural gas-
fueled compression ignition engine's air intake. We are requesting 
comment on the costs and effectiveness of technologies that we have 
identified to comply with these provisions. In addition, EPA is 
proposing that this revised standard not take effect until the 2021 
model year, consistent with the requirement of section 202(a)(3)(C) to 
provide four years lead time.

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    \111\ See 40 CFR 86.008-10(c).
---------------------------------------------------------------------------

III. Class 7 and 8 Combination Tractors

    Class 7 and 8 combination tractors-trailers contribute the largest 
portion of the total GHG emissions and fuel consumption of the heavy-
duty sector, approximately two-thirds, due to their large payloads, 
their high annual miles traveled, and their major role in national 
freight transport.\112\ These vehicles consist of a cab and engine 
(tractor or combination tractor) and a trailer.\113\ In general, 
reducing GHG emissions and fuel consumption for these vehicles would 
involve improvements to all aspects of the vehicle.
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    \112\ The on-highway Class 7 and 8 combination tractor-trailers 
constitute the vast majority of this regulatory category. A small 
fraction of combination tractors are used in off-road applications 
and are regulated differently, as described in Section III.C.
    \113\ ``Tractor'' is defined in 49 CFR 571.3 to mean ``a truck 
designed primarily for drawing other motor vehicles and not so 
constructed as to carry a load other than a part of the weight of 
the vehicle and the load so drawn.''
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    As we found during the development in Phase 1 and as continues to 
be true in the industry today, the heavy-duty combination tractor-
trailer industry consists of separate tractor manufacturers and trailer 
manufacturers. We are not aware of any manufacturer that typically 
assembles both the finished truck and the trailer and introduces the 
combination into commerce for sale to a buyer. There are also large 
differences in the kinds of manufacturers involved with producing 
tractors and trailers. For HD highway tractors and their engines, a 
relatively limited number of manufacturers produce the vast majority of 
these products. The trailer manufacturing industry is quite different, 
and includes a large number of companies, many of which are relatively 
small in size and production volume. Setting standards for the products 
involved--tractors and trailers--requires recognition of the large 
differences between these manufacturing industries, which can then 
warrant consideration of different regulatory approaches. Thus, 
although tractor-trailers operate essentially as a unit from both a 
commercial standpoint and for purposes of fuel efficiency and 
CO2 emissions, the agencies have developed separate proposed 
standards for each.
    Based on these industry characteristics, EPA and NHTSA believe that 
the most appropriate regulatory approach for combination tractors and 
trailers is to establish standards for tractors separately from 
trailers. As discussed below in Section IV, the agencies are also 
proposing standards for certain types of trailers.

A. Summary of the Phase 1 Tractor Program

    The design of each tractor's cab and drivetrain determines the 
amount of power that the engine must produce in moving the truck and 
its payload down the road. As illustrated in Figure III-1, the loads 
that require additional power from the engine include air resistance 
(aerodynamics), tire rolling resistance, and parasitic losses 
(including accessory loads and friction in the drivetrain). The 
importance of the engine design is that it determines the basic GHG 
emissions and fuel consumption performance for the variety of demands 
placed on the vehicle, regardless of the characteristics of the cab in 
which it is installed.

[[Page 40209]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.002

    Accordingly, for Class 7 and 8 combination tractors, the agencies 
adopted two sets of Phase 1 tractor standards for fuel consumption and 
CO2 emissions. The CO2 emission and fuel 
consumption reductions related to engine technologies are recognized in 
the engine standards. For vehicle-related emissions and fuel 
consumption, tractor manufacturers are required to meet vehicle-based 
standards. Compliance with the vehicle standard must be determined 
using the GEM vehicle simulation tool.
---------------------------------------------------------------------------

    \114\ Adapted from Figure 4.1. Class 8 Truck Energy Audit, 
Technology Roadmap for the 21st Century Truck Program: A Government-
Industry Research Partnership, 21CT-001, December 2000.
---------------------------------------------------------------------------

    The Phase 1 tractor standards were based on several key attributes 
related to GHG emissions and fuel consumption that reasonably represent 
the many differences in utility and performance among these vehicles. 
Attribute-based standards in general recognize the variety of functions 
performed by vehicles and engines, which in turn can affect the kind of 
technology that is available to control emissions and reduce fuel 
consumption, or its effectiveness. Attributes that characterize 
differences in the design of vehicles, as well as differences in how 
the vehicles will be employed in-use, can be key factors in evaluating 
technological improvements for reducing CO2 emissions and 
fuel consumption. Developing an appropriate attribute-based standard 
can also avoid interfering with the ability of the market to offer a 
variety of products to meet the customer's demand. The Phase 1 tractor 
standards differ depending on GVWR (i.e., whether the truck is Class 7 
or Class 8), the height of the roof of the cab, and whether it is a 
``day cab'' or a ``sleeper cab.'' These later two attributes are 
important because the height of the roof, designed to correspond to the 
height of the trailer, significantly affects air resistance, and a 
sleeper cab generally corresponds to the opportunity for extended 
duration idle emission and fuel consumption improvements. Based on 
these attributes, the agencies created nine subcategories within the 
Class 7 and 8 combination tractor category. The Phase 1 rules set 
standards for each of them. Phase 1 standards began with the 2014 model 
year and were followed with more stringent standards following in model 
year 2017.\115\ The standards represent an overall fuel consumption and 
CO2 emissions reduction up to 23 percent from the tractors 
and the engines installed in them when compared to a baseline 2010 
model year tractor and engine without idle shutdown technology. 
Although the EPA and NHTSA standards are expressed differently (grams 
of CO2 per ton-mile and gallons per 1,000 ton-mile 
respectively), the standards are equivalent.
---------------------------------------------------------------------------

    \115\ Manufacturers may voluntarily opt-in to the NHTSA fuel 
consumption standards in model years 2014 or 2015. Once a 
manufacturer opts into the NHTSA program it must stay in the program 
for all optional MYs.
---------------------------------------------------------------------------

    In Phase 1, the agencies allowed manufacturers to certify certain 
types of combination tractors as vocational vehicles. These are 
tractors that do not typically operate at highway speeds, or would 
otherwise not benefit from efficiency improvements designed for line-
haul tractors (although standards would still apply to the engines 
installed in these vehicles). The agencies created a subcategory of 
``vocational tractors,'' or referred to as ``special purpose tractors'' 
in 40 CFR part 1037, because real world operation of these tractors is 
better represented by our Phase 1 vocational vehicle duty cycle than 
the tractor duty cycles. Vocational tractors are subject to the 
standards for vocational vehicles rather than the combination tractor 
standards. In addition, specific vocational tractors and heavy-duty 
vocational vehicles primarily designed to perform work off-road or 
having tires installed with a maximum speed rating at or below 55 mph 
are exempted from the Phase 1 standards.
    In Phase 1, the agencies also established separate performance 
standards for the engines manufactured for use in these tractors. EPA's 
engine-based CO2 standards and NHTSA's engine-based fuel 
consumption standards are being implemented using EPA's existing test 
procedures and regulatory structure for criteria pollutant emissions 
from medium- and heavy-duty engines. These engine standards vary 
depending on engine size linked to intended vehicle service class 
(which are the same service classes used for many years for EPA's 
criteria pollutant standards).
    Manufacturers demonstrate compliance with the Phase 1 tractor 
standards using the GEM simulation tool. As explained in Section II 
above, GEM is a customized vehicle simulation model which is the 
preferred approach to demonstrating compliance testing for combination 
tractors rather than chassis dynamometer testing used in light-duty 
vehicle compliance. As discussed in the development of HD Phase 1 and 
recommended by the NAS 2010 study,

[[Page 40210]]

a simulation tool is the preferred approach for HD tractor compliance 
because of the extremely large number of vehicle configurations.\116\ 
The GEM compliance tool was developed by EPA and is an accurate and 
cost-effective alternative to measuring emissions and fuel consumption 
while operating the vehicle on a chassis dynamometer. Instead of using 
a chassis dynamometer as an indirect way to evaluate real world 
operation and performance, various characteristics of the vehicle are 
measured and these measurements are used as inputs to the model. For HD 
Phase 1, these characteristics relate to key technologies appropriate 
for this category of truck including aerodynamic features, weight 
reductions, tire rolling resistance, the presence of idle-reducing 
technology, and vehicle speed limiters. The model also assumes the use 
of a representative typical engine in compliance with the separate, 
applicable Phase 1 engine standard. Using these inputs, the model is 
used to quantify the overall performance of the vehicle in terms of 
CO2 emissions and fuel consumption. CO2 emission 
reduction and fuel consumption technologies not measured by the model 
must be evaluated separately, and the HD Phase 1 rules establish 
mechanisms allowing credit for such ``off-cycle'' technologies.
---------------------------------------------------------------------------

    \116\ National Academy of Science. ``Technologies and Approaches 
to Reducing the Fuel Consumption of Medium- and Heavy-Duty 
Vehicles.'' 2010. Recommendation 8-4 stated ``Simulation modeling 
should be used with component test data and additional tested inputs 
from powertrain tests, which could lower the cost and administrative 
burden yet achieve the needed accuracy of results.''
---------------------------------------------------------------------------

    In addition to the final Phase 1 tractor-based standards for 
CO2, EPA adopted a separate standard to reduce leakage of 
HFC refrigerant from cabin air conditioning (A/C) systems from 
combination tractors, to apply to the tractor manufacturer. This HFC 
leakage standard is independent of the CO2 tractor standard. 
Manufacturers can choose technologies from a menu of leak-reducing 
technologies sufficient to comply with the standard, as opposed to 
using a test to measure performance.
    The Phase 1 program also provided several flexibilities to advance 
the goals of the overall program while providing alternative pathways 
to achieve compliance. The primary flexibility is the averaging, 
banking, and trading program which allows emissions and fuel 
consumption credits to be averaged within an averaging set, banked for 
up to five years, or traded among manufacturers. Manufacturers with 
credit deficits were allowed to carry-forward credit deficits for up to 
three model years, similar to the LD GHG and CAFE carry-back credits. 
Phase 1 also included several interim provisions, such as incentives 
for advanced technologies and provisions to obtain credits for 
innovative technologies (called off-cycle in the Phase 2 program) not 
accounted for by the HD Phase 1 version of GEM or for certifying early.

B. Overview of the Proposed Phase 2 Tractor Program

    The proposed HD Phase 2 program is similar in many respects to the 
Phase 1 approach. The agencies are proposing to maintain the Phase 1 
attribute-based regulatory structure in terms of dividing the tractor 
category into the same nine subcategories based on the tractor's GVWR, 
cab configuration, and roof height. This structure is working well in 
the implementation of Phase 1. The one area where the agencies are 
proposing to change the regulatory structure is related to heavy-haul 
tractors. As noted above, the Phase 1 regulations include a set of 
provisions that allow vocational tractors to be treated as vocational 
vehicles. However, because the agencies propose to include the 
powertrain as part of the technology basis for the tractor and 
vocational vehicle standards in Phase 2, we are proposing to classify a 
certain set of these vocational tractors as heavy-haul tractors and 
subject them to a separate tractor standard that reflects their unique 
powertrain requirements and limitations in application of technologies 
to reduce fuel consumption and CO2 emissions.\117\
---------------------------------------------------------------------------

    \117\ See 76 FR 57138 for Phase 1 discussion. See 40 CFR 
1037.801 for proposed Phase 2 heavy-haul tractor regulatory 
definition.
---------------------------------------------------------------------------

    The agencies propose to also retain much of the certification and 
compliance structure developed in Phase 1 but to simplify end of the 
year reporting. The agencies propose that the Phase 2 tractor 
CO2 emissions and fuel consumption standards, as in Phase 1, 
be aligned.\118\ The agencies also propose to continue to have separate 
engine and vehicle standards to drive technology improvements in both 
areas. The reasoning behind the proposal to maintain separate standards 
is discussed above in Section II.B.2. As in Phase 1, the agencies 
propose to certify tractors using the GEM simulation tool and to 
require manufacturers to evaluate the performance of subsystems through 
testing (the results of this testing to be used as inputs to the GEM 
simulation tool). Other aspects of the proposed HD Phase 2 
certification and compliance program also mirror the Phase 1 program, 
such as maintaining a single reporting structure to satisfy both 
agencies, requiring limited data at the beginning of the model year for 
certification, and determining compliance based on end of year reports. 
In the Phase 1 program, manufacturers participating in the ABT program 
provided 90 day and 270 day reports after the end of the model year. 
The agencies required two reports for the initial program to help 
manufacturers become familiar with the reporting process. For the Phase 
2 program, the agencies propose that manufacturers would only be 
required to submit one end of the year report, which would simplify 
reporting.
---------------------------------------------------------------------------

    \118\ Fuel consumption is calculated from CO2 using 
the conversion factor of 10,180 grams of CO2 per gallon 
for diesel fuel.
---------------------------------------------------------------------------

    Even though many aspects of the proposed HD Phase 2 program are 
similar to Phase 1, there are some key differences. While Phase 1 
focused on reducing CO2 emissions and fuel consumption in 
tractors through the application of existing (``off-the-shelf'') 
technologies, the proposed HD Phase 2 standards seek additional 
reductions through increased use of existing technologies and the 
development and deployment of more advanced technologies. To evaluate 
the effectiveness of a more comprehensive set of technologies, the 
agencies propose several additional inputs to GEM. The proposed set of 
inputs includes the Phase 1 inputs plus parameters to assess the 
performance of the engine, transmission, and driveline. Specific inputs 
for, among others, predictive cruise control, automatic tire inflation 
systems, and 6x2 axles would now be required. Manufacturers would 
conduct component testing to obtain the values for these technologies 
(should they choose to use them), which testing values would then be 
input into the GEM simulation tool. See Section III.D.2 below. To 
effectively assess performance of the technologies, the agencies also 
propose to change some aspects of the drive cycle used in certification 
through the addition of road grade. To reflect the existing trailer 
market, the agencies are proposing to refine the aerodynamic test 
procedure for high roof cabs by adding some aerodynamic improving 
devices to the reference trailer (used for determining the relative 
aerodynamic performance of the tractor). The agencies also propose to 
change the aerodynamic certification test procedure to capture 
aerodynamic improvement of trailers and the impact of wind on tractor 
aerodynamic performance. The agencies are also proposing to change some 
of the interim provisions developed in Phase 1 to reflect the maturity 
of the program and

[[Page 40211]]

reduced need and justification for some of the Phase 1 flexibilities. 
Further discussions on all of these matters are covered in the 
following sections.

C. Proposed Phase 2 Tractor Standards

    EPA is proposing CO2 standards and NHTSA is proposing 
fuel consumption standards for new Class 7 and 8 combination tractors. 
In addition, EPA is proposing to maintain the HFC standards for the air 
conditioning systems that were adopted in Phase 1. EPA is also seeking 
comment on new standards to further control emissions of particulate 
matter (PM) from auxiliary power units (APU) installed in tractors that 
would prevent an unintended consequence of increasing PM emissions from 
tractors during long duration idling.
    This section describes in detail the proposed standards. In 
addition to describing the proposed alternative (``Alternative 3''), in 
Section III.D.2.f we also detail another alternative (``Alternative 
4''). Alternative 4 provides less lead time than the proposed set of 
standards but may provide more net benefits in the form of greater 
emission and fuel consumption reductions (with somewhat higher costs) 
in the early years of the program. The agencies believe Alternative 4 
has the potential to be maximum feasible and appropriate as discussed 
later in this section.
    The agencies welcome comment on all aspects of the proposed 
standards and the alternative standards described in Section III.D.2.f. 
Commenters are encouraged to address all aspects of feasibility 
analysis, including costs, the likelihood of developing the technology 
to achieve sufficient relaibility within the proposed and alternative 
lead-times, and the extent to which the market could utilize the 
technology. It would be helpful if comments addressed these issues 
separately for each type of technology.
(1) Proposed Fuel Consumption and CO2 Standards
    The proposed fuel consumption and CO2 standards for the 
tractor cab are shown below in Table III-1. These proposed standards 
would achieve reductions of up to 24 percent compared to the 2017 model 
year baseline level when fully phased in beginning in the 2027 MY.\119\ 
The proposed standards for Class 7 are described as ``Day Cabs'' 
because we are not aware of any Class 7 sleeper cabs in the market 
today; however, the agencies propose to require any Class 7 tractor, 
regardless of cab configuration, meet the standards described as 
``Class 7 Day Cab.'' We welcome comment on this proposed approach.
---------------------------------------------------------------------------

    \119\ Since the HD Phase 1 tractor standards fully phase-in by 
the MY 2017, this is the logical baseline year.
---------------------------------------------------------------------------

    The agencies' analyses, as discussed briefly below and in more 
detail later in this preamble and in the draft RIA Chapter 2, indicate 
that these proposed standards, if finalized, would be maximum feasible 
(within the meaning of 49 U.S.C. Section 32902 (k)) and would be 
appropriate under each agency's respective statutory authorities. The 
agencies solicit comment on all aspects of these analyses.

 Table III-1--Proposed Phase 2 Heavy-Duty Combination Tractor EPA Emissions Standards (g CO2/ton-mile) and NHTSA
                                 Fuel Consumption Standards (gal/1,000 ton-mile)
----------------------------------------------------------------------------------------------------------------
                                                                              Day cab               Sleeper cab
                                                                 -----------------------------------------------
                                                                      Class 7         Class 8         Class 8
----------------------------------------------------------------------------------------------------------------
2021 Model Year CO2 Grams per Ton-Mile..........................................................................
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................              97              78              70
Mid Roof........................................................             107              84              78
High Roof.......................................................             109              86              77
----------------------------------------------------------------------------------------------------------------
2021 Model Year Gallons of Fuel per 1,000 Ton-Mile..............................................................
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................          9.5285          7.6621          6.8762
Mid Roof........................................................         10.5108          8.2515          7.6621
High Roof.......................................................         10.7073          8.4479          7.5639
----------------------------------------------------------------------------------------------------------------
2024 Model Year CO2 Grams per Ton-Mile..........................................................................
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................              90              72              64
Mid Roof........................................................             100              78              71
High Roof.......................................................             101              79              70
----------------------------------------------------------------------------------------------------------------
2024 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile....................................................
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................          8.8409          7.0727          6.2868
Mid Roof........................................................          9.8232          7.6621          6.9745
High Roof.......................................................          9.9214          7.7603          6.8762
----------------------------------------------------------------------------------------------------------------
2027 Model Year CO2 Grams per Ton-Mile..........................................................................
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................              87              70              62
Mid Roof........................................................              96              76              69
High Roof.......................................................              96              76              67
----------------------------------------------------------------------------------------------------------------
2027 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile....................................................
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................          8.5462          6.8762          6.0904
Mid Roof........................................................          9.4303          7.4656          6.7780

[[Page 40212]]

 
High Roof.......................................................          9.4303          7.4656          6.5815
----------------------------------------------------------------------------------------------------------------

    It should be noted that the proposed HD Phase 2 CO2 and 
fuel consumptions standards are not directly comparable to the Phase 1 
standards. This is because the agencies are proposing several test 
procedure changes to more accurately reflect real world operation of 
tractors. These changes will result in the following differences. 
First, the same vehicle evaluated using the proposed HD Phase 2 version 
of GEM will obtain higher (i.e. less favorable) CO2 and fuel 
consumption values because the Phase 2 drive cycles include road grade. 
Road grade, which (of course) exists in the real-world, requires the 
engine to operate at higher horsepower levels to maintain speed while 
climbing a hill. Even though the engine saves fuel on a downhill 
section, the overall impact increases CO2 emissions and fuel 
consumption. The second of the key differences between the 
CO2 and fuel consumption values in Phase 1 and Phase 2 is 
due to proposed changes in the evaluation of aerodynamics. In the real 
world, vehicles are exposed to wind which increases the drag of the 
vehicle and in turn increases the power required to move the vehicle 
down the road. To more appropriately reflect the in-use aerodynamic 
performance of tractor-trailers, the agencies are proposing to input 
into Phase 2 GEM the wind averaged coefficient of drag instead of the 
no-wind (zero yaw) value used in Phase 1. The final key difference 
between Phase 1 and the proposed Phase 2 program includes a more 
realistic and improved simulation of the transmission in GEM, which 
could increase CO2 and fuel consumption relative to Phase 1.
    The agencies are proposing Phase 2 CO2 emissions and 
fuel consumption standards for the combination tractors that reflect 
reductions that can be achieved through improvements in the tractor's 
powertrain, aerodynamics, tires, and other vehicle systems. The 
agencies have analyzed the feasibility of achieving the proposed 
CO2 and fuel consumption standards, and have identified 
means of achieving the proposed standards that are technically feasible 
in the lead time afforded, economically practicable and cost-effective. 
EPA and NHTSA present the estimated costs and benefits of the proposed 
standards in Section III.D.2. In developing the proposed standards for 
Class 7 and 8 tractors, the agencies have evaluated the following:

 the current levels of emissions and fuel consumption
 the kinds of technologies that could be utilized by tractor 
and engine manufacturers to reduce emissions and fuel consumption from 
tractors and associated engines
 the necessary lead time
 the associated costs for the industry
 fuel savings for the consumer
 the magnitude of the CO2 and fuel savings that may 
be achieved

    The technologies on whose performance the proposed tractor 
standards are predicated include: Improvements in the engine, 
transmission, driveline, aerodynamic design, tire rolling resistance, 
other accessories of the tractor, and extended idle reduction 
technologies. These technologies, and other accessories of the tractor, 
are described in draft RIA Chapter 2.4. The agencies' evaluation shows 
that some of these technologies are available today, but have very low 
adoption rates on current vehicles, while others will require some lead 
time for development. EPA and NHTSA also present the estimated costs 
and benefits of the proposed Class 7 and 8 combination tractor 
standards in draft RIA Chapter 2.8 and 2.12, explaining as well the 
basis for the agencies' proposed stringency level.
    As explained below in Section III.D, EPA and NHTSA have determined 
that there would be sufficient lead time to introduce various tractor 
and engine technologies into the fleet starting in the 2021 model year 
and fully phasing in by the 2027 model year. This is consistent with 
NHTSA's statutory requirement to provide four full model years of 
regulatory lead time for standards. As was adopted in Phase 1, the 
agencies are proposing for Phase 2 that manufacturers may generate and 
use credits from Class 7 and 8 combination tractors to show compliance 
with the standards. This is discussed further in Section III.F.
    Based on our analysis, the 2027 model year standards for 
combination tractors and engines represent up to a 24 percent reduction 
in CO2 emissions and fuel consumption over a 2017 model year 
baseline tractor, as detailed in Section III.D.2. In considering the 
feasibility of vehicles to comply with the proposed standards over 
their useful lives, EPA also considered the potential for 
CO2 emissions to increase during the regulatory useful life 
of the product. As we discuss in Phase 1 and separately in the context 
of deterioration factor (DF) testing, we have concluded that 
CO2 emissions are likely to stay the same or actually 
decrease in-use compared to new certified configurations. In general, 
engine and vehicle friction decreases as products wear, leading to 
reduced parasitic losses and consequent lower CO2 emissions. 
Similarly, tire rolling resistance falls as tires wear due to the 
reduction in tread height. In the case of aerodynamic components, we 
project no change in performance through the regulatory life of the 
vehicle since there is essentially no change in their physical form as 
vehicles age. Similarly, weight reduction elements such as aluminum 
wheels are (evidently) not projected to increase in mass through time, 
and hence, we can conclude will not deteriorate with regard to 
CO2 performance in-use. Given all of these considerations, 
the agencies are confident in projecting that the tractor standards 
being proposed today would be technically feasible throughout the 
regulatory useful life of the program.
(2) Proposed Non-CO2 GHG Standards for Tractors
    EPA is also proposing standards to control non-CO2 GHG 
emissions from Class 7 and 8 combination tractors.
(a) N2O and CH4 Emissions
    The proposed heavy-duty engine standards for both N2O 
and CH4 as well as details of the proposed standards are 
included in the discussion in Section II.D.3 and II.D.4. No additional 
controls for N2O or CH4 emissions beyond those in 
the proposed HD Phase 2 engine standards are being considered for the 
tractor category.
(b) HFC Emissions
    Manufacturers can reduce hydrofluorocarbon (HFC) emissions from air 
conditioning (A/C) leakage emissions in two ways. First, they can

[[Page 40213]]

utilize leak-tight A/C system components. Second, manufacturers can 
largely eliminate the global warming impact of leakage emissions by 
adopting systems that use an alternative, low-Global Warming Potential 
(GWP) refrigerant, to replace the commonly used R-134a refrigerant. EPA 
proposes to address HFC emissions by maintaining the A/C leakage 
standards adopted in HD Phase 1 (see 40 CFR 1037.115). EPA believes the 
Phase 1 use of leak-tight components is at an appropriate level of 
stringency while maintaining the flexibility to produce the wide 
variety of A/C system configurations required in the tractor category. 
In addition, there currently are not any low GWP refrigerants approved 
for the heavy-duty vehicle sector. Without an alternative refrigerant 
approved for this sector, it is challenging to demonstrate feasibility 
to reduce the amount of leakage allowed under the HFC leakage standard. 
Please see Section I.F(1)(b) for a discussion related to alternative 
refrigerants.
(3) PM Emissions From APUs
    Auxiliary power units (APUs) can be used in lieu of operating the 
main engine during extended idle operations to provide climate control 
and power to the driver. APUs can reduce fuel consumption, 
NOX, HC, CH4, and CO2 emissions when 
compared to main engine idling.\120\ However, a potential unintended 
consequence of reducing CO2 emissions from combination 
tractors through the use of APUs during extended idle operation is an 
increase in PM emissions. Therefore, EPA is seeking comment on the need 
and appropriateness to further reduce PM emissions from APUs.
---------------------------------------------------------------------------

    \120\ U.S. EPA. Development of Emission Rates for Heavy-Duty 
Vehicles in the Motor Vehicle Emissions Simulator MOVES 2010. EPA-
420-B-12-049. August 2012.
---------------------------------------------------------------------------

    EPA conducted an analysis evaluating the potential impact on PM 
emissions due to an increase in APU adoption rates using MOVES. In this 
analysis, EPA assumed that these APUs emit criteria pollutants at the 
level of the EPA standard for this type of non-road diesel engines. 
Under this assumption, an APU would emit 1.8 grams PM per hour, 
assuming an extended idle load demand of 4.5 kW (6 hp).\121\ However, a 
2010 model year or newer tractor that uses its main engine to idle 
emits approximately 0.35 grams PM per hour.\122\ The results from these 
MOVES runs are shown below in Table III-2. These results show that an 
increase in use of APUs could lead to an overall increase in PM 
emissions if left uncontrolled. Column three labeled ``Proposed Program 
PM2.5 Emission Impact without Further PM Control (tons)'' 
shows the incremental increase in PM2.5 without further 
regulation of APU PM2.5 emissions.
---------------------------------------------------------------------------

    \121\ Tier 4, less-than-8 kW nonroad compression-ignition engine 
exhaust emissions standards assumed for APUs: http://www.epa.gov/otaq/standards/nonroad/nonroadci.htm.
    \122\ U.S. EPA. MOVES2014 Reports. Last accessed on May 1, 2015 
at http://www.epa.gov/otaq/models/moves/moves-reports.htm.

     Table III-2--Projected Impact of Increased Adoption of APUs in
                                 Phase 2
------------------------------------------------------------------------
                                                       Proposed program
                                Baseline HD vehicle   PM2.5\a\ emission
              CY                  PM2.5 emissions       impact without
                                       (tons)         further PM control
                                                            (tons)
------------------------------------------------------------------------
2035..........................               21,452                1,631
2050..........................               24,675                2,257
------------------------------------------------------------------------
Note:
\a\ Positive numbers mean emissions would increase from baseline to
  control case. PM2.5 from tire wear and brake wear are included.

    Since January 1, 2008, California ARB has prohibited the idling of 
sleeper cab tractors during periods of sleep and rest.\123\ The 
regulations apply additional requirements to diesel-fueled APUs on 
tractors equipped with 2007 model year or newer engines. Truck owners 
in California must either: (1) Fit the APU with an ARB verified Level 3 
particulate control device that achieves 85 percent reduction in 
particulate matter; or (2) have the APU exhaust plumbed into the 
vehicle's exhaust system upstream of the particulate matter 
aftertreatment device.\124\ Currently ARB includes four control devices 
that have been verified to meet the Level 3 p.m. requirements. These 
devices include HUSS Umwelttechnik GmbH's FS-MK Series Diesel 
Particulate filters, Impco Ecotrans Technologies' ClearSky Diesel 
Particulate Filter, Thermo King's Electric Regenerative Diesel 
Particulate Filter, and Proventia's Electronically Heated Diesel 
Particulate Filter. In addition, ARB has approved a Cummins integrated 
diesel-fueled APU and several fuel-fired heaters produced by Espar and 
Webasto.
---------------------------------------------------------------------------

    \123\ California Air Resources Board. Idle Reduction 
Technologies for Sleeper Berth Trucks. Last viewed on September 19, 
2014 at http://www.arb.ca.gov/msprog/cabcomfort/cabcomfort.htm.
    \124\ California Air Resources Board. Sec.  2485(c)(3)(A)(1).
---------------------------------------------------------------------------

    EPA conducted an evaluation of the impact of potentially requiring 
further PM control from APUs nationwide. As shown in Table III-2, EPA 
projects that the HD Phase 2 program as proposed (without additional PM 
controls) would increase PM2.5 emissions by 1,631 tons in 
2035 and 2,257 tons in 2050. The annual impact of a program to further 
control PM could lead to a reduction of PM2.5 emissions 
nationwide by 3,084 tons in 2035 and by 4,344 tons in 2050, as shown in 
Table III-3 the column labeled ``Net Impact on National 
PM2.5 Emission with Further PM Control of APUs (tons).''

[[Page 40214]]

                     Table III-3--Projected Impact of Further Control on PM2.5 Emissions \a\
----------------------------------------------------------------------------------------------------------------
                                                   Proposed HD phase 2  Proposed HD Phase 2     Net impact on
                               Baseline national     program national     Program National      national PM2.5
             CY                heavy-duty vehicle    PM2.5 Emissions      PM2.5 emissions       emission with
                                PM2.5 emissions     without Further PM    with further pm     further PM control
                                     (tons)           Control (tons)       control (tons)       of APUs (tons)
----------------------------------------------------------------------------------------------------------------
2035........................               21,452               23,083               19,999               -3,084
2050........................               24,675               26,932               22,588               -4,344
----------------------------------------------------------------------------------------------------------------
Note:
\a\ PM2.5 from tire wear and brake wear are included.

    EPA developed long-term cost projections for catalyzed diesel 
particulate filters (DPF) as part of the Nonroad Diesel Tier 4 
rulemaking. In that rulemaking, EPA estimated the DPF costs would add 
$580 to the cost of 150 horsepower engines (69 FR 39126, June 29, 
2004). On the other hand, ARB estimated the cost of retrofitting a 
diesel powered APU with a PM trap to be $2,000 in 2005.\125\ The costs 
of a DPF for an APU that provides less than 25 horsepower would be less 
than the projected cost of a 150 HP engine because the filter volume is 
in general proportional to the engine-out emissions and exhaust flow 
rate. Proventia is charging customers $2,240 for electronically heated 
DPF.\126\ EPA welcomes comments on cost estimates associated with DPF 
systems for APUs.
---------------------------------------------------------------------------

    \125\ California Air Resources Board. Staff Report: Initial 
Statement of Reasons; Notice of Public Hearing to Consider 
Requirements to Reduce Idling Emissions From New and In-Use Trucks, 
Beginning in 2008. September 1, 2005. Page 38. Last viewed on 
October 20, 2014 at http://www.arb.ca.gov/regact/hdvidle/isor.pdf.
    \126\ Proventia. Tripac Filter Kits. Last accessed on October 
21, 2014 at http://www.proventiafilters.com/purchase.html.
---------------------------------------------------------------------------

    EPA requests comments on the technical feasibility of diesel 
particulate filters ability to reduce PM emissions by 85 percent from 
non-road engines used to power APUs. EPA also requests comments on 
whether the technology costs outlined above are accurate, and if so, if 
projected reductions are appropriate taking into account cost, noise, 
safety, and energy factors. See CAA section 213(a)(4).
(4) Proposed Exclusions From the Phase 2 Tractor Standards
    As noted above, in Phase 1, the agencies adopted provisions to 
allow tractor manufacturers to reclassify certain tractors as 
vocational vehicles.\127\ The agencies propose in Phase 2 to continue 
to allow manufacturers to exclude certain vocational-types of tractors 
from the combination tractor standards and instead be subject to the 
vocational vehicle standards. However, the agencies propose to set 
unique standards for tractors used in heavy haul applications in Phase 
2. Details regarding the proposed heavy-haul standards are included 
below in Section II.D.3.
---------------------------------------------------------------------------

    \127\ See 40 CFR 1037.630.
---------------------------------------------------------------------------

    During the development of Phase 1, the agencies received multiple 
comments from several stakeholders supporting an approach for an 
alternative treatment of a subset of tractors because they were 
designed to operate at lower speeds, in stop and go traffic, and 
sometimes operate at higher weights than the typical line-haul tractor. 
These types of applications have limited potential for improvements in 
aerodynamic performance to reduce CO2 emissions and fuel 
consumption. Consistent with the agencies' approach in Phase 1, the 
agencies agree that these vocational tractors are operated differently 
than line-haul tractors and therefore fit more appropriately into the 
vocational vehicle category. However, we need to continue to ensure 
that only tractors that are truly vocational tractors are classified as 
such.\128\ A vehicle determined by the manufacturer to be a HHD 
vocational tractor would fall into one of the HHD vocational vehicle 
subcategories and be regulated as a vocational vehicle. Similarly, MHD 
tractors which the manufacturer chooses to reclassify as vocational 
tractors would be regulated as a MHD vocational vehicle. Specifically, 
the agencies are proposing to change the provisions in EPA's 40 CFR 
1037.630 and NHTSA's regulation at 49 CFR 523.2 and only allow the 
following two types of vocational tractors to be eligible for 
reclassification by the manufacturer:
---------------------------------------------------------------------------

    \128\ As a part of the end of the year compliance process, EPA 
and NHTSA verify manufacturer's production reports to avoid any 
abuse of the vocational tractor allowance.
---------------------------------------------------------------------------

    (1) Low-roof tractors intended for intra-city pickup and delivery, 
such as those that deliver bottled beverages to retail stores.
    (2) Tractors intended for off-road operation (including mixed 
service operation), such as those with reinforced frames and increased 
ground clearance.\129\
---------------------------------------------------------------------------

    \129\ See existing 40 CFR 1037.630(a)(1)(i) through (iii).
---------------------------------------------------------------------------

    Because the difference between some vocational tractors and line-
haul tractors is potentially somewhat subjective, we are also proposing 
to continue to limit the use of this provision to a rolling three year 
sales limit of 21,000 vocational tractors per manufacturer consistent 
with past production volumes of such vehicles. We propose to carry-over 
the existing three year sales limit with the recognition that heavy-
haul tractors would no longer be permitted to be treated as vocational 
vehicles (suggesting a lower volumetric cap could be appropriate) but 
that the heavy-duty market has improved since the development of the HD 
Phase 1 rule (suggesting the need for a higher sales cap). The agencies 
welcome comment on whether the proposed sales volume limit is set at an 
appropriate level looking into the future.
    Also in Phase 1, EPA determined that manufacturers that met the 
small business criteria specified in 13 CFR 121.201 for ``Heavy Duty 
Truck Manufacturing'' were not subject to the greenhouse gas emissions 
standards of 40 CFR 1037.106.\130\ The regulations required that 
qualifying manufacturers must notify the Designated Compliance Officer 
each model year before introducing the vehicles into commerce. The 
manufacturers are also required to label the vehicles to identify them 
as excluded vehicles. EPA and NHTSA are seeking comments on eliminating 
this provision for tractor manufacturers in the Phase 2 program. The 
agencies are aware of two second stage manufacturers building custom 
sleeper cab tractors. We could treat these vehicles in one of two ways. 
First, the vehicles may be considered as dromedary vehicles and 
therefore treated as vocational vehicles.\131\ Or the

[[Page 40215]]

agencies could provide provisions that stated if a manufacturer changed 
the cab, but not the frontal area of the vehicle, then it could retain 
the aerodynamic bin of the original tractor. We welcome comments on 
these considerations.
---------------------------------------------------------------------------

    \130\ See 40 CFR 1037.150(c).
    \131\ A dromedary is a box, deck, or plate mounted behind the 
tractor cab and forward of the fifth wheel on the frame of the power 
unit of a tractor-trailer combination to carry freight.
---------------------------------------------------------------------------

    EPA is proposing to not exempt glider kits from the Phase 2 GHG 
emission standards.\132\ Gliders and glider kits are exempt from 
NHTSA's Phase 1 fuel consumption standards. For EPA purposes, the 
CO2 provisions of Phase 1 exempted gliders and glider kits 
produced by small businesses but did not include such a blanket 
exemption for other glider kits.\133\ Thus, some gliders and glider 
kits are already subject to the requirement to obtain a vehicle 
certificate prior to introduction into commerce as a new vehicle. 
However, the agencies believe glider manufacturers may not understand 
how these regulations apply to them, resulting in a number of 
uncertified vehicles.
---------------------------------------------------------------------------

    \132\ Glider vehicles are new vehicles produced to accept 
rebuilt engines (or other used engines) along with used axles and/or 
transmissions. The common commercial term ``glider kit'' is used 
here primarily to refer to an assemblage of parts into which the 
used/rebuilt engine is installed.
    \133\ Rebuilt engines used in glider vehicles are subject to EPA 
criteria pollutant emission standards applicable for the model year 
of the engine. See 40 CFR 86.004-40 for requirements that apply for 
engine rebuilding. Under existing regulations, engines that remain 
in their certified configuration after rebuilding may continue to be 
used.
---------------------------------------------------------------------------

    EPA is concerned about adverse economic impacts on small businesses 
that assemble glider kits and glider vehicles. Therefore, EPA is 
proposing an option that would grandfather existing small businesses, 
but cap annual production based on their recent sales. EPA requests 
comment on whether any special provisions would be needed to 
accommodate glider kits. See Section XIV for additional discussion of 
the proposed requirements for glider vehicles.
    Similarly, NHTSA is considering including glider vehicles under its 
Phase 2 program. The agencies request comment on their respective 
considerations.
    We believe that the agencies potentially having different policies 
for glider kits and glider vehicles under the Phase 2 program would not 
result in problematic disharmony between the NHTSA and EPA programs, 
because of the small number of vehicles that would be involved. EPA 
believes that its proposed changes would result in the glider market 
returning to the pre-2007 levels, in which fewer than 1,000 glider 
vehicles would be produced in most years. Only non-exempt glider 
vehicles would be subject to different requirements under the NHTSA and 
EPA regulations. However, we believe that this is unlikely to exceed a 
few hundred vehicles in any year, which would be few enough not to 
result in any meaningful disharmony between the two agencies.
    With regard to NHTSA's safety authority over gliders, the agency 
notes that it has become increasingly aware of potential noncompliance 
with its regulations applicable to gliders. NHTSA has learned of 
manufacturers who are creating glider vehicles that are new vehicles 
under 49 CFR 571.7(e); however, the manufacturers are not certifying 
them and obtaining a new VIN as required. NHTSA plans to pursue 
enforcement actions as applicable against noncompliant manufacturers. 
In addition to enforcement actions, NHTSA may consider amending 49 CFR 
571.7(e) and related regulations as necessary. NHTSA believes 
manufacturers may not be using this regulation as originally intended.
(5) In-Use Standards
    Section 202(a)(1) of the CAA specifies that EPA is to propose 
emissions standards that are applicable for the useful life of the 
vehicle. The in-use Phase 2 standards that EPA is proposing would apply 
to individual vehicles and engines, just as EPA adopted for Phase 1. 
NHTSA is also proposing to use the same useful life mileage and years 
as EPA for Phase 2.
    EPA is also not proposing any changes to provisions requiring that 
the useful life for tractors with respect to CO2 emissions 
be equal to the respective useful life periods for criteria pollutants, 
as shown below in Table III-4. See 40 CFR 1037.106(e). EPA does not 
expect degradation of the technologies evaluated for Phase 2 in terms 
of CO2 emissions, therefore we propose no changes to the 
regulations describing compliance with GHG pollutants with regards to 
deterioration. See 40 CFR 1037.241. We welcome comments that highlight 
a need to change this approach.

                Table III-4--Tractor Useful Life Periods
------------------------------------------------------------------------
                                                      Years      Miles
------------------------------------------------------------------------
Class 7 Tractors..................................         10    185,000
Class 8 Tractors..................................         10    435,000
------------------------------------------------------------------------

D. Feasibility of the Proposed Tractor Standards

    This section describes the agencies' technical feasibility and cost 
analysis in greater detail. Further detail on all of these technologies 
can be found in the draft RIA Chapter 2.
    Class 7 and 8 tractors are used in combination with trailers to 
transport freight. The variation in the design of these tractors and 
their typical uses drive different technology solutions for each 
regulatory subcategory. As noted above, the agencies are proposing to 
continue the Phase 1 provisions that treat vocational tractors as 
vocational vehicles instead of as combination tractors, as noted in 
Section III.C. The focus of this section is on the feasibility of the 
proposed standards for combination tractors including the heavy-haul 
tractors, but not the vocational tractors.
    EPA and NHTSA collected information on the cost and effectiveness 
of fuel consumption and CO2 emission reducing technologies 
from several sources. The primary sources of information were the 
Southwest Research Institute evaluation of heavy-duty vehicle fuel 
efficiency and costs for NHTSA,\134\ the Department of Energy's 
SuperTruck Program,\135\ 2010 National Academy of Sciences report of 
Technologies and Approaches to Reducing the Fuel Consumption of Medium- 
and Heavy-Duty Vehicles,\136\ TIAX's assessment of technologies to 
support the NAS panel report,\137\ the analysis conducted by the 
Northeast States Center for a Clean Air Future, International Council 
on Clean Transportation, Southwest Research Institute and TIAX for 
reducing fuel consumption of heavy-duty long haul combination tractors 
(the NESCCAF/ICCT study),\138\ and the technology cost analysis 
conducted by ICF for EPA.\139\

[[Page 40216]]

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    \134\ Reinhart, T.E. (June 2015). Commercial Medium- and Heavy-
Duty Truck Fuel Efficiency Technology Study--Report #1. (Report No. 
DOT HS 812 146). Washington, DC: National Highway Traffic Safety 
Administration.
    \135\ U.S. Department of Energy. SuperTruck Initiative. 
Information available at http://energy.gov/eere/vehicles/vehicle-technologies-office.
    \136\ Committee to Assess Fuel Economy Technologies for Medium- 
and Heavy-Duty Vehicles; National Research Council; Transportation 
Research Board (2010). Technologies and Approaches to Reducing the 
Fuel Consumption of Medium- and Heavy-Duty Vehicles. (``The 2010 NAS 
Report'') Washington, DC, The National Academies Press.
    \137\ TIAX, LLC. ``Assessment of Fuel Economy Technologies for 
Medium- and Heavy-Duty Vehicles,'' Final Report to National Academy 
of Sciences, November 19, 2009.
    \138\ NESCCAF, ICCT, Southwest Research Institute, and TIAX. 
Reducing Heavy-Duty Long Haul Combination Truck Fuel Consumption and 
CO2 Emissions. October 2009.
    \139\ ICF International. ``Investigation of Costs for Strategies 
to Reduce Greenhouse Gas Emissions for Heavy-Duty On-Road 
Vehicles.'' July 2010. Docket Number EPA-HQ-OAR-2010-0162-0283.
---------------------------------------------------------------------------

(1) What technologies did the agencies consider to reduce the 
CO2 emissions and fuel consumption of combination tractors?
    Manufacturers can reduce CO2 emissions and fuel 
consumption of combination tractors through use of many technologies, 
including engine, drivetrain, aerodynamic, tire, extended idle, and 
weight reduction technologies. The agencies' determination of the 
feasibility of the proposed HD Phase 2 standards is based on our 
projection of the use of these technologies and an assessment of their 
effectiveness. We will also discuss other technologies that could 
potentially be used, such as vehicle speed limiters, although we are 
not basing the proposed standards on their use for the model years 
covered by this proposal, for various reasons discussed below.
    In this section we discuss generally the tractor and engine 
technologies that the agencies considered to improve performance of 
heavy-duty tractors, while Section III.D.2 discusses the baseline 
tractor definition and technology packages the agencies used to 
determine the proposed standard levels.
    Engine technologies: As discussed in Section II.D above, there are 
several engine technologies that can reduce fuel consumption of heavy-
duty tractors. These technologies include friction reduction, 
combustion system optimization, and Rankine cycle. These engine 
technologies would impact the Phase 2 vehicle results because the 
agencies propose that the manufacturers enter a fuel map into GEM.
    Aerodynamic technologies: There are opportunities to reduce 
aerodynamic drag from the tractor, but it is sometimes difficult to 
assess the benefit of individual aerodynamic features. Therefore, 
reducing aerodynamic drag requires optimizing of the entire system. The 
potential areas to reduce drag include all sides of the truck--front, 
sides, top, rear and bottom. The grill, bumper, and hood can be 
designed to minimize the pressure created by the front of the truck. 
Technologies such as aerodynamic mirrors and fuel tank fairings can 
reduce the surface area perpendicular to the wind and provide a smooth 
surface to minimize disruptions of the air flow. Roof fairings provide 
a transition to move the air smoothly over the tractor and trailer. 
Side extenders can minimize the air entrapped in the gap between the 
tractor and trailer. Lastly, underbelly treatments can manage the flow 
of air underneath the tractor. DOE has partnered with the heavy-duty 
industry to demonstrate vehicles that achieve a 50 percent improvement 
in freight efficiency. This SuperTruck program has led to significant 
advancements in the aerodynamics of combination tractor-trailers. The 
manufacturers' SuperTruck demonstration vehicles are achieving 
approximately 7 percent freight efficiency improvements over a 2010 MY 
baseline vehicle due to improvements in tractor aerodynamics.\140\ The 
2010 NAS Report on heavy-duty trucks found that aerodynamic 
improvements which yield 3 to 4 percent fuel consumption reduction or 6 
to 8 percent reduction in Cd values, beyond technologies used in 
today's SmartWay trucks are achievable.\141\
---------------------------------------------------------------------------

    \140\ Daimler Truck North America. SuperTruck Program Vehicle 
Project Review. June 19, 2014.
    \141\ See TIAX, Note 137, Page 4-40.
---------------------------------------------------------------------------

    Lower Rolling Resistance Tires: A tire's rolling resistance results 
from the tread compound material, the architecture and materials of the 
casing, tread design, the tire manufacturing process, and its operating 
conditions (surface, inflation pressure, speed, temperature, etc.). 
Differences in rolling resistance of up to 50 percent have been 
identified for tires designed to equip the same vehicle. Since 2007, 
SmartWay designated tractors have had steer tires with rolling 
resistance coefficients of less than 6.6 kg/metric ton for the steer 
tire and less than 7.0 kg/metric ton for the drive tire.\142\ Low 
rolling resistance (LRR) drive tires are currently offered in both dual 
assembly and wide-based single configurations. Wide based single tires 
can offer rolling resistance reduction along with improved aerodynamics 
and weight reduction. The lowest rolling resistance value submitted for 
2014MY GHG and fuel efficiency certification was 4.3 and 5.0 kg/metric 
ton for the steer and drive tires respectively.\143\
---------------------------------------------------------------------------

    \142\ Ibid.
    \143\ Memo to Docket. Coefficient of Rolling Resistance 
Certification Data. See Docket EPA-HQ-OAR-2014-0827.
---------------------------------------------------------------------------

    Weight Reduction: Reductions in vehicle mass lower fuel consumption 
and GHG emissions by decreasing the overall vehicle mass that is moved 
down the road. Weight reductions also increase vehicle payload 
capability which can allow additional tons to be carried by fewer 
trucks consuming less fuel and producing lower emissions on a ton-mile 
basis. We treated such weight reduction in two ways in Phase 1 to 
account for the fact that combination tractor-trailers weigh-out 
approximately one-third of the time and cube-out approximately two-
thirds of the time. Therefore in Phase 1 and also as proposed for Phase 
2, one-third of the weight reduction would be added payload in the 
denominator while two-thirds of the weight reduction is subtracted from 
the overall weight of the vehicle in GEM. See 76 FR 57153.
    In Phase 1, we reflected mass reductions for specific technology 
substitutions (e.g., installing aluminum wheels instead of steel 
wheels). These substitutions were included where we could with 
confidence verify the mass reduction information provided by the 
manufacturer. The agencies propose to expand the list of weight 
reduction components which can be input into GEM in order to provide 
the manufacturers with additional means to comply via GEM with the 
combination tractor standards and to further encourage reductions in 
vehicle weight. As in Phase 1, we recognize that there may be 
additional potential for weight reduction in new high strength steel 
components which combine the reduction due to the material substitution 
along with improvements in redesign, as evidenced by the studies done 
for light-duty vehicles.\144\ In the development of the high strength 
steel component weights, we are only assuming a reduction from material 
substitution and no weight reduction from redesign, since we do not 
have any data specific to redesign of heavy-duty components nor do we 
have a regulatory mechanism to differentiate between material 
substitution and improved design. Additional weight reduction would be 
evaluated as a potential off-cycle credit.
---------------------------------------------------------------------------

    \144\ American Iron and Steel Institute. ``A Cost Benefit 
Analysis Report to the North American Steel Industry on Improved 
Material and Powertrain Architectures for 21st Century Trucks.''
---------------------------------------------------------------------------

    Extended Idle Reduction: Auxiliary power units (APU), fuel operated 
heaters, battery supplied air conditioning, and thermal storage systems 
are among the technologies available today to reduce main engine 
extended idling from sleeper cabs. Each of these technologies reduces 
fuel consumption during idling from a truck without this equipment (the 
baseline) from approximately 0.8 gallons per hour (main engine idling 
fuel consumption rate) to approximately 0.2 gallons per hour for an 
APU.\145\ EPA and NHTSA agree with the TIAX assessment that a 5 percent 
reduction in overall fuel consumption reduction is achievable.\146\
---------------------------------------------------------------------------

    \145\ See the draft RIA Chapter 2.4.8 for details.
    \146\ See the 2010 NAS Report, Note 136, above, at 128.

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

[[Page 40217]]

    Idle Reduction: Day cab tractors often idle while cargo is loaded 
or unloaded, as well as during the frequent stops that are inherent 
with driving in urban traffic conditions near cargo destinations. To 
recognize idle reduction technologies that reduce workday idling, the 
agencies have developed a new idle-only duty cycle that is proposed to 
be used in GEM. As discussed above in Section II.D, this new proposed 
certification test cycle would measure the amount of fuel saved and 
CO2 emissions reduced by two primary types of technologies: 
Neutral idle and stop-start. The proposed rules apply this test cycle 
only to vocational vehicles because these types of vehicles spend more 
time at idle than tractors. However, the agencies request comment on 
whether we should extend this vocational vehicle idle reduction 
approach to day cab tractors. Neutral idle would only be available for 
tractors using torque-converter automatic transmissions, and stop-start 
would be available for any tractor. Unlike the fixed numerical value in 
GEM for automatic engine shutdown systems to reduce overnight idling of 
combination tractors, this new idle reduction approach would result in 
different numerical values depending on user inputs. The required 
inputs and other details about this cycle, as it would apply to 
vocational vehicles, are described in the draft RIA Chapter 3. If we 
extended this approach to day cab tractors, we could set a fixed GEM 
composite cycle weighting factor at a value representative of the time 
spent at idle for a typical day cab tractor, possibly five percent. 
Under this approach, tractor manufacturers would be able to select GEM 
inputs that identify the presence of workday idle reduction 
technologies, and GEM would calculate the associated benefit due to 
these technologies, using this new idle-only cycle as described in the 
draft RIA Chapter 3.
    The agencies have also received a letter from the California Air 
Resources Board requesting consideration of credits for reducing solar 
loads. Solar reflective paints and solar control glazing technologies 
are briefly discussed in draft RIA Chapter 2.4.9.3. The agencies 
request comment on the Air Resources Board's letter and 
recommendations.\147\
---------------------------------------------------------------------------

    \147\ California Air Resources Board. Letter from Michael Carter 
to Matthew Spears dated December 3, 2014. Solar Control: Heavy-Duty 
Vehicles White Paper. Docket EPA-HA-OAR-2014-0827.
---------------------------------------------------------------------------

    Vehicle Speed Limiters: Fuel consumption and GHG emissions increase 
proportional to the square of vehicle speed. Therefore, lowering 
vehicle speeds can significantly reduce fuel consumption and GHG 
emissions. A vehicle speed limiter (VSL), which limits the vehicle's 
maximum speed, is another technology option for compliance that is 
already utilized today by some fleets (though the typical maximum speed 
setting is often higher than 65 mph).
    Downsized Engines and Downspeeding: As tractor manufacturers 
continue to reduce the losses due to vehicle loads, such as aerodynamic 
drag and rolling resistance, the amount of power required to move the 
vehicle decreases. In addition, engine manufacturers continue to 
improve the power density of heavy-duty engines through means such as 
reducing the engine friction due to smaller surface area. These two 
changes lead to the ability for truck purchasers to select lower 
displacement engines while maintaining the previous level of 
performance. Engine downsizing could be more effective if it is 
combined with the downspeeding assuming increased BMEP does not affect 
durability. The increased efficiency of the vehicle moves the operating 
points down to a lower load zone on a fuel map, which often moves the 
engine away from its sweet spot to a less efficient zone. In order to 
compensate for this loss, downspeeding allows the engine to run at a 
lower engine speed and move back to higher load zones, thus can 
slightly improve fuel efficiency. Reducing the engine size allows the 
vehicle operating points to move back to the sweet spot, thus further 
improving fuel efficiency. Engine downsizing can be accounted for as a 
vehicle technology through the use of the engine's fuel map in GEM.
    Transmission: As discussed in the 2010 NAS report, automatic (AT) 
and automated manual transmissions (AMT) may offer the ability to 
improve vehicle fuel consumption by optimizing gear selection compared 
to an average driver.\148\ However, as also noted in the report and in 
the supporting TIAX report, the improvement is very dependent on the 
driver of the truck, such that reductions ranged from 0 to 8 
percent.\149\ Well-trained drivers would be expected to perform as well 
or even better than an automatic transmission since the driver can see 
the road ahead and anticipate a changing stoplight or other road 
condition that neither an automatic nor automated manual transmission 
can anticipate. However, poorly-trained drivers that shift too 
frequently or not frequently enough to maintain optimum engine 
operating conditions could be expected to realize improved in-use fuel 
consumption by switching from a manual transmission to an automatic or 
automated manual transmission. As transmissions continue to evolve, we 
are now seeing in the European heavy-duty vehicle market the addition 
of dual clutch transmissions (DCT). DCTs operate similar to AMTs, but 
with two clutches so that the transmission can maintain engine speed 
during a shift which improves fuel efficiency. We believe there may be 
real benefits in reduced fuel consumption and GHG emissions through the 
adoption of dual clutch, automatic or automated manual transmission 
technology.
---------------------------------------------------------------------------

    \148\ Manual transmissions require the driver to shift the gears 
and manually engage and disengage the clutch. Automatic 
transmissions shift gears through computer controls and typically 
include a torque converter. An AMT operates similar to a manual 
transmission, except that an automated clutch actuator disengages 
and engages the drivetrain instead of a human driver. An AMT does 
not include a clutch pedal controllable by the driver or a torque 
converter.
    \149\ See TIAX, Note 137, above at 4-70.
---------------------------------------------------------------------------

    Low Friction Transmission, Axle, and Wheel Bearing Lubricants: The 
2010 NAS report assessed low friction lubricants for the drivetrain as 
providing a 1 percent improvement in fuel consumption based on fleet 
testing.\150\ A field trial of European medium-duty trucks found an 
average fuel consumption improvement of 1.8 percent using SAE 5W-30 
engine oil, SAE 75W90 axle oil and SAE 75W80 transmission oil when 
compared to SAE 15W40 engine oil and SAE 90W axle oil, and SAE 80W 
transmission oil.\151\ The light-duty 2012-16 MY vehicle rule and the 
pickup truck portion of this program estimate that low friction 
lubricants can have an effectiveness value between 0 and 1 percent 
compared to traditional lubricants.
---------------------------------------------------------------------------

    \150\ See the 2010 NAS Report, Note 136, page 67.
    \151\ Green, D.A., et al. ``The Effect of Engine, Axle, and 
Transmission Lubricant, and Operating Conditions on Heavy Duty 
Diesel Fuel Economy. Part 1: Measurements.'' SAE 2011-01-2129. SAE 
International Journal of Fuels and Lubricants. January 2012.
---------------------------------------------------------------------------

    Drivetrain: Most tractors today have three axles--a steer axle and 
two rear drive axles, and are commonly referred to as 6x4 tractors. 
Manufacturers offer 6x2 tractors that include one rear drive axle and 
one rear non-driving axle. The 6x2 tractors offer three distinct 
benefits. First, the non-driving rear axle does not have internal 
friction and therefore reduces the overall parasitic losses in the 
drivetrain. In addition, the 6x2 configuration typically weighs 
approximately 300 to 400 lbs less than

[[Page 40218]]

a 6x4 configuration.\152\ Finally, the 6x2 typically costs less or is 
cost neutral when compared to a 6x4 tractor. Sources cite the 
effectiveness of 6x2 axles at between 1 and 3 percent.\153\ Similarly, 
with the increased use of double and triple trailers, which reduce the 
weight on the tractor axles when compared to a single trailer, 
manufacturers offer 4x2 axle configurations. The 4x2 axle configuration 
would have as good as or better fuel efficiency performance than a 6x2.
---------------------------------------------------------------------------

    \152\ North American Council for Freight Efficiency. 
''Confidence Findings on the Potential of 6x2 Axles.'' 2014. Page 
16.
    \153\ Reinhart, T.E. (June 2015). Commercial Medium- and Heavy-
Duty Truck Fuel Efficiency Technology Study--Report #1. (Report No. 
DOT HS 812 146). Washington, DC: National Highway Traffic Safety 
Administration.
---------------------------------------------------------------------------

    Accessory Improvements: Parasitic losses from the engine come from 
many systems, including the water pump, oil pump, and power steering 
pump. Reductions in parasitic losses are one of the areas being 
developed under the DOE SuperTruck program. As presented in the DOE 
Merit reviews, Navistar stated that they demonstrated a 0.45 percent 
reduction in fuel consumption through water pump improvements and 0.3 
percent through oil pump improvements compared to a current engine. In 
addition, Navistar showed a 0.9 percent benefit for a variable speed 
water pump and variable displacement oil pump. Detroit Diesel reports a 
0.5 percent coming from improved water pump efficiency.\154\ It should 
be noted that water pump improvements include both pump efficiency 
improvement and variable speed or on/off controls. Lube pump 
improvements are primarily achieved using variable displacement pumps 
and may also include efficiency improvement. All of these results shown 
in this paragraph are demonstrated through the DOE SuperTruck program 
at single operating point on the engine map, and therefore the overall 
expected reduction of these technologies is less than the single point 
result.
---------------------------------------------------------------------------

    \154\ See the draft RIA Chapter 2.4 for details.
---------------------------------------------------------------------------

    Intelligent Controls: Skilled drivers know how to control a vehicle 
to obtain maximum fuel efficiency by, among other things, considering 
road terrain. For example, the driver may allow the vehicle to slow 
down below the target speed on an uphill and allow it to go over the 
target speed when going downhill, to essentially smooth out the engine 
demand. Electronic controls can be developed to essentially mimic this 
activity. The agencies propose to provide a 2 percent reduction in fuel 
consumption and CO2 emissions for vehicles configured with 
intelligent controls, such as predictive cruise control.
    Automatic Tire Inflation Systems: Proper tire inflation is critical 
to maintaining proper stress distribution in the tire, which reduces 
heat loss and rolling resistance. Tires with reduced inflation pressure 
exhibit a larger footprint on the road, more sidewall flexing and tread 
shearing, and therefore, have greater rolling resistance than a tire 
operating at its optimal inflation pressure. Bridgestone tested the 
effect of inflation pressure and found a 2 percent variation in fuel 
consumption over a 40 psi range.\155\ Generally, a 10 psi reduction in 
overall tire inflation results in about a 1 percent reduction in fuel 
economy.\156\ To achieve the intended fuel efficiency benefits of low 
rolling resistance tires, it is critical that tires are maintained at 
the proper inflation pressure.
---------------------------------------------------------------------------

    \155\ Bridgestone Tires. Real Questions, Real Answers. http://www.bridgestonetrucktires.com/us_eng/real/magazines/ra_special-edit_4/ra_special4_fuel-tires.asp.
    \156\ ``Factors Affecting Truck Fuel Economy,'' Goodyear, Radial 
Truck and Retread Service Manual. Accessed February 16, 2010 at 
http://www.goodyear.com/truck/pdf/radialretserv/Retread_S9_V.pdf.
---------------------------------------------------------------------------

    Proper tire inflation pressure can be maintained with a rigorous 
tire inspection and maintenance program or with the use of tire 
pressure and inflation systems. According to a study conducted by FMCSA 
in 2003, about 1 in 5 tractors/trucks is operating with 1 or more tires 
underinflated by at least 20 psi.\157\ A 2011 FMCSA study estimated 
underinflation accounts for one service call per year and increases 
tire procurement costs 10 to 13 percent. The study found that total 
operating costs can increase by $600 to $800 per year due to 
underinflation.\158\ A recent study by The North American Council on 
Freight Efficiency, found that adoption of tire pressure monitoring 
systems is increasing. It also found that reliability and durability of 
commercially available tire pressure systems are good and early issues 
with the systems have been addressed.\159\ These automatic tire 
inflation systems monitor tire pressure and also automatically keep 
tires inflated to a specific level. The agencies propose to provide a 1 
percent CO2 and fuel consumption reduction value for 
tractors with automatic tire inflation systems installed.
---------------------------------------------------------------------------

    \157\ American Trucking Association. Tire Pressure Monitoring 
and Inflation Maintenance. June 2010. Page 3. Last accessed on 
December 15, 2014 at http://www.trucking.org/ATA%20Docs/About/Organization/TMC/Documents/Position%20Papers/Study%20Group%20Information%20Reports/Tire%20Pressure%20Monitoring%20and%20Inflation%20Maintenance%E2%80%94TMC%20I.R.%202010-2.pdf.
    \158\ TMC Future Truck Committee Presentation ``FMCSA Tire 
Pressure Monitoring Field Operational Test Results,'' February 8, 
2011.
    \159\ North American Council for Freight Efficiency, ``Tire 
Pressure Systems,'' 2013.
---------------------------------------------------------------------------

    Tire pressure monitoring systems notify the operator of tire 
pressure, but require the operator to manually inflate the tires to the 
optimum pressure. Because of the dependence on the operator's action, 
the agencies are not proposing to provide a reduction value for tire 
pressure monitoring systems. We request comment on this approach and 
seek data from those that support a reduction value be assigned to tire 
pressure monitoring systems.
    Hybrid: Hybrid powertrain development in Class 7 and 8 tractors has 
been limited to a few manufacturer demonstration vehicles to date. One 
of the key benefit opportunities for fuel consumption reduction with 
hybrids is less fuel consumption when a vehicle is idling, but the 
standard is already premised on use of extended idle reduction so use 
of hybrid technology would duplicate many of the same emission 
reductions attributable to extended idle reduction. NAS estimated that 
hybrid systems would cost approximately $25,000 per tractor in the 2015 
through the 2020 time frame and provide a potential fuel consumption 
reduction of 10 percent, of which 6 percent is idle reduction which can 
be achieved (less expensively) through the use of other idle reduction 
technologies.\160\ The limited reduction potential outside of idle 
reduction for Class 8 sleeper cab tractors is due to the mostly highway 
operation and limited start-stop operation. Due to the high cost and 
limited benefit during the model years at issue in this action (as well 
as issues regarding sufficiency of lead time (see Section III.D.2 
below), the agencies are not including hybrids in assessing standard 
stringency (or as an input to GEM).
---------------------------------------------------------------------------

    \160\ See the 2010 NAS Report, Note 136, page 128.
---------------------------------------------------------------------------

    Management: The 2010 NAS report noted many operational 
opportunities to reduce fuel consumption, such as driver training and 
route optimization. The agencies have included discussion of several of 
these strategies in draft RIA Chapter 2, but are not using these 
approaches or technologies in the standard setting process. The 
agencies are looking to other resources, such as EPA's SmartWay 
Transport Partnership and regulations that could potentially be 
promulgated by the Federal Highway Administration and the Federal Motor 
Carrier Safety Administration, to continue to encourage the development 
and utilization of these approaches.

[[Page 40219]]

(2) Projected Technology Effectiveness and Cost
    EPA and NHTSA project that CO2 emissions and fuel 
consumption reductions can be feasibly and cost-effectively met through 
technological improvements in several areas. The agencies evaluated 
each technology and estimated the most appropriate adoption rate of 
technology into each tractor subcategory. The next sections describe 
the baseline vehicle configuration, the effectiveness of the individual 
technologies, the costs of the technologies, the projected adoption 
rates of the technologies into the regulatory subcategories, and 
finally the derivation of the proposed standards.
    The agencies propose Phase 2 standards that project by 2027, all 
high-roof tractors would have aerodynamic performance equal to or 
better today's SmartWay performance--which represents the best of 
today's technology. This would equate to having 40 percent of new high 
roof sleeper cabs in 2027 complying with the current best practices and 
60 percent of the new high-roof sleeper cab tractors sold in 2027 
having better aerodynamic performance than the best tractors available 
today. For tire rolling resistance, we premised the proposed standards 
on the assumption that nearly all tires in 2027 would have rolling 
resistance equal to or superior to tires meeting today's SmartWay 
designation. As discussed in Section II.D, the agencies assume the 
proposed 2027 MY engines would achieve an additional 4 percent 
improvement over Phase 1 engines and we project would include 15 
percent of waste heat recovery (WHR) and many other advanced engine 
technologies. In addition, we are proposing standards that project 
improvements to nearly all of today's transmissions, incorporation of 
extended idle reduction technologies on 90 percent of sleeper cabs, and 
significant adoption of other types of technologies such as predictive 
cruise control and automatic tire inflation systems.
    In addition to the high cost and limited utility of hybrids for 
many tractor drive cycles noted above, the agencies believe that hybrid 
powertrains systems for tractors may not be sufficiently developed and 
the necessary manufacturing capacity put in place to base a standard on 
any significant volume of hybrid tractors. Unlike hybrids for 
vocational vehicles and light-duty vehicles, the agencies are not aware 
of any full hybrid systems currently developed for long haul tractor 
applications. To date, hybrid systems for tractors have been primarily 
focused on idle shutdown technologies and not on the broader energy 
storage and recovery systems necessary to achieve reductions over 
typical vehicle drive cycles. The proposed standards reflect the 
potential for idle shutdown technologies through GEM. Further as 
highlighted by the 2010 NAS report, the agencies do believe that full 
hybrid powertrains may have the potential in the longer term to provide 
significant improvements in tractor fuel efficiency and to greenhouse 
gas emission reductions. However, due to the high cost, limited benefit 
during highway driving, and lacking any existing systems or 
manufacturing base, we cannot conclude with certainty, absent 
additional information, that such technology would be available for 
tractors in the 2021-2027 timeframe. However the agencies welcome 
comment from industry and others on their projected timeline for 
deployment of hybrid powertrains for tractor applications.
(a) Tractor Baselines for Costs and Effectiveness
    The fuel efficiency and CO2 emissions of combination 
tractors vary depending on the configuration of the tractor. Many 
aspects of the tractor impact its performance, including the engine, 
transmission, drive axle, aerodynamics, and rolling resistance. For 
each subcategory, the agencies selected a theoretical tractor to 
represent the average 2017 model year tractor that meets the Phase 1 
standards (see 76 FR 57212, September 15, 2011). These tractors are 
used as baselines from which to evaluate costs and effectiveness of 
additional technologies and standards. The specific attributes of each 
tractor subcategory are listed below in Table III-5. Using these 
values, the agencies assessed the CO2 emissions and fuel 
consumption performance of the proposed baseline tractors using the 
proposed version of Phase 2 GEM. The results of these simulations are 
shown below in Table III-6.
    As noted earlier, the Phase 1 2017 model year tractor standards and 
the baseline 2017 model year tractor results are not directly 
comparable. The same set of aerodynamic and tire rolling resistance 
technologies were used in both setting the Phase 1 standards and 
determining the baseline of the Phase 2 tractors. However, there are 
several aspects that differ. First, a new version of GEM was developed 
and validated to provide additional capabilities, including more 
refined modeling of transmissions and engines. Second, the 
determination of the proposed HD Phase 2 CdA value takes into account a 
revised test procedure, a new standard reference trailer, and wind 
averaged drag as discussed below in Section III.E. In addition, the 
proposed HD Phase 2 version of GEM includes road grade in the 55 mph 
and 65 mph highway cycles, as discussed below in Section III.E. 
Finally, the agencies assessed the current level of automatic engine 
shutdown and idle reduction technologies used by the tractor 
manufacturers to comply with the 2014 model year CO2 and 
fuel consumption standards. To date, the manufacturers are meeting the 
2014 model year standards without the use of this technology. 
Therefore, in this proposal the agencies reverted back to the baseline 
APU adoption rate of 30 percent, the value used in the Phase 1 
baseline.

[[Page 40220]]

                         Table III-5--GEM Inputs for the Baseline Class 7 and 8 Tractor
----------------------------------------------------------------------------------------------------------------
               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
----------------------------------------------------------------------------------------------------------------
2017 MY 11L  2017 MY 11L  2017 MY 11L  2017 MY 15L  2017 MY 15L  2017 MY 15L    2017 MY     2017 MY     2017 MY
 Engine 350  Engine 350   Engine 350   Engine 455   Engine 455   Engine 455   15L Engine  15L Engine  15L Engine
     HP              HP           HP           HP           HP           HP      455 HP      455 HP      455 HP
----------------------------------------------------------------------------------------------------------------
                                           Aerodynamics (CdA in m\2\)
----------------------------------------------------------------------------------------------------------------
      5.00         6.40         6.42         5.00         6.40         6.42        4.95        6.35        6.22
----------------------------------------------------------------------------------------------------------------
                                       Steer Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
      6.99         6.99         6.87         6.99         6.99         6.87        6.87        6.87        6.54
----------------------------------------------------------------------------------------------------------------
                                       Drive Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
      7.38         7.38         7.26         7.38         7.38         7.26        7.26        7.26        6.92
----------------------------------------------------------------------------------------------------------------
                                      Extended Idle Reduction Adoption Rate
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A          N/A          N/A          N/A         30%         30%         30%
----------------------------------------------------------------------------------------------------------------
                                   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 = 3.70
----------------------------------------------------------------------------------------------------------------

                                     Table III-6--Class 7 and 8 Tractor Baseline CO2 Emissions and Fuel Consumption
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   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
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (grams CO2/ton-mile).............................     107        118        121         86         93         95         79         87         88
Fuel Consumption (gal/1,000 ton-mile)................      10.5       11.6       11.9        8.4        9.1        9.3        7.8        8.5        8.6
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The fuel consumption and CO2 emissions in the baseline 
described above remains the same over time with no assumed improvements 
after 2017, absent a Phase 2 regulation. An alternative baseline was 
also evaluated by the agencies in which there is a continuing uptake of 
technologies in the tractor market that reduce fuel consumption and 
CO2 emissions absent a Phase 2 regulation. This alternative 
baseline, referred to as the more dynamic baseline, was developed to 
estimate the effect of market pressures and non-regulatory government 
initiatives to improve tractor fuel consumption. The more dynamic 
baseline assumes that the significant level of research funded and 
conducted by the Federal government, industry, academia and other 
organizations will, in the future, result the adoption of some 
technologies beyond the levels required to comply with Phase 1 
standards. One example of such research is the Department of Energy 
Super Truck program \161\ which has a goal of demonstrating cost-
effective measures to improve the efficiency of Class 8 long-haul 
freight trucks by 50 percent by 2015. The more dynamic baseline also 
assumes that manufacturers will not cease offering fuel efficiency 
improving technologies that currently have significant market 
penetration, such as automated manual transmissions. The baselines (one 
for each of the nine tractor types) are characterized by fuel 
consumption and CO2 emissions that gradually decrease 
between 2019 and 2028. In 2028, the fuel consumption for the 
alternative tractor baselines is approximately 4.0 percent lower than 
those shown in Table III-6. This results from the assumed introduction 
of aerodynamic technologies such as down exhaust, underbody airflow 
treatment in addition to tires with lower rolling resistance. The 
assumed introduction of these technologies reduces the CdA of the 
baseline tractors and CRR of the tractor tires. To take one example, 
the CdA for baseline high roof sleeper cabs in Table III-5 is 6.22 
(m\2\) in 2018. In 2028, the CdA of a high roof sleeper cab would be 
assumed to still be 6.22 m\2\ in the baseline case outlined above. 
Alternatively, in the dynamic baseline, the CdA for high roof sleeper 
cabs is 5.61 (m\2\) in 2028 due to assumed market penetration of 
technologies absent the Phase 2 regulation. The dynamic baseline 
analysis is discussed in more detail in draft RIA Chapter 11.
---------------------------------------------------------------------------

    \161\ U.S. Department of Energy. ``SuperTruck Making Leaps in 
Fuel Efficiency.'' 2014. Last accessed on May 10, 2015 at http://energy.gov/eere/articles/supertruck-making-leaps-fuel-efficiency.

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

[[Page 40221]]

(b) Tractor Technology Packages
    The agencies' assessment of the proposed technology effectiveness 
was developed through the use of the GEM in coordination with modeling 
conducted by Southwest Research Institute. The agencies developed the 
proposed standards through a three-step process, similar to the 
approach used in Phase 1. First, the agencies developed technology 
performance characteristics for each technology, as described below. 
Each technology is associated with an input parameter which in turn 
would be used as an input to the Phase 2 GEM simulation tool and its 
effectiveness thereby modeled. The performance levels for the range of 
Class 7 and 8 tractor aerodynamic packages and vehicle technologies are 
described below in Table III-7. Second, the agencies combined the 
technology performance levels with a projected technology adoption rate 
to determine the GEM inputs used to set the stringency of the proposed 
standards. Third, the agencies input these parameters into Phase 2 GEM 
and used the output to determine the proposed CO2 emissions 
and fuel consumption levels. All percentage improvements noted below 
are over the 2017 baseline tractor.
(i) Engine Improvements
    There are several technologies that could be used to improve the 
efficiency of diesel engines used in tractors. Details of the engine 
technologies, adoption rates, and overall fuel consumption and 
CO2 emission reductions are included in Section II.D. The 
proposed heavy-duty tractor engine standards would lead to a 1.5 
percent reduction in 2021MY, a 3.5 percent reduction in 2024MY, and a 4 
percent reduction in 2027MY. These reductions would show up in the fuel 
map used in GEM.
(ii) Aerodynamics
    The aerodynamic packages are categorized as Bin I, Bin II, Bin III, 
Bin IV, Bin V, Bin VI, or Bin VII based on the wind averaged drag 
aerodynamic performance determined through testing conducted by the 
manufacturer. A more complete description of these aerodynamic packages 
is included in Chapter 2 of the draft RIA. In general, the proposed CdA 
values for each package and tractor subcategory were developed through 
EPA's coastdown testing of tractor-trailer combinations, the 2010 NAS 
report, and SAE papers.
(iii) Tire Rolling Resistance
    The proposed rolling resistance coefficient target for Phase 2 was 
developed from SmartWay's tire testing to develop the SmartWay 
certification, testing a selection of tractor tires as part of the 
Phase 1 and Phase 2 programs, and from 2014 MY certification data. Even 
though the coefficient of tire rolling resistance comes in a range of 
values, to analyze this range, the tire performance was evaluated at 
four levels for both steer and drive tires, as determined by the 
agencies. The four levels are the baseline (average) from 2010, Level I 
and Level 2 from Phase 1, and Level 3 that achieves an additional 25 
percent improvement over Level 2. The Level 1 rolling resistance 
performance represents the threshold used to develop SmartWay 
designated tires for long haul tractors. The Level 2 threshold 
represents an incremental step for improvements beyond today's SmartWay 
level and represents the best in class rolling resistance of the tires 
we tested. The Level 3 values represent the long-term rolling 
resistance value that the agencies predicts could be achieved in the 
2025 timeframe. Given the multiple year phase-in of the standards, the 
agencies expect that tire manufacturers will continue to respond to 
demand for more efficient tires and will offer increasing numbers of 
tire models with rolling resistance values significantly better than 
today's typical low rolling resistance tires. The tire rolling 
resistance level assumed to meet the 2017 MY Phase 1 standard high roof 
sleeper cab is considered to be a weighted average of 10 percent 
baseline rolling resistance, 70 percent Level 1, and 20 percent Level 
2. The tire rolling resistance to meet the 2017MY Phase 1 standards for 
the high roof day cab, low roof sleeper cab, and mid roof sleeper cab 
includes 30 percent baseline, 60 percent Level 1 and 10 percent Level 
2. Finally, the low roof day cab 2017MY standard can be met with a 
weighted average rolling resistance consisting of 40 percent baseline, 
50 percent Level 1, and 10 percent Level 2.
(iv) Idle Reduction
    The benefits for the extended idle reductions were developed from 
literature, SmartWay work, and the 2010 NAS report. Additional details 
regarding the comments and calculations are included in draft RIA 
Section 2.4.
(v) Transmission
    The benefits for automated manual, automatic, and dual clutch 
transmissions were developed from literature and from simulation 
modeling conducted by Southwest Research Institute. The benefit of 
these transmissions is proposed to be set to a two percent improvement 
over a manual transmission due to the automation of the gear shifting.
(vi) Drivetrain
    The reduction in friction due to low viscosity axle lubricants is 
set to 0.5 percent. 6x4 and 4x2 axle configurations lead to a 2.5 
percent improvement in vehicle efficiency. Downspeeding would be as 
demonstrated through the Phase 2 GEM inputs of transmission gear ratio, 
drive axle ratio, and tire diameter. Downspeeding is projected to 
improve the fuel consumption by 1.8 percent.
(vii) Accessories and Other Technologies
    Compared to 2017MY air conditioners, air conditioners with improved 
efficiency compressors will reduce CO2 emissions by 0.5 
percent. Improvements in accessories, such as power steering, can lead 
to an efficiency improvement of 1 percent over the 2017MY baseline. 
Based on literature information, intelligent controls such as 
predictive cruise control will reduce CO2 emissions by 2 
percent while automatic tire inflation systems improve fuel consumption 
by 1 percent by keeping tire rolling resistance to its optimum based on 
inflation pressure.
(viii) Weight Reduction
    The weight reductions were developed from tire manufacturer 
information, the Aluminum Association, the Department of Energy, SABIC 
and TIAX, as discussed above in Section II.B.3.e.
(ix) Vehicle Speed Limiter
    The agencies did not consider the availability of vehicle speed 
limiter technology in setting the Phase 1 stringency levels, and again 
did not consider the availability of the technology in developing 
regulatory alternatives for Phase 2. However, as described in more 
detail above, speed limiters could be an effective means for achieving 
compliance, if employed on a voluntary basis.
(x) Summary of Technology Performance
    Table III-7 describes the performance levels for the range of Class 
7 and 8 tractor vehicle technologies.

[[Page 40222]]

                                                     Table III-7--Proposed Phase 2 Technology Inputs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         2021MY     2021MY     2021MY     2021MY     2021MY     2021MY     2021MY     2021MY     2021MY
                                                          11L        11L        11L        15L        15L        15L        15L        15L        15L
                                                         Engine     Engine     Engine     Engine     Engine     Engine     Engine     Engine     Engine
                                                         350 HP     350 HP     350 HP     455 HP     455 HP     455 HP     455 HP     455 HP     455 HP
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Aerodynamics (CdA in m\2\)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bin I................................................        5.3        6.7        7.6        5.3        6.7        7.6        5.3        6.7        7.4
Bin II...............................................        4.8        6.2        7.1        4.8        6.2        7.1        4.8        6.2        6.9
Bin III..............................................        4.3        5.7        6.5        4.3        5.7        6.5        4.3        5.7        6.3
Bin IV...............................................        4.0        5.4        5.8        4.0        5.4        5.8        4.0        5.4        5.6
Bin V................................................        N/A        N/A        5.3        N/A        N/A        5.3        N/A        N/A        5.1
Bin VI...............................................        N/A        N/A        4.9        N/A        N/A        4.9        N/A        N/A        4.7
Bin VII..............................................        N/A        N/A        4.5        N/A        N/A        4.5        N/A        N/A        4.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Steer Tires (CRR in kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base.................................................        7.8        7.8        7.8        7.8        7.8        7.8        7.8        7.8        7.8
Level 1..............................................        6.6        6.6        6.6        6.6        6.6        6.6        6.6        6.6        6.6
Level 2..............................................        5.7        5.7        5.7        5.7        5.7        5.7        5.7        5.7        5.7
Level 3..............................................        4.3        4.3        4.3        4.3        4.3        4.3        4.3        4.3        4.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Drive Tires (CRR in kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base.................................................        8.2        8.2        8.2        8.2        8.2        8.2        8.2        8.2        8.2
Level 1..............................................        7.0        7.0        7.0        7.0        7.0        7.0        7.0        7.0        7.0
Level 2..............................................        6.0        6.0        6.0        6.0        6.0        6.0        6.0        6.0        6.0
Level 3..............................................        4.5        4.5        4.5        4.5        4.5        4.5        4.5        4.5        4.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Idle Reduction (% reduction)
--------------------------------------------------------------------------------------------------------------------------------------------------------
APU..................................................        N/A        N/A        N/A        N/A        N/A        N/A         5%         5%         5%
Other................................................        N/A        N/A        N/A        N/A        N/A        N/A         7%         7%         7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Transmission Type (% reduction)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manual...............................................         0%         0%         0%         0%         0%         0%         0%         0%         0%
AMT..................................................          2          2          2          2          2          2          2          2          2
Auto.................................................          2          2          2          2          2          2          2          2          2
Dual Clutch..........................................          2          2          2          2          2          2          2          2          2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Driveline (% reduction)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Axle Lubricant.......................................       0.5%       0.5%       0.5%       0.5%       0.5%       0.5%       0.5%       0.5%       0.5%
6x2 or 4x2 Axle......................................        2.5        2.5        2.5        2.5        2.5        2.5        2.5        2.5        2.5
Downspeed............................................        1.8        1.8        1.8        1.8        1.8        1.8        1.8        1.8        1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Accessory Improvements (% reduction)
--------------------------------------------------------------------------------------------------------------------------------------------------------
A/C..................................................       0.5%       0.5%       0.5%       0.5%       0.5%       0.5%       0.5%       0.5%       0.5%
Electric Access......................................          1          1          1          1          1          1          1          1          1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Other Technologies (% reduction)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Predictive Cruise Control............................         2%         2%         2%         2%         2%         2%         2%         2%         2%
Automated Tire Inflation System......................          1          1          1          1          1          1          1          1          1
--------------------------------------------------------------------------------------------------------------------------------------------------------

(c) Tractor Technology Adoption Rates
    As explained above, tractor manufacturers often introduce major 
product changes together, as a package. In this manner the 
manufacturers can optimize their available resources, including 
engineering, development, manufacturing and marketing activities to 
create a product with multiple new features. In addition, manufacturers 
recognize that a truck design will need to remain competitive over the 
intended life of the design and meet future regulatory requirements. In 
some limited cases, manufacturers may implement an individual 
technology outside of a vehicle's redesign cycle.
    With respect to the levels of technology adoption used to develop 
the proposed HD Phase 2 standards, NHTSA and EPA established technology

[[Page 40223]]

adoption constraints. The first type of constraint was established 
based on the application of fuel consumption and CO2 
emission reduction technologies into the different types of tractors. 
For example, extended idle reduction technologies are limited to Class 
8 sleeper cabs using the reasonable assumption that day cabs are not 
used for overnight hoteling. A second type of constraint was applied to 
most other technologies and limited their adoption based on factors 
reflecting the real world operating conditions that some combination 
tractors encounter. This second type of constraint was applied to the 
aerodynamic, tire, powertrain, and vehicle speed limiter technologies.
    Table III-8 and Table III-10, specify the adoption rates that EPA 
and NHTSA used to develop the proposed standards. The agencies welcome 
comments on these adoption rates.
    NHTSA and EPA believe that within each of these individual vehicle 
categories there are particular applications where the use of the 
identified technologies would be either ineffective or not technically 
feasible. For example, the agencies are not predicating the proposed 
standards on the use of full aerodynamic vehicle treatments on 100 
percent of tractors because we know that in many applications (for 
example gravel truck engaged in local aggregate delivery) the added 
weight of the aerodynamic technologies will increase fuel consumption 
and hence CO2 emissions to a greater degree than the 
reduction that would be accomplished from the more aerodynamic nature 
of the tractor.
(i) Aerodynamics Adoption Rate
    The impact of aerodynamics on a tractor-trailer's efficiency 
increases with vehicle speed. Therefore, the usage pattern of the 
vehicle will determine the benefit of various aerodynamic technologies. 
Sleeper cabs are often used in line haul applications and drive the 
majority of their miles on the highway travelling at speeds greater 
than 55 mph. The industry has focused aerodynamic technology 
development, including SmartWay tractors, on these types of trucks. 
Therefore the agencies are proposing the most aggressive aerodynamic 
technology application to this regulatory subcategory. All of the major 
manufacturers today offer at least one SmartWay sleeper cab tractor 
model, which is represented as Bin III aerodynamic performance. The 
proposed aerodynamic adoption rate for Class 8 high roof sleeper cabs 
in 2027 (i.e., the degree of technology adoption on which the 
stringency of the proposed standard is premised) consists of 20 percent 
of Bin IV, 35 percent Bin V, 20 percent Bin VI, and 5 percent Bin VII 
reflecting our assessment of the fraction of tractors in this segment 
that could successfully apply these aerodynamic packages with this 
amount of lead time. We believe that there is sufficient lead time to 
develop aerodynamic tractors that can move the entire high roof sleeper 
cab aerodynamic performance to be as good as or better than today's 
SmartWay designated tractors. The changes required for Bin IV and 
better performance reflect the kinds of improvements projected in the 
Department of Energy's SuperTruck program. That program assumes that 
such systems can be demonstrated on vehicles by 2017. In this case, the 
agencies are projecting that truck manufacturers would be able to begin 
implementing these aerodynamic technologies as early as 2021 MY on a 
limited scale. Importantly, our averaging, banking and trading 
provisions provide manufacturers with the flexibility (and incentive) 
to implement these technologies over time even though the standard 
changes in a single step.
    The aerodynamic adoption rates used to develop the proposed 
standards for the other tractor regulatory categories are less 
aggressive than for the Class 8 sleeper cab high roof. Aerodynamic 
improvements through new tractor designs and the development of new 
aerodynamic components is an inherently slow and iterative process. The 
agencies recognize that there are tractor applications which require 
on/off-road capability and other truck functions which restrict the 
type of aerodynamic equipment applicable. We also recognize that these 
types of trucks spend less time at highway speeds where aerodynamic 
technologies have the greatest benefit. The 2002 VIUS data ranks trucks 
by major use.\162\ The heavy trucks usage indicates that up to 35 
percent of the trucks may be used in on/off-road applications or 
heavier applications. The uses include construction (16 percent), 
agriculture (12 percent), waste management (5 percent), and mining (2 
percent). Therefore, the agencies analyzed the technologies to evaluate 
the potential restrictions that would prevent 100 percent adoption of 
more advanced aerodynamic technologies for all of the tractor 
regulatory subcategories.
---------------------------------------------------------------------------

    \162\ U.S. Department of Energy. Transportation Energy Data 
Book, Edition 28-2009. Table 5.7.
---------------------------------------------------------------------------

    As discussed in Section III.C.2, the agencies propose to increase 
the number of aerodynamic bins for low and mid roof tractors from the 
two levels adopted in Phase 1 to four levels in Phase 2. The agencies 
propose to increase the number of bins for these tractors to reflect 
the actual range of aerodynamic technologies effective in low and mid 
roof tractor applications. The aerodynamic improvements to the bumper, 
hood, windshield, mirrors, and doors are developed for the high roof 
tractor application and then carried over into the low and mid roof 
applications.
(ii) Low Rolling Resistance Tire Adoption Rate
    For the tire manufacturers to further reduce tire rolling 
resistance, the manufacturers must consider several performance 
criteria that affect tire selection. The characteristics of a tire also 
influence durability, traction control, vehicle handling, comfort, and 
retreadability. A single performance parameter can easily be enhanced, 
but an optimal balance of all the criteria will require improvements in 
materials and tread design at a higher cost, as estimated by the 
agencies. Tire design requires balancing performance, since changes in 
design may change different performance characteristics in opposing 
directions. Similar to the discussion regarding lesser aerodynamic 
technology application in tractor segments other than sleeper cab high 
roof, the agencies believe that the proposed standards should not be 
premised on 100 percent application of Level 3 tires in all tractor 
segments given the potential interference with vehicle utility that 
could result.
(iii) Weight Reduction Technology Adoption Rate
    Unlike in HD Phase 1, the agencies propose setting the 2021 through 
2027 model year tractor standards without using weight reduction as a 
technology to demonstrate the feasibility. However, as described in 
Section III.C.2 below, the agencies are proposing an expanded list of 
weight reduction options which could be input into the GEM by the 
manufacturers to reduce their certified CO2 emission and 
fuel consumption levels. The agencies view weight reduction as a 
technology with a high cost that offers a small benefit in the tractor 
sector. For example, our estimate of a 400 pound weight reduction would 
cost $2,050 (2012$) in 2021MY, but offers a 0.3 percent reduction in 
fuel consumption and CO2 emissions.
(iv) Idle Reduction Technology Adoption Rate
    Idle reduction technologies provide significant reductions in fuel 
consumption and CO2 emissions for Class 8 sleeper cabs and 
are available on

[[Page 40224]]

the market today. There are several different technologies available to 
reduce idling. These include APUs, diesel fired heaters, and battery 
powered units. Our discussions with manufacturers indicate that idle 
technologies are sometimes installed in the factory, but it is also a 
common practice to have the units installed after the sale of the 
truck. We would like to continue to incentivize this practice and to do 
so in a manner that the emission reductions associated with idle 
reduction technology occur in use. Therefore, as adopted in Phase 1, we 
are allowing only idle emission reduction technologies which include an 
automatic engine shutoff (AES) with some override provisions.\163\ 
However, we welcome comment on other approaches that would 
appropriately quantify the reductions that would be experienced in the 
real world.
---------------------------------------------------------------------------

    \163\ The agencies are proposing to continue the HD Phase 1 AES 
override provisions included in 40 CFR 1037.660(b) for driver 
safety.
---------------------------------------------------------------------------

    We propose an overall 90 percent adoption rate for this technology 
for Class 8 sleeper cabs. The agencies are unaware of reasons why AES 
with extended idle reduction technologies could not be applied to this 
high fraction of tractors with a sleeper cab, except those deemed a 
vocational tractor, in the available lead time.
    The agencies are interested in extending the idle reduction 
benefits beyond Class 8 sleepers, to day cabs. The agencies reviewed 
literature to quantify the amount of idling which is conducted outside 
of hoteling operations. One study, conducted by Argonne National 
Laboratory, identified several different types of trucks which might 
idle for extended amounts of time during the work day.\164\ Idling may 
occur during the delivery process, queuing at loading docks or border 
crossings, during power take off operations, or to provide comfort 
during the work day. However, the study provided only ``rough 
estimates'' of the idle time and energy use for these vehicles. The 
agencies are not able to appropriately develop a baseline of workday 
idling for day cabs and identify the percent of this idling which could 
be reduced through the use of AES. We welcome comment and data on 
quantifying the effectiveness of AES on day cabs.
---------------------------------------------------------------------------

    \164\ Gaines, L., A. Vyas, J. Anderson. Estimation of Fuel Use 
by Idling Commercial Trucks. January 2006.
---------------------------------------------------------------------------

(v) Vehicle Speed Limiter Adoption Rate
    As adopted in Phase 1, we propose to continue the approach where 
vehicle speed limiters may be used as a technology to meet the proposed 
standard. In setting the proposed standard, however, we assumed a zero 
percent adoption rate of vehicle speed limiters. Although we believe 
vehicle speed limiters are a simple, easy to implement, and inexpensive 
technology, we want to leave the use of vehicles speed limiters to the 
truck purchaser. Since truck fleets purchase tractors today with owner-
set vehicle speed limiters, we considered not including VSLs in our 
compliance model. However, we have concluded that we should allow the 
use of VSLs that cannot be overridden by the operator as a means of 
compliance for vehicle manufacturers that wish to offer it and truck 
purchasers that wish to purchase the technology. In doing so, we are 
providing another means of meeting that standard that can lower 
compliance cost and provide a more optimal vehicle solution for some 
truck fleets or owners. For example, a local beverage distributor may 
operate trucks in a distribution network of primarily local roads. 
Under those conditions, aerodynamic fairings used to reduce aerodynamic 
drag provide little benefit due to the low vehicle speed while adding 
additional mass to the vehicle. A vehicle manufacturer could choose to 
install a VSL set at 55 mph for this vehicle at the request of the 
customer. The resulting tractor would be optimized for its intended 
application and would be fully compliant with our program all at a 
lower cost to the ultimate tractor purchaser.\165\
---------------------------------------------------------------------------

    \165\ Ibid.
    The agencies note that because a VSL value can be input into 
GEM, its benefits can be directly assessed with the model and off 
cycle credit applications therefore are not necessary even though 
the proposed standard is not based on performance of VSLs (i.e. VSL 
is an on-cycle technology).
---------------------------------------------------------------------------

    As in Phase 1, we have chosen not to base the proposed standards on 
performance of VSLs because of concerns about how to set a realistic 
adoption rate that avoids unintended adverse impacts. Although we 
expect there would be some use of VSL, currently it is used when the 
fleet involved decides it is feasible and practicable and increases the 
overall efficiency of the freight system for that fleet operator. To 
date, the compliance data provided by manufacturers indicate that none 
of the tractor configurations include a tamper-proof VSL setting less 
than 65 mph. At this point the agencies are not in a position to 
determine in how many additional situations use of a VSL would result 
in similar benefits to overall efficiency or how many customers would 
be willing to accept a tamper-proof VSL setting. As discussed in 
Section III.E.2.f below, we welcome comment on suggestions to modify 
the tamper-proof requirement while maintaining assurance that the speed 
limiter is used in-use throughout the life of the vehicle. We are not 
able at this time to quantify the potential loss in utility due to the 
use of VSLs, but we welcome comment on whether the use of a VSL would 
require a fleet to deploy additional tractors. Absent this information, 
we cannot make a determination regarding the reasonableness of setting 
a standard based on a particular VSL level. Therefore, the agencies are 
not premising the proposed standards on use of VSL, and instead would 
continue to rely on the industry to select VSL when circumstances are 
appropriate for its use. The agencies have not included either the cost 
or benefit due to VSLs in analysis of the proposed program's costs and 
benefits, therefore it remains a significant flexibility for 
manufacturers to choose.
(vi) Summary of the Adoption Rates Used To Determine the Proposed 
Standards
    Table III-8 through Table III-10 provide the adoption rates of each 
technology broken down by weight class, cab configuration, and roof 
height.

[[Page 40225]]

                    Table III-8--Technology Adoption Rates for Class 7 and 8 Tractors for Determining the Proposed 2021 MY 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
                                                           %          %           %         %          %           %         %          %           %
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            2021 MY Engine Technology Package
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             100        100        100        100        100        100        100        100        100
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Aerodynamics
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bin I................................................          0          0          0          0          0          0          0          0          0
Bin II...............................................         75         75          0         75         75          0         75         75          0
Bin III..............................................         25         25         40         25         25         40         25         25         40
Bin IV...............................................          0          0         35          0          0         35          0          0         35
Bin V................................................        N/A        N/A         20        N/A        N/A         20        N/A        N/A         20
Bin VI...............................................        N/A        N/A          5        N/A        N/A          5        N/A        N/A          5
Bin VII..............................................        N/A        N/A          0        N/A        N/A          0        N/A        N/A          0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Steer Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base.................................................          5          5          5          5          5          5          5          5          5
Level 1..............................................         60         60         60         60         60         60         60         60         60
Level 2..............................................         25         25         25         25         25         25         25         25         25
Level 3..............................................         10         10         10         10         10         10         10         10         10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Drive Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base.................................................          5          5          5          5          5          5          5          5          5
Level 1..............................................         60         60         60         60         60         60         60         60         60
Level 2..............................................         25         25         25         25         25         25         25         25         25
Level 3..............................................         10         10         10         10         10         10         10         10         10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Extended Idle Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
APU..................................................        N/A        N/A        N/A        N/A        N/A        N/A         80         80         80
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Transmission Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manual...............................................         45         45         45         45         45         45         45         45         45
AMT..................................................         40         40         40         40         40         40         40         40         40
Auto.................................................         10         10         10         10         10         10         10         10         10
Dual Clutch..........................................          5          5          5          5          5          5          5          5          5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Driveline
--------------------------------------------------------------------------------------------------------------------------------------------------------
Axle Lubricant.......................................         20         20         20         20         20         20         20         20         20
6x2 or 4x2 Axle......................................  .........  .........  .........         10         10         20         10         10         20
Downspeed............................................         20         20         20         20         20         20         20         20         20
                                                                 Accessory Improvements
--------------------------------------------------------------------------------------------------------------------------------------------------------
A/C..................................................         10         10         10         10         10         10         10         10         10
Electric Access......................................         10         10         10         10         10         10         10         10         10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Other Technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Predictive Cruise Control............................         20         20         20         20         20         20         20         20         20
Automated Tire Inflation System......................         20         20         20         20         20         20         20         20         20
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40226]]

                    Table III-9--Technology Adoption Rates for Class 7 and 8 Tractors for Determining the Proposed 2024 MY 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
                                                           %          %           %         %          %           %         %          %           %
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            2024 MY Engine Technology Package
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             100        100        100        100        100        100        100        100        100
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Aerodynamics
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bin I................................................          0          0          0          0          0          0          0          0          0
Bin II...............................................         60         60          0         60         60          0         60         60          0
Bin III..............................................         38         38         30         38         38         30         38         38         30
Bin IV...............................................          2          2         30          2          2         30          2          2         30
Bin V................................................        N/A        N/A         25        N/A        N/A         25        N/A        N/A         25
Bin VI...............................................        N/A        N/A         13        N/A        N/A         13        N/A        N/A         13
Bin VII..............................................        N/A        N/A          2        N/A        N/A          2        N/A        N/A          2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Steer Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base.................................................          5          5          5          5          5          5          5          5          5
Level 1..............................................         50         50         50         50         50         50         50         50         50
Level 2..............................................         30         30         30         30         30         30         30         30         30
Level 3..............................................         15         15         15         15         15         15         15         15         15
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Drive Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base.................................................          5          5          5          5          5          5          5          5          5
Level 1..............................................         50         50         50         50         50         50         50         50         50
Level 2..............................................         30         30         30         30         30         30         30         30         30
Level 3..............................................         15         15         15         15         15         15         15         15         15
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Extended Idle Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
APU..................................................        N/A        N/A        N/A        N/A        N/A        N/A         90         90         90
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Transmission Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manual...............................................         20         20         20         20         20         20         20         20         20
AMT..................................................         50         50         50         50         50         50         50         50         50
Auto.................................................         20         20         20         20         20         20         20         20         20
Dual Clutch..........................................         10         10         10         10         10         10         10         10         10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Driveline
--------------------------------------------------------------------------------------------------------------------------------------------------------
Axle Lubricant.......................................         40         40         40         40         40         40         40         40         40
6x2 or 4x2 Axle......................................  .........  .........  .........         20         20         60         20         20         60
Downspeed............................................         40         40         40         40         40         40         40         40         40
Direct Drive.........................................         50         50         50         50         50         50         50         50         50
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Accessory Improvements
--------------------------------------------------------------------------------------------------------------------------------------------------------
A/C..................................................         20         20         20         20         20         20         20         20         20
Electric Access......................................         20         20         20         20         20         20         20         20         20
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Other Technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Predictive Cruise Control............................         40         40         40         40         40         40         40         40         40
Automated Tire Inflation System......................         40         40         40         40         40         40         40         40         40
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40227]]

                    Table III-10--Technology Adoption Rates for Class 7 and 8 Tractors for Determining the Proposed 2027 MY 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
                                                           %          %           %         %          %           %         %          %           %
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            2027 MY Engine Technology Package
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             100        100        100        100        100        100        100        100        100
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Aerodynamics
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bin I................................................          0          0          0          0          0          0          0          0          0
Bin II...............................................         50         50          0         50         50          0         50         50          0
Bin III..............................................         40         40         20         40         40         20         40         40         20
Bin IV...............................................         10         10         20         10         10         20         10         10         20
Bin V................................................        N/A        N/A         35        N/A        N/A         35        N/A        N/A         35
Bin VI...............................................        N/A        N/A         20        N/A        N/A         20        N/A        N/A         20
Bin VII..............................................        N/A        N/A          5        N/A        N/A          5        N/A        N/A          5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Steer Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base.................................................          5          5          5          5          5          5          5          5          5
Level 1..............................................         20         20         20         20         20         20         20         20         20
Level 2..............................................         50         50         50         50         50         50         50         50         50
Level 3..............................................         25         25         25         25         25         25         25         25         25
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Drive Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base.................................................          5          5          5          5          5          5          5          5          5
Level 1..............................................         20         20         20         20         20         20         20         20         20
Level 2..............................................         50         50         50         50         50         50         50         50         50
Level 3..............................................         25         25         25         25         25         25         25         25         25
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Extended Idle Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
APU..................................................        N/A        N/A        N/A        N/A        N/A        N/A         90         90         90
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Transmission Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manual...............................................         10         10         10         10         10         10         10         10         10
AMT..................................................         50         50         50         50         50         50         50         50         50
Auto.................................................         30         30         30         30         30         30         30         30         30
Dual Clutch..........................................         10         10         10         10         10         10         10         10         10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Driveline
--------------------------------------------------------------------------------------------------------------------------------------------------------
Axle Lubricant.......................................         40         40         40         40         40         40         40         40         40
6x2 Axle.............................................  .........  .........  .........         20         20         60         20         20         60
Downspeed............................................         60         60         60         60         60         60         60         60         60
Direct Drive.........................................         50         50         50         50         50         50         50         50         50
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Accessory Improvements
--------------------------------------------------------------------------------------------------------------------------------------------------------
A/C..................................................         30         30         30         30         30         30         30         30         30
Electric Access......................................         30         30         30         30         30         30         30         30         30
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Other Technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Predictive Cruise Control............................         40         40         40         40         40         40         40         40         40
Automated Tire Inflation System......................         40         40         40         40         40         40         40         40         40
--------------------------------------------------------------------------------------------------------------------------------------------------------

(d) Derivation of the Proposed Tractor Standards
    The agencies used the technology effectiveness inputs and 
technology adoption rates to develop GEM inputs to derive the proposed 
HD Phase 2 fuel consumption and CO2 emissions standards for 
each subcategory of Class 7 and 8 combination tractors. Note that we 
have analyzed one technology pathway for each proposed level of 
stringency, but manufacturers would be free to use any combination of 
technology to meet the standards, and with the flexibility of 
averaging, banking and trading, to meet the standard on average. The 
agencies derived a scenario tractor for each subcategory by weighting 
the individual GEM input parameters included in Table III-7 with the 
adoption rates in Table III-8 through Table III-10. For example, the 
proposed CdA value for a 2021MY Class 8 Sleeper Cab High Roof scenario 
case was

[[Page 40228]]

derived as 40 percent times 6.3 plus 35 percent times 5.6 plus 20 
percent times 5.1 plus 5 percent times 4.7, which is equal to a CdA of 
5.74 m\2\. Similar calculations were made for tire rolling resistance, 
transmission types, idle reduction, and other technologies. To account 
for the proposed engine standards and engine technologies, the agencies 
assumed a compliant engine fuel map in GEM.\166\ The agencies then ran 
GEM with a single set of vehicle inputs, as shown in Table III-11, to 
derive the proposed standards for each subcategory. Additional detail 
is provided in the draft RIA Chapter 2.
---------------------------------------------------------------------------

    \166\ See Section II.D above explaining the derivation of the 
proposed engine standards.

             Table III-11--GEM Inputs for the Proposed 2021MY Class 7 and 8 Tractor Standard Setting
----------------------------------------------------------------------------------------------------------------
               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
----------------------------------------------------------------------------------------------------------------
2021MY 11L   2021MY 11L   2021MY 11L   2021MY 15L   2021MY 15L   2021MY 15L   2021MY 15L  2021MY 15L  2021MY 15L
 Engine 350  Engine 350   Engine 350   Engine 455   Engine 455   Engine 455   Engine 455  Engine 455  Engine 455
         HP          HP           HP           HP           HP           HP          HP          HP          HP
----------------------------------------------------------------------------------------------------------------
                                           Aerodynamics (CdA in m\2\)
----------------------------------------------------------------------------------------------------------------
      4.68         6.08         5.94         4.68         6.08         5.94        4.68        6.08        5.74
----------------------------------------------------------------------------------------------------------------
                                       Steer Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       6.2          6.2          6.2          6.2          6.2          6.2         6.2         6.2         6.2
----------------------------------------------------------------------------------------------------------------
                                       Drive Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       6.6          6.6          6.6          6.6          6.6          6.6         6.6         6.6         6.6
----------------------------------------------------------------------------------------------------------------
                                 Extended Idle Reduction Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A          N/A          N/A          N/A        2.5%        2.5%        2.5%
----------------------------------------------------------------------------------------------------------------
                              Transmission = 10 speed Automated 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 = 3.55
----------------------------------------------------------------------------------------------------------------
                                         6x2 Axle Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A         0.3%         0.3%         0.5%        0.3%        0.3%        0.5%
----------------------------------------------------------------------------------------------------------------
                        Low Friction Axle Lubrication = 0.1%
----------------------------------------------------------------------------------------------------------------
                                           Transmission benefit = 1.1%
----------------------------------------------------------------------------------------------------------------
                                        Predictive Cruise Control = 0.4%
----------------------------------------------------------------------------------------------------------------
                                          Accessory Improvements = 0.1%
----------------------------------------------------------------------------------------------------------------
                                 Air Conditioner Efficiency Improvements = 0.1%
----------------------------------------------------------------------------------------------------------------
                                     Automatic Tire Inflation Systems = 0.2%
----------------------------------------------------------------------------------------------------------------
                                            Weight Reduction = 0 lbs
----------------------------------------------------------------------------------------------------------------

[[Page 40229]]

             Table III-12--GEM Inputs for the Proposed 2024MY Class 7 and 8 Tractor Standard Setting
----------------------------------------------------------------------------------------------------------------
               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
----------------------------------------------------------------------------------------------------------------
2024MY 11L   2024MY 11L   2024MY 11L   2024MY 15L   2024MY 15L   2024MY 15L   2024MY 15L  2024MY 15L  2024MY 15L
 Engine 350  Engine 350   Engine 350   Engine 455   Engine 455   Engine 455   Engine 455  Engine 455  Engine 455
         HP          HP           HP           HP           HP           HP          HP          HP          HP
----------------------------------------------------------------------------------------------------------------
                                           Aerodynamics (CdA in m\2\)
----------------------------------------------------------------------------------------------------------------
      4.59         5.99         5.74         4.59         5.99         5.74        4.59        5.99        5.54
----------------------------------------------------------------------------------------------------------------
                                       Steer Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       5.9          5.9          5.9          5.9          5.9          5.9         5.9         5.9         5.9
                                       Drive Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       6.2          6.2          6.2          6.2          6.2          6.2         6.2         6.2         6.2
----------------------------------------------------------------------------------------------------------------
                                 Extended Idle Reduction Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A          N/A          N/A          N/A          3%          3%          3%
----------------------------------------------------------------------------------------------------------------
                              Transmission = 10 speed Automated 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 = 3.36
----------------------------------------------------------------------------------------------------------------
                                         6x2 Axle Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A         0.5%         0.5%         1.5%        0.5%        0.5%        1.5%
----------------------------------------------------------------------------------------------------------------
                                      Low Friction Axle Lubrication = 0.2%
----------------------------------------------------------------------------------------------------------------
                                           Transmission benefit = 1.6%
----------------------------------------------------------------------------------------------------------------
                                        Predictive Cruise Control = 0.8%
----------------------------------------------------------------------------------------------------------------
                                          Accessory Improvements = 0.2%
----------------------------------------------------------------------------------------------------------------
                                 Air Conditioner Efficiency Improvements = 0.1%
----------------------------------------------------------------------------------------------------------------
                                     Automatic Tire Inflation Systems = 0.4%
----------------------------------------------------------------------------------------------------------------
                                            Weight Reduction = 0 lbs
----------------------------------------------------------------------------------------------------------------
                    Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs
----------------------------------------------------------------------------------------------------------------

             Table III-13--GEM Inputs for the Proposed 2027MY Class 7 and 8 Tractor Standard Setting
----------------------------------------------------------------------------------------------------------------
               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
----------------------------------------------------------------------------------------------------------------
2027MY 11L   2027MY 11L   2027MY 11L   2027MY 15L   2027MY 15L   2027MY 15L   2027MY 15L  2027MY 15L  2027MY 15L
 Engine 350  Engine 350   Engine 350   Engine 455   Engine 455   Engine 455   Engine 455  Engine 455  Engine 455
         HP          HP           HP           HP           HP           HP          HP          HP          HP
----------------------------------------------------------------------------------------------------------------
                                           Aerodynamics (CdA in m\2\)
----------------------------------------------------------------------------------------------------------------
      4.52         5.92         5.52         4.52         5.92         5.52        4.52        5.92        5.32
----------------------------------------------------------------------------------------------------------------
                                       Steer Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       5.6          5.6          5.6          5.6          5.6          5.6         5.6         5.6         5.6
----------------------------------------------------------------------------------------------------------------

[[Page 40230]]

 
                                       Drive Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       5.9          5.9          5.9          5.9          5.9          5.9         5.9         5.9         5.9
----------------------------------------------------------------------------------------------------------------
                                 Extended Idle Reduction Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A          N/A          N/A          N/A          3%          3%          3%
----------------------------------------------------------------------------------------------------------------
                              Transmission = 10 speed Automated 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 = 3.2
----------------------------------------------------------------------------------------------------------------
                                         6x2 Axle Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A         0.5%         0.5%         1.5%        0.5%        0.5%        1.5%
----------------------------------------------------------------------------------------------------------------
                                      Low Friction Axle Lubrication = 0.2%
----------------------------------------------------------------------------------------------------------------
                                           Transmission benefit = 1.8%
----------------------------------------------------------------------------------------------------------------
                                        Predictive Cruise Control = 0.8%
----------------------------------------------------------------------------------------------------------------
                                          Accessory Improvements = 0.3%
----------------------------------------------------------------------------------------------------------------
                                 Air Conditioner Efficiency Improvements = 0.2%
----------------------------------------------------------------------------------------------------------------
                                     Automatic Tire Inflation Systems = 0.4%
----------------------------------------------------------------------------------------------------------------
                                            Weight Reduction = 0 lbs
----------------------------------------------------------------------------------------------------------------
                    Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs
----------------------------------------------------------------------------------------------------------------

    The proposed level of the 2027 model year standards, in addition to 
the phase-in standards in model years 2021 and 2024 for each 
subcategory is included in Table III-14.

                    Table III-14--Proposed 2021, 2024, and 2027 Model Year Tractor Standards
----------------------------------------------------------------------------------------------------------------
                                                                              Day cab               Sleeper Cab
                                                                 -----------------------------------------------
                                                                      Class 7         Class 8         Class 8
----------------------------------------------------------------------------------------------------------------
                                     2021 Model Year CO2 Grams per Ton-Mile
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................              97              78              70
Mid Roof........................................................             107              84              78
High Roof.......................................................             109              86              77
----------------------------------------------------------------------------------------------------------------
                               2021 Model Year Gallons of Fuel per 1,000 Ton-Mile
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................          9.5285          7.6621          6.8762
Mid Roof........................................................         10.5108          8.2515          7.6621
High Roof.......................................................         10.7073          8.4479          7.5639
----------------------------------------------------------------------------------------------------------------
                                     2024 Model Year CO2 Grams per Ton-Mile
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................              90              72              64
Mid Roof........................................................             100              78              71
High Roof.......................................................             101              79              70
----------------------------------------------------------------------------------------------------------------
                          2024 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................          8.8409          7.0727          6.2868
Mid Roof........................................................          9.8232          7.6621          6.9745
High Roof.......................................................          9.9214          7.7603          6.8762
----------------------------------------------------------------------------------------------------------------

[[Page 40231]]

 
                                     2027 Model Year CO2 Grams per Ton-Mile
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................              87              70              62
Mid Roof........................................................              96              76              69
High Roof.......................................................              96              76              67
----------------------------------------------------------------------------------------------------------------
                          2027 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile
----------------------------------------------------------------------------------------------------------------
Low Roof........................................................          8.5462          6.8762          6.0904
Mid Roof........................................................          9.4303          7.4656          6.7780
High Roof.......................................................          9.4303          7.4656          6.5815
----------------------------------------------------------------------------------------------------------------

    A summary of the draft technology package costs is included in 
Table III-15 through Table III-17 for MYs 2021, 2024, and 2027, 
respectively, with additional details available in the draft RIA 
Chapter 2.12. We welcome comments on the technology costs.

    Table III-15--Class 7 and 8 Tractor Technology Incremental Costs in the 2021 Model Year \a\ \b\ Preferred
                                    Alternative vs. the Less Dynamic Baseline
                                               [2012$ per vehicle]
----------------------------------------------------------------------------------------------------------------
                                            Class 7                               Class 8
                                    ----------------------------------------------------------------------------
                                            Day cab               Day cab                  Sleeper cab
                                    ----------------------------------------------------------------------------
                                      Low/mid               Low/mid
                                        roof    High roof     roof    High roof   Low roof   Mid roof  High roof
----------------------------------------------------------------------------------------------------------------
Engine \c\.........................       $314       $314       $314       $314       $314       $314       $314
Aerodynamics.......................        687        511        687        511        656        656        535
Tires..............................         49          9         81         15         59         59         15
Tire inflation system..............        180        180        180        180        180        180        180
Transmission.......................      3,969      3,969      3,969      3,969      3,969      3,969      3,969
Axle & axle lubes..................         50         50         70         90         70         70         90
Idle reduction with APU............          0          0          0          0      2,449      2,449      2,449
Air conditioning...................         45         45         45         45         45         45         45
Other vehicle technologies.........        174        174        174        174        174        174        174
                                    ----------------------------------------------------------------------------
    Total..........................      5,468      5,252      5,520      5,298      7,916      7,916      7,771
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2021 model year and are incremental to the costs of a tractor meeting the Phase 1
  standards. These costs include indirect costs via markups along with learning impacts. For a description of
  the markups and learning impacts considered in this analysis and how it impacts technology costs for other
  years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the
  average cost expected for each of the indicated tractor classes. To see the actual estimated technology costs
  exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12 in particular).
\c\ Engine costs are for a heavy HD diesel engine meant for a combination tractor. The engine costs in this
  table are equal to the engine costs associated with the separate engine standard because both include the same
  set of engine technologies (see Section II.D.2.d.i).

    Table III-16--Class 7 and 8 Tractor Technology Incremental Costs in the 2024 Model Year \a\ \b\ Preferred
                                    Alternative vs. the Less Dynamic Baseline
                                               [2012$ per vehicle]
----------------------------------------------------------------------------------------------------------------
                                            Class 7                               Class 8
                                    ----------------------------------------------------------------------------
                                            Day cab               Day cab                  Sleeper cab
                                    ----------------------------------------------------------------------------
                                      Low/mid               Low/mid
                                        roof    High roof     roof    High roof   Low roof   Mid roof  High roof
----------------------------------------------------------------------------------------------------------------
Engine \c\.........................       $904       $904       $904       $904       $904       $904       $904
Aerodynamics.......................        744        684        744        684        712        712        723
Tires..............................         47         11         78         18         58         58         18
Tire inflation system..............        330        330        330        330        330        330        330
Transmission.......................      5,883      5,883      5,883      5,883      5,883      5,883      5,883
Axle & axle lubes..................         92         92        128        200        128        128        200
Idle reduction with APU............          0          0          0          0      2,687      2,687      2,687
Air conditioning...................         82         82         82         82         82         82         82

[[Page 40232]]

 
Other vehicle technologies.........        318        318        318        318        318        318        318
                                    ----------------------------------------------------------------------------
    Total..........................      8,400      8,304      8,467      8,419     11,102     11,102     11,145
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2024 model year and are incremental to the costs of a tractor meeting the Phase 1
  standards. These costs include indirect costs via markups along with learning impacts. For a description of
  the markups and learning impacts considered in this analysis and how it impacts technology costs for other
  years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the
  average cost expected for each of the indicated tractor classes. To see the actual estimated technology costs
  exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
\c\ Engine costs are for a heavy HD diesel engine meant for a combination tractor. The engine costs in this
  table are equal to the engine costs associated with the separate engine standard because both include the same
  set of engine technologies (see Section II.D.2.d.i).

    Table III-17--Class 7 and 8 Tractor Technology Incremental Costs in the 2027 Model Year \a\ \b\ Preferred
                                    Alternative vs. the Less Dynamic Baseline
                                               [2012$ per vehicle]
----------------------------------------------------------------------------------------------------------------
                                            Class 7                               Class 8
                                    ----------------------------------------------------------------------------
                                            Day cab               Day cab                  Sleeper cab
                                    ----------------------------------------------------------------------------
                                      Low/mid               Low/mid
                                        roof    High roof     roof    High roof   Low roof   Mid roof  High roof
----------------------------------------------------------------------------------------------------------------
Engine \c\.........................     $1,698     $1,698     $1,698     $1,698     $1,698     $1,698     $1,698
Aerodynamics.......................        771        765        771        765        733        733        802
Tires..............................         45         10         75         17         56         56         17
Tire inflation system..............        314        314        314        314        314        314        314
Transmission.......................      6,797      6,797      6,797      6,797      6,797      6,797      6,797
Axle & axle lubes..................         97         97        131        200        131        131        200
Idle reduction with APU............          0          0          0          0      2,596      2,596      2,596
Air conditioning...................        117        117        117        117        117        117        117
Other vehicle technologies.........        302        302        302        302        302        302        302
                                    ----------------------------------------------------------------------------
    Total..........................     10,140     10,099     10,204     10,209     12,744     12,744     12,842
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2027 model year and are incremental to the costs of a tractor meeting the Phase 1
  standards. These costs include indirect costs via markups along with learning impacts. For a description of
  the markups and learning impacts considered in this analysis and how it impacts technology costs for other
  years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the
  average cost expected for each of the indicated tractor classes. To see the actual estimated technology costs
  exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12 in particular).
\c\ Engine costs are for a heavy HD diesel engine meant for a combination tractor. The engine costs in this
  table are equal to the engine costs associated with the separate engine standard because both include the same
  set of engine technologies (see Section II.D.2.d.i).

(i) Proposed Heavy-Haul Tractor Standards
    For Phase 2, the agencies propose to add a tenth subcategory to the 
tractor category for heavy-haul tractors. The agencies recognize the 
need for manufacturers to build these types of vehicles for specific 
applications and believe the appropriate way to prevent penalizing 
these vehicles is to set separate standards recognizing a heavy-haul 
vehicle's unique needs, such as requiring a higher horsepower engine or 
different transmissions. The agencies are proposing this change in 
Phase 2 because unlike in Phase 1 the engine, transmission, and 
drivetrain technologies are included in the technology packages used to 
determine the stringency of the proposed tractor standards and are 
included as manufacturer inputs in GEM. This means that the agencies 
can adopt a standard reflecting individualized performance of these 
technologies in particular applications, in this case, heavy-haul 
tractors, and further, have a means of reliably assessing 
individualized performance of these technology at certification.
    The typical tractor is designed with a Gross Combined Weight Rating 
(GCWR) of approximately 80,000 lbs due to the effective weight limit on 
the federal highway system, except in states with preexisting higher 
weight limits. The agencies propose to consider tractors with a GCWR 
over 120,000 lbs as heavy-haul tractors. Based on comments received 
during the development of HD Phase 1 (76 FR 57136-57138) and because we 
are not proposing a sales limit for heavy-haul like we have for the 
vocational tractors, the agencies also believe it would be appropriate 
to further define the heavy-haul vehicle characteristics to 
differentiate these vehicles from the vehicles in the other nine 
tractor subcategories. The two additional requirements would include

[[Page 40233]]

a total gear reduction greater than or equal to 57:1 and a frame 
Resisting Bending Moment (RBM) greater than or equal to 2,000,000 in-
lbs per rail or rail and liner combination. Heavy-haul tractors 
typically require the large gear reduction to provide the torque 
necessary to start the vehicle moving. These vehicles also typically 
require frame rails with extra strength to ensure the ability to haul 
heavy loads. We welcome comment on the proposed heavy-haul tractor 
specifications, including whether Gross Vehicle Weight Rating (GVWR) or 
Gross Axle Weight Rating (GAWR) would be a more appropriate metric to 
differentiate between a heavy-haul tractor and a typical tractor.
    The agencies propose that heavy-haul tractors demonstrate 
compliance with the proposed standards using the day cab drive cycle 
weightings of 19 percent transient cycle, 17 percent 55 mph cycle, and 
64 percent 65 mph cycle. We also propose that GEM simulates the heavy-
haul tractors with a payload of 43 tons and a total tractor, trailer, 
and payload weight of 118,500 lbs. In addition, we propose that the 
engines installed in heavy-haul tractors meet the proposed tractor 
engine standards included in 40 CFR 1036.108. We welcome comments on 
these proposed specifications.
    The agencies recognize that certain technologies used to determine 
the stringency of the proposed Phase 2 tractor standards are less 
applicable to heavy-haul tractors. Heavy-haul tractors are not 
typically used in the same manner as long-haul tractors with extended 
highway driving, and therefore would experience less benefit from 
aerodynamics. Aerodynamic technologies are very effective at reducing 
the fuel consumption and GHG emissions of tractors, but only when 
traveling at highway speeds. At lower speeds, the aerodynamic 
technologies may have a detrimental impact due to the potential of 
added weight. The agencies therefore are not considering the use of 
aerodynamic technologies in the development of the proposed Phase 2 
heavy-haul tractor standards. Moreover, because aerodynamics would not 
play a role in the heavy-haul standards, the agencies propose to 
combine all of the heavy-haul tractor cab configurations (day and 
sleeper) and roof heights (low, mid, and high) into a single heavy-haul 
tractor subcategory.\167\ We welcome comment on this approach.
---------------------------------------------------------------------------

    \167\ Since aerodynamic improvements are not part of the 
technology package, the agencies likewise are not proposing any bin 
structure for the heavy-haul tractor subcategory.
---------------------------------------------------------------------------

    Certain powertrain and drivetrain components are also impacted 
during the design of a heavy-haul tractor, including the transmission, 
axles, and the engine. Heavy-haul tractors typically require 
transmissions with 13 or 18 speeds to provide the ratio spread to 
ensure that the tractor is able to start pulling the load from a stop. 
Downsped powertrains are typically not an option for heavy-haul 
operations because these vehicles require more torque to move the 
vehicle because of the heavier load. Finally, due to the loading 
requirements of the vehicle, it is not likely that a 6x2 axle 
configuration can be used in heavy-haul applications.
    The agencies used the following heavy-haul tractor inputs for 
developing the proposed 2021, 2024, and 2027 MY standards, as shown in 
Table III-18 and Table III-19.

     Table III-18--Application Rates for Proposed Heavy-Haul Tractor
                                Standards
------------------------------------------------------------------------
                  Heavy-Haul Tractor Application Rates
-------------------------------------------------------------------------
                                      2021MY       2024MY       2027MY
                                  --------------------------------------
              Engine               2021 MY 15L  2024 MY 15L  2027 MY 15L
                                   Engine with  Engine with  Engine with
                                    600 HP (%)   600 HP (%)   600 HP (%)
------------------------------------------------------------------------
                            Aerodynamics--0%
------------------------------------------------------------------------
                               Steer Tires
------------------------------------------------------------------------
Phase 1 Baseline.................            5            5            5
Level I..........................           60           50           20
Level 2..........................           25           30           50
Level 3..........................           10           15           25
------------------------------------------------------------------------
                               Drive Tires
------------------------------------------------------------------------
Phase 1 Baseline.................            5            5            5
Level I..........................           60           50           20
Level 2..........................           25           30           50
Level 3..........................           10           15           25
------------------------------------------------------------------------
                              Transmission
------------------------------------------------------------------------
AMT..............................           40           50           50
Automatic........................           10           20           30
DCT..............................            5           10           10
------------------------------------------------------------------------
                           Other Technologies
------------------------------------------------------------------------
6x2 Axle.........................            0            0            0
Low Friction Axle Lubrication....           20           40           40
Predictive Cruise Control........           20           40           40
Accessory Improvements...........           10           20           30
Air Conditioner Efficiency                  10           20           30
 Improvements....................
Automatic Tire Inflation Systems.           20           40           40

[[Page 40234]]

 
Weight Reduction.................            0            0            0
------------------------------------------------------------------------

            Table III-19--GEM Inputs for Proposed 2021, 2024 and 2027 MY Heavy-Haul Tractor Standards
----------------------------------------------------------------------------------------------------------------
                                               Heavy-haul tractor
-----------------------------------------------------------------------------------------------------------------
               Baseline                         2021MY                   2024MY                   2027MY
----------------------------------------------------------------------------------------------------------------
Engine = 2017 MY 15L Engine with 600   Engine = 2021 MY 15L     Engine = 2024 MY 15L     Engine = 2027 MY 15L
 HP.                                    Engine with 600 HP.      Engine with 600 HP.      Engine with 600 HP
----------------------------------------------------------------------------------------------------------------
                                        Aerodynamics (CdA in m\2\) = 5.00
----------------------------------------------------------------------------------------------------------------
Steer Tires (CRR in kg/metric ton) =   Steer Tires (CRR in kg/  Steer Tires (CRR in kg/  Steer Tires (CRR in kg/
 7.0.                                   metric ton) = 6.2.       metric ton) = 6.0.       metric ton) = 5.8.
Drive Tires (CRR in kg/metric ton) =   Drive Tires (CRR in kg/  Drive Tires (CRR in kg/  Drive Tires (CRR in kg/
 7.4.                                   metric ton) = 6.6.       metric ton) = 6.4.       metric ton) = 6.2.
Transmission = 13 speed Manual         Transmission = 13 speed  Transmission = 13 speed  Transmission = 13 speed
 Transmission, Gear Ratios = 12.29,     Automated Manual         Automated Manual         Automated Manual
 8.51, 6.05, 4.38, 3.20, 2.29, 1.95,    Transmission, Gear       Transmission, Gear       Transmission, Gear
 1.62, 1.38, 1.17, 1.00, 0.86, 0.73.    Ratios = 12.29, 8.51,    Ratios = 12.29, 8.51,    Ratios = 12.29, 8.51,
                                        6.05, 4.38, 3.20,        6.05, 4.38, 3.20,        6.05, 4.38, 3.20,
                                        2.29, 1.95, 1.62,        2.29, 1.95, 1.62,        2.29, 1.95, 1.62,
                                        1.38, 1.17, 1.00,        1.38, 1.17, 1.00,        1.38, 1.17, 1.00,
                                        0.86, 0.73.              0.86, 0.73.              0.86, 0.73.
Drive axle Ratio = 3.55..............  Drive axle Ratio = 3.55  Drive axle Ratio = 3.55  Drive axle Ratio =
                                                                                          3.55.
N/A..................................  6x2 Axle Weighted        6x2 Axle Weighted        6x2 Axle Weighted
                                        Effectiveness = 0%.      Effectiveness = 0%.      Effectiveness = 0%.
N/A..................................  Low Friction Axle        Low Friction Axle        Low Friction Axle
                                        Lubrication = 0.1%.      Lubrication = 0.2%.      Lubrication = 0.2%.
N/A..................................  AMT benefit = 1.1%.....  AMT benefit = 1.8%.....  AMT benefit = 1.8%.
N/A..................................  Predictive Cruise        Predictive Cruise        Predictive Cruise
                                        Control = 0.4%.          Control = 0.8%.          Control = 0.8%.
N/A..................................  Accessory Improvements   Accessory Improvements   Accessory Improvements
                                        = 0.1%.                  = 0.2%.                  = 0.3%.
N/A..................................  Air Conditioner          Air Conditioner          Air Conditioner
                                        Efficiency               Efficiency               Efficiency
                                        Improvements = 0.1%.     Improvements = 0.1%.     Improvements = 0.2%.
N/A..................................  Automatic Tire           Automatic Tire           Automatic Tire
                                        Inflation Systems =      Inflation Systems =      Inflation Systems =
                                        0.2%.                    0.4%.                    0.4%.
N/A..................................  Weight Reduction = 0     Weight Reduction = 0     Weight Reduction = 0
                                        lbs.                     lbs.                     lbs.
----------------------------------------------------------------------------------------------------------------

    The baseline 2017 MY heavy-haul tractor would emit 57 grams of 
CO2 per ton-mile and consume 5.6 gallons of fuel per 1,000 
ton-mile. The agencies propose the heavy-haul standards shown in Table 
III-20. We welcome comment on the heavy-haul tractor technology path 
and standards proposed by the agencies.

           Table III-20--Proposed Heavy-Haul Tractor Standards
------------------------------------------------------------------------
                                             Heavy-haul tractor
                                  --------------------------------------
                                     2021 MY      2024 MY      2027 MY
------------------------------------------------------------------------
Grams of CO2 per Ton-Mile                   54           52           51
 Standard........................
Gallons of Fuel per 1,000 Ton-          5.3045       5.1081        5.010
 Mile............................
------------------------------------------------------------------------

    The technology costs associated with the proposed heavy-haul 
tractor standards are shown below in Table III-21. We welcome comment 
on the technology costs.

[[Page 40235]]

  Table III-21--Heavy-Haul Tractor Technology Incremental Costs in the
  2021, 2024, and 2027 Model Year \a\ \b\ Preferred Alternative vs. the
                          Less Dynamic Baseline
                           [2012$ per vehicle]
------------------------------------------------------------------------
                                     2021 MY      2024 MY      2027 MY
------------------------------------------------------------------------
Engine \c\.......................         $314         $904       $1,698
Tires............................           81           78           75
Tire inflation system............          180          330          314
Transmission.....................        3,969        5,883        6,797
Axle & axle lubes................           70          128          200
Air conditioning.................           45           82          117
Other vehicle technologies.......          174          318          302
    Total........................        4,833        7,723        9,503
------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the specified model year and are incremental to
  the costs of a tractor meeting the phase 1 standards. These costs
  include indirect costs via markups along with learning impacts. For a
  description of the markups and learning impacts considered in this
  analysis and how it impacts technology costs for other years, refer to
  Chapter 2 of the draft RIA (see draft RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore,
  the technology costs shown reflect the average cost expected for each
  of the indicated tractor classes. To see the actual estimated
  technology costs exclusive of adoption rates, refer to Chapter 2 of
  the draft RIA (see draft RIA 2.12 in particular).
\c\ Engine costs are for a heavy HD diesel engine meant for a
  combination tractor.

(e) Consistency of the Proposed Tractor Standards With the Agencies' 
Legal Authority
    The proposed HD Phase 2 standards are based on adoption rates for 
technologies that the agencies regard, subject to consideration of 
public comment, as the maximum feasible for purposes of EISA Section 
32902 (k) and appropriate under CAA Section 202 (a) for the reasons 
given in Section III.D.2(b) through (d) above; see also draft RIA 
Chapter 2.4. The agencies believe these technologies can be adopted at 
the estimated rates for these standards within the lead time provided, 
as discussed in draft RIA Chapter 2. The 2021 and 2024 MY standards are 
phase-in standards on the path to the 2027 MY standards and were 
developed using less aggressive application rates and therefore have 
lower technology package costs than the 2027 MY standards. Moreover, we 
project the cost of these technologies would be rapidly recovered by 
operators due to the associated fuel savings, as shown in the payback 
analysis included in Section IX below. The cost per tractor to meet the 
proposed 2027 MY standards is projected to range between $10,000 and 
$13,000 (much or all of this would be mitigated by the fuel savings 
during the first two years of ownership). The agencies note that while 
the projected costs are significantly greater than the costs projected 
for Phase 1, we still consider that cost to be reasonable, especially 
given the relatively short payback period. In this regard the agencies 
note that the estimated payback period for tractors of less than two 
years \168\ is itself shorter than the estimated payback period for 
light duty trucks in the 2017-2025 light duty greenhouse gas standards. 
That period was slightly over three years, see 77 FR 62926-62927, which 
EPA found to be a highly reasonable given the usual period of ownership 
of light trucks is typically five years.\169\ The same is true here. 
Ownership of new tractors is customarily four to six years, meaning 
that the greenhouse gas and fuel consumption technologies pay for 
themselves early on and the purchaser sees overall savings in 
succeeding years--while still owning the vehicle.\170\ The agencies 
note further that the costs for each subcategory are relatively 
proportionate; that is, costs of any single tractor subcategory are not 
disproportionately higher (or lower) than any other. Although the 
proposal is technology-forcing (especially with respect to aerodynamic 
and tire rolling resistance improvements), the agencies believe that 
manufacturers retain leeway to develop alternative compliance paths, 
increasing the likelihood of the standards' successful implementation. 
The agencies also regard these reductions as cost-effective, even 
without considering payback period. The agencies estimate the cost per 
metric ton of CO2eq reduction without considering fuel 
savings to be $20 in 2030, and we estimate the cost per gallon of 
avoided fuel consumption to be about $0.25 per gallon, which compares 
favorably with the levels of cost effectiveness the agencies found to 
be reasonable for light duty trucks.171 172 See 77 FR 62922. 
The proposed phase-in 2021 and 2024 MY standards are less stringent and 
less costly than the proposed 2027 MY standards. For these reasons, and 
because the agencies have carefully considered lead time, EPA believes 
they are also reasonable under Section 202(a) of the CAA. Given that 
the agencies believe the proposed standards are technically feasible, 
are highly cost effective, and highly cost effective when accounting 
for the fuel savings, and have no apparent adverse potential impacts 
(e.g., there are no projected negative impacts on safety or vehicle 
utility), the proposed standards appear to represent a reasonable 
choice under Section 202(a) of the CAA and the maximum feasible under 
NHTSA's EISA authority at 49 U.S.C. 32902(k)(2).
---------------------------------------------------------------------------

    \168\ See Draft RIA Chapter 7.1.3.
    \169\ Auto Remarketing. Length of Ownership Returning to More 
Normal Levels; New Registrations Continue Slow Climb. April 1, 2013. 
Last accessed on February 26, 2015 at http://www.autoremarketing.com/trends/length-ownership-returning-more-normal-levels-new-registrations-continue-slow-climb.
    \170\ North American Council for Freight Efficiency. Barriers to 
Increased Adoption of Fuel Efficiency Technologies in Freight 
Trucking. July 2013. Page 24.
    \171\ See Draft RIA Chapter 7.1.4.
    \172\ If using a cost effectiveness metric that treats fuel 
savings as a negative cost, net costs per ton of GHG emissions 
reduced or per gallon of avoided fuel consumption would be negative 
under the proposed standards.
---------------------------------------------------------------------------

    Based on the information before the agencies, we currently believe 
that Alternative 3 would be maximum feasible and reasonable for the 
tractor segment for the model years in question. The agencies believe 
Alternative 4 has potential to be the maximum feasible and reasonable 
alternative; however, based on the evidence currently before us, EPA 
and NHTSA have outstanding questions regarding relative risks and 
benefits of Alternative 4 due to the timeframe envisioned by the 
alternative. Alternative 3 is generally designed to achieve the levels 
of fuel consumption and GHG reduction that Alternative 4 would achieve, 
but with several years of

[[Page 40236]]

additional lead-time--i.e., the Alternative 3 standards would end up in 
the same place as the Alternative 4 standards, but several years later, 
meaning that manufacturers could, in theory, apply new technology at a 
more gradual pace and with greater flexibility. However, Alternative 4 
would provide earlier GHG benefits compared to Alternative 3.
(f) Alternative Tractor Standards Considered
    The agencies developed and considered other alternative levels of 
stringency for the Phase 2 program. The results of the analysis of 
these alternatives are discussed below in Section X of the preamble. 
For tractors, the agencies developed the following alternatives as 
shown in Table III-22.

    Table III-22--Summary of Alternatives Considered for the Proposed
                               Rulemaking
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Alternative 1.....................  No action alternative
Alternative 2.....................  Less Stringent than the Proposed
                                     Alternative applying off-the-shelf
                                     technologies.
Alternative 3 (Proposed             Proposed Alternative fully phased-in
 Alternative).                       by 2027 MY.
Alternative 4.....................  Alternative that pulls ahead the
                                     proposed 2027 MY standards to 2024
                                     MY.
Alternative 5.....................  Alternative based on very high
                                     market adoption of advanced
                                     technologies.
------------------------------------------------------------------------

    When evaluating the alternatives, it is necessary to evaluate the 
impact of a proposed regulation in terms of CO2 emission 
reductions, fuel consumption reductions, and technology costs. However, 
it is also necessary to consider other aspects, such as manufacturers' 
research and development resources, the impact on purchase price, and 
the impact on purchasers. Manufacturers are limited in their ability to 
develop and implement new technologies due to their human resources and 
budget constraints. This has a direct impact on the amount of lead time 
that is required to meet any new standards. From the owner/operator 
perspective, heavy-duty vehicles are a capital investment for firms and 
individuals so large increases in the upfront cost could impact buying 
patterns. Though the dollar value of the lifetime fuel savings will far 
exceed the upfront technology costs, purchasers often discount future 
fuel savings for a number of reasons. The purchaser often has 
uncertainty in the amount of fuel savings that can be expected for 
their specific operation due to the diversity of the heavy-duty tractor 
market. Although a nationwide perspective that averages out this 
uncertainty is appropriate for rulemaking analysis, individual 
operators must consider their potentially narrow operation. In 
addition, purchasers often put a premium on reliability (because 
downtime is costly in terms of towing, repair, late deliveries, and 
lost revenue) and may perceive any new technology as a potential risk 
with respect to reliability. Another factor that purchasers consider is 
the impact of a new technology on the resale market, which can also be 
impacted by uncertainty.
    The agencies selected the proposed standards over the more 
stringent alternatives based on considering the relevant statutory 
factors. In 2027, the proposed standards achieve up to a 24 percent 
reduction in CO2 emissions and fuel consumption compared to 
a Phase 1 tractor at a per vehicle cost of approximately $13,000. 
Alternative 4 achieves the same percent reduction in CO2 
emissions and fuel consumption compared to a Phase 1 tractor, but three 
years earlier, at a per vehicle cost of approximately $14,000. The 
alternative standards are projected to result in more emission and fuel 
consumption reductions from the heavy-duty tractors built in model 
years 2021 through 2026.\173\ We project the proposed standards to be 
achievable within known design cycles, and we believe these standards 
would allow different paths to compliance in addition to the one we 
outline and cost here.
---------------------------------------------------------------------------

    \173\ See Tables III-14 and III-27.
---------------------------------------------------------------------------

    The agencies solicit comment on all of these issues and again note 
the possibility of adopting, in a final action, standards that are more 
accelerated than those proposed in Alternative 3. The agencies are also 
assuming that both the proposed standards and Alternative 4 could be 
accomplished with all changes being made during manufacturers' normal 
product design cycles. However, we note that doing so would be more 
challenging for Alternative 4 and may require accelerated research and 
development outside of design cycles with attendant increased costs.
    The agencies are especially interested in seeking detailed comments 
on Alternative 4. Therefore, we are including the details of the 
Alternative 4 analysis below. The adoption rates considered for the 
2021 and 2024 MY standards developed for Alternative 4 are shown below 
in Table III-23 and Table III-24. The inputs to GEM used to develop the 
Alternative 4 CO2 and fuel consumption standards are shown 
below in Table III-25 and Table III-26. The standards associated with 
Alternative 4 are shown below in Table III-27. Commenters are 
encouraged to address all aspects of feasibility analysis, including 
costs, the likelihood of developing the technology to achieve 
sufficient relaibility within the proposed lead time, and the extent to 
which the market could utilize the technology.
(g) Derivation of Alternative 4 Tractor Standards
    The adoption rates considered for the 2021 and 2024 MY standards 
developed for Alternative 4 are shown below in Table III-23 and Table 
III-24. The inputs to GEM used to develop the Alternative 4 
CO2 and fuel consumption standards are shown below in Table 
III-25 and Table III-26. The standards associated with Alternative 4 
are shown below in Table III-27. Commenters are encouraged to address 
all aspects of feasibility analysis, including costs, the likelihood of 
developing the technology to achieve sufficient relaibility within the 
lead time.

[[Page 40237]]

                                                 Table III-23--Alternative 4 Adoption Rates for 2021 MY
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    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
                                         (%)          (%)          (%)          (%)          (%)          (%)          (%)          (%)          (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Alternative 4 2021MY Engine Technology Package
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             100          100          100          100          100          100          100          100          100
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Aerodynamics
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bin I..............................            0            0            0            0            0            0            0            0            0
Bin II.............................           65           65            0           65           65            0           65           65            0
Bin III............................           30           30           35           30           30           35           30           30           35
Bin IV.............................            5            5           30            5            5           30            5            5           30
Bin V..............................          N/A          N/A           25          N/A          N/A           25          N/A          N/A           25
Bin VI.............................          N/A          N/A           10          N/A          N/A           10          N/A          N/A           10
Bin VII............................          N/A          N/A            0          N/A          N/A            0          N/A          N/A            0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Steer Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base...............................            5            5            5            5            5            5            5            5            5
Level 1............................           35           35           35           35           35           35           35           35           35
Level 2............................           45           45           45           45           45           45           45           45           45
Level 3............................           15           15           15           15           15           15           15           15           15
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Drive Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base...............................            5            5            5            5            5            5            5            5            5
Level 1............................           35           35           35           35           35           35           35           35           35
Level 2............................           45           45           45           45           45           45           45           45           45
Level 3............................           15           15           15           15           15           15           15           15           15
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Extended Idle Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
APU................................          N/A          N/A          N/A          N/A          N/A          N/A           80           80           80
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Transmission Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manual.............................           25           25           25           25           25           25           25           25           25
AMT................................           40           40           40           40           40           40           40           40           40
Auto...............................           30           30           30           30           30           30           30           30           30
Dual Clutch........................            5            5            5            5            5            5            5            5            5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Driveline
--------------------------------------------------------------------------------------------------------------------------------------------------------
Axle Lubricant.....................           20           20           20           20           20           20           20           20           20
6x2 Axle...........................  ...........  ...........  ...........           10           10           20           10           10           30
Downspeed..........................           30           30           30           30           30           30           30           30           30
Direct Drive.......................           50           50           50           50           50           50           50           50           50
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Accessory Improvements
--------------------------------------------------------------------------------------------------------------------------------------------------------
A/C................................           20           20           20           20           20           20           20           20           20
Electric Access....................           20           20           20           20           20           20           20           20           20
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Other Technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Predictive Cruise Control..........           30           30           30           30           30           30           30           30           30
--------------------------------------------------------------------------------------------------------------------------------------------------------
Automated Tire Inflation System....           30           30           30           30           30           30           30           30           30
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40238]]

                                                 Table III-24--Alternative 4 Adoption Rates for 2024 MY
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    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
                                         (%)          (%)          (%)          (%)          (%)          (%)          (%)          (%)          (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Alternative 4 2024MY Engine Technology Package
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             100          100          100          100          100          100          100          100          100
                                                                      Aerodynamics
--------------------------------------------------------------------------------------------------------------------------------------------------------
Bin I..............................            0            0            0            0            0            0            0            0            0
Bin II.............................           50           50            0           50           50            0           50           50            0
Bin III............................           40           40           20           40           40           20           40           40           20
Bin IV.............................           10           10           20           10           10           20           10           10           20
Bin V..............................          N/A          N/A           35          N/A          N/A           35          N/A          N/A           35
Bin VI.............................          N/A          N/A           20          N/A          N/A           20          N/A          N/A           20
Bin VII............................          N/A          N/A            5          N/A          N/A            5          N/A          N/A            5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Steer Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base...............................            5            5            5            5            5            5            5            5            5
Level 1............................           20           20           20           20           20           20           20           20           20
Level 2............................           50           50           50           50           50           50           50           50           50
Level 3............................           25           25           25           25           25           25           25           25           25
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Drive Tires
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base...............................            5            5            5            5            5            5            5            5            5
Level 1............................           20           20           20           20           20           20           20           20           20
Level 2............................           50           50           50           50           50           50           50           50           50
Level 3............................           25           25           25           25           25           25           25           25           25
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Extended Idle Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
APU................................          N/A          N/A          N/A          N/A          N/A          N/A           90           90           90
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Transmission Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manual.............................           10           10           10           10           10           10           10           10           10
AMT................................           50           50           50           50           50           50           50           50           50
Auto...............................           30           30           30           30           30           30           30           30           30
Dual Clutch........................           10           10           10           10           10           10           10           10           10
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Driveline
--------------------------------------------------------------------------------------------------------------------------------------------------------
Axle Lubricant.....................           40           40           40           40           40           40           40           40           40
6x2 Axle...........................  ...........  ...........  ...........           20           20           60           20           20           60
Downspeed..........................           60           60           60           60           60           60           60           60           60
Direct Drive.......................           50           50           50           50           50           50           50           50           50
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Accessory Improvements
--------------------------------------------------------------------------------------------------------------------------------------------------------
A/C................................           30           30           30           30           30           30           30           30           30
Electric Access....................           30           30           30           30           30           30           30           30           30
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Other Technologies
--------------------------------------------------------------------------------------------------------------------------------------------------------
Predictive Cruise Control..........           40           40           40           40           40           40           40           40           40
Automated Tire Inflation System....           40           40           40           40           40           40           40           40           40
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40239]]

                                Table III-25--Alternative 4 GEM Inputs for 2021MY
----------------------------------------------------------------------------------------------------------------
               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
----------------------------------------------------------------------------------------------------------------
2021MY 11L   2021MY 11L   2021MY 11L   2021MY 15L   2021MY 15L   2021MY 15L   2021MY 15L  2021MY 15L  2021MY 15L
 Engine 350  Engine 350   Engine 350   Engine 455   Engine 455   Engine 455   Engine 455  Engine 455  Engine 455
     HP--2%      HP--2%       HP--2%       HP--2%       HP--2%       HP--2%      HP--2%      HP--2%      HP--2%
  reduction   reduction    reduction    reduction    reduction    reduction   reduction   reduction   reduction
----------------------------------------------------------------------------------------------------------------
                                           Aerodynamics (CdA in m\2\)
----------------------------------------------------------------------------------------------------------------
      4.61         6.01         5.83         4.61         6.01         5.83        4.61        6.01        5.63
----------------------------------------------------------------------------------------------------------------
                                       Steer Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       5.9          5.9          5.9          5.9          5.9          5.9         5.9         5.9         5.9
----------------------------------------------------------------------------------------------------------------
                                       Drive Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       6.2          6.2          6.2          6.2          6.2          6.2         6.2         6.2         6.2
----------------------------------------------------------------------------------------------------------------
                                 Extended Idle Reduction Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A          N/A          N/A          N/A        2.5%        2.5%        2.5%
----------------------------------------------------------------------------------------------------------------
                              Transmission = 10 speed Automated 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 = 3.45
----------------------------------------------------------------------------------------------------------------
                                         6x2 Axle Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A         0.3%         0.3%         0.8%        0.3%        0.3%        0.8%
----------------------------------------------------------------------------------------------------------------
                                      Low Friction Axle Lubrication = 0.1%
----------------------------------------------------------------------------------------------------------------
                                           Transmission benefit = 1.5%
----------------------------------------------------------------------------------------------------------------
                                        Predictive Cruise Control = 0.6%
----------------------------------------------------------------------------------------------------------------
                                          Accessory Improvements = 0.2%
----------------------------------------------------------------------------------------------------------------
                                 Air Conditioner Efficiency Improvements = 0.1%
----------------------------------------------------------------------------------------------------------------
                                     Automatic Tire Inflation Systems = 0.3%
----------------------------------------------------------------------------------------------------------------
                                            Weight Reduction = 0 lbs
----------------------------------------------------------------------------------------------------------------
                    Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------

                                Table III-26--Alternative 4 GEM Inputs for 2024MY
----------------------------------------------------------------------------------------------------------------
               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
----------------------------------------------------------------------------------------------------------------
2021MY 11L   2021MY 11L   2021MY 11L   2021MY 15L   2021MY 15L   2021MY 15L   2021MY 15L  2021MY 15L  2021MY 15L
 Engine 350  Engine 350   Engine 350   Engine 455   Engine 455   Engine 455   Engine 455  Engine 455  Engine 455
     HP--4%      HP--4%       HP--4%       HP--4%       HP--4%       HP--4%      HP--4%      HP--4%      HP--4%
  reduction   reduction    reduction    reduction    reduction    reduction   reduction   reduction   reduction
----------------------------------------------------------------------------------------------------------------
                                           Aerodynamics (CdA in m\2\)
----------------------------------------------------------------------------------------------------------------
      4.52         5.92         5.52         4.52         5.92         5.52        4.52        5.92        5.32
----------------------------------------------------------------------------------------------------------------

[[Page 40240]]

 
                                       Steer Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       5.6          5.6          5.6          5.6          5.6          5.6         5.6         5.6         5.6
----------------------------------------------------------------------------------------------------------------
                                       Drive Tires (CRR in kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       5.9          5.9          5.9          5.9          5.9          5.9         5.9         5.9         5.9
----------------------------------------------------------------------------------------------------------------
                                 Extended Idle Reduction Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A          N/A          N/A          N/A          3%          3%          3%
----------------------------------------------------------------------------------------------------------------
                              Transmission = 10 speed Automated 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 = 3.2
----------------------------------------------------------------------------------------------------------------
                                         6x2 Axle Weighted Effectiveness
----------------------------------------------------------------------------------------------------------------
       N/A          N/A          N/A         0.5%         0.5%         1.5%        0.5%        0.5%        1.5%
----------------------------------------------------------------------------------------------------------------
                                      Low Friction Axle Lubrication = 0.2%
----------------------------------------------------------------------------------------------------------------
                                           Transmission benefit = 1.8%
----------------------------------------------------------------------------------------------------------------
                                        Predictive Cruise Control = 0.8%
----------------------------------------------------------------------------------------------------------------
                                          Accessory Improvements = 0.3%
----------------------------------------------------------------------------------------------------------------
                                 Air Conditioner Efficiency Improvements = 0.2%
----------------------------------------------------------------------------------------------------------------
                                     Automatic Tire Inflation Systems = 0.4%
----------------------------------------------------------------------------------------------------------------
                                            Weight Reduction = 0 lbs
----------------------------------------------------------------------------------------------------------------
                    Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------

      Table III-27--Tractor Standards Associated with Alternative 4
------------------------------------------------------------------------
                                            Day cab          Sleeper cab
------------------------------------------------------------------------
                                     Class 7      Class 8      Class 8
------------------------------------------------------------------------
                 2021 Model Year CO2 Grams per Ton-Mile
------------------------------------------------------------------------
Low Roof.........................           92           74           66
Mid Roof.........................          102           81           74
High Roof........................          104           82           73
------------------------------------------------------------------------
           2021 Model Year Gallons of Fuel per 1,000 Ton-Mile
------------------------------------------------------------------------
Low Roof.........................       9.0373       7.2692       6.4833
Mid Roof.........................      10.0196       7.9568       7.2692
High Roof........................      10.2161       8.0550       7.1709
------------------------------------------------------------------------
                 2024 Model Year CO2 Grams per Ton-Mile
------------------------------------------------------------------------
Low Roof.........................           87           70           62
Mid Roof.........................           96           76           69
High Roof........................           96           76           67
------------------------------------------------------------------------
      2024 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile
------------------------------------------------------------------------
Low Roof.........................       8.5462       6.8762       6.0904
Mid Roof.........................       9.4303       7.4656       6.7780
High Roof........................       9.4303       7.4656       6.5815
------------------------------------------------------------------------

[[Page 40241]]

    The technology costs of achieving the reductions projected in 
Alternative 4 are included below in Table III-28 and Table III-29.

       Table III-28-Class 7 and 8 Tractor Technology Incremental Costs in the 2021 Model Year Alternative 4 vs. the Less Dynamic Baseline \a\ \b\
                                                                   (2012$ per vehicle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Class 7                                      Class 8
                                                              ------------------------------------------------------------------------------------------
                                                                        Day cab                   Day cab                       Sleeper cab
                                                              ------------------------------------------------------------------------------------------
                                                                 Low/mid                   Low/mid
                                                                   roof      High roof       roof      High roof     Low roof     Mid roof    High roof
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\...................................................         $656         $656         $656         $656         $656         $656         $656
Aerodynamics.................................................          769          632          769          632          740          740          665
Tires........................................................           50           11           83           18           61           61           18
Tire inflation system........................................          271          271          271          271          271          271          271
Transmission.................................................        6,794        6,794        6,794        6,794        6,794        6,794        6,794
Axle & axle lubes............................................           56           56           75           95           75           75          115
Idle reduction with APU......................................            0            0            0            0        2,449        2,449        2,449
Air conditioning.............................................           90           90           90           90           90           90           90
Other vehicle technologies...................................          261          261          261          261          261          261          261
                                                              ------------------------------------------------------------------------------------------
    Total....................................................        8,946        8,769        8,999        8,816       11,397       11,397       11,318
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2021 model year and are incremental to the costs of a tractor meeting the Phase 1 standards. These costs include indirect
  costs via markups along with learning impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts
  technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the
  indicated tractor classes. To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft
  RIA 2.12 in particular).
\c\ Engine costs are for a heavy HD diesel engine meant for a combination tractor. The engine costs in this table are equal to the engine costs
  associated with the separate engine standard because both include the same set of engine technologies (see Section II.D.2.e).

       Table III-29-Class 7 and 8 Tractor Technology Incremental Costs in the 2024 Model Year Alternative 4 vs. the Less Dynamic Baseline \a\ \b\
                                                                   (2012$ per vehicle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Class 7                                      Class 8
                                                              ------------------------------------------------------------------------------------------
                                                                        Day cab                   Day cab                       Sleeper cab
                                                              ------------------------------------------------------------------------------------------
                                                                 Low/mid                   Low/mid
                                                                   roof      High roof       roof      High roof     Low roof     Mid roof    High roof
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\...................................................       $1,885       $1,885       $1,885       $1,885       $1,885       $1,885       $1,885
Aerodynamics.................................................          805          935          805          935          773          773          997
Tires........................................................           50           14           83           23           63           63           23
Tire inflation system........................................          330          330          330          330          330          330          330
Transmission.................................................        7,143        7,143        7,143        7,143        7,143        7,143        7,143
Axle & axle lubes............................................          102          102          138          210          138          138          210
Idle reduction with APU......................................            0            0            0            0        2,687        2,687        2,687
Air conditioning.............................................          123          123          123          123          123          123          123
Other vehicle technologies...................................          318          318          318          318          318          318          318
                                                              ------------------------------------------------------------------------------------------
    Total....................................................       10,757       10,851       10,826       10,968       13,461       13,461       13,717
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2024 model year and are incremental to the costs of a tractor meeting the Phase 1 standards. These costs include indirect
  costs via markups along with learning impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts
  technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the
  indicated tractor classes. To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft
  RIA 2.12 in particular).
\c\ Engine costs are for a heavy HD diesel engine meant for a combination tractor. The engine costs in this table are equal to the engine costs
  associated with the separate engine standard because both include the same set of engine technologies (see Section II.D.2.e).

E. Proposed Compliance Provisions for Tractors

    In HD Phase 1, the agencies developed an entirely new program to 
assess the CO2 emissions and fuel consumption of tractors. 
The agencies propose to carry over many aspects of the Phase 1 
compliance approach, but are proposing to enhance several aspects of 
the compliance program. The sections below highlight the key areas that 
are the same and those that are different.
(1) HD Phase 2 Compliance Provisions That Remain the Same
    The regulatory structure considerations for Phase 2 are discussed 
in more detail above in Section II. We welcome comment on all aspects 
of the

[[Page 40242]]

compliance program including where we are not proposing any changes.
(a) Application and Certification Process
    For the Phase 2 proposed rule, the agencies are proposing to keep 
many aspects of the HD Phase 1 tractor compliance program. For example, 
the agencies propose to continue to use GEM (as revised for Phase 2), 
in coordination with additional component testing by manufacturers to 
determine the inputs, to determine compliance with the proposed fuel 
efficiency and CO2 standards. Another aspect that we propose 
to carry over is the overall compliance approach.
    In Phase 1 and as proposed in Phase 2, the general compliance 
process in terms of the pre-model year, during the model year, and post 
model year activities remain unchanged. The manufacturers would 
continue to be required to apply for certification through a single 
source, EPA, with limited sets of data and GEM results (see 40 CFR 
1037.205). EPA would issue certificates upon approval based on 
information submitted through the VERIFY database (see 40 CFR 
1037.255). In Phase 1, EPA and NHTSA jointly review and approve 
innovative technology requests, i.e. performance of any technology 
whose performance is not measured by the GEM simulation tool and is not 
in widespread use in the 2010 MY. For Phase 2, the agencies are 
proposing a similar process for allowing credits for off-cycle 
technologies that are not measured by the GEM simulation tool (see 
Section I.B.v. for a more detailed discussion of off-cycle requests). 
During the model year, the manufacturers would continue to generate 
certification data and conduct GEM runs on each of the vehicle 
configurations it builds. After the model year ends, the manufacturers 
would submit end of year reports to EPA that include the GEM results 
for all of the configurations it builds, along with credit/deficit 
balances if applicable (see 40 CFR 1037.250 and 1037.730). EPA and 
NHTSA would jointly coordinate on any enforcement action required.
(b) Compliance Requirements
    The agencies are also proposing not to change the following 
provisions:

 Useful life of tractors (40 CFR 1037.105(e) and 1037.106(e)) 
although added for NHTSA in Phase 2 (40 CFR 535.5)
 Emission-related warranty requirements (40 CFR 1037.120)
 Maintenance instructions, allowable maintenance, and amending 
maintenance instructions (40 CFR 1037.125 and 137.220)
 Deterioration factors (40 CFR 1037.205(l) and 1037.241(c))
 Vehicle family, subfamily, and configurations (40 CFR 
1037.230)
(c) Drive Cycles and Weightings
    In Phase 1, the agencies adopted three drive cycles used in GEM to 
evaluate the fuel consumption and CO2 emissions from various 
vehicle configurations. One of the cycles is the Transient mode of the 
California ARB Heavy Heavy-Duty Truck 5 Mode cycle. It is intended to 
broadly cover urban driving. The other two cycles represent highway 
driving at 55 mph and 65 mph.
    The agencies propose to maintain the existing drive cycles and 
weighting. For sleeper cabs, the weightings would remain 5 percent of 
the Transient cycle, 9 percent of the 55 mph cycle, and 86 percent of 
the 65 mph cycle. The day cab results would be weighted based on 19 
percent of the transient cycle, 17 percent of the 55 mph cycle, and 64 
percent of the 65 mph cycle (see 40 CFR 1037.510(c)). One key 
difference in the proposed drive cycles is the addition of grade, 
discussed below in Section III.E.2.
    The 55 mph and 65 mph drive cycles used in GEM assume constant 
speed operation at nominal vehicle speeds with downshifting occurring 
if road incline causes a predetermined drop in vehicle speed. In real-
world vehicle operation, traffic conditions and other factors may cause 
periodic operation at lower (e.g. creep) or variable vehicle speeds. 
The agencies therefore request comment on the need to include segments 
of lower or variable speed operation in the nominally 55 mph and 65 mph 
drive cycles used in GEM and how this may or may not impact the 
strategies manufacturers would develop. We also request data from fleet 
operators or others that may track vehicle speed operation of heavy-
duty tractors.
(d) Empty Weight and Payload
    The total weight of the tractor-trailer combination is the sum of 
the tractor curb weight, the trailer curb weight, and the payload. The 
total weight of a vehicle is important because it in part determines 
the impact of technologies, such as rolling resistance, on GHG 
emissions and fuel consumption. In Phase 2, we are proposing to carry 
over the total weight of the tractor-trailer combination used in GEM 
for Phase 1. The agencies developed the proposed tractor curb weight 
inputs for Phase 2 from actual tractor weights measured in two of EPA's 
Phase 1 test programs. The proposed trailer curb weight inputs were 
derived from actual trailer weight measurements conducted by EPA and 
from weight data provided to ICF International by the trailer 
manufacturers.\174\
---------------------------------------------------------------------------

    \174\ ICF International. Investigation of Costs for Strategies 
to Reduce Greenhouse Gas Emissions for Heavy-Duty On-road Vehicles. 
July 2010. Pages 4-15. Docket Number EPA-HQ-OAR-2010-0162-0044.
---------------------------------------------------------------------------

    There is a further issue of what payload weight to assign during 
compliance testing. In use, trucks operate at different weights at 
different times during their operations. The greatest freight transport 
efficiency (the amount of fuel required to move a ton of payload) would 
be achieved by operating trucks at the maximum load for which they are 
designed all of the time. However, this may not always be practicable. 
Delivery logistics may dictate partial loading. Some payloads, such as 
potato chips, may fill the trailer before it reaches the vehicle's 
maximum weight limit. Or full loads simply may not be available 
commercially. M.J. Bradley analyzed the Truck Inventory and Use Survey 
and found that approximately 9 percent of combination tractor miles 
travelled empty, 61 percent are ``cubed-out'' (the trailer is full 
before the weight limit is reached), and 30 percent are ``weighed out'' 
(operating weight equal 80,000 lbs which is the gross vehicle weight 
limit on the Federal Interstate Highway System or greater than 80,000 
lbs for vehicles traveling on roads outside of the interstate 
system).\175\
---------------------------------------------------------------------------

    \175\ M.J. Bradley & Associates. Setting the Stage for 
Regulation of Heavy-Duty Vehicle Fuel Economy and GHG Emissions: 
Issues and Opportunities. February 2009. Page 35. Analysis based on 
1992 Truck Inventory and Use Survey data, where the survey data 
allowed developing the distribution of loads instead of merely the 
average loads.
---------------------------------------------------------------------------

    The amount of payload that a tractor can carry depends on the 
category (or GVWR and GCWR) of the vehicle. For example, a typical 
Class 7 tractor can carry less payload than a Class 8 tractor. For 
Phase 1, the agencies used the Federal Highway Administration Truck 
Payload Equivalent Factors using Vehicle Inventory and Use Survey 
(VIUS) and Vehicle Travel Information System data to determine the 
payloads. FHWA's results indicated that the average payload of a Class 
8 vehicle ranged from 36,247 to 40,089 lbs, depending on the average 
distance travelled per day.\176\ The same study shows that Class 7 
vehicles carried between 18,674 and 34,210 lbs of payload also 
depending on average distance travelled per day. Based on

[[Page 40243]]

these data, the agencies are proposing to continue to prescribe a fixed 
payload of 25,000 lbs for Class 7 tractors and 38,000 lbs for Class 8 
tractors for certification testing. The agencies propose to continue to 
use a common payload for Class 8 day cabs and sleeper cabs as a 
predefined GEM input because the data available do not distinguish 
among Class 8 tractor types. These proposed payload values represent a 
heavily loaded trailer, but not maximum GVWR, since as described above 
the majority of tractors ``cube-out'' rather than ``weigh-out.''
---------------------------------------------------------------------------

    \176\ The U.S. Federal Highway Administration. Development of 
Truck Payload Equivalent Factor. Table 11. Last viewed on March 9, 
2010 at http://ops.fhwa.dot.gov/freight/freight_analysis/faf/faf2_reports/reports9/s510_11_12_tables.htm.
---------------------------------------------------------------------------

    Details of the proposed individual weight inputs by regulatory 
category, as shown in Table III-30, are included in draft RIA Chapter 
3. We welcome comment or new data to support changes to the tractor 
weights, or refinements to the heavy-haul tractor, trailer, and payload 
weights.

                            Table III-30--Proposed Combination Tractor Weight Inputs
----------------------------------------------------------------------------------------------------------------
                                  Regulatory     Tractor tare    Trailer weight                    Total weight
          Model type             subcategory     weight  (lbs)        (lbs)       Payload  (lbs)       (lbs)
----------------------------------------------------------------------------------------------------------------
Class 8......................  Sleeper Cab              19,000            13,500          38,000          70,500
                                High Roof.
Class 8......................  Sleeper Cab Mid          18,750            10,000          38,000          66,750
                                Roof.
Class 8......................  Sleeper Cab Low          18,500            10,500          38,000          67,000
                                Roof.
Class 8......................  Day Cab High             17,500            13,500          38,000          69,000
                                Roof.
Class 8......................  Day Cab Mid              17,100            10,000          38,000          65,100
                                Roof.
Class 8......................  Day Cab Low              17,000            10,500          38,000          65,500
                                Roof.
Class 7......................  Day Cab High             11,500            13,500          25,000          50,000
                                Roof.
Class 7......................  Day Cab Mid              11,100            10,000          25,000          46,100
                                Roof.
Class 7......................  Day Cab Low              11,000            10,500          25,000          46,500
                                Roof.
Class 8......................  Heavy-Haul.....          19,000            13,500          86,000         118,500
----------------------------------------------------------------------------------------------------------------

(e) Tire Testing
    In Phase 1, the manufacturers are required to input their tire 
rolling resistance coefficient into GEM. Also in Phase 1, the agencies 
adopted the provisions in ISO 28580 to determine the rolling resistance 
of tires. As described in 40 CFR 1037.520(c), the agencies require that 
at least three tires for each tire design are to be tested at least one 
time. Our assessment of the Phase 1 program to date indicates that 
these requirements reasonably balance the need for precision, 
repeatability, and testing burden. Therefore we propose to carry over 
the Phase 1 testing provisions for tire rolling resistance into Phase 
2. We welcome comments regarding the proposed tire testing provisions.
    In Phase 1, the agencies received comments from stakeholders 
highlighting a need to develop a reference lab and alignment tires for 
the HD sector. The agencies discussed the lab-to-lab comparison 
conducted in the Phase 1 EPA tire test program (76 FR 57184). The 
agencies reviewed the rolling resistance data from the tires that were 
tested at both the STL and Smithers laboratories to assess inter-
laboratory and test machine variability. The agencies conducted 
statistical analysis of the data to gain better understanding of lab-
to-lab correlation and developed an adjustment factor for data measured 
at each of the test labs. Based on these results, the agencies believe 
the lab-to-lab variation for the STL and Smithers laboratories would 
have very small effect on measured rolling resistance values. Based on 
the test data, the agencies judge for the HD Phase 2 program to 
continue to use the current levels of variability, and the agencies 
therefore propose to allow the use of either Smithers or STL 
laboratories for determining the tire rolling resistance value. 
However, we welcome comment on the need to establish a reference 
machine for the HD sector and whether tire testing facilities are 
interested in and willing to commit to developing a reference machine.
(2) Key Differences in HD Phase 2 Compliance Provisions
    We welcome comment on all aspects of the compliance program for 
which we are proposing changes.
(a) Aerodynamic Assessment
    In Phase 1, the manufacturers conduct aerodynamic testing to 
establish the appropriate bin and GEM input for determining compliance 
with the CO2 and fuel consumption standards. The agencies 
propose to continue this general approach in HD Phase 2, but make 
several enhancements to the aerodynamic assessment of tractors. As 
discussed below in this section, we propose some modifications to the 
aerodynamic test procedures--the addition of wind averaged yaw in the 
aerodynamic assessment, the addition of trailer skirts to the standard 
trailer used to determine aerodynamic performance of tractors and 
revisions to the aerodynamic bins.
(i) Aerodynamic Test Procedures
    The aerodynamic drag of a vehicle is determined by the vehicle's 
coefficient of drag (Cd), frontal area, air density and speed. 
Quantifying tractor aerodynamics as an input to the GEM presents 
technical challenges because of the proliferation of tractor 
configurations, and subtle variations in measured aerodynamic values 
among various test procedures. In Phase 1, Class 7 and 8 tractor 
aerodynamic results are developed by manufacturers using a range of 
techniques, including wind tunnel testing, computational fluid 
dynamics, and constant speed tests.
    We continue to believe a broad approach allowing manufacturers to 
use these multiple test procedures to demonstrate aerodynamic 
performance of its tractor fleet is appropriate given that no single 
test procedure is superior in all aspects to other approaches. However, 
we also recognize the need for consistency and a level playing field in 
evaluating aerodynamic performance. To address the consistency and 
level playing field concerns, NHTSA and EPA adopted in Phase 1, while 
working with industry, an approach that identified a reference 
aerodynamic test method and a procedure to align results from other 
aerodynamic test procedures with the reference method.
    The agencies adopted in Phase 1 an enhanced coastdown procedure as 
the reference method (see 40 CFR 1066.310) and defined a process for 
manufacturers to align drag results from each of their own test methods 
to the reference method results using Falt-aero (see 40 CFR 1037.525). 
Manufacturers are able to use any aerodynamic evaluation method in 
demonstrating a vehicle's aerodynamic performance as long as the method 
is aligned to the reference method. The agencies propose to continue to 
use this alignment method

[[Page 40244]]

approach to maintain the testing flexibility that manufacturers have 
today. However, the agencies propose to increase the rigor in 
determining the Falt-aero for Phase 2. Beginning in 2021 MY, we propose 
that the manufacturers would be required to determine a new Falt-aero 
for each of their tractor models for each aerodynamic test method. In 
Phase 1, manufacturers are required to determine their Falt-aero using 
only a high roof sleeper cab with a full aerodynamics package (see 40 
CFR 1037.521(a)(2) and proposed 40 CFR 1037.525(b)(2)). In Phase 2, we 
propose that manufacturers would be required to determine a unique 
Falt-aero value for each major model of their high roof day cabs and 
high roof sleeper cabs. In Phase 2, we propose that manufacturers may 
carry over the Falt-aero value until a model changeover or based on the 
agencies' discretion to require up to six new Falt-aero determinations 
each year. We welcome comment on the burden associated with this 
proposed change to conduct up to six coastdown tests per year per 
manufacturer.
    Based on feedback received during the development of Phase 1, we 
understand that there is interest from some manufacturers to change the 
reference method in Phase 2 from coastdown to constant speed testing. 
EPA has conducted an aerodynamic test program at Southwest Research 
Institute to evaluate both methods in terms of cost of testing, testing 
time, testing facility requirements, and repeatability of results. 
Details of the analysis and results are included in draft RIA Chapter 
3.2. The results showed that the enhanced coastdown test procedures and 
analysis produced results with acceptable repeatability and at a lower 
cost than the constant speed testing. Based on the results of this 
testing, the agencies propose to continue to use the enhanced coastdown 
procedure for the reference method in Phase 2.\177\ However, we welcome 
comment on the need to change the reference method for the Phase 2 
final rule to constant speed testing, including comparisons of 
aerodynamic test results using both the coastdown and constant speed 
test procedures. In addition, we welcome comments on and suggested 
revisions to the constant speed test procedure specifications set forth 
in Chapter 3.2.2.2 of the draft RIA and 40 CFR 1037.533. If we 
determine that it is appropriate to make the change, then the 
aerodynamic bins in the final rule would be adjusted to take into 
account the difference in absolute CdA values due to the change in 
method.
---------------------------------------------------------------------------

    \177\ Southwest Research Institute. ``Heavy Duty Class 8 Truck 
Coastdown and Constant Speed Testing.'' April 2015.
---------------------------------------------------------------------------

    The agencies are also considering refinements to the computational 
fluid dynamics modeling method to determine the aerodynamic performance 
of tractors. Specifically, we are considering whether the conditions 
for performing the analysis require greater specificity (e.g., wind 
speed and direction inclusion, turbulence intensity criteria value) or 
if turbulence model and mesh deformation should be required, rather 
than ``if applicable,'' for all CFD analysis.\178\ The agencies welcome 
comment on the proposed revisions.
---------------------------------------------------------------------------

    \178\ 40 CFR 1037.531 ``Computational fluid dynamics (CFD)''.
---------------------------------------------------------------------------

    In Phase 1, we adopted interim provisions in 40 CFR 1037.150(k) 
that accounted for coastdown measurement variability by allowing a 
compliance demonstration based on in-use test results if the drag area 
was at or below the maximum drag area allowed for the bin above the bin 
to which the vehicle was certified. Since adoption of Phase 1, EPA has 
conducted in-use aerodynamic testing and found that uncertainty 
associated with coastdown testing is less than anticipated.\179\ In 
addition, we are proposing additional enhancements in the Phase 2 
coastdown procedures to continue to reduce the variability of coastdown 
results, including the impact of environmental conditions. Therefore, 
we are proposing to sunset the provision in 40 CFR 1037.150(k) at the 
end of the Phase 1 program (after the 2020 model year). We request 
comment on whether or not we should factor in a test variability 
compliance margin into the aerodynamic test procedure, and therefore 
request data on aerodynamic test variability.
---------------------------------------------------------------------------

    \179\ Southwest Research Institute. ``Heavy Duty Class 8 Truck 
Coastdown and Constant Speed Testing.'' April 2015.
---------------------------------------------------------------------------

(ii) Wind Averaged Drag
    In Phase 1, EPA and NHTSA recognized that wind conditions, most 
notably wind direction, have a greater impact on real world 
CO2 emissions and fuel consumption of heavy-duty trucks than 
of light-duty vehicles.\180\ As noted in the NAS report, the wind 
average drag coefficient is about 15 percent higher than the zero 
degree coefficient of drag.\181\ In addition, the agencies received 
comments in Phase 1 that supported the use of wind averaged drag 
results for the aerodynamic determination. The agencies considered 
adopting the use of a wind averaged drag coefficient in the Phase 1 
regulatory program, but ultimately decided to finalize drag values 
which represent zero yaw (i.e., representing wind from directly in 
front of the vehicle, not from the side) instead. We took this approach 
recognizing that the reference method is coastdown testing and it is 
not capable of determining wind averaged yaw.\182\ Wind tunnels and CFD 
are currently the only tools to accurately assess the influence of wind 
speed and direction on a truck's aerodynamic performance. The agencies 
recognized, as NAS did, that the results of using the zero yaw approach 
may result in fuel consumption predictions that are offset slightly 
from real world performance levels, not unlike the offset we see today 
between fuel economy test results in the CAFE program and actual fuel 
economy performance observed in-use.
---------------------------------------------------------------------------

    \180\ See 2010 NAS Report, page 95
    \181\ See 2010 NAS Report, Finding 2-4 on page 39. Also see 2014 
NAS Report, Recommendation 3.5.
    \182\ See 2010 NAS Report. Page 95.
---------------------------------------------------------------------------

    As the tractor manufacturers continue to refine the aerodynamics of 
tractors, we believe that continuing the zero yaw approach into Phase 2 
could potentially impact the overall technology effectiveness or change 
the kinds of technology decisions made by the tractor manufacturers in 
developing equipment to meet our proposed HD Phase 2 standards. 
Therefore, we are proposing aerodynamic test procedures that take into 
account the wind averaged drag performance of tractors. The agencies 
propose to account for this change in aerodynamic test procedure by 
appropriately adjusting the aerodynamic bins to reflect a wind averaged 
drag result instead of a zero yaw result.
    The agencies propose that beginning in 2021 MY, the manufacturers 
would be required to adjust their CdA values to represent a zero yaw 
value from coastdown and add the CdA impact of the wind averaged drag. 
The impact of wind averaged drag relative to a zero yaw condition can 
only be measured in a wind tunnel or with CFD. We welcome data 
evaluating the consistency of wind averaged drag measurements between 
wind tunnel, CFD, and other potential methods such as constant speed or 
coastdown. The agencies propose that manufacturers would use the 
following equation to make the necessary adjustments to a coastdown 
result to obtain the CdAwad value:

CdAwad = CdAzero,coastdown + 
(CdAwad,wind tunnel-CdAzero,wind tunnel) * 
Falt-aero

    If the manufacturer has a wind averaged CdA value from either a 
wind tunnel or CFD, then we propose they

[[Page 40245]]

would use the following equation to obtain the CdAwad value:

CdAwad = CdAwad,wind tunnel or CFD * 
Falt-aero

    We welcome comment on whether the wind averaged drag should be 
determined using a full yaw sweep as specified in Appendix A of the 
Society of Automotive Engineers (SAE) recommended practice number J1252 
``SAE Wind Tunnel Test Procedure for Trucks and Buses'' (e.g., zero 
degree yaw and a six other yaw angles at increments of 3 degrees or 
greater) or a subset of specific angles as currently allowed in the 
Phase 1 regulations.\183\
---------------------------------------------------------------------------

    \183\ Proposed 40 CFR 1037.525(d)(2); ``Yaw Sweep Corrections''.
---------------------------------------------------------------------------

    To reduce the testing burden the agencies propose that 
manufacturers have the option of determining the offset between zero 
yaw and wind averaged yaw either through testing or by using the EPA-
defined default offset. Details regarding the determination of the 
offset are included in the draft RIA Chapter 3.2. We propose the 
manufacturers would use the following equation if they had a zero yaw 
coastdown value and choose not to conduct wind averaged measurements.

CdAwad = CdAzero,coastdown + 0.80

    In addition, we propose the manufacturers would use the following 
equation if they had a zero yaw wind tunnel or CFD value and choose not 
to conduct wind averaged measurements.

CdAwad = (CdAzero,wind tunnel or CFD * 
Falt-aero)+0.80
    We welcome comments on all aspects of the proposed wind averaged 
drag provisions.
(iii) Standard Trailer Definition
    Similar to the approach the agencies adopted in Phase 1, NHTSA and 
EPA are proposing provisions such that the tractor performance in GEM 
is judged assuming the tractor is pulling a standardized trailer.\184\ 
The agencies believe that an assessment of the tractor fuel consumption 
and CO2 emissions should be conducted using a tractor-
trailer combination, as tractors are invariably used in combination 
with trailers and this is their essential commercial purpose. Trailers, 
of course, also influence the extent of carbon emissions from the 
tractor (and vice-versa). We believe that using a standardized trailer 
best reflects the impact of the overall weight of the tractor-trailer 
and the aerodynamic technologies in actual use, and consequent real-
world performance, where tractors are designed and used with a trailer. 
EPA research confirms what one would intuit: tractor-trailer pairings 
are almost always optimized. EPA conducted an evaluation of over 4,000 
tractor-trailer combinations using live traffic cameras in 2010.\185\ 
The results showed that approximately 95 percent of the tractors were 
matched with the standard trailer specified (high roof tractor with box 
trailer, mid roof tractor with tanker trailer, and low roof with 
flatbed trailer). Therefore, the agencies propose that Phase 2 GEM 
continue to use a predefined typical trailer defined in Phase 1 in 
assessing overall performance for test purposes. As such, the high roof 
tractors would be paired with a standard box trailer; the mid roof 
tractors would be paired with a tanker trailer; and the low roof 
tractors would be paired with a flatbed trailer.
---------------------------------------------------------------------------

    \184\ See 40 CFR 1037.501(g).
    \185\ See Memo to Docket, Amy Kopin. ``Truck and Trailer Roof 
Match Analysis.'' August 2010.
---------------------------------------------------------------------------

    However, the agencies are proposing to change the definition of the 
standard box trailer used by tractor manufacturers to determine the 
aerodynamic performance of high roof tractors in Phase 2. We believe 
this is necessary to reflect the aerodynamic improvements experienced 
by the trailer fleet over the last several years due to influences from 
the California Air Resources Board mandate \186\ and EPA's SmartWay 
Transport Partnership. The standard box trailer used in Phase 1 to 
assess the aerodynamic performance of high roof tractors is a 53 foot 
box trailer without any aerodynamic devices. In the development of 
Phase 2, the agencies evaluated the increase in adoption rates of 
trailer side skirts and boat tails in the market over the last several 
years and have seen a marked increase. We estimate that approximately 
50 percent of the new trailers sold in 2018 will have trailer side 
skirts.187 188 As the agencies look towards the proposed 
standards in the 2021 and beyond timeframe, we believe that it is 
appropriate to update the standard box trailer definition. In 2021-
2027, we believe the trailer fleet will be a mix of trailers with no 
aerodynamics, trailers with skirts, and trailers with advanced aero; 
with the advanced aero being a very limited subset of the new trailers 
sold each year. Consequently, overall, we believe a trailer with a 
skirt will be the most representative of the trailer fleet for the 
duration of the regulation timeframe, and plausibly beyond. Therefore, 
we are proposing that the standard box trailer in Phase 2--the trailer 
assumed during the certification process to be paired with a high roof 
tractor--be updated to include a trailer skirt starting in 2021 model 
year. Even though the agencies are proposing new box trailer standards 
beginning in 2018 MY, we are not proposing to update the standard 
trailer in the tractor certification process until 2021 MY, to align 
with the new tractor standards. If we were to revise the standardized 
trailer definition for Phase 1, then we would need to revise the Phase 
1 tractor standards. The details of the trailer skirt definition are 
included in 40 CFR 1037.501(g)(1).
---------------------------------------------------------------------------

    \186\ California Air Resources Board. Tractor-Trailer Greenhouse 
Gas regulation. Last viewed on September 4, 2014 at http://www.arb.ca.gov/msprog/truckstop/trailers/trailers.htm.
    \187\ Ben Sharpe (ICCT) and Mike Roeth (North American Council 
for Freight Efficiency), ``Costs and Adoption Rates of Fuel-Saving 
Technologies for Trailer in the North American On-Road Freight 
Sector'', Feb 2014.
    \188\ Frost & Sullivan, ``Strategic Analysis of North American 
Semi-trailer Advanced Technology Market'', Feb 2013.
---------------------------------------------------------------------------

    EPA has conducted extensive aerodynamic testing to quantify the 
impact on the coefficient of drag of a high roof tractor due to the 
addition of a trailer skirt. Details of the test program and the 
results can be found in the draft RIA Chapter 3.2. The results of the 
test program indicate that on average, the impact of a trailer skirt 
matching the definition of the skirt specified in 40 CFR 1037.501(g)(1) 
is approximately 8 percent improvement in coefficient of drag area. 
This off-set was used during the development of the Phase 2 aerodynamic 
bins.
    We seek comment on our proposed HD Phase 2 standard trailer 
configuration. We also welcome comments on suggestions on alternative 
ways to define the standard trailer, such as developing a certified 
computer aided drawing (CAD) model.
(iv) Aerodynamic Bins
    The agencies are proposing to continue the approach where the 
manufacturer would determine a tractor's aerodynamic drag force through 
testing, determine the appropriate predefined aerodynamic bin, and then 
input the predefined CdA value for that bin into the GEM. The agencies 
proposed Phase 2 aerodynamic bins reflect three changes to the Phase 1 
bins--the incorporation of wind averaged drag, the addition of trailer 
skirts to the standard box trailer used to determine the aerodynamic 
performance of high roof tractors, and the addition of bins to reflect 
the continued improvement of tractor aerodynamics in the future. 
Because of each of these changes, the aerodynamic bins proposed for 
Phase 2 are not directly comparable to the Phase 1 bins.
    HD Phase 1 included five aerodynamic bins to cover the spectrum of 
aerodynamic performance of high

[[Page 40246]]

roof tractors. Since the development of the Phase 1 rules, the 
manufacturers have continued to invest in aerodynamic improvements for 
tractors. This continued evolution of aerodynamic performance, both in 
production and in the research stage as part of the SuperTruck program, 
has consequently led the agencies to propose two additional aerodynamic 
technology bins (Bins VI and VII) for high roof tractors. These two new 
bins would further segment the Phase 1 aerodynamic Bin V to recognize 
the difference in advanced aerodynamic technologies and designs.
    In both HD Phase 1 and as proposed by the agencies in Phase 2, 
aerodynamic Bin I through Bin V represent tractors sharing similar 
levels of technology. The first high roof aerodynamic category, Bin I, 
is designed to represent tractor bodies which prioritize appearance or 
special duty capabilities over aerodynamics. These Bin I tractors 
incorporate few, if any, aerodynamic features and may have several 
features that detract from aerodynamics, such as bug deflectors, custom 
sunshades, B-pillar exhaust stacks, and others. The second high roof 
aerodynamics category is Bin II which roughly represents the 
aerodynamic performance of the average new tractor sold in 2010. The 
agencies developed this bin to incorporate conventional tractors which 
capitalize on a generally aerodynamic shape and avoid classic features 
which increase drag. High roof tractors within Bin III build on the 
basic aerodynamics of Bin II tractors with added components to reduce 
drag in the most significant areas on the tractor, such as integral 
roof fairings, side extending gap reducers, fuel tank fairings, and 
streamlined grill/hood/mirrors/bumpers, similar to 2013 model year 
SmartWay tractors. The Bin IV aerodynamic category for high roof 
tractors builds upon the Bin III tractor body with additional 
aerodynamic treatments such as underbody airflow treatment, down 
exhaust, and lowered ride height, among other technologies. HD Phase 1 
Bin V tractors incorporate advanced technologies which are currently in 
the prototype stage of development, such as advanced gap reduction, 
rearview cameras to replace mirrors, wheel system streamlining, and 
advanced body designs. For HD Phase 2, the agencies propose to segment 
the aerodynamic performance of these advanced technologies into Bins V 
through VII.
    In Phase 1, the agencies adopted only two aerodynamic bins for low 
and mid roof tractors. The agencies limited the number of bins to 
reflect the actual range of aerodynamic technologies effective in low 
and mid roof tractor applications. High roof tractors are consistently 
paired with box trailer designs, and therefore manufacturers can design 
the tractor aerodynamics as a tractor-trailer unit and target specific 
areas like the gap between the tractor and trailer. In addition, the 
high roof tractors tend to spend more time at high speed operation 
which increases the impact of aerodynamics on fuel consumption and GHG 
emissions. On the other hand, low and mid roof tractors are designed to 
pull variable trailer loads and shapes. They may pull trailers such as 
flat bed, low boy, tankers, or bulk carriers. The loads on flat bed 
trailers can range from rectangular cartons with tarps, to a single 
roll of steel, to a front loader. Due to these variables, manufacturers 
do not design unique low and mid roof tractor aerodynamics but instead 
use derivatives from their high roof tractor designs. The aerodynamic 
improvements to the bumper, hood, windshield, mirrors, and doors are 
developed for the high roof tractor application and then carried over 
into the low and mid roof applications. As mentioned above, the types 
of designs that would move high roof tractors from a Bin III to Bins IV 
through VII include features such as gap reducers and integral roof 
fairings which would not be appropriate on low and mid roof tractors.
    As Phase 2 looks to further improve the aerodynamics for high roof 
sleeper cabs, we believe it is also appropriate to expand the number of 
bins for low and mid roof tractors too. For Phase 2, the agencies are 
proposing to differentiate the aerodynamic performance for low and mid 
roof applications with four bins, instead of two, in response to 
feedback received from manufacturers of low and mid roof tractors 
related to the limited opportunity to incorporate aerodynamic 
technologies in their compliance plan. We propose that low and mid roof 
tractors may determine the aerodynamic bin based on the aerodynamic bin 
of an equivalent high roof tractor, as shown below in Table III-31.

    Table III-31--Proposed Phase 2 Revisions to 40 CFR 1037.520(b)(3)
------------------------------------------------------------------------
            High roof bin                    Low and mid roof bin
------------------------------------------------------------------------
Bin I                                 Bin I
Bin II                                Bin I
Bin III                               Bin II
Bin IV                                Bin II
Bin V                                 Bin III
Bin VI                                Bin III
Bin VII                               Bin IV
------------------------------------------------------------------------

    The agencies developed new high roof tractor aerodynamic bins for 
Phase 2 that reflect the change from zero yaw to wind averaged drag, 
the more aerodynamic reference trailer, and the addition of two bins. 
Details regarding the derivation of the proposed high roof bins are 
included in Draft RIA Chapter 3.2.8. The proposed high roof tractor 
bins are defined in Table III-32. The proposed revisions to the low and 
mid roof tractor bins reflect the addition of two new aerodynamic bins 
and are listed in Table III-33.

 Table III-32--Proposed Phase 2 Aerodynamic Input Definitions to GEM for
                           High Roof Tractors
------------------------------------------------------------------------
                                     Class 7             Class 8
                                  --------------------------------------
                                     Day cab      Day cab    Sleeper cab
                                  --------------------------------------
                                    High roof    High roof    High roof
------------------------------------------------------------------------
                Aerodynamic Test Results (CdAwad in m\2\)
------------------------------------------------------------------------
Bin I............................        >=7.5        >=7.5        >=7.3
Bin II...........................      6.8-7.4      6.8-7.4      6.6-7.2
Bin III..........................      6.2-6.7      6.2-6.7      6.0-6.5
Bin IV...........................      5.6-6.1      5.6-6.1      5.4-5.9
Bin V............................      5.1-5.5      5.1-5.5      4.9-5.3
Bin VI...........................      4.7-5.0      4.7-5.0      4.5-4.8
Bin VII..........................        <=4.6        <=4.6        <=4.4
------------------------------------------------------------------------

[[Page 40247]]

 
                Aerodynamic Input to GEM (CdAwad in m\2\)
------------------------------------------------------------------------
Bin I............................          7.6          7.6          7.4
Bin II...........................          7.1          7.1          6.9
Bin III..........................          6.5          6.5          6.3
Bin IV...........................          5.8          5.8          5.6
Bin V............................          5.3          5.3          5.1
Bin VI...........................          4.9          4.9          4.7
Bin VII..........................          4.5          4.5          4.3
------------------------------------------------------------------------

        Table III-33--Proposed Phase 2 Aerodynamic Input Definitions to GEM for Low and Mid Roof Tractors
----------------------------------------------------------------------------------------------------------------
                                             Class 7                                Class 8
                                   -----------------------------------------------------------------------------
                                             Day cab                   Day cab                 Sleeper cab
                                   -----------------------------------------------------------------------------
                                      Low roof     Mid roof     Low roof     Mid roof     Low roof     Mid roof
----------------------------------------------------------------------------------------------------------------
                                     Aerodynamic Test Results (CdA in m\2\)
----------------------------------------------------------------------------------------------------------------
Bin I.............................        >=5.1        >=6.5        >=5.1        >=6.5        >=5.1        >=6.5
Bin II............................      4.6-5.0      6.0-6.4      4.6-5.0      6.0-6.4      4.6-5.0      6.0-6.4
Bin III...........................      4.2-4.5      5.6-5.9      4.2-4.5      5.6-5.9      4.2-4.5      5.6-5.9
Bin IV............................        <=4.1        <=5.5        <=4.1        <=5.5        <=4.1        <=5.5
----------------------------------------------------------------------------------------------------------------
                                     Aerodynamic Input to GEM (CdA in m\2\)
----------------------------------------------------------------------------------------------------------------
Bin I.............................          5.3          6.7          5.3          6.7          5.3          6.7
Bin II............................          4.8          6.2          4.8          6.2          4.8          6.2
Bin III...........................          4.3          5.7          4.3          5.7          4.3          5.7
Bin IV............................          4.0          5.4          4.0          5.4          4.0          5.4
----------------------------------------------------------------------------------------------------------------

(b) Road Grade in the Drive Cycles
    Road grade can have a significant impact on the overall fuel 
economy of a heavy-duty vehicle. Table III-34 shows the results from a 
real world evaluation of heavy-duty tractor-trailers conducted by Oak 
Ridge National Lab.\189\ The study found that the impact of a mild 
upslope of one to four percent led to a decrease in average fuel 
economy from 7.33 mpg to 4.35 mpg. These results are as expected 
because vehicles consume more fuel while driving on an upslope than 
driving on a flat road because the vehicle needs to exert additional 
power to overcome the grade resistance force.\190\ The amount of extra 
fuel increases with increases in road gradient. On downgrades, vehicles 
consume less fuel than on a flat road. However, as shown in the fuel 
consumption results in Table III-34, the amount of increase in fuel 
consumption on an upslope is greater than the amount of decrease in 
fuel consumption on a downslope which leads to a net increase in fuel 
consumption. As an example, the data shows that a vehicle would use 0.3 
gallons per mile more fuel in a severe upslope than on flat terrain, 
but only save 0.1 gallons of fuel per mile on a severe downslope. In 
another study, Southwest Research Institute modeling found that the 
addition of road grade to a drive cycle has an 8 to 10 percent negative 
impact on fuel economy.\191\
---------------------------------------------------------------------------

    \189\ Oakridge National Laboratory. Transportation Energy Book, 
Edition 33. Table 5.10 Effect of Terrain on Class 8 Truck Fuel 
Economy. 2014. Last accessed on September 19, 2014 at http://cta.ornl.gov/data/Chapter5.shtml.
    \190\ Ibid.
    \191\ Reinhart, T. (2015). Commercial Medium- and Heavy-Duty 
(MD/HD) Truck Fuel Efficiency Technology Study--Report #2. 
Washington, DC: National Highway Traffic Safety Administration.

          Table III-34--Fuel Consumption Relative to Road Grade
------------------------------------------------------------------------
                                  Average fuel          Average fuel
       Type of terrain         economy  (miles per       consumption
                                     gallon)         (gallons per mile)
------------------------------------------------------------------------
Severe upslope (>4%)........                  2.90                  0.34
Mild upslope (1% to 4%).....                  4.35                  0.23
Flat terrain (1% to 1%).....                  7.33                  0.14
Mild downslope (-4% to -1%).                 15.11                  0.07
Severe downslope (<-4%).....                 23.50                  0.04
------------------------------------------------------------------------

[[Page 40248]]

    In Phase 1, the agencies did not include road grade. However, we 
believe it is important to propose including road grade in Phase 2 to 
properly assess the value of technologies, such as downspeeding and the 
integration of the engine and transmission, which were not technologies 
included in the technology basis for Phase 1 and are not directly 
assessed by GEM in its Phase 1 iteration. The addition of road grade to 
the drive cycles would be consistent with the NAS recommendation in the 
2014 Phase 2 First Report.\192\
---------------------------------------------------------------------------

    \192\ National Academy of Science. ``Reducing the Fuel 
Consumption and GHG Emissions of Medium- and Heavy-Duty Vehicles, 
Phase Two, First Report.'' 2014. Recommendation S.3 (3.6).
---------------------------------------------------------------------------

    The U.S. Department of Energy and EPA have partnered to support a 
project aimed at evaluating, refining and/or developing the appropriate 
road grade profiles for the 55 mph and 65 mph highway cruise duty 
cycles that would be used in the certification of heavy-duty vehicles 
to the Phase 2 GHG emission and fuel efficiency standards. The National 
Renewable Energy Laboratory (NREL) was contracted to do this work and 
has since developed two pairs of candidate, activity-weighted road 
grade profiles representative of U.S. limited-access highways. To this 
end, NREL used high-accuracy road grade data and county-specific 
vehicle miles traveled data. One pair of the profiles is representative 
of the nation's limited-access highways with 55 and 60 mph speed 
limits, and another is representative of such highways with speed 
limits of 65 to 75 mph. The profiles are distance-based and cover a 
maximum distance of 12 and 15 miles, respectively. A report documenting 
this NREL work is in the public docket for these proposed rules, and 
comments are requested on the recommendations therein.\193\ In addition 
to NREL work, the agencies have independently developed yet another 
candidate road grade profile for use in the 55 mph and 65 mph highway 
cruise duty cycles. While based on the same road grade database 
generated by NREL for U.S. restricted-access highways, its design is 
predicated on a different approach. The development of this profile is 
documented in the memorandum to the docket.\194\ The agencies have 
evaluated all of the candidate road grade profiles and have prepared 
possible alternative tractor standards based on these profiles. The 
agencies request comment on this analysis, which is available in a 
memorandum to the docket.\195\
---------------------------------------------------------------------------

    \193\ See NREL Report ``EPA Road Grade profiles'' for DOE-EPA 
Interagency Agreement to Refine Drive Cycles for GHG Certification 
of Medium- and Heavy-Duty Vehicles, IA Number DW-89-92402501.
    \194\ Memorandum dated April 2015 on Possible Tractor, Trailer, 
and Vocational Vehicle Standards Derived from Alternative Road Grade 
Profiles.
    \195\ Ibid.
---------------------------------------------------------------------------

    For the proposal, the agencies developed an interim road grade 
profile for development of the proposed standards. The agencies are 
proposing the inclusion of an interim road grade profile, as shown 
below in Figure III-2, in both the 55 mph and 65 mph cycles. The grade 
profile was developed by Southwest Research Institute on a 12.5 mile 
stretch of restricted-access highway during on-road tests conducted for 
EPA's validation of the Phase 2 version of GEM.\196\ The minimum grade 
in the interim cycle is -2.1 percent and the maximum grade is 2.4 
percent. The cycle spends 30 percent of the distance in grades of +/- 
0.5 percent. Overall, the cycle spends approximately 50 percent of the 
time in relatively flat terrain with road gradients of less than 1 
percent.
---------------------------------------------------------------------------

    \196\ Southwest Research Institute. ``GEM Validation'', 
Technical Research Workshop supporting EPA and NHTSA Phase 2 
Standards for MD/HD Greenhouse Gas and Fuel Efficiency--December 10 
and 11, 2014. Can be accessed at http://www.epa.gov/otaq/climate/regs-heavy-duty.htm.
---------------------------------------------------------------------------

    The agencies believe the interim cycle has sufficient 
representativeness based on a comparison to data from the Department of 
Transportation used in the development of the light-duty Federal Test 
Procedure cycle (FTP), which found approximately 55 percent of the 
vehicle miles traveled were on road gradients of less than 1 
percent.\197\ Consequently, we expect that road grade profiles 
developed by NREL and by the agencies will not differ significantly 
from the interim profile proposed here. The agencies request data from 
fleet operators or others that have real world grade profile data.
---------------------------------------------------------------------------

    \197\ U.S. EPA. FTP Preliminary Report. May 14, 1993. Table 5-1, 
page 76. EPA-420-R-93-007.
[GRAPHIC] [TIFF OMITTED] TP13JY15.003

(c) Weight Reduction
    In Phase 1, the agencies adopted regulations that provided 
manufacturers with the ability to use GEM to measure emission reduction 
and reductions in fuel consumption resulting from use of high strength 
steel and aluminum components for weight reduction,, and to do so 
without the burden of entering the curb weight of every tractor 
produced. We treated such weight reduction in two ways in Phase 1 to 
account for the fact that combination tractor-trailers weigh-out 
approximately one-third of the time and cube-out approximately two-
thirds of the time. Therefore, one-third of the weight reduction is 
added payload in the denominator while two-thirds of the weight 
reduction is subtracted from the overall weight of the vehicle in GEM. 
See 76 FR 57153. The agencies also allowed manufacturers to petition 
for off-cycle credits for components not measured in GEM.
    NHTSA and EPA propose carrying the Phase 1 treatment of weight 
reduction into Phase 2. That is, these types of weight reduction, 
although not part of the agencies' technology packages for

[[Page 40249]]

the proposed (or alternative) standards, can still be recognized in GEM 
up to a point. In addition, the agencies propose to add additional 
thermoplastic components to the weight reduction table, as shown below 
in Table III-35. The thermoplastic component weight reduction values 
were developed in coordination with SABIC, a thermoplastic component 
supplier. Also, in Phase 2, we are proposing to recognize the potential 
weight reduction opportunities in the powertrain and drivetrain systems 
as part of the vehicle inputs into GEM. Therefore, we believe it is 
appropriate to also recognize the weight reduction associated with both 
smaller engines and 6x2 axles.\198\ We propose including the values 
listed in Table III-36 and make them available upon promulgation of the 
final Phase 2 rules (i.e., available even under Phase 1). We welcome 
comments on all aspects of weight reduction.
---------------------------------------------------------------------------

    \198\ North American Council for Freight Efficiency. 
``Confidence Findings on the Potential of 6x2 Axles.'' 2014. Page 
16.

                    Table III-35--Proposed Phase 2 Weight Reduction Technologies for Tractors
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
                               Weight reduction technology                                    Weight reduction
                                                                                             (lb per tire/wheel)
----------------------------------------------------------------------------------------------------------------
Single Wide Drive Tire with.....................  Steel Wheel............................                     84
                                                  Aluminum Wheel.........................                    139
                                                  Light Weight Aluminum Wheel............                    147
Steer Tire or Dual Wide Drive Tire with.........  High Strength Steel Wheel..............                      8
                                                  Aluminum Wheel.........................                     21
                                                  Light Weight Aluminum Wheel............                     30
----------------------------------------------------------------------------------------------------------------

 
                                                                   Aluminum      High strength    Thermoplastic
                                                                    weight        steel weight        weight
                Weight reduction technologies                     reduction        reduction        reduction
                                                                    (lb.)            (lb.)            (lb.)
----------------------------------------------------------------------------------------------------------------
Door (per door)..............................................               20                6  ...............
Roof (per vehicle)...........................................               60               18  ...............
Cab rear wall (per vehicle)..................................               49               16  ...............
Cab floor (per vehicle)......................................               56               18  ...............
Hood (per vehicle)...........................................               55               17  ...............
Hood Support Structure (per vehicle).........................               15                3  ...............
Hood and Front Fender (per vehicle)..........................  ...............  ...............               65
Day Cab Roof Fairing (per vehicle)...........................  ...............  ...............               18
Sleeper Cab Roof Fairing (per vehicle).......................               75               20               40
Aerodynamic Side Extender (per vehicle)......................  ...............  ...............               10
Fairing Support Structure (per vehicle)......................               35                6  ...............
Instrument Panel Support Structure (per vehicle).............                5                1  ...............
Brake Drums--Drive (per 4)...................................              140               11  ...............
Brake Drums--Non Drive (per 2)...............................               60                8  ...............
Frame Rails (per vehicle)....................................              440               87  ...............
Crossmember--Cab (per vehicle)...............................               15                5  ...............
Crossmember--Suspension (per vehicle)........................               25                6  ...............
Crossmember--Non Suspension ( per 3).........................               15                5  ...............
Fifth Wheel (per vehicle)....................................              100               25  ...............
Radiator Support (per vehicle)...............................               20                6  ...............
Fuel Tank Support Structure (per vehicle)....................               40               12  ...............
Steps (per vehicle)..........................................               35                6  ...............
Bumper (per vehicle).........................................               33               10  ...............
Shackles (per vehicle).......................................               10                3  ...............
Front Axle (per vehicle).....................................               60               15  ...............
Suspension Brackets, Hangers (per vehicle)...................              100               30  ...............
Transmission Case (per vehicle)..............................               50               12  ...............
Clutch Housing (per vehicle).................................               40               10  ...............
Drive Axle Hubs (per 4)......................................               80               20  ...............
Non Drive Front Hubs (per 2).................................               40                5  ...............
Driveshaft (per vehicle).....................................               20                5  ...............
Transmission/Clutch Shift Levers (per vehicle)...............               20                4  ...............
----------------------------------------------------------------------------------------------------------------

    Table III-36--Proposed Phase 2 Weight Reduction Values for Other
                               Components
------------------------------------------------------------------------
                                                      Weight reduction
            Weight reduction technology                     (lb)
------------------------------------------------------------------------
6x2 axle configuration in tractors................                   300
4x2 axle configuration in Class 8 tractors........                   300
Tractor engine with displacement less than 14.0L..              \199\300
CI Liquified Natural Gas tractor..................       \200\ \201\-600
SI Compressed Natural Gas tractor.................                  -525

[[Page 40250]]

 
CI Compressed Natural Gas tractor.................                  -900
------------------------------------------------------------------------

(d) GEM Inputs
---------------------------------------------------------------------------

    \199\ Kenworth. ``Kenworth T680 with PACCAR MX-13 Engine Lowers 
Costs for Oregon Open-Deck Carrier.'' Last viewed on December 16, 
2014 at http://www.kenworth.com/news/news-releases/2013/december/t680-cotc.aspx.
    \200\ National Energy Policy Institute. ``What Set of Conditions 
Would Make the Business Case to Convert Heavy Trucks to Natural 
Gas?--A Case Study.'' May 1, 2012. Last accessed on December 15, 
2014 at http://www.tagnaturalgasinfo.com/uploads/1/2/2/3/12232668/natural_gas_for_heavy_trucks.pdf.
    \201\ Westport presentation (2013). Last accessed on December 
15, 2014 at http://www.westport.com/file_library/files/webinar/2013-06-19_CNGandLNG.pdf.
---------------------------------------------------------------------------

    The agencies propose to continue to require the Phase 1 GEM inputs 
for tractors in Phase 2. These inputs include the following:
     Steer tire rolling resistance,
     Drive tire rolling resistance,
     Coefficient of Drag Area,
     Idle Reduction, and
     Vehicle Speed Limiter.
    As discussed above in Section II.C and III.D, there are several 
additional inputs that are proposed for Phase 2. The new GEM inputs 
proposed for Phase 2 include the following:
     Engine information including manufacturer, model, 
combustion type, fuel type, family name, and calibration identification
     Engine fuel map,
     Engine full-load torque curve,
     Engine motoring curve,
     Transmission information including manufacturer and model
     Transmission type,
     Transmission gear ratios,
     Drive axle ratio,
     Loaded tire radius for drive tires, and
     Other technology inputs.
    The agencies welcome comments on the inclusion of these proposed 
technologies into GEM in Phase 2.
(e) Vehicle Speed Limiters and Extended Idle Provisions
    The agencies received comments during the development of Phase 1 
that the Clean Air Act provisions to prevent tampering (CAA section 
203(a)(3)(A); 42 U.S.C. 7522(a)(3)(A)) of vehicle speed limiters and 
extended idle reduction technologies would prohibit their use for 
demonstrating compliance with the Phase 1 standards. In Phase 1, the 
agencies adopted provisions to allow for discounted credits for idle 
reduction technologies that allowed for override conditions and 
expiring engine shutdown systems (see 40 CFR 1037.660). Similarly, the 
agencies adopted provisions to allow for ``soft top'' speeds and 
expiring vehicle speed limiters, and we are not proposing to change 
those provisions (see 40 CFR 1037.640). However, as we develop Phase 2, 
we understand that the concerns still exist that the ability for a 
tractor manufacturer to reflect the use of a VSL in its compliance 
determination may be constrained by the demand for flexibility in the 
use of VSLs by the customers. . The agencies welcome suggestions on how 
to close the gap between the provisions that would be acceptable to the 
industry while maintaining our need to ensure that modifications do not 
violate 42 U.S.C. 7522(a)(3)(A). We request comment on potential 
approaches which would enable feedback mechanism between the vehicle 
owner/fleet that would provide the agencies the assurance that the 
benefits of the VSLs will be seen in use but which also provides the 
vehicle owner/fleet the flexibility they many need during in-use 
operation. More generally in our discussions with several trucking 
fleets and with the American Trucking Associations an interest was 
expressed by the fleets if there was a means by which they could 
participate in the emissions credit transactions which is currently 
limited to the directly regulated truck manufacturers. VSLs and 
extended idle systems were two example technologies that fleets and 
individual owners can order for a new build truck, and that from the 
fleet's perspective the truck manufacturers receive emission credits 
for. The agencies do not have a specific proposal or a position on the 
request from the American Trucking Association and its members, but we 
request comment on whether or not it is appropriate to allow owners to 
participate in the overall compliance process for the directly 
regulated parties, if such a thing is allowed under the two agencies' 
respective statutes, and what regulatory provisions would be needed to 
incorporate such an approach.
(f) Emission Control Labels
    The agencies consider it crucial that authorized compliance 
inspectors are able to identify whether a vehicle is certified, and if 
so whether it is in its certified condition. To facilitate this 
identification in Phase 1, EPA adopted labeling provisions for tractors 
that included several items. The Phase 1 tractor label must include the 
manufacturer, vehicle identifier such as the Vehicle Identification 
Number (VIN), vehicle family, regulatory subcategory, date of 
manufacture, compliance statements, and emission control system 
identifiers (see 40 CFR 1037.135). In Phase 1, the emission control 
system identifiers are limited to vehicle speed limiters, idle 
reduction technology, tire rolling resistance, some aerodynamic 
components, and other innovative and advanced technologies.
    The number of proposed emission control systems for greenhouse gas 
emissions in Phase 2 has increased significantly. For example, the 
engine, transmission, drive axle ratio, accessories, tire radius, wind 
averaged drag, predictive cruise control, and automatic tire inflation 
system are controls which can be evaluated on-cycle in Phase 2 (i.e. 
these technologies' performance can now be input to GEM), but could not 
be in Phase 1. Due to the complexity in determining greenhouse gas 
emissions as proposed in Phase 2, the agencies do not believe that we 
can unambiguously determine whether or not a vehicle is in a certified 
condition through simply comparing information that could be made 
available on an emission control label with the components installed on 
a vehicle. Therefore, EPA proposes to remove the requirement to include 
the emission control system identifiers required in 40 CFR 
1037.135(c)(6) and in Appendix III to 40 CFR part 1037 from the 
emission control labels for vehicles certified to the Phase 2 
standards. However, the agencies may finalize requirements to maintain 
some label content to facilitate a limited visual inspection of key 
vehicle parameters that can be readily observed. Such requirements may 
be very similar to the labeling requirements from the Phase 1 
rulemaking, though we would want to more carefully consider the list of 
technologies that would allow for the most effective inspection. We 
request comment on an appropriate list of candidate technologies that 
would properly balance the need to limit label content with the 
interest in providing the most useful information for inspectors to 
confirm that vehicles have been properly built. We are not proposing to 
modify the existing emission control labels for tractors certified for 
MYs 2014-2020 (Phase 1) CO2 standards.
    Under the agencies' existing authorities, manufacturers must 
provide detailed build information for a specific vehicle upon our 
request. Our expectation is that this information should be available 
to us via email or other similar electronic communication

[[Page 40251]]

on a same-day basis, or within 24 hours of a request at most. We 
request comment on any practical limitations in promptly providing this 
information. We also request comment on approaches that would minimize 
burden for manufacturers to respond to requests for vehicle build 
information and would expedite an authorized compliance inspector's 
visual inspection. For example, the agencies have started to explore 
ideas that would provide inspectors with an electronic method to 
identify vehicles and access on-line databases that would list all of 
the engine-specific and vehicle-specific emissions control system 
information. We believe that electronic and Internet technology exists 
today for using scan tools to read a bar code or radio frequency 
identification tag affixed to a vehicle that would then lead to secure 
on-line access to a database of manufacturers' detailed vehicle and 
engine build information. Our exploratory work on these ideas has 
raised questions about the level of effort that would be required to 
develop, implement and maintain an information technology system to 
provide inspectors real-time access to this information. We have also 
considered questions about privacy and data security. We request 
comment on the concept of electronic labels and database access, 
including any available information on similar systems that exist today 
and on burden estimates and approaches that could address concerns 
about privacy and data security. Based on new information that we 
receive, we may consider initiating a separate rulemaking effort to 
propose and request comment on implementing such an approach.
(g) End of Year Reports
    In the Phase 1 program, manufacturers participating in the ABT 
program provided 90 day and 270 day reports to EPA and NHTSA after the 
end of the model year. The agencies adopted two reports for the initial 
program to help manufacturers become familiar with the reporting 
process. For the HD Phase 2 program, the agencies propose to simplify 
reporting such that manufacturers would only be required to submit the 
final report 90 days after the end of the model year with the potential 
to obtain approval for a delay up to 30 days. We are accordingly 
proposing to eliminate the end of year report, which represents a 
preliminary set of ABT figures for the preceding year. We welcome 
comment on this proposed revision.
(h) Special Compliance Provisions
    In Phase 2, the agencies propose to consider the performance of the 
engine, transmission, and drivetrain in determining compliance with the 
Phase 2 tractor standards. With the inclusion of the engine's 
performance in the vehicle compliance, EPA proposes to modify the 
prohibition to introducing into U.S. commerce a tractor containing an 
engine not certified for use in tractor (see proposed 40 CFR 
1037.601(a)(1)). In Phase 2, we no longer see the need to prohibit the 
use of vocational engines in tractors because the performance of the 
engine would be appropriately reflected in GEM. We welcome comment on 
removing this prohibition.
    The agencies also propose to change the compliance process for 
manufacturers seeking to use the off-road exclusion. During the Phase 1 
program, manufacturers realized that contacting the agencies in advance 
of the model year was necessary to determine whether vehicles would 
qualify for exemption and need approved certificates of conformity. The 
agencies found that the petition process allowed at the end of the 
model year was not necessary and that an informal approval during the 
precertification period was more effective. Therefore, NHTSA is 
proposing to remove its off-road petitioning process in 49 CFR 535.8 
and EPA is proposing to add requirements for informal approvals in 40 
CFR 1037.610.
(i) Chassis Dynamometer Testing Requirement
    The agencies foresee the need to continue to track the progress of 
the Phase 2 program throughout its implementation. As discussed in 
Section II, the agencies expect to evaluate the overall performance of 
tractors with the GEM results provided by manufacturers through the end 
of year reports. However, we also need to continue to have confidence 
in our simulation tool, GEM, as the vehicle technologies continue to 
evolve. Therefore, EPA proposes that the manufacturers conduct annual 
chassis dynamometer testing of three sleeper cabs tractor and two day 
cab tractor and provide the data and the GEM result from each of these 
two tractor configurations to EPA (see 40 CFR 1037.665). We request 
comment on the costs and efficacy of this data submission requirement. 
We emphasize that this program would not be used for compliance or 
enforcement purposes.

F. Flexibility Provisions

    EPA and NHTSA are proposing two flexibility provisions specifically 
for heavy-duty tractor manufacturers in Phase 2. These are an 
averaging, banking and trading program for CO2 emissions and 
fuel consumption credits, as well as provisions for credits for off-
cycle technologies which are not included as inputs to the GEM. Credits 
generated under these provisions can only be used within the same 
averaging set which generated the credit.
    The agencies are also proposing to remove or modify several Phase 1 
interim provisions, as described below.
(1) Averaging, Banking, and Trading (ABT) Program
    Averaging, banking, and trading of emission credits have been an 
important part of many EPA mobile source programs under CAA Title II, 
and the NHTSA light-duty CAFE program. The agencies also included this 
flexibility in the HD Phase 1 program. ABT provisions are useful 
because they can help to address many potential issues of technological 
feasibility and lead-time, as well as considerations of cost. They 
provide manufacturers flexibilities that assist in the efficient 
development and implementation of new technologies and therefore enable 
new technologies to be implemented at a more aggressive pace than 
without ABT. A well-designed ABT program can also provide important 
environmental and energy security benefits by increasing the speed at 
which new technologies can be implemented. Between MYs 2013 and 2014 
all four tractor manufacturers are taking advantage of the ABT 
provisions in the Phase 1 program. NHTSA and EPA propose to carry-over 
the Phase 1 ABT provisions for tractors into Phase 2.
    The agencies propose to continue the five year credit life and 
three year deficit carry-over provisions from Phase 1 (40 CFR 
1037.740(c) and 1037.745). Please see additional discussion in Section 
I.C.1.b. Although we are not proposing any additional restrictions on 
the use of Phase 1 credits, we are requesting comment on this issue. 
Early indications suggest that positive market reception to the Phase 1 
technologies could lead to manufacturers accumulating credits surpluses 
that could be quite large at the beginning of the proposed Phase 2 
program. This appears especially likely for tractors. The agencies are 
specifically requesting comment on the likelihood of this happening, 
and whether any regulatory changes would be appropriate. For example, 
should the agencies limit the amount of credits than could be carried

[[Page 40252]]

over from Phase 1 or limit them to the first year or two of the Phase 2 
program? Also, if we determine that large surpluses are likely, how 
should that factor into our decision on the feasibility of more 
stringent standards in MY 2021?
    We welcome comments on these proposed flexibilities and are 
interested in information that may indicate doing as proposed could 
distort the heavy-duty vehicle market.
(2) Off-Cycle Technology Credits
    In Phase 1, the agencies adopted an emissions and fuel consumption 
credit generating opportunity that applied to innovative technologies 
that reduce fuel consumption and CO2 emissions. These 
technologies were required to not be in common use with heavy-duty 
vehicles before the 2010MY and not reflected in the GEM simulation tool 
(i.e., the benefits are ``off-cycle''). See 76 FR 57253. The agencies 
propose to largely continue, but redesignate the Phase 1 innovative 
technology program as part of the off-cycle program for Phase 2. In 
other words, beginning in 2021 MY all technologies that are not fully 
accounted for in the GEM simulation tool, or by compliance dynamometer 
testing could be considered off-cycle, including those technologies 
that may have been considered innovative technologies in Phase 1 of the 
program. The agencies propose to maintain the requirement that, in 
order for a manufacturer to receive credits for Phase 2, the off-cycle 
technology would still need to meet the requirement that it was not in 
common use prior to MY 2010. For additional information on the 
treatment of off-cycle technologies see Section I.C.1.c.
    The agencies are proposing a split process for handling off-cycle 
technologies in Phase 2. First, there is a set of predefined off-cycle 
technologies that are entering the market today, but could be fully-
recognized in our proposed HD Phase 2 certification procedures. 
Examples of such technologies include predictive cruise control, 6x2 
axles, axle lubricants, automated tire inflation systems, and air 
conditioning efficiency improvements. For these technologies, the 
agencies propose to define the effectiveness value of these 
technologies similar to the approach taken in the MY2017-2025 light-
duty rule (see 77 FR 62832-62840 (October 15, 2012)). These default 
effectiveness values could be used as valid inputs to Phase 2 GEM. The 
proposed effectiveness value of each technology is discussed above in 
Section III.D.2.
    The agencies also recognize that there are emerging technologies 
today that are being developed, but would not be accounted for in the 
GEM inputs, therefore would be considered off-cycle. These technologies 
could include systems such as efficient steering systems, cooling fan 
optimization, and further tractor-trailer integration. These off-cycle 
technologies could include known, commercialized technologies if they 
are not yet widely utilized in a particular heavy-duty sector 
subcategory. Any credits for these technologies would need to be based 
on real-world fuel consumption and GHG reductions that can be measured 
with verifiable test methods using representative driving conditions 
typical of the engine or vehicle application.
    The agencies propose that the approval for Phase 1 innovative 
technology credits (approved prior to 2021 MY) would be carried into 
the Phase 2 program on a limited basis for those technologies where the 
benefit is not accounted for in the Phase 2 test procedure. Therefore, 
the manufacturers would not be required to request new approval for any 
innovative credits carried into the off-cycle program, but would have 
to demonstrate the new cycle does not account for these improvements 
beginning in the 2021 MY. The agencies believe this is appropriate 
because technologies, such as those related to the transmission or 
driveline, may no longer be ``off-cycle'' because of the addition of 
these technologies into the Phase 2 version of GEM. The agencies also 
seek comments on whether off-cycle technologies in the Phase 2 program 
should be limited by infrequent common use and by what model years, if 
any. We also seek comments on an appropriate penetration rate for a 
technology not to be considered in common use.
    As in Phase 1, the agencies are proposing to continue to provide 
two paths for approval of the test procedure to measure the 
CO2 emissions and fuel consumption reductions of an off-
cycle technology used in the HD tractor. See proposed 40 CFR 1037.610 
and 49 CFR 535.7. The first path would not require a public approval 
process of the test method. A manufacturer could use ``pre-approved'' 
test methods for HD vehicles including the A-to-B chassis testing, 
powerpack testing or on-road testing. A manufacturer may also use any 
developed test procedure that has known quantifiable benefits. A test 
plan detailing the testing methodology would be required to be approved 
prior to collecting any test data. The agencies are also proposing to 
continue the second path, which includes a public approval process of 
any testing method that could have questionable benefits (i.e., an 
unknown usage rate for a technology). Furthermore, the agencies are 
proposing to modify their provisions to clarify what documentation must 
be submitted for approval, which would align them with provisions in 40 
CFR 86.1869-12. NHTSA and EPA are also proposing to prohibit credits 
from technologies addressed by any of NHTSA's crash avoidance safety 
rulemakings (i.e., congestion management systems). See 77 FR 62733 
(discussing similar issues in the context of the light-duty fuel 
economy and greenhouse gas reduction standards). We welcome 
recommendations on how to improve or streamline the off-cycle 
technology approval process.
(3) Post Useful Life Modifications
    Under 40 CFR part 1037, it is generally prohibited for any person 
to remove or render inoperative any emission control device installed 
to comply with the requirements of part 1037. However, in 40 CFR 
1037.655 EPA clarifies that certain vehicle modifications are allowed 
after a vehicle reaches the end of its regulatory useful life. This 
section applies for all vehicles subject to 40 CFR part 1037 and would 
thus apply for trailers regulated in Phase 2. EPA is proposing to 
continue this provision and requests comment on it.
    This section states (as examples) that it is generally allowable to 
remove tractor roof fairings after the end of the vehicle's useful life 
if the vehicle will no longer be used primarily to pull box trailers, 
or to remove other fairings if the vehicle will no longer be used 
significantly on highways with vehicle speed of 55 miles per hour or 
higher. More generally, this section clarifies that owners may modify a 
vehicle for the purpose of reducing emissions, provided they have a 
reasonable technical basis for knowing that such modification will not 
increase emissions of any other pollutant. This essentially requires 
the owner to have information that would lead an engineer or other 
person familiar with engine and vehicle design and function to 
reasonably believe that the modifications will not increase emissions 
of any regulated pollutant. Thus, this provision does not provide a 
blanket allowance for modifications after the useful life.
    This section also makes clear that no person may ever disable a 
vehicle speed limiter prior to its expiration point, or remove 
aerodynamic fairings from tractors that are used primarily to pull box 
trailers on highways. It is also clear that this allowance does not 
apply with

[[Page 40253]]

respect to engine modifications or recalibrations.
    This section does not apply with respect to modifications that 
occur within the useful life period, other than to note that many such 
modifications to the vehicle during the useful life and to the engine 
at any time are presumed to violate 42 U.S.C. 7522(a)(3)(A). EPA notes, 
however, that this is merely a presumption, and would not prohibit 
modifications during the useful life where the owner clearly has a 
reasonable technical basis for knowing that the modifications would not 
cause the vehicle to exceed any applicable standard.
(4) Other Interim Provisions
    In HD Phase 1, EPA adopted provisions to delay the onboard 
diagnostics (OBD) requirements for heavy-duty hybrid powertrains (see 
40 CFR 86.010-18(q)). This provision delayed full OBD requirements for 
hybrids until 2016 and 2017 model years. In discussion with 
manufacturers during the development of Phase 2, the agencies have 
learned that meeting the on-board diagnostic requirements for criteria 
pollutant engine certification continues to be a potential impediment 
to adoption of hybrid systems. See Section XIV.A.1 for a discussion of 
regulatory changes proposed to reduce the non-GHG certification burden 
for engines paired with hybrid powertrain systems.
(5) Phase 1 Flexibilities Not Proposed for Phase 2
    The Phase 1 advanced technology credits were adopted to promote the 
implementation of advanced technologies, such as hybrid powertrains, 
Rankine cycle engines, all-electric vehicles, and fuel cell vehicles 
(see 40 CFR 1037.150(i)). As the agencies stated in the Phase 1 final 
rule, the Phase 1 standards were not premised on the use of advanced 
technologies but we expected these advanced technologies to be an 
important part of the Phase 2 rulemaking (76 FR 57133, September 15, 
2011). The proposed HD Phase 2 heavy-duty engine and tractor standards 
are premised on the use of Rankine-cycle engines, therefore the 
agencies believe it is no longer appropriate to provide extra credit 
for this technology. While the agencies have not premised the proposed 
HD Phase 2 tractor standards on hybrid powertrains, fuel cells, or 
electric vehicles, we also foresee some limited use of these 
technologies in 2021 and beyond. Therefore, we propose to not provide 
advanced technology credits in Phase 2 for any technology, but we 
welcome comments on the need for such incentive.
    Also in Phase 1, the agencies adopted early credits to create 
incentives for manufacturers to introduce more efficient engines and 
vehicles earlier than they otherwise would have planned to do (see 40 
CFR 1037.150(a)). The agencies are not proposing to extend this 
flexibility to Phase 2 because the ABT program from Phase 1 will be 
available to manufacturers in 2020 model year and this would displace 
the need for early credits.

IV. Trailers

    As mentioned in Section III, trailers pulled by Class 7 and 8 
tractors (together considered ``tractor-trailers'') account for 
approximately two-thirds of the heavy-duty sector's total 
CO2 emissions and fuel consumption. Because neither trailers 
nor the tractors that pull them are useful by themselves, it is the 
combination of the tractor and the trailer that forms the useful 
vehicle. Although trailers do not directly generate exhaust emissions 
or consume fuels (except for the refrigeration units on refrigerated 
trailers), their designs and operation nevertheless contribute 
substantially to the CO2 emissions and diesel fuel 
consumption of the tractors pulling them. See also Section I.E (1) and 
(2) above.
    The agencies are proposing standards for trailers specifically 
designed to be drawn by Class 7 and 8 tractors when coupled to the 
tractor's fifth wheel. The agencies are not proposing standards for 
trailers designed to be drawn by vehicles other than tractors, and 
those that are coupled to vehicles with pintle hooks or hitches instead 
of a fifth wheel. These proposed standards are expressed as 
CO2 and fuel consumption standards, and would apply to each 
trailer with respect to the emissions and fuel consumption that would 
be expected for a specific standard type of tractor pulling such a 
trailer. Note that this approach is discussed in more detail later. 
Nevertheless, EPA and NHTSA believe it is appropriate to establish 
standards for trailers separately from tractors because they are 
separately manufactured by distinct companies; the agencies are not 
aware of any manufacturers that currently assemble both the finished 
tractor and the trailer.

A. Summary of Trailer Consideration in Phase 1

    In the Phase 1 program, the agencies did not regulate trailers, but 
discussed how we might do so in the future (see 76 FR 57362). We chose 
not to regulate trailers at that time, primarily because of the lack of 
a proposed test procedure, as well as the technical and policy issues 
at that time. The agencies also noted the large number of small 
businesses in this industry, the possibility that regulations would 
substantially impact these small businesses, and the agencies' 
consequent obligations under the Small Business Regulatory Enforcement 
Fairness Act.\202\ However, the agencies did indicate the potential 
CO2 and fuel consumption benefits of including trailers in 
the program and we committed to consider establishing standards for 
trailers in future rulemakings.
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    \202\ The Regulatory Flexibility Act (RFA), as amended by the 
Small Business Regulatory Enforcement Fairness Act (SBREFA), 
requires agencies to account for economic impacts of all rules that 
may have a significant impact on a substantial number of small 
businesses and in addition contains provisions specially applicable 
to EPA requiring a multi-agency pre-proposal process involving 
outreach and consultation with representatives of potentially 
affected small businesses. See http://www.epa.gov/rfa/ for more 
information. Note that for this Phase 2 proposal, EPA has completed 
a Small Business Advocacy Review panel process that included small 
trailer manufacturers, as discussed in XIV.C below.
---------------------------------------------------------------------------

    In the Phase 1 proposal, the agencies solicited general comments on 
controlling CO2 emissions and fuel consumption through 
future trailer regulations (see 75 FR 74345-74351). Although we neither 
proposed nor finalized trailer regulations at that time, the agencies 
have considered those comments in developing this proposal. This notice 
proposes the first EPA regulations covering trailer manufacturers for 
CO2 emissions (or any other emissions), and the first fuel 
consumption regulations by NHTSA for these manufacturers. The agencies 
intend for this program to be a unified national program so that when a 
trailer model complies with EPA's standards it will also comply with 
NHTSA's standards.

B. The Trailer Industry

(1) Industry Characterization
    The trailer industry encompasses a wide variety of trailer 
applications and designs. Among these are box trailers (dry vans and 
refrigerated vans of all sizes) and ``non-box'' trailers, including 
platform (sometimes called ``flatbed''), tanker, container chassis, 
bulk, dump, grain, and many specialized types of trailers, such as car 
carriers, pole trailers, and logging trailers. Most trailers are 
designed for predominant use on paved streets, roads, and highways 
(called ``highway trailers'' for purposes of this proposed rule). A 
relatively small number of trailers are designed for dedicated use in 
logging and mining operations or for use in

[[Page 40254]]

applications that we expect would involve little or no time on paved 
roadways. A more detailed description of the characteristics that 
distinguish these trailers is included in Section IV.C.(5).
    The trailer manufacturing industry is very competitive, and 
manufacturers are highly responsive to their customers' diverse 
demands. The wide range of trailer designs and features reflects the 
broad variety of customer needs, chief among them typically being the 
ability to maximize the amount of freight the trailer can transport. 
Other design goals reflect the numerous, more specialized customer 
needs.
    Box trailers are the most common type of trailer and are made in 
many different lengths, generally ranging from 28 feet to 53 feet. 
While all have a rectangular shape, they can vary widely in basic 
construction design (internal volume and weight), materials (steel, 
fiberglass composites, aluminum, and wood) and the number and 
configuration of axles (usually two axles closely spaced, but number 
and spacing of axles can be greater). Box trailer designs may also 
include additional features, such as one or more side doors, out-
swinging or roll-up rear doors, side or rear lift gates, and numerous 
types of undercarriage accessories.
    Non-box trailers are uniquely designed to transport a specific type 
of freight. Platform trailers carry cargo that may not be easily 
contained within or loaded and unloaded into a box trailer, such as 
large, nonuniform equipment or machine components. Tank trailers are 
often pressure-tight enclosures designed to carry liquids, gases or 
bulk, dry solids and semi-solids. There are also a number of other 
specialized trailers such as grain, dump, automobile hauler, livestock 
trailers, construction and heavy-hauling trailers.
    Chapter 1 of the Draft RIA includes a more thorough 
characterization of the trailer industry. The agencies have considered 
the variety of trailer designs and applications in developing the 
proposed CO2 emissions and fuel consumption standards for 
trailers.
(2) Historical Context for Proposed Trailer Provisions
(a) SmartWay Program
    EPA's voluntary SmartWay Transport Partnership program encourages 
businesses to take actions that reduce fuel consumption and 
CO2 emissions while cutting costs. See Section I.A.2.f 
above. SmartWay staff work with the shipping, logistics, and carrier 
communities to identify low carbon strategies and technologies across 
their transportation supply chains. It is a voluntary, fleet-targeted 
program that provides an objective ranking of a fleet's freight 
efficiency relative to its competitors. SmartWay Partners commit to 
adopting fuel-saving practices and technologies relative to a baseline 
year as well as tracking their progress.
    EPA's SmartWay program has accelerated the availability and market 
penetration of advanced, fuel efficient technologies and operational 
practices. In conjunction with the SmartWay Partners Program, EPA 
established a testing, verification, and designation program, the 
SmartWay Technology Program, to help freight companies identify the 
equipment, technologies, and strategies that save fuel and lower 
emissions. SmartWay verifies the performance of aerodynamic equipment 
and low rolling resistance tires and maintains a list of verified 
technologies on its Web site. The trailer aerodynamic technologies 
verified are grouped in bins that represent one percent, four percent, 
or five percent fuel savings relative to a typical long-haul tractor-
trailer at 65-mph cruise conditions. Historically, use of verified 
aerodynamic devices totaling at least five percent fuel savings, along 
with verified tires, qualifies a 53-foot dry van trailer for the 
``SmartWay Trailer'' designation. In 2014, EPA expanded the program to 
qualify trailers as ``SmartWay Elite'' if they use verified tires and 
aerodynamic equipment providing nine percent or greater fuel savings. 
The 2014 updates also expanded the SmartWay-designated trailer 
eligibility to include 53-foot refrigerated van trailers in addition to 
53-foot dry van trailers.
    The SmartWay Technology Program continues to improve the technical 
quality of data that EPA and stakeholders need for verification. EPA 
bases its SmartWay verifications on common industry test methods using 
SmartWay-specified testing protocols. Historically, SmartWay's 
aerodynamic equipment verification was performed using the SAE J1321 
test procedure, which measures fuel consumption as the test vehicle 
drives laps around a test track. Under SmartWay's 2014 updates, EPA 
expanded its trailer designation and equipment verification programs to 
allow additional testing options. The updates included a new, more 
stringent 2014 track test protocol based on SAE's 2012 update to its 
SAE J1321 test method,\203\ as well as protocols for wind tunnel, 
coastdown, and possibly computational fluid dynamics (CFD) approaches. 
These new protocols are based on stakeholder input, the latest industry 
standards (i.e., 2012 versions of the SAE fuel consumption and wind 
tunnel test \204\ methods), EPA's own testing and research, and lessons 
learned from years of implementing technology verification programs. 
Wind tunnel, coastdown, and CFD testing produce values for aerodynamic 
drag improvements in terms of coefficient of drag (CD), 
which is then related to projected fuel savings using a mathematical 
curve.\205\
---------------------------------------------------------------------------

    \203\ SAE International, Fuel Consumption Test Procedure--Type 
II. SAE Standard J1321. Revised 2012-02-06. Available at: http://standards.sae.org/j1321_201202/.
    \204\ SAE International. Wind Tunnel Test Procedure for Trucks 
and Buses. SAE Standard J1252. Revised 2012-07-16. Available at: 
http://standards.sae.org/j1252_201207/.
    \205\ McCallen, R., et al. Progress in Reducing Aerodynamic Drag 
for Higher Efficiency of Heavy Duty Trucks (Class 7-8). SAE 
Technical Paper. 1999-01-2238.
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    SmartWay verifies tires based on test data submitted by tire 
manufacturers demonstrating the coefficient of rolling resistance 
(CRR) of their tires using either the SAE J1269 or ISO 28580 
test methods. These verified tires have rolling resistance targets for 
each axle position on the tractor-trailer. SmartWay-verified trailer 
tires achieve a CRR of 5.1 kg/metric ton or less on the 
ISO28580 test method. An operator who replaces the trailer tires with 
SmartWay-verified tires can expect fuel consumption savings of one 
percent or more at a 65-mph cruise. Operators who apply SmartWay-
verified tires on both the trailer and tractor can achieve three 
percent fuel consumption savings at 65-mph.
    Over the last decade, SmartWay partners have demonstrated 
measureable fuel consumption benefits by adding aerodynamic features 
and low rolling resistance tires to their 53-foot dry van trailers. To 
date, SmartWay has verified over 70 technologies, including nine 
packages from five manufacturers that have received the Elite 
designation. The SmartWay Transport program has worked with over 3,000 
partners, the majority of which are trucking fleets, and broadly 
throughout the supply-chain industry, since 2004. These relationships, 
combined with the Technology Program's extensive involvement in the HD 
vehicle technology industry, have provided EPA with significant 
experience in freight fuel efficiency. Furthermore, the more than 10-
year duration of the voluntary SmartWay Transport Partnership has 
resulted in significant fleet and manufacturer experience with 
innovating and deploying technologies

[[Page 40255]]

that reduce CO2 emissions and fuel consumption.
(b) California Tractor-Trailer Greenhouse Gas Regulation
    The state of California passed the Global Warming Solutions Act of 
2006 (Assembly Bill 32, or AB32), enacting the state's 2020 greenhouse 
gas emissions reduction goal into law. Pursuant to this Act, the 
California Air Resource Board (CARB) was required to begin developing 
early actions to reduce GHG emissions. As a part of a larger effort to 
comply with AB32, the California Air Resource Board issued a regulation 
entitled ``Heavy-Duty Greenhouse Gas Emission Reduction Regulation'' in 
December 2008.
    This regulation reduces GHG emissions by requiring improvement in 
the efficiency of heavy-duty tractors and 53 foot or longer dry and 
refrigerated box trailers that operate in California.\206\ The program 
is being phased in between 2010 and 2020. Small fleets have been 
allowed special compliance opportunities to phase in the retrofits of 
their existing trailer fleets through 2017. The regulation requires 
affected trailer fleet owners to either use SmartWay-verified trailers 
or to retrofit trailers with SmartWay-verified technologies. The 
efficiency improvements are achieved through the use of aerodynamic 
equipment and low rolling resistance tires on both the tractor and 
trailer. EPA has granted a waiver for this California program.\207\
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    \206\ Recently, in December 2013, ARB adopted regulations that 
establish its own parallel Phase 1 program with standards consistent 
with the EPA Phase 1 tractor standards. On December 5, 2014 
California's Office of Administrative Law approved ARB's adoption of 
the Phase 1 standards, with an effective date of December 5, 2014.
    \207\ See EPA's waiver of CARB's heavy-duty tractor-trailer 
greenhouse gas regulation applicable to new 2011 through 2013 model 
year Class 8 tractors equipped with integrated sleeper berths 
(sleeper-cab tractors) and 2011 and subsequent model year dry-can 
and refrigerated-van trailers that are pulled by such tractors on 
California highways at 79 FR 46256 (August 7, 2014).
---------------------------------------------------------------------------

(c) NHTSA Safety-Related Regulations for Trailers and Tires
    NHTSA regulates new trailer safety through regulations. Table IV-1 
lists the current regulations in place related to trailers. Trailer 
manufacturers will continue to be required to meet current safety 
regulations for the trailers they produce. We welcome any comments on 
additional regulations that are not included and particularly those 
that may be incompatible with the regulations outlined in this 
proposal.
    FMVSS Nos. 223 and 224 \208\ require installation of rear guard 
protection on trailers. The definition of rear extremity of the trailer 
in 223 limits installation of rear fairings to a specified zone behind 
the trailer. The agencies request comment on any issues associated with 
installing potential boat tails or other rear aerodynamic fairings that 
would be more effective than current designs, given the current 
definition of trailer rear extremity in FMVSS 223.
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    \208\ 49 CFR 571.223, 224.

 Table IV--1 Current NHTSA Statutes and Regulations Related to Trailers
------------------------------------------------------------------------
               Reference                              Title
------------------------------------------------------------------------
49 CFR 565.............................  Vehicle Identification Number
                                          (VIN) Requirements.
49 CFR 566.............................  Manufacturer Identification.
49 CFR 567.............................  Certification.
49 CFR 568.............................  Vehicles Manufactured in Two or
                                          More Stages.
49 CFR 569.............................  Regrooved Tires.
49 CFR 571.............................  Federal Motor Vehicle Safety
                                          Standards.
49 CFR 573.............................  Defect and Noncompliance
                                          Responsibility and Reports.
49 CFR 574.............................  Tire Identification and
                                          Recordkeeping.
49 CFR 575.............................  Consumer Information.
49 CFR 576.............................  Record Retention.
------------------------------------------------------------------------

(d) Additional DOT Regulations Related to Trailers
    In addition to NHTSA's regulations, DOT's Federal Highway 
Administration (FHWA) regulates the weight and dimensions of motor 
vehicles on the National Network.\209\ FHWA's regulations limit states 
from setting truck size and weight limits beyond certain ranges for 
vehicles used on the National Network. Specifically, vehicle weight and 
truck tractor-semitrailer length and width are limited by FHWA.\210\ 
EPA and NHTSA do not anticipate any conflicts between FHWA's 
regulations and those proposed in this rulemaking.
---------------------------------------------------------------------------

    \209\ 23 CFR 658.9.
    \210\ 23 CFR part 658.
---------------------------------------------------------------------------

(3) Agencies' Outreach in Developing This Proposal
    In developing this proposed rule, EPA and NHTSA staff met and 
consulted with a wide range of organizations that have an interest in 
trailer regulations. Staff from both agencies met representatives of 
the Truck Trailer Manufacturers Association, the National Trailer 
Dealers Association, and the American Trucking Association, including 
their Fuel Efficiency Advisory Committee and their Technology and 
Maintenance Council. We also met with and visited the facilities of 
several individual trailer manufacturers, trailer aerodynamic device 
manufacturing companies, and trailer tire manufacturers, as well as 
visited an aerodynamic wind tunnel test facility and two independent 
tire testing facilities. The agencies consulted with representatives 
from California Air Resources Board, the International Council on Clean 
Transportation, the North American Council for Freight Efficiency, and 
several environmental NGOs.
    In addition to these informal meetings, and as noted above, EPA 
also conducted several outreach meetings with representatives from 
small business trailer manufacturers as required under section 609(b) 
of the Regulatory Flexibility Act (RFA) and amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). EPA 
convened a Small Business Advocacy Review (SBAR) Panel, and additional 
information regarding the findings and recommendations of the Panel are 
available in Section XIV below and in the Panel's final report.\211\ 
EPA worked with NHTSA to propose flexibilities in response to EPA's 
SBAR Panel (as outlined in Section IV. F(6)(f) with more detail 
provided in Chapter 12 of the draft RIA). We welcome comments from all 
entities and the public to all aspects of this proposal.
---------------------------------------------------------------------------

    \211\ Final Report of the Small Business Advocacy Review Panel 
on EPA's Planned Proposed Rule: Greenhouse Gas Emissions and Fuel 
Efficiency Standards for Medium- and Heavy-Duty Engines and 
Vehicles: Phase 2, January 15, 2015.
---------------------------------------------------------------------------

C. Proposed Phase 2 Trailer Standards

    This proposed rule proposes, for the first time, a set of 
CO2 emission and fuel consumption standards for 
manufacturers of new trailers that would phase in over a period of nine 
years and continue to reduce CO2 emissions and fuel 
consumption in the years to follow. The proposed standards are 
expressed as overall CO2 emissions and fuel consumption 
performance standards considering the trailer as an integral part of 
the tractor-trailer vehicle.
    The agencies are proposing trailer standards that we believe well 
implement our respective statutory obligations. The agencies believe 
that a proposed set of standards with similar stringencies, but less 
lead-time (referred to as ``Alternative 4'' and discussed in more 
detail later) has the potential to be the maximum feasible alternative 
within the meaning of section 32902 (k) of EISA, and appropriate under 
EPA's CAA authority (sections 202 (a)(1) and (2)). However, based on 
the evidence

[[Page 40256]]

currently before us, EPA and NHTSA have outstanding questions regarding 
relative risks and benefits of Alternative 4 due to the timeframe 
envisioned by that alternative. The proposed alternative (referred to 
as ``Alternative 3'' and discussed in more detail later) is generally 
designed to achieve the levels of fuel consumption and GHG reduction 
that Alternative 4 would achieve, but with several years of additional 
lead-time. Put another way, the Alternative 3 standards would result in 
the same stringency as the Alternative 4 standards, but several years 
later, meaning that manufacturers could, in theory apply new technology 
at a more gradual pace and with greater flexibility. Additional lead-
time will also provide for a more gradual implementation of full 
compliance program, which could be especially helpful for this newly-
regulated trailer industry. It is possible that the agencies could 
adopt, in full or in part, stringencies from Alternative 4 in the final 
rule. The agencies seek comment on the lead-time and market penetration 
in these alternatives.
    The agencies are not proposing standards for CO2 
emissions and fuel consumption from the transport refrigeration units 
(TRUs) used on refrigerated box trailers. Additionally, EPA is not 
proposing standards for hydrofluorocarbon (HFC) emissions from TRUs. 
See Section IV.C.(4)
    It is worth noting that the proposed standards for box trailers are 
based in part on the expectation that the proposed program would allow 
emissions averaging. However, as discussed in Section IV.F. below, 
given the specific structure and competitive nature of the trailer 
industry, we request comment on the advantages and disadvantages of 
implementing the proposed standards without an averaging program. 
Commenters addressing the stringency of the proposed standards are 
encouraged to address stringency in the context of compliance programs 
with and without averaging.
(1) Trailer Designs Covered by This Proposed Rule
    As described previously, the trailer industry produces many 
different trailer designs for many different applications. The agencies 
are proposing standards for a majority of these trailers. Note that 
these proposed regulations apply to trailers designed for being drawn 
by a tractor when coupled to the tractor's fifth wheel. As described in 
detail in Section IV.C below, the agencies are proposing standards that 
would phase in between MY 2018 and 2027; the NHTSA standards would be 
voluntary until MY 2021. The proposed standards would apply to most 
types of trailers. For most box trailers, these standards would be 
based on the use of various technologies to improve aerodynamic 
performance, and on improved tire efficiency through low rolling 
resistance tires and use of automatic tire inflation (ATI) systems. As 
discussed below, the agencies have identified some trailers with 
characteristics that limit the aerodynamics that can be applied, and 
are proposing reduced the stringencies for those trailer types. As 
described in Sections IV.D.(1)(d) and (2)(d) below, although 
manufacturers can reduce trailer weight to reduce fuel costs by 
reducing trailer weight, these standards are not predicated on weight 
reduction for the industry.
    The most comprehensive set of proposed requirements would apply to 
long box trailers, which include refrigerated and non-refrigerated 
(dry) vans. Long box trailers are the largest trailer category and are 
typically paired with high roof cab tractors that have high annual 
vehicle miles traveled (VMT) and high average speeds, and therefore 
offer the greatest potential for CO2 and fuel consumption 
reductions. Many of the aerodynamic and tire technologies considered 
for long box trailers in this proposal are similar to those used in 
EPA's SmartWay program and required by California's Heavy-Duty 
Greenhouse Gas Emission Reduction Regulation. Many manufacturers and 
operators of box trailers have experience with these CO2- 
and fuel consumption-reducing technologies. In addition to SmartWay 
partners and those fleets affected by the California regulation, many 
operators also seek such technologies in response to high fuel prices 
and the prospect of improved fuel efficiency. As a result, more data 
about the performance of these technologies exist for long box trailers 
than for other trailer types. Short box vans do not have the benefit of 
programs such as SmartWay to provide an incentive for development of 
and a reliable evaluation and promotion of CO2- and fuel 
consumption-reducing technologies for their trailers. In addition, 
short box trailers are more frequently used in short-haul and urban 
operations, which may limit the potential effectiveness of these 
technologies. As such, EPA is proposing less stringent requirements for 
manufacturers of short box trailers.
    Some trailer designs include features that can affect the 
practicality or the effectiveness of devices that manufacturers may 
consider to lower their CO2 emissions and fuel consumption. 
We are proposing to recognize box trailers that are restricted from 
using aerodynamic devices in one location on the trailer as ``partial-
aero'' box trailers.\212\ The proposed standards for these trailers are 
based on the proposed standards for full-aero box-trailers, but would 
be less stringent than when the program is fully phased in.
---------------------------------------------------------------------------

    \212\ Examples of types of work-performing components, 
equipment, or designs that the agencies might consider as warranting 
recognition as partial-aero or non-aero trailers include side or end 
lift gates, belly boxes, pull-out platforms or steps for side door 
access, and drop-deck designs. See 40 CFR 1037.107 and 49 CFR 
535.5(e).
---------------------------------------------------------------------------

    We propose that box trailers that have work-performing devices in 
two locations such that they inhibit the use of all practical 
aerodynamic devices be considered ``non-aero'' box trailers in this 
proposal. The proposed standards for non-aero box trailers are 
predicated on the use of tire technologies--lower rolling resistance 
tires and ATI. We are proposing similar standards for non-box trailers 
(including applications such as dump trailers and agricultural trailers 
that are designed to be used both on and off the highway).
    We are proposing to completely exclude several types of trailers 
from this trailer program. These excluded trailers would include those 
designed for dedicated in-field operations related to logging and 
mining. In addition, we are proposing to exclude heavy-haul trailers 
and trailers the primary function of which is performed while they are 
stationary. For all of these excluded trailers, manufacturers would not 
have any regulatory requirements under this program, and would not be 
subject to the proposed trailer compliance requirements. We seek 
comment on the appropriateness of excluding these types of trailers 
from the proposed trailer program and whether other trailer designs 
should be excluded. Section IV. C. (5) discusses these trailer types we 
propose to exclude and the physical characteristics that would define 
these trailers.
    In summary, the agencies are proposing separate standards for ten 
trailer subcategories:

--Long box (longer than 50 feet \213\) dry vans
---------------------------------------------------------------------------

    \213\ Most long trailers are 53 feet in length; we are proposing 
a cut-point of 50 feet to avoid an unintended incentive for an OEM 
to slightly shorten a trailer design in order to avoid the new 
regulatory requirements.
---------------------------------------------------------------------------

--Long box (longer than 50 feet) refrigerated vans
--Short box (50 feet and shorter) dry vans
--Short box (50 feet and shorter) refrigerated vans
--Partial-aero long box dry vans
--Partial-aero long box refrigerated vans
--Partial-aero short box dry vans

[[Page 40257]]

--Partial-aero short box refrigerated vans
--Non-aero box vans (all lengths of dry and refrigerated vans)
--Non-box trailers (tanker, platform, container chassis, and all other 
types of highway trailers that are not box trailers)

    As discussed in the next section, partial-aero box trailers would 
have the same standards as their corresponding full-aero trailers in 
the early phase-in years, and would have separate, less stringent 
standards as the program is fully implemented. Section IV. C. (5) 
introduces these proposed partial-aero trailer standards and Section 
IV. D. describes the technologies that could be applied to meet these 
proposed standards.
(2) Proposed Fuel Consumption and CO2 Standards
    As described in previously, it is the combination of the tractor 
and the trailer that form the useful vehicle, and trailer designs 
substantially affect the CO2 emissions and diesel fuel 
consumption of the tractors pulling them. Note that although the 
agencies are proposing new CO2 and fuel consumption 
standards for trailers separately from tractors, we set the numerical 
level of the trailer standards (see Section IV.D below) in relation to 
``standard'' reference tractors in recognition of their 
interrelatedness. In other words, the regulatory standards refer to the 
simulated emissions and fuel consumption of a standard tractor pulling 
the trailer being certified.
    The agencies project that these proposed standards, when fully 
implemented in MY (model year) 2027, would achieve fuel consumption and 
CO2 emissions reductions of three to eight percent, 
depending on trailer subcategory. These projected reductions assume a 
degree of technology adoption into the future absent the proposed 
program and are evaluated on a weighted drive cycle (see Section IV. D. 
(3) . We expect that the MY 2027 standards would be met with high-
performing aerodynamic and tire technologies largely available in the 
marketplace today. With a lead-time of more than 10 years, the agencies 
believe that both trailer construction and bolt-on CO2- and 
fuel consumption-reducing technologies will advance well beyond the 
performance of their current counterparts that exist today. A 
description of technologies that the agencies considered for this 
proposal is provided in Section IV. D.
    The agencies designed this proposed trailer program to ensure a 
gradual progression of both stringency and compliance requirements in 
order to limit the impact on this newly-regulated industry. The 
agencies are proposing progressively more stringent standards in three-
year stages leading up to the MY 2027.\214\ The agencies are proposing 
several options to reduce compliance burden (see Section IV. F.) in the 
early years as the industry gains experience with the program. EPA is 
proposing to initiate its program in 2018 with modest standards for 
long box dry and refrigerated vans that can be met with common 
SmartWay-verified aerodynamic and tire technologies. In this early 
stage, we expect that manufacturers of the other trailer subcategories 
would meet those standards by using tire technologies only. Standards 
that we propose for the next stages, which we propose to begin in MY 
2021, MY 2024, and MY 2027, would gradually increase in stringency for 
each subcategory, including the introduction of standards for shorter 
box vans that we expect would be met by applying both aerodynamic and 
tire technologies. NHTSA's regulations would be voluntary until MY 2021 
as described in Section IV. C. (3).
---------------------------------------------------------------------------

    \214\ These stages are consistent with NHTSA's stability 
requirements under EISA.
---------------------------------------------------------------------------

    Table IV-2 below presents the CO2 and fuel consumption 
phase-in standards, beginning in MY 2018 that the agencies are 
proposing for trailers. The standards are expressed in grams of 
CO2 per ton-mile and gallons of fuel per 1,000 ton-miles to 
reflect the load-carrying capacity of the trailers. Partial-aero 
trailers would be subject to the same standards as their corresponding 
``full aero'' trailers for MY 2018 through MY 2026. In MY 2027 and the 
years to follow, partial-aero trailers would continue to meet the 
standards for MY 2024.
    The agencies are not proposing CO2 or fuel consumption 
standards predicated on aerodynamic improvements for non-box trailers 
or non-aero box vans at any stage of this proposed program. Instead, we 
are proposing design standards that would require manufacturers of 
these trailers to adopt specific tire technologies and thus to comply 
without aerodynamic devices. We believe that this approach would 
significantly limit the compliance burden for these manufacturers and 
request comment on this provision.\215\
---------------------------------------------------------------------------

    \215\ The agencies are not proposing provisions to allow 
averaging for non-box trailers, non-aero box trailers, or partial-
aero box trailers, and this reduced flexibility would likely have 
the effect of requiring compliant tire technologies to be used.

                Table IV-2--Proposed Trailer CO2 and Fuel Consumption Standards for Box Trailers
----------------------------------------------------------------------------------------------------------------
                                   Subcategory                Dry van                    Refrigerated van
          Model year           ---------------------------------------------------------------------------------
                                     Length            Long            Short           Long            Short
----------------------------------------------------------------------------------------------------------------
2018-2020.....................  EPA Standard....              83             144              84             147
                                (CO2 Grams per
                                 Ton-Mile).
                                Voluntary NHTSA           8.1532         14.1454          8.2515         14.4401
                                 Standard.
                                (Gallons per
                                 1,000 Ton-Mile).
2021-2023.....................  EPA Standard....              81             142              82             146
                                (CO2 Grams per
                                 Ton-Mile).
                                NHTSA Standard..          7.9568         13.9489          8.0550         14.3418
                                (Gallons per
                                 1,000 Ton-Mile).
2024-2026.....................  EPA Standard....              79             141              81             144
                                (CO2 Grams per
                                 Ton-Mile).
                                NHTSA Standard..          7.7603         13.8507          7.9568         14.1454
                                (Gallons per
                                 1,000 Ton-Mile).
2027 +........................  EPA Standard....              77             140              80             144
                                (CO2 Grams per
                                 Ton-Mile).
                                NHTSA Standard..          7.5639         13.7525          7.8585         14.1454
                                (Gallons per
                                 1,000 Ton-Mile).
----------------------------------------------------------------------------------------------------------------

[[Page 40258]]

    Differences in the numerical values of these standards among 
trailer subcategories are due to differences in the tractor-trailer 
characteristics, as well as differences in the default payloads, in the 
vehicle simulation model we used to develop the proposed standards (as 
described in Section IV. D. (3) (a) below). Lower numerical values in 
Table IV-2 do not necessarily indicate more stringent standards. For 
instance, the proposed standards for dry and refrigerated vans of the 
same length have the same stringency through MY 2026, but the standards 
recognize differences in trailer weight and aerodynamic performance due 
to the TRU on refrigerated vans. Trailers of the same type but 
different length differ in weight as well as in the number of axles 
(and tires), tractor type, payload and aerodynamic performance. Section 
IV. D. and Chapter 2.10 of the draft RIA provide more details on the 
characteristics of the tractor-trailer vehicles, with various 
technologies, that are the basis for these standards.
    In developing the proposed standards for trailers, the agencies 
evaluated the current level of CO2 emissions and fuel 
consumption, the types and availability of technologies that could be 
applied to reduce CO2 and fuel consumption, and the current 
adoption rates of these technologies. Additionally, we considered the 
necessary lead-time and associated costs to the industry to meet these 
standards, as well as the fuel savings to the consumer and magnitude of 
CO2 and fuel savings that we project would be achieved as a 
result of these proposed standards. As discussed in more detail later 
in this preamble and in Chapter 2.10 of the draft RIA, the analyses of 
trailer aerodynamic and tire technologies that the agencies have 
conducted appear to show that these proposed standards would be the 
maximum feasible and appropriate in the lead-time provided under each 
agency's respective statutory authorities. We ask that any comments 
related to stringency include data whenever possible indicating the 
potential effectiveness and cost of adding such devices to these 
vehicles.
    The agencies request comment on all aspects of these proposed 
standards, including trailers to be covered and the proposed 50-foot 
demarcation between ``long'' and ``short'' box vans, the proposed 
phase-in schedule, and the stringency of the standards in relation to 
their cost, CO2 and fuel consumption reductions, and on the 
proposed compliance provisions, as discussed in Section IV. F.
    In addition to these proposed trailer standards, the agencies 
considered standards both less stringent and more stringent than the 
proposed standards. We specifically request comment on a set of 
accelerated standards that we considered, as presented in Section IV. 
E. This set of standards is predicated on performance and penetration 
rates of the same technologies as the proposed standards, but would 
reach full implementation three years sooner.
(3) Lead-Time Considerations
    As mentioned earlier, although the agencies did not include 
standards for trailers in Phase 1, box trailer manufacturers have been 
gaining experience with CO2- and fuel consumption-reducing 
technologies over the past several years, and the agencies expect that 
trend to continue, due in part to EPA's SmartWay program and 
California's Tractor-Trailer Greenhouse Gas Regulation. Most 
manufacturers of long box trailers have some experience installing 
these aerodynamic and tire technologies for customers. This experience 
impacts how much lead-time is necessary from a technological 
perspective. EPA is proposing CO2 emission standards for 
long box trailers for MY 2018 that represent stringency levels similar 
to those used for SmartWay verification and required for the California 
regulation, and thus could be met by adopting off-the-shelf aerodynamic 
and tire technologies available today. The NHTSA program from 2018 
through 2020 would be voluntary.
    Manufacturers of trailers other than 53-foot box vans do not have 
the benefit of programs such as SmartWay to provide a reliable 
evaluation and promotion of these technologies for their trailers and 
therefore have less experience with these technologies. As such, EPA is 
proposing less stringent requirements for manufacturers of other 
highway trailer subcategories beginning in MY 2018. We expect these 
manufacturers of short box trailers would adopt some aerodynamic and 
tire technologies, and manufacturers of other trailers would adopt tire 
technologies only, as a means of achieving the proposed standards. Some 
manufacturers of trailers other than long boxes may not yet have direct 
experience with these technologies, but the technologies they would 
need are fairly simple and can be incorporated into trailer production 
lines without significant process changes. Also, the NHTSA program for 
these trailers would be voluntary until MY 2021.
    The agencies believe that the burdens of installing and marketing 
these technologies would not be limiting factors in determining 
necessary lead-time for manufacturers of these trailers. Instead, we 
expect that the proposed first-time compliance and, in some cases, 
performance testing requirements, would be the more challenging 
obstacles for this newly regulated industry. For these reasons, we are 
proposing that these standards phase in over a period of nine years, 
with flexibilities that would minimize the compliance and testing 
burdens in the early years of the proposed program (see Section IV. 
F.).
    As mentioned previously, EPA is proposing modest standards and 
several compliance options that would allow it to begin its program for 
MY 2018. However, EISA requires four model years of lead-time for fuel 
consumption standards, regardless of the stringency level or 
availability of flexibilities. Therefore, NHTSA's proposed fuel 
consumption requirements would not become mandatory until MY 2021. 
Prior to MY 2021, trailer manufacturers could voluntarily participate 
in NHTSA's program, noting that once they made such a choice, they 
would need to stay in the program for all succeeding model years.\216\
---------------------------------------------------------------------------

    \216\ NHTSA adopted a similar voluntary approach in the first 
years of Phase 1 (see 76 FR 57106).
---------------------------------------------------------------------------

    The agencies believe that the expected period of seven years or 
more between the issuing of the final rules and full implementation of 
the program would provide sufficient lead-time for all affected trailer 
manufacturers to adopt CO2- and fuel consumption-reducing 
technologies or design trailers to meet the proposed standards.
(4) Non-CO2 GHG Emissions from Trailers
    In addition to the impact of trailer design on the CO2 
emissions of tractor-trailer vehicles, the agencies recognize that 
refrigerated trailers can also be a source of emissions of HFCs. 
Specifically, HFC refrigerants that are used in transport refrigeration 
units (TRUs) have the potential to leak into the atmosphere. We do not 
currently believe that HFC leakage is likely to become a major problem 
in the near future, and we are not proposing provisions addressing 
refrigerant leakage of trailer-related HFCs in this proposed 
rulemaking. TRUs differ from the other source categories where EPA has 
adopted (or proposed) to apply HFC leakage requirements (i.e., air 
conditioning). We believe trailer owners have a strong incentive to 
limit refrigerant leakage in order to maintain the operability of the 
trailer's refrigeration unit and avoid financial liability for damage 
to perishable freight due to a failure to maintain the agreed-

[[Page 40259]]

upon temperature and humidity conditions. In addition, refrigerated van 
units represent a relatively small fraction of new trailers. 
Nevertheless, we request comment on this issue, including any data on 
typical TRU charge capacity, the frequency of HFC refrigerant leakage 
from these units across the fleet, the magnitude of unaddressed leakage 
from individual units, and how potential EPA regulations might address 
this leakage issue.
(5) Exclusions and Less-Stringent Standards
    All trailers built before January 1, 2018 are excluded from the 
Phase 2 trailer program, and from 40 CFR part 1037 and 49 CFR part 535 
in general (see 40 CFR 1037.5(g) and 49 CFR 535.3(e)). Furthermore, the 
proposed regulations do not apply to trailers designed to be drawn by 
vehicles other than tractors, and those that are coupled to vehicles 
with pintle hooks or hitches instead of a fifth wheel. As stated 
previously, we are proposing that non-box trailers that are designed 
for dedicated use with in-field operations related to logging and 
mining be completely excluded from this Phase 2 trailer program. The 
agencies believe that the operational capabilities of trailers designed 
for these purposes could be compromised by the use of aerodynamic 
devices or tires with lower rolling resistance. Additionally, the 
agencies are proposing to exclude trailers designed for heavy-haul 
applications and those that are not intended for highway use, as 
follows:

--Trailers shorter than 35 feet in length with three axles, and all 
trailers with four or more axles (including any lift axles)
--Trailers designed to operate at low speeds such that they are 
unsuitable for normal highway operation
--Trailers designed to perform their primary function while stationary
--Trailers intended for temporary or permanent residence, office space, 
or other work space, such as campers, mobile homes, and carnival 
trailers
--Trailers designed to transport livestock
--Incomplete trailers that are sold to a secondary manufacturer for 
modification to serve a purpose other than transporting freight, such 
as for offices or storage \217\
---------------------------------------------------------------------------

    \217\ Secondary manufacturers who purchase incomplete trailers 
and complete their construction to serve as trailers are subject to 
the requirements of 40 CFR 1037.620.

    Where the criteria for exclusion identified above may be unclear 
for specific trailer models, manufacturers would be encouraged to ask 
the agencies to make a determination before production begins. The 
agencies seek comments on these and any other trailer characteristics 
that might make the trailers incompatible with highway use or would 
restrict their typical operating speeds.
    Because the agencies are proposing that these trailers be excluded 
from the program, we are not proposing to require manufacturers to 
report to the agencies about these excluded trailers. We seek comments 
on whether, in lieu of the exclusion of trailers from the program, the 
agencies should instead exempt these trailers from the standards, but 
still require reporting to the agencies in order to verify that a 
manufacturer qualifies for an exemption. In that case, exempt trailers 
would have some regulatory requirements (e.g., reporting); again, 
excluded trailers would have no regulatory requirements under this 
proposal. All other trailers would remain covered by the proposed 
standards.
    As described earlier, the proposed program is based on the 
expectation that manufacturers would be able to apply aerodynamic 
devices and tire technologies to the vast majority of box trailers, and 
these standards would be relatively stringent. We propose to categorize 
trailers with functional components or work-performing equipment, and 
trailers with certain design elements, that could partially interfere 
with the installation or the effectiveness of some aerodynamic 
technologies, as ``partial-aero'' box trailers. For example, some 
trailer equipment by their placement or their need for operator access 
might not be compatible with current designs of trailer skirts, but a 
boat tail could be effective on that trailer in the early years of the 
program. Similarly, a rear lift gate or roll-up rear door might not be 
compatible with a current boat tail design, but skirts could be 
effective. The proposed requirements for these trailers would the same 
as their full-aero counterparts until MY 2027, at which time they would 
continue to be subject to the MY 2024 standards. See 40 CFR 1037.107.
    For trailers for which no aerodynamic devices are practical, the 
agencies are proposing design standards requiring LRR tires and ATI 
systems. Trailers for which neither skirt/under-body devices nor rear-
end devices would be likely to be feasible fall into two categories: 
non-box trailers and non-aero box trailers. We believe that there is 
limited availability of aerodynamic technologies for non-box trailers 
(for example, platform (flatbed) trailers, tank trailers, and container 
chassis trailers). Also, for container chassis trailers, operational 
considerations, such as stacking of the chassis trailers, impede 
introduction of aerodynamic technologies. In addition, manufacturers of 
these trailer types have little or no experience with aerodynamic 
technologies designed for their products. Non-aero box trailers, 
defined as those with equipment or design features that would preclude 
both skirt/under-body and rear-end aerodynamic technologies (e.g., a 
trailer with both a pull-out platform for side access and a rear lift 
gate), would be subject to the same tire-only design standards as would 
non-box trailers, based exclusively on the performance of tire and ATI 
technologies.\218\
---------------------------------------------------------------------------

    \218\ The agencies are not aware of work-performing equipment 
that would prevent the use of gap-reducing trailer devices on dry 
vans of any length; thus dry vans with side and rear equipment could 
qualify as ``non-aero'' trailers, even if the manufacturer could 
install a gap-reducing device.
---------------------------------------------------------------------------

    We recognize that the shortest short box vans (i.e., less than 35 
feet) are often pulled in tandem. Since these trailers make up the 
majority of trailers in the short box van subcategories, we are not 
proposing standards for short box dry and refrigerated vans based on 
the use of rear devices. Thus, work-performing features on the rear of 
the trailer (e.g., lift gates) would not impact a trailer's ability to 
meet the full-aero short-box trailer standards. As a result, we are 
proposing that all short box vans only be categorized as partial-aero 
vans if they have work-performing side features (e.g., belly boxes). We 
expect that partial-aero short dry van trailers would be able to adopt 
front-side devices that would achieve the reduced standards. 
Furthermore, some short box trailers that are not operated in tandem, 
such as 40- or 48-foot trailers, could also be able to adopt rear-side 
devices and achieve even greater reductions.
    Refrigerated short box vans are a special case in that they have 
TRUs that limit the ability to apply aerodynamic technologies to the 
front side of the trailers. Because of this, we are proposing to 
classify the shortest refrigerated box vans (shorter than 35 feet) as 
non-aero trailers if they are designed with work-performing side 
features. Since these trailers may be pulled in tandem and since they 
cannot adopt front-side aerodynamic devices, we propose that they meet 
standards predicated on tire technologies only. Short box refrigerated 
trailers 35 feet and longer would only qualify for non-aero standards 
if they have work-

[[Page 40260]]

performing devices on both the side and rear of the trailer. See 40 CFR 
1037.107.
    We request comment on these proposed provisions for excluding some 
trailers from the program, including speed restrictions and physical 
characteristics that would generally make them incompatible for highway 
use. We also request comment on the proposed approach of applying less-
stringent standards to non-box, non-aero box, and partial-aero box 
trailers.
(6) In-Use Standards
    Consistent with Section 202(a)(1) of the CAA, EPA is proposing that 
the emissions standards apply for the useful life of the trailers. 
NHTSA also proposes to adopt EPA's useful life requirements for 
trailers to ensure manufacturers consider in the design process the 
need for fuel efficiency standards to apply for the same duration and 
mileage as EPA standards. Aerodynamic devices available today, 
including trailer skirts, rear fairings, under-body devices, and gap-
reducing fairings, are designed to maintain their physical integrity 
for the life of the trailer. In the absence of failures like 
detachment, breakage, or misalignment, we expect that the aerodynamic 
performance of the devices will not degrade appreciably over time and 
that the projected CO2 and fuel consumption reductions will 
continue for the life of the vehicle with no special maintenance 
requirements. Because of this, EPA does not see a benefit to 
establishing separate standards that would apply in-use for trailers. 
EPA and NHTSA are proposing a regulatory useful life value for trailers 
of 10 years, and thus the certification standards would apply in-use 
for that period of time.\219\ See Section IV. F. (5) (a) for a 
discussion of other factors related to trailer useful life.
---------------------------------------------------------------------------

    \219\ EPA may perform in-use testing of any vehicle subject to 
the standards of this part, including trailers. For example, we may 
test trailers to verify drag areas or other GEM inputs.
---------------------------------------------------------------------------

D. Feasibility of the Proposed Trailer Standards

    As discussed below, the agencies' initial determination, subject to 
consideration of public comment, is that the standards presented in the 
Section IV.C.2, are the maximum feasible and appropriate under the 
agencies' respective authorities, considering lead time, cost, and 
other factors. We summarize our analyses in this section, and describe 
them in more detail in the Draft RIA (Chapter 2.10).
    Our analysis of the feasibility of the proposed CO2 and 
fuel consumption standards is based on technology cost and 
effectiveness values collected from several sources. Our assessment of 
the proposed trailer program is based on information from:

--Southwest Research Institute evaluation of heavy-duty vehicle fuel 
efficiency and costs for NHTSA,\220\
---------------------------------------------------------------------------

    \220\ Reinhart, T.E. (June 2015). Commercial Medium- and Heavy-
Duty Truck Fuel Efficiency Technology Study--Report #1. (Report No. 
DOT HS 812 146). Washington, DC: National Highway Traffic Safety 
Administration.
---------------------------------------------------------------------------

--2010 National Academy of Sciences report of Technologies and 
Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty 
Vehicles,\221\
---------------------------------------------------------------------------

    \221\ Committee to Assess Fuel Economy Technologies for Medium- 
and Heavy-Duty Vehicles; National Research Council; Transportation 
Research Board (2010). Technologies and Approaches to Reducing the 
Fuel Consumption of Medium- and Heavy-Duty Vehicles. (``The NAS 
Report'') Washington, DC, The National Academies Press. Available 
electronically from the National Academy Press Web site at http://www.nap.edu/catalog.php?record_id=12845.
---------------------------------------------------------------------------

--TIAX's assessment of technologies to support the NAS panel 
report,\222\
---------------------------------------------------------------------------

    \222\ TIAX, LLC. ``Assessment of Fuel Economy Technologies for 
Medium- and Heavy-Duty Vehicles,'' Final Report to National Academy 
of Sciences, November 19, 2009.
---------------------------------------------------------------------------

--The analysis conducted by the Northeast States Center for a Clean Air 
Future, International Council on Clean Transportation, Southwest 
Research Institute and TIAX for reducing fuel consumption of heavy-duty 
long haul combination tractors (the NESCCAF/ICCT study),\223\
---------------------------------------------------------------------------

    \223\ NESCCAF, ICCT, Southwest Research Institute, and TIAX. 
Reducing Heavy-Duty Long Haul Combination Truck Fuel Consumption and 
CO2 Emissions. October 2009.
---------------------------------------------------------------------------

--The technology cost analysis conducted by ICF for EPA,\224\ and
---------------------------------------------------------------------------

    \224\ ICF International. ``Investigation of Costs for Strategies 
to Reduce Greenhouse Gas Emissions for Heavy-Duty On-Road 
Vehicles.'' July 2010. Docket Number EPA-HQ-OAR-2010-0162-0283.
---------------------------------------------------------------------------

--Testing conducted by EPA.

    As an initial step in our analysis, we identified the extent to 
which fuel consumption- and CO2-reducing technologies are in 
use today.
    The technologies include those that reduce aerodynamic drag at the 
front, back, and underside of trailers, tires with lower rolling 
resistance, tire inflation technologies, and weight reduction through 
component substitution. It should be noted that the agencies need not 
and did not attempt to predict the exact future pathway of the 
industry's response to the new standards, but rather demonstrated one 
example of how compliance could reasonably occur, taking into account 
cost of the standards (including costs of compliance testing and 
certification), and needed lead time. We are proposing that full-aero 
box trailer manufacturers have additional flexibility in meeting the 
standards through averaging. The less complex standards proposed for 
partial- and non-aero box and non-box trailers would still provide a 
degree of technology choices that would meet their standards.
    For our feasibility analysis, we identified a set of technologies 
to represent the range of those likely to be used in the time frame of 
the rule. We then combined these technologies into packages of 
increasing effectiveness in reducing CO2 and fuel 
consumption and projected reasonable rates at which the evaluated 
technologies and packages could be adopted across the trailer industry. 
More details regarding our analysis can be found in Chapter 2.10.4.1 of 
the draft RIA.
    The agencies developed the proposed CO2 and fuel 
consumption standards for each stage of the program by combining the 
projected effectiveness of trailer technologies and the projected 
adoption rates for each trailer type. We evaluated these standards with 
respect to the cost of these technologies, the emission reductions and 
fuel consumption improvements achieved, and the lead-time needed to 
deploy the technology at a given adoption rate.
    Unlike the other sectors covered by this Phase 2 rulemaking, 
trailer manufacturers do not have experience certifying under the Phase 
1 program. Moreover, a large fraction of the trailer industry is 
composed of small businesses and very few of the largest trailer 
manufacturers have the same resources available as manufacturers in the 
other heavy-duty sectors. The standards have been developed with this 
in mind, and we are confident the proposed standards can be achieved by 
manufacturers who lack prior experience implementing such standards.
(1) Available Technologies
    Trailer manufacturers can design a trailer to reduce fuel 
consumption and CO2 emissions by addressing the trailer's 
aerodynamic drag, tire rolling resistance and weight. In this section 
we outline the general trailer technologies that the agencies 
considered in evaluating the feasibility of the proposed standards.
(a) Aerodynamic Drag Reduction
    Historically, the primary goal when designing the shape of box 
trailers has been to maximize usable internal cargo volume, while 
complying with regulatory size limits and minimizing construction 
costs. This led to standard box trailers being rectangular. This basic 
shape creates significant aerodynamic

[[Page 40261]]

drag and makes box trailers strong candidates for aerodynamic 
improvements. Current bolt-on aerodynamic technologies for box trailers 
are designed to create a smooth transition of airflow from the tractor, 
around the trailer, and beyond the trailer.
    Table IV-3 lists general aerodynamic technologies that the EPA 
SmartWay program has evaluated for use on box trailers and a 
description of their intended impact. Several versions of each of these 
technologies are commercially available and have seen increased 
adoption over the past decade. Performance of these devices varies 
based on their design, their location and orientation on the trailer, 
and the vehicle speed. More information regarding the agencies' initial 
assessment of these devices, including incremental costs is discussed 
in Chapter 2.10 of the draft RIA.

          Table IV-3--Aerodynamic Technologies for Box Trailers
------------------------------------------------------------------------
                                        Example       Intended impact on
       Location on trailer           technologies        aerodynamics
------------------------------------------------------------------------
Front...........................  Front fairings and  Reduce cross-flow
                                   gap-reducing        through gap and
                                   fairings.           smoothly
                                                       transition
                                                       airflow from
                                                       tractor to the
                                                       trailer.
Rear............................  Rear fairings,      Reduce pressure
                                   boat tails and      drag induced by
                                   flow diffusers.     the trailer wake.
Underside.......................  Side fairings and   Manage flow of air
                                   skirts, and         under the trailer
                                   underbody devices.  to reduce
                                                       turbulence,
                                                       eddies and wake.
------------------------------------------------------------------------

    As mentioned previously, SmartWay-verified technologies are 
evaluated on 53-foot dry vans. However, the CO2- and fuel 
consumption-reducing potential of some aerodynamic technologies 
demonstrated on 53-foot dry vans can be translated to refrigerated vans 
and box trailers in lengths different than 53 feet and some fleets have 
opted to add trailer skirts to their refrigerated vans and 28-foot 
trailers (often called ``pups''). In addition, some side skirts have 
been adapted for non-box trailers (e.g., tankers, platforms, and 
container chassis), and have shown potential for large reductions in 
drag. At this time, however, non-box trailer aerodynamic devices are 
not widely available, with many still at the prototype stage. The 
agencies encourage commenters to provide more information and data 
related to the effectiveness of technologies applied to trailers other 
than 53-foot dry and refrigerated vans.
    ``Boat tail'' devices, applied to the rear of a trailer, are 
typically designed to collapse flat as the trailer rear doors are 
opened. If the tail structure can remain in the collapsed configuration 
when the doors are closed, the benefit of the device is lost. The 
agencies request comment on whether we should require that trailer 
manufacturers using such devices for compliance with the proposed 
standards only use designs that automatically deploy when the vehicle 
is in motion.
    The agencies are aware that physical characteristics of some box 
trailers influence the technologies that can be applied. For instance, 
the TRUs on refrigerated vans are located at the front of the trailer, 
which prohibits the use of current gap-reducers. Similarly, drop deck 
dry vans have lowered floors between the landing gear and the trailer 
axles that limit the ability to use side skirts. The agencies 
considered the availability and limitations of aerodynamic technologies 
for each trailer type evaluated in our feasibility analysis of the 
proposed and alternative standards.
(b) Tire Rolling Resistance
    On a typical Class 8 long-haul tractor-trailer, over 40 percent of 
the total energy loss from tires is attributed to rolling resistance 
from the trailer tires.\225\ Trailer tire rolling resistance values 
collected by the agencies for Phase 1 indicate that the average 
coefficient of rolling resistance (CRR) for new trailer 
tires was 6.0 kg/ton. This value was applied for the standard trailer 
used for tractor compliance in the Phase 1 tractor program. For Phase 
2, the agencies consider all trailer tires with CRR values 
below 6.0 kg/ton to be ``lower rolling resistance'' (LRR) tires. For 
reference, a trailer tire that qualifies as a SmartWay-verified tire 
must meet a CRR value of 5.1 kg/ton, a 15 percent 
CRR reduction from the trailer tire identified in Phase 1. 
Our research of rolling resistance indicates an additional 
CRR reduction of 15 percent or more from the SmartWay 
verification threshold is possible with tires that are available in the 
commercial market today.
---------------------------------------------------------------------------

    \225\ ``Tires & Truck Fuel Economy: A New Perspective'', The 
Tire Topic Magazine, Special Edition Four, 2008, Bridgestone 
Firestone, North American Tire, LLC. Available online: http://www.trucktires.com/bridgestone/us_eng/brochures/pdf/08-Tires_and_Truck_Fuel_Economy.pdf.
---------------------------------------------------------------------------

    For this proposal, the agencies are proposing to use the same 
rolling resistance baseline value of 6.0 kg/ton for all trailer 
subcategories. We request comment on the appropriateness of 6.0 kg/ton 
as the proposed CRR threshold for all regulated trailers. 
Specifically, the agencies would like more information on current 
adoption rates of and CRR values for models of LRR tires 
currently in use on short box trailers and the various non-box 
trailers.
    Similar to the case of tractor tires, LRR tires are available as 
either dual or as single wide-based tires for trailers. Single wide-
based tires achieve CRR values that are similar to their 
dual counterparts, but have an added benefit of weight reduction, which 
can be an attractive option for trailers that frequently maximize cargo 
weight. See Section IV.D.1.d below.
(c) Tire Pressure Systems
    The inflation pressure of tires also impacts the rolling 
resistance. Tractor-trailers operating with all tires under-inflated by 
10 psi have been shown to increase fuel consumed by up to 1 
percent.\226\ Tires can gradually lose pressure from small punctures, 
leaky valves or simply diffusion through the tire casing. Changes in 
ambient temperature can also have an effect on tire pressure. Trailers 
that remain unused for long periods of time between hauls may 
experience any of these conditions. A 2003 FMCSA report found that 
nearly 1 in 5 trailers had at least 1 tire under-inflated by 20 psi or 
more. If drivers or fleets are not diligent about checking and 
attending to under-inflated tires, the trailer may have much higher 
rolling resistance and much higher CO2 emissions and fuel 
consumption.
---------------------------------------------------------------------------

    \226\ ``Tire Pressure Systems--Confidence Report''. North 
American Council for Freight Efficiency. 2013. Available online: 
http://nacfe.org/wp-content/uploads/2014/01/TPS-Detailed-Confidence-Report1.pdf.
---------------------------------------------------------------------------

    Tire pressure monitoring (TPM) and automatic tire inflation (ATI) 
systems are designed to address under-inflated tires. Both systems 
alert drivers if a tire's pressure drops below its set point. TPM 
systems are simpler and merely monitor tire pressure. Thus, they 
require user-interaction to re inflate to the appropriate pressure. 
Today's ATI systems, on the other hand, typically

[[Page 40262]]

take advantage of trailers' air brake systems to supply air back into 
the tires (continuously or on demand) until a selected pressure is 
achieved. In the event of a slow leak, ATI systems have the added 
benefit of maintaining enough pressure to allow the driver to get to a 
safe stopping area. The agencies believe TPM systems cannot 
sufficiently guarantee the proper inflation of tires due to the 
inherent user-interaction required. Therefore, ATI systems are the only 
pressure systems the agencies are proposing to recognize in Phase 2.
    Benefits of ATI systems in individual trailers vary depending on 
the base level of maintenance already performed by the driver or fleet, 
as well as the number of miles the trailer travels. Trailers that are 
well maintained or that travel fewer miles will experience less 
benefits from ATI systems compared to trailers that often drive with 
poorly inflated tires or log many miles. The agencies believe ATI 
systems can provide a CO2 and fuel consumption benefit to 
most trailers. With ATI use, trailers that have lower annual vehicle 
miles traveled (VMT) due to long periods between uses would be less 
susceptible to low tire pressures when they resume activity. Trailers 
with high annual VMT would experience the fuel savings associated with 
consistent tire pressures. Automatic tire inflation systems could 
provide a CO2 and fuel consumption savings of 0.5-2.0 
percent, depending on the degree of under-inflation in the trailer 
system. See Section IV.D.3.d below for discussion of our estimates of 
these factors, as well as estimates of the degree of adoption of ATI 
systems prior to and at various points in the phase-in of the proposed 
program.
    The use of ATI systems can result in cost savings beyond reducing 
fuel costs. For example, drivers and fleets that diligently maintain 
their tires would spend less time and money to inspect each tire. A 
2011 FMCSA estimated under-inflation accounts for one service call per 
year and increases tire procurement costs 10 to 13 percent. The study 
found that total operating costs can increase by $600 to $800 per year 
due to under-inflation.\227\
---------------------------------------------------------------------------

    \227\ TMC Future Truck Committee Presentation ``FMCSA Tire 
Pressure Monitoring Field Operational Test Results,'' February 8, 
2011.
---------------------------------------------------------------------------

(d) Weight Reduction
    Reduction in trailer tare (i.e., empty) weight can lead to fuel 
efficiency reductions in two ways. For applications where payload is 
not limited by weight restrictions, the overall weight of the tractor 
and trailer would be reduced and would lead to improved fuel 
efficiency. For applications where payload is limited by weight 
restrictions, the lower trailer weight would allow additional payload 
to be transported during the truck's trip, so emissions and fuel 
consumption on a ton-mile basis would decrease. There are weight 
reduction opportunities for trailers in both the structural components 
and in the wheels/tires. Material substitution (e.g., replacing steel 
with aluminum or lighter-weight composites) is feasible for components 
such as roof bows, side and corner posts, cross members, floor joists, 
floors, and van sidewalls. Similar material substitution is feasible 
for wheels (e.g., substituting aluminum for steel). Weight can also be 
reduced through the use of single wide-based tires replacing two dual 
tires.
    Lower weight is a desired trailer attribute for many customers, and 
most trailer manufacturers offer options that reduce weight to some 
degree. Some of these manufacturers, especially box van makers, market 
trailers with lower-weight major components, such as light-weight 
composite van sidewalls or aluminum floors, especially to customers 
that expect to frequently reach regulatory weight limits (i.e., ``weigh 
out'') and are willing to pay a premium for the ability to increase 
cargo weight without exceeding overall vehicle weight. Alternatively, 
manufacturers that primarily design trailers for customers that do not 
have weight limit concerns (i.e., their payloads frequently fill the 
available trailer cargo space before the weight limit is reached, or 
``cube out''), or for customers that have smaller budgets, may continue 
to design trailers based on traditional, heavier materials, such as 
wood and steel.
    There is no clear ``baseline'' for current trailer weight against 
which lower-weight designs could be compared for regulatory purposes. 
For this reason, the agencies do not believe it would be appropriate or 
fair across the industry to apply overall weight reductions toward 
compliance. However, the agencies do believe it would be appropriate to 
allow a manufacturer to account for weight reductions that involve 
substituting very specific, traditionally heavier components with 
lower-weight options that are not currently widely adopted in the 
industry. We discuss how we apply weight reduction in developing the 
standards in Section IV. D. (2)(d) below.
(2) Technological Basis of the Standards
    The analysis below presents one possible set of technology designs 
by which trailer manufacturers could reasonably achieve the goals of 
the program on average. However, in practice, trailer manufacturers 
could choose different technologies, versions of technologies, and 
combinations of technologies that meet the business needs of their 
customers while complying with this proposed program.
    Much of our analysis is performed for box trailers, which have the 
most stringent proposed standards. As mentioned previously, we have 
separate standards for short and long box vans, and a trailer length of 
50 feet is proposed as the cut-point to distinguish the two length 
categories. For the purpose of this analysis, long trailers are 
represented by 53-foot vans and short trailers are represented by 
single, 28-foot (``pup'') vans. These trailer lengths make up the 
largest fraction of the vans in the two categories. The agencies 
recognize that many 28-foot short vans are operated in tandem. However, 
these trailers are sold individually, and require a ``dolly'', often 
sold by a separate manufacturer, to connect the trailers for tandem 
operation.
    In addition, the other trailer types considered short vans in this 
proposal (e.g., 40-foot and 48-foot) typically operate as single 
trailers. To minimize complexity, we are proposing that 28-foot 
trailers represent all short refrigerated and dry vans for both 
compliance and for this feasibility analysis. This means that 
manufacturers would not need to perform tests (or report device 
manufacturers' test data) of the performance of devices for each 
trailer length in the short van category. Although this approach would 
provide a conservative estimate of actual CO2 emissions and 
fuel consumption reductions for the short van category, the agencies 
believe that the need to avoid an overly complex compliance program 
justifies this approach. We request comment on this approach to 
evaluating short box trailers.
(a) Aerodynamic Packages
    In order to evaluate performance and cost of the aerodynamic 
technologies discussed in the previous section, the agencies identified 
``packages'' of individual or combined technologies that are being sold 
today on box trailers. The agencies also identified distinct 
performance levels (i.e., bins) for these technologies based on EPA's 
aerodynamic testing. The agencies recognize that there are other 
technology options that have similar performance. We chose the 
technologies presented here based on their current adoption rates and 
effectiveness in reducing CO2 and fuel consumption.

[[Page 40263]]

    Bin I represents a base trailer with no aerodynamic technologies 
added. There is no cost associated with this bin. Bin II achieves small 
reductions in CO2 and fuel consumption. This bin includes a 
gap reducing fairing added to a long dry van or a skirt added to a solo 
short dry van.\228\ Bin III includes devices that would achieve 
SmartWay's verification threshold of four percent at cruise speeds. 
Some basic skirts and boat tails would achieve these levels of 
reductions for long box trailers. A gap reducer and a basic skirt on a 
short dry van would meet this level of performance. Bin IV technologies 
are more effective, single aerodynamic devices for long box trailers, 
including advanced skirts or boat tails, that achieve larger reductions 
in drag than the technologies in Bin III. The combination of an 
advanced skirt and gap reducer on a short dry van are also expected to 
achieve this bin.
---------------------------------------------------------------------------

    \228\ The agencies recognize that many 28-foot pup trailers are 
often operated in tandem. However, we are regulating and evaluating 
short dry vans as solo trailers since they are sold individually and 
the short box regulatory subcategories also include trailer sizes 
not often operated in tandem (e.g., 40-foot and 48-foot trailers).
---------------------------------------------------------------------------

    Bin V levels of performance were not observed in EPA's aerodynamic 
testing for short box trailers. It is possible that a gap reducer, 
skirt, and boat tail could achieve this performance, but boat tails are 
not feasible for 28-foot trailers operated in tandem unless the trailer 
is located in the rear position. For this analysis, the agencies only 
evaluated solo pup trailers and, therefore, did not evaluate any 
technologies for short box trailers beyond Bin IV. For this proposed 
rulemaking, we believe a Bin V level of performance can be achieved for 
long box trailers by either highly effective single devices or by 
applying a combination of basic boat tails and skirts. We do not 
currently have data for a single aerodynamic device that fits this bin 
and we evaluated it as a combination of a basic tail and skirt. Bin VI 
combines advanced skirts and boat tail technologies on long box 
trailers. This bin is expected to include many technologies that 
qualify for SmartWay's ``Elite'' designation.
    Bin VII represents an optimized system of technologies that work 
together to synergistically address each of the main areas of drag and 
achieves aerodynamic improvements greater than SmartWay's ``Elite'' 
designation. We are representing Bin VII with a gap reducer, and 
advanced tail and skirt. Bin VIII is designed to represent aerodynamic 
technologies that may become available in the future, including 
aerodynamic devices yet to be designed or approaches that would 
incorporate changes to the construction of trailer bodies. We have not 
analyzed this final bin in terms of effectiveness or cost, but are 
including it to account for future advancements in trailer 
aerodynamics.
    For this proposal, aerodynamic performance is evaluated using a 
vehicle's aerodynamic drag area, CDA. EPA collected 
aerodynamic test data for several tractor-trailer configurations, 
including 53-foot dry vans and 28-foot dry van trailers with many of 
these technology packages. The agencies developed bins, somewhat 
similar to the aerodynamic bins in the Phase 1 and proposed Phase 2 
tractor programs, based on results from our test program. However, 
unlike the tractor program, we grouped the technologies by changes in 
CDA (or ``delta CDA'') rather than by absolute 
values. In other words, each bin would comprise aerodynamic 
technologies that provide similar improvements in drag. This delta 
CDA classification methodology, which measures improvement 
in performance relative to a baseline, is similar to the SmartWay 
technology verification program with which most trailer manufacturers 
are familiar.
    Table IV-4 illustrates the bin structure that the agencies are 
proposing as the basis for compliance. The table shows example 
technology packages that might be included in each bin based on EPA's 
testing of 53-foot dry vans and solo 28-foot dry vans. The agencies 
believe these bins apply to other box trailers (refrigerated vans and 
lengths other than 28 and 53 feet), which will be described in more 
detail in Section IV.D.3.b. These bins cover a wide enough range of 
delta CDAs to account for the uncertainty seen in EPA's 
aerodynamic testing program due to procedure variability, the use of 
different test methods, or different models of tractors, trailers and 
devices. A more detailed description of the development of these bins 
can be found in the draft RIA, Chapter 2.10. We welcome comments and 
additional data that may support or suggest changes to these bins.

                     Table IV-4--Technology Bins Used To Evaluate Trailer Benefits and Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Example technologies
                Bin                    Delta CdA     Average delta ---------------------------------------------
                                                          CDA          53-foot dry van        28-foot dry van
----------------------------------------------------------------------------------------------------------------
Bin I.............................          < 0.09             0.0  No Aero Devices......  No Aero Devices.
Bin II............................       0.10-0.19             0.1  Gap Reducer..........  Skirt.
Bin III...........................       0.20-0.39             0.3  Basic Skirt or Basic   Skirt + Gap Reducer.
                                                                     Tail.
Bin IV............................       0.40-0.59             0.5  Advanced Skirt or      Adv. Skirt + Gap
                                                                     Tail.                  Reducer.
Bin V.............................       0.60-0.79             0.7  Basic Combinations...
Bin VI............................       0.80-1.19             1.0  Advanced Combinations  .....................
                                                                     (including SmartWay
                                                                     Elite).
Bin VII...........................       1.20-1.59             1.4  Optimized              .....................
                                                                     Combinations.
Bin VIII..........................           > 1.6             1.8  Changes to Trailer     .....................
                                                                     Construction.
----------------------------------------------------------------------------------------------------------------
Note: A blank cell indicates a zero or NA value in this table.

    The agencies used EPA's Greenhouse gas Emissions Model (GEM) 
vehicle simulation tool to conduct this analysis. See Section F.1 below 
for more about GEM. Within GEM, the aerodynamic performance of each 
trailer subcategory is evaluated by subtracting the delta 
CDA shown in Table IV-4 from the CDA value 
representing a specific standard tractor pulling a zero-technology 
trailer. The agencies chose to model the zero-technology long box dry 
van using a CDA value of 6.2 m\2\ (the average 
CDA from EPA's coastdown testing). For long box refrigerated 
vans, a two percent reduction in CDA was assumed to account 
for the aerodynamic benefit of the TRU at the front of the trailer. 
Short box dry vans also received a two percent lower CDA 
value compared to its 53-foot counterpart, consistent with the 
reduction observed in EPA's wind tunnel testing. The CDA 
value assigned to the refrigerated short box vans was an

[[Page 40264]]

additional two percent lower than the short box dry van. Non-aero box 
trailers are modeled as short box dry vans. The trailer subcategories 
that have design standards (i.e., non-box and non-aero box trailers) do 
not have numerical standards to meet, but they were evaluated in this 
feasibility analysis in order to quantify the benefits of including 
them in the program. Non-aero box trailers are modeled as short dry 
vans. Non-box trailers, which are modeled as flatbed trailers, were 
assigned a drag area of 4.9 m\2\, as was done in the Phase 1 tractor 
program for low roof day cabs. Table IV-5 illustrates the Bin I drag 
areas (CDA) associated with each trailer subcategory.

    Table IV-5--Baseline CDA Values Associated With Aerodynamic Bin I
                       [Zero trailer technologies]
------------------------------------------------------------------------
                   Trailer subcategory                        Dry van
------------------------------------------------------------------------
Long Dry Van............................................             6.2
Short Dry Van...........................................             6.1
Long Ref. Van...........................................             6.1
Short Ref. Van..........................................             6.0
Non-Aero Box............................................             6.1
Non-Box.................................................             4.9
------------------------------------------------------------------------

(b) Tire Rolling Resistance
    Similar to the proposed Phase 2 tractor and vocational vehicle 
programs, the agencies are proposing a tire program based on adoption 
of lower rolling resistance tires. Feedback from several box trailer 
manufacturers indicates that the standard tires offered on their new 
trailers are SmartWay-verified tires (i.e., CRR of 5.1 kg/
ton or better). An informal survey of members from the Truck Trailer 
Manufacturers Association (TTMA) indicates about 35 percent of box 
trailers sold today have SmartWay tires.\229\ While some trailers 
continue to be sold with tires of higher rolling resistances, the 
agencies believe most box trailer tires currently achieve the Phase 1 
trailer tire CRR of 6.0 kg/ton or better.
---------------------------------------------------------------------------

    \229\ Truck Trailer Manufacturers Association letter to EPA. 
Received on October 16, 2014. Docket EPA-HQ-OAR-2014-0827.
---------------------------------------------------------------------------

    The agencies evaluated two levels of tire performance for this 
proposal beyond the baseline trailer tire rolling resistance level 
(TRRL) of 6.0 kg/ton. The first performance level was set at the 
criteria for SmartWay-verification for trailer tires, 5.1 kg/ton, which 
is a 15 percent reduction in CRR from the baseline. As 
mentioned previously, several tire models available today achieve 
rolling resistance values well below the present SmartWay threshold. 
Given the multiple year phase-in of the standards, the agencies expect 
that tire manufacturers will continue to respond to demand for more 
efficient tires and will offer increasing numbers of tire models with 
rolling resistance values significantly better than today's typical LRR 
tires. In this context, we believe it is reasonable to expect a large 
fraction of the trailer industry could adopt tires with rolling 
resistances at a second performance level that would achieve an 
additional eight percent reduction in rolling resistance (a 22 percent 
reduction from the baseline tire), especially in the later stages of 
the program. The agencies project the CRR for this second 
level of performance to be a value of 4.7 kg/ton.
    The agencies evaluated these three tire rolling resistance levels, 
summarized in Table IV-6, in the feasibility analysis of the following 
sections. GEM simulations that apply Level 1 and 2 tires result in 
CO2 and fuel consumption reductions of two and three percent 
from the baseline tire, respectively. It should be noted that these 
levels are for the feasibility analysis only. For compliance, 
manufacturers would have the option to use tires with any rolling 
resistance and would not be limited to these TRRLs.

 Table IV-6--Summary of Trailer Tire Rolling Resistance Levels Evaluated
------------------------------------------------------------------------
                                                                CRR (kg/
                Tire rolling resistance level                     ton)
------------------------------------------------------------------------
Baseline.....................................................        6.0
Level 1......................................................        5.1
Level 2......................................................        4.7
------------------------------------------------------------------------

(c) Automatic Tire Inflation Systems
    NHTSA and EPA recognize the role of proper tire inflation in 
maintaining optimum tire rolling resistance during normal trailer 
operation. For this proposal, rather than require performance testing 
of ATI systems, the agencies are proposing to recognize the benefits of 
ATI systems with a single default reduction for manufacturers that 
incorporate ATI systems into their trailer designs. Based on 
information available today, we believe that there is a narrow range of 
performance among technologies available and among systems in typical 
use. We propose to assign a 1.5 percent reduction in CO2 and 
fuel consumption for all trailers that implement ATI systems, based on 
information available today.\230\ We believe the use of these systems 
can consistently ensure that tire pressure and tire rolling resistance 
are maintained. We selected the levels of the proposed trailer 
standards with the expectation that a high rate of adoption of ATI 
systems would occur across all on-highway trailers and during all years 
of the phase-in of the program. See Section IV.D.3.d below for 
discussion of our estimates of these factors, as well as estimates of 
the degree of adoption of ATI systems prior to and at various points in 
the phase-in of the proposed program. The informal survey of members 
from the Truck Trailer Manufacturers Association (TTMA) indicates about 
40 percent of box trailers sold today have ATI systems.\231\
---------------------------------------------------------------------------

    \230\ See the Chapter 2.10.2.3 of the draft RIA.
    \231\ Truck Trailer Manufacturers Association letter to EPA. 
Received on October 16, 2014. Docket EPA-HQ-OAR-2014-0827
---------------------------------------------------------------------------

(d) Weight Reduction
    The agencies are proposing compliance provisions that would limit 
the weight-reduction options to the substitution of specified 
components that can be clearly isolated from the trailer as a whole. 
For this proposal, the agencies have identified several conventional 
components with available lighter-weight substitutes (e.g., 
substituting conventional dual tires mounted on steel wheels with wide-
based single tires mounted on aluminum wheels). We are proposing values 
for the associated weight-related savings that would be applied with 
these substitutions for compliance. The proposed component 
substitutions and their associated weight savings are presented in the 
draft RIA, Chapter 2.10.2.4 and in proposed 40 CFR 1037.515. We believe 
that the initial cost of these component substitutions is currently 
substantial enough that only a relatively small segment of the industry 
has adopted these technologies today.
    The agencies recognize that when weight reduction is applied to a 
trailer, some operators will replace that saved weight with additional 
payload. To account for this in EPA's GEM vehicle simulation tool, it 
is assumed that one-third of the weight reduction will be applied to 
the payload. For tractor-trailers simulated in GEM, it takes a weight 
reduction of nearly 1,000 lbs before a one percent fuel savings is 
achieved. The component substitutions identified by the agencies result 
in weight reductions of less than 500 lbs, yet can cost over $1,000. 
The agencies believe that few trailer manufacturers would apply weight 
reduction solely as a means of achieving reduced fuel consumption and 
CO2 emissions. Therefore, we are proposing standards that 
could be met without reducing weight--that is, the compliance path set

[[Page 40265]]

out by the agencies for the proposed standards does not include weight 
reduction. However, we are proposing to offer weight reduction as an 
option for box trailer manufacturers who wish to apply it to some of 
their trailers as part of their compliance strategy.
    The agencies have identified 11 common trailer components that have 
lighter weight options available (see 40 CFR 1037.515) 
232 233 234 235 Manufacturers that adopt these technologies 
would sum the associated weight reductions and apply those values in 
GEM. As mentioned previously, we are restricting the weight reduction 
options to those listed in 40 CFR 1037.515. We are requesting comment 
on the appropriateness of the specified weight reductions from 
component substitution. In addition, we seek weight and cost data 
regarding additional components that could be offered as specific 
weight reduction options. The agencies request that any such components 
be applicable to most box trailers, and that the reduced weight option 
not currently be in common use.
---------------------------------------------------------------------------

    \232\ Scarcelli, Jamie. ``Fuel Efficiency for Trailers'' 
Presented at ACEEE/ICCT Workshop: Emerging Technologies for Heavy-
Duty Vehicle Fuel Efficiency, Wabash National Corporation. July 22, 
2014.
    \233\ ``Weight Reduction: A Glance at Clean Freight 
Strategies'', EPA SmartWay. EPA420F09-043. Available at: http://permanent.access.gpo.gov/gpo38937/EPA420F09-043.pdf.
    \234\ Memorandum dated June 2015 regarding confidential weight 
reduction information obtained during SBREFA Panel. Docket EPA-HQ-
OAR-2014-0827.
    \235\ Randall Scheps, Aluminum Association, ``The Aluminum 
Advantage: Exploring Commercial Vehicles Applications,'' presented 
in Ann Arbor, Michigan, June 18, 2009.
---------------------------------------------------------------------------

(3) Effectiveness, Adoption Rates, and Costs of Technologies for the 
Proposed Standards
    The agencies evaluated the technologies above as they apply to each 
of the trailer subcategories. The next sections describe the 
effectiveness, adoption rates and costs associated with these 
technologies. The effectiveness and adoption rates are then used to 
derive the proposed standards.
(a) Zero-Technology Baseline Tractor-Trailer Vehicles
    The regulatory purpose of EPA's heavy-duty vehicle compliance tool, 
GEM, is to combine the effects of trailer technologies through 
simulation so that they can be expressed as g/ton-mile and gal/1000 
ton-mile and thus avoid the need for direct testing of each trailer 
model being certified. The proposed trailer program has separate 
standards for each trailer subcategory, and a unique tractor-trailer 
vehicle was chosen to represent each subcategory for compliance. In the 
Phase 2 update to GEM, each trailer subcategory is modeled as a 
particular trailer being pulled by a standard tractor depending on the 
physical characteristics and use pattern of the trailer. Table IV-7 
highlights the relevant vehicle characteristics for the zero-technology 
baseline of each subcategory. Baseline trailer tires are used, and the 
drag area, which is a function of the aerodynamic characteristics of 
both the tractor and trailer, is set to the Bin I values shown 
previously in Table IV-5. Weight reduction and ATI systems are not 
applied in these baselines. Chapter 2.10 of the draft RIA provides a 
detailed description of the development of these baseline tractor-
trailers.
    The agencies chose to consistently model a Class 8 tractor across 
all trailer subcategories. We recognize that Class 7 tractors are 
sometimes used in certain applications. However, we believe Class 8 
tractors are more widely available, which will make it easier for 
trailer manufacturers to obtain a qualified tractor if they choose to 
perform trailer testing. We request comment on the use of Class 8 
tractors as part of the tractor-trailer vehicles used in the compliance 
simulation as well as performance testing. We ask that commenters 
include data, where available, related to the current use and 
availability of Class 7 and 8 tractors with respect to the trailer 
types in each trailer subcategory.

                                  Table IV--7 Characteristics of the Zero-Technology Baseline Tractor-Trailer Vehicles
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Dry van
                                             Refrigerated van                Non-aero box           Non-box
                                 -----------------------------------------------------------------------------------------------------------------------
Trailer Length..................  Long..............  Short.............  Long..............  Short.............  All Lengths.......  All Lengths
Tractor Class...................  Class 8...........  Class 8...........  Class 8...........  Class 8...........  Class 8...........  Class 8
Tractor Cab Type................  Sleeper...........  Day...............  Sleeper...........  Day...............  Day...............  Day
Tractor Roof Height.............  High..............  High..............  High..............  High..............  High..............  Low
Engine..........................  2018 MY 15L,......  2018 MY 15L,......  2018 MY 15L,......  2018 MY 15L,......  2018 MY 15L,......  2018 MY 15L,
                                  455 HP............  455 HP............  455 HP............  455 HP............  455 HP............  455 HP
Frontal Area (m\2\).............  10.4..............  10.4..............  10.4..............  10.4..............  10.4..............  6.9
Drag Area, CDA (m\2\)...........  6.2...............  6.1...............  6.1...............  6.0...............  6.1...............  4.9
Steer Tire RR (kg/ton)..........  6.54..............  6.54..............  6.54..............  6.54..............  6.54..............  6.54
Drive Tire RR (kg/ton)..........  6.92..............  6.92..............  6.92..............  6.92..............  6.92..............  6.92
Trailer Tire RR (kg/ton)........  6.00..............  6.00..............  6.00..............  6.00..............  6.00..............  6.00
Total Weight (kg)...............  31,978............  21,028............  33,778............  22,828............  21,028............  29,710
Payload (tons)..................  19................  10................  19................  10................  10................  19
ATI System Use..................  0.................  0.................  0.................  0.................  0.................  0
Weight Reduction (lb)...........  0.................  0.................  0.................  0.................  0.................  0
Drive Cycle Weightings..........  ..................  ..................  ..................  ..................  ..................  ..................
65-MPH Cruise...................  86%...............  64%...............  86%...............  64%...............  64%...............  64%
55-MPH Cruise...................  9%................  17%...............  9%................  17%...............  17%...............  17%
Transient Driving...............  5%................  19%...............  5%................  19%...............  19%...............  19%
--------------------------------------------------------------------------------------------------------------------------------------------------------

(b) Effectiveness of Technologies
    The agencies are proposing to recognize trailer improvements via 
four performance parameters: aerodynamic drag reduction, tire rolling 
resistance reduction, the adoption of ATI systems, and by substituting 
specific weight-reducing components. Table IV-8 summarizes the 
performance levels for each of these parameters based on the technology 
characteristics outlined in Section IV. D. (2) .

[[Page 40266]]

   Table IV--8 Performance Parameters for the Proposed Trailer Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Aerodynamics (Delta CDA, m\2\):
  Bin I...................................  0.0.
  Bin II..................................  0.1.
  Bin III.................................  0.3.
  Bin IV..................................  0.5.
  Bin V...................................  0.7.
  Bin VI..................................  1.0.
  Bin VII.................................  1.4.
  Bin VIII................................  1.8.
Tire Rolling Resistance (CRR, kg/ton):
  Tire Baseline...........................  6.0.
  Tire Level 1............................  5.1.
  Tire Level 2............................  4.7.
Tire Inflation System (% reduction):
  ATI System..............................  1.5.
Weight Reduction (lbs):
  Weight..................................  1/3 added to payload,
                                             remaining reduces overall
                                             vehicle weight.
------------------------------------------------------------------------

    These performance parameters have different effects on each trailer 
subcategory due to differences in the simulated trailer 
characteristics. Table IV-9 shows the agencies' estimates of the 
effectiveness of each parameter for the four box trailer subcategories. 
Each technology was evaluated using the baseline parameter values for 
the other technology categories. For example, each aerodynamic bin was 
evaluated using the baseline tire (6.0 kg/ton) and the baseline weight 
reduction option (zero lbs). The table shows that aerodynamic 
improvements offer the largest potential for CO2 emissions 
and fuel consumption reductions, making them relatively effective 
technologies.

 Table IV-9--Effectiveness (Percent CO2 and Fuel Savings From Baseline) of Technologies for the Proposed Trailer
                                                     Program
----------------------------------------------------------------------------------------------------------------
                                                              Dry van                    Refrigerated van
         Aerodynamics           Delta CDA (m\2\) ---------------------------------------------------------------
                                                       Long            Short           Long            Short
----------------------------------------------------------------------------------------------------------------
Bin I.........................  0.0.............              0%              0%              0%              0%
Bin II........................  0.1.............              -1              -1              -1              -1
Bin III.......................  0.3.............              -2              -2              -2              -2
Bin IV........................  0.5.............              -3              -4              -3              -3
Bin V.........................  0.7.............              -5              -5              -5              -5
Bin VI........................  1.0.............              -7              -7              -7              -7
Bin VII.......................  1.4.............             -10             -10              -9             -10
Bin VIII......................  1.8.............             -13             -13             -12             -12
----------------------------------------------------------------------------------------------------------------
Tire Rolling Resistance         CRR (kg/ton)....              Dry van
                                        Refrigerated van
                                                 ---------------------------------------------------------------
                                                            Long           Short            Long           Short
----------------------------------------------------------------------------------------------------------------
Baseline......................  6.0.............               0               0               0               0
Level 1.......................  5.1.............              -2              -1              -2              -1
Level 2.......................  4.7.............              -3              -2              -3              -2
----------------------------------------------------------------------------------------------------------------
Weight Reduction                Weight (lb).....              Dry van
                                        Refrigerated van
                                                 ---------------------------------------------------------------
                                                            Long           Short            Long           Short
----------------------------------------------------------------------------------------------------------------
Baseline......................  0.0.............             0.0             0.0             0.0             0.0
Al. Dual Wheels...............  168.............            -0.2            -0.3            -0.2            -0.3
Upper Coupler.................  280.............            -0.3              -1            -0.3              -1
Suspension....................  430.............            -0.5              -1            -0.5              -1
Al. Single Wide...............  556.............              -1              -1              -1              -1
----------------------------------------------------------------------------------------------------------------

(c) Reference Tractor-Trailer To Evaluate Benefits and Costs
    In order to evaluate the benefits and costs of the proposed 
standards, it is necessary to establish a reference point for 
comparison. As mentioned previously, the technologies described in 
Section IV. D. (2) exist in the market today, and their adoption is 
driven by available fuel savings as well as by the voluntary SmartWay 
Partnership and California's tractor-trailer requirements. For this 
proposal, the agencies identified reference case tractor-trailers for 
each trailer subcategory based on the technology adoption rates we 
project would exist if this proposed trailer program was not 
implemented.
    We project that by 2018, absent further California regulation, 
EPA's SmartWay program and these research programs will result in about 
20 percent of 53-foot dry and refrigerated vans adopting basic 
SmartWay-level aerodynamic technologies (meeting SmartWay's four 
percent verification level and Bin III from Table IV-5), 30 percent 
adopting more advanced aerodynamic technologies at the five percent 
SmartWay-verification level (Bin IV from Table IV-5) and five percent 
adding combinations of technologies (Bin V).236 237 238 In 
addition, we project half of these 53' box trailers will be equipped 
with SmartWay-verified tires (i.e., 5.1 kg/ton or better) and ATI 
systems as well. The agencies project that market forces will drive an 
additional one percent increase in adoption of the advanced SmartWay 
and tire technologies each year through 2027. For analytical purposes, 
the agencies assumed manufacturers of the shorter box trailers and 
other trailer

[[Page 40267]]

subcategories would not adopt these technologies in the timeframe 
considered and a zero-technology baseline is assumed. We are not 
assuming weight reduction for any of the trailer subcategories in the 
reference cases. Table IV-10 summarizes the reference case trailers for 
each trailer subcategory.
---------------------------------------------------------------------------

    \236\ Truck Trailer Manufacturers Association letter to EPA. 
Received on October 16, 2014. Docket EPA-HQ-OAR-2014-0827.
    \237\ Ben Sharpe (ICCT) and Mike Roeth (North American Council 
for Freight Efficiency), ``Costs and Adoption Rates of Fuel-Saving 
Technologies for Trailer in the North American On-Road Freight 
Sector'', Feb 2014.
    \238\ Frost & Sullivan, ``Strategic Analysis of North American 
Semi-trailer Advanced Technology Market'', Feb 2013.

  Table IV-10--Projected Adoption Rates and Average Performance Parameters for the Less Dynamic Reference Case
                                                    Trailers
----------------------------------------------------------------------------------------------------------------
           Technology                            Long box  dry & refrigerated vans                Short box, non-
-------------------------------------------------------------------------------------------------   aero box, &
                                                                                                      non-box
                                                                                                     trailers
           Model Year                  2018            2021            2024            2027      ---------------
                                                                                                     2018-2027
----------------------------------------------------------------------------------------------------------------
Aerodynamics:
    Bin I.......................             45%             41%             38%             35%            100%
    Bin II......................  ..............  ..............  ..............  ..............  ..............
    Bin III.....................              20              20              20              20  ..............
    Bin IV......................              30              34              37              40  ..............
    Bin V.......................               5               5               5               5  ..............
    Bin VI......................  ..............  ..............  ..............  ..............  ..............
    Bin VII.....................  ..............  ..............  ..............  ..............  ..............
    Bin VIII....................  ..............  ..............  ..............  ..............  ..............
        Average Delta CDA (m\2\)             0.2             0.3             0.3             0.3             0.0
         \a\....................
Tire Rolling Resistance:
    Baseline tires..............              50              47              43              40             100
    Level 1 tires...............              50              53              57              60  ..............
    Level 2 tires...............  ..............  ..............  ..............  ..............  ..............
        Average CRR (kg/ton) \a\            5.55            5.52            5.49            5.46             6.0
Tire Inflation:
    ATI.........................              50              53              57              60               0
        Average % Reduction \a\.             0.8             0.8             0.9             0.9             0.0
Weight Reduction (lbs):
    Weight \b\..................  ..............  ..............  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
Notes: A blank cell indicates a zero value.
\a\ Combines adoption rates with performance levels shown in Table IV-8.
\b\ Weight reduction was not projected for the reference case trailers.

    Also shown in Table IV-10 are average aerodynamic performance 
(delta CDA), average tire rolling resistance 
(CRR), and average reductions due to use of ATI and weight 
reduction for each stage of the proposed program. These values indicate 
the performance of theoretical average tractor-trailers that the 
agencies project will be in use if no federal regulations were in place 
for trailer CO2 and fuel consumption. The average tractor-
trailer vehicles serve as reference cases for each trailer subcategory. 
The agencies provide a detailed description of the development of these 
reference case vehicles in Chapter 2.10 in the draft RIA.
    Because the agencies cannot be certain about future trends, we also 
considered a second reference case. This more dynamic reference case 
reflects the possibility that absent a Phase 2 regulation, there will 
be continuing adoption of technologies in the trailer market after 2027 
that reduce fuel consumption and CO2 emissions. This case 
assumes the research funded and conducted by the federal government, 
industry, academia and other organizations will, after 2027, result the 
adoption of some technologies beyond the levels required to comply with 
existing regulatory and voluntary programs. One example of such 
research is the Department of Energy Super Truck program which has a 
goal of demonstrating cost-effective measures to improve the efficiency 
of Class 8 long-haul freight trucks by 50 percent by 2015.\239\ This 
reference case assumes that by 2040, 75 percent of new trailers will be 
equipped with SmartWay-verified aerodynamic devices, low rolling 
resistance tires, and ATI systems. Table IV-11 shows the agencies' 
projected adoption rates of technologies in the more dynamic reference 
case.
---------------------------------------------------------------------------

    \239\ Daimler Truck North America. SuperTruck Program Vehicle 
Project Review. June 19, 2014. Docket EPA-HQ-OAR-2014-0827.

                      Table IV-11--Projected Adoption Rates and Average Performance Parameters for the More Dynamic Reference Case
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Technology                                                Long box dry & refrigerated vans                         Short box, non-
-----------------------------------------------------------------------------------------------------------------------------------------   aero box, &
                                                                                                                                              non-box
                                                                                                                                             trailers
                       Model year                              2018            2021            2024            2027            2040      ---------------
                                                                                                                                             2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aerodynamics:
    Bin I...............................................             45%             41%             38%             35%             20%            100%
    Bin II..............................................  ..............  ..............  ..............  ..............  ..............  ..............
    Bin III.............................................              20              20              20              20              20  ..............

[[Page 40268]]

 
    Bin IV..............................................              30              34              37              40              55  ..............
    Bin V...............................................               5               5               5               5               5  ..............
    Bin VI..............................................  ..............  ..............  ..............  ..............  ..............  ..............
    Bin VII.............................................  ..............  ..............  ..............  ..............  ..............  ..............
    Bin VIII............................................  ..............  ..............  ..............  ..............  ..............  ..............
        Average Delta C DA (m\2\) \a\...................             0.2             0.3             0.3             0.3             0.4             0.0
Tire Rolling Resistance:
    Baseline tires......................................              50              47              43              40              25             100
    Level 1 tires.......................................              50              53              57              60              75  ..............
    Level 2 tires.......................................  ..............  ..............  ..............  ..............  ..............  ..............
        Average CRR (kg/ton) \a\........................             5.6             5.5             5.5             5.5             5.3             6.0
Tire Inflation:
ATI.....................................................              50              53              57              60              75               0
        Average % Reduction \a\.........................             0.8             0.8             0.9             0.9             1.1             0.0
Weight Reduction (lbs):
    Weight \b\..........................................  ..............  ..............  ..............  ..............  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: A blank cell indicates a zero value.
\a\ Combines adoption rates with performance levels shown in Table IV-8.
\b\ Weight reduction was not projected for the reference case trailers.

    The agencies applied the vehicle attributes from Table IV-7 and the 
average performance values from Table IV-10 in the proposed Phase 2 GEM 
vehicle simulation to calculate the CO2 emissions and fuel 
consumption performance of the reference tractor-trailers. The results 
of these simulations are shown in Table IV-12. We used these 
CO2 and fuel consumption values to calculate the relative 
benefits of the proposed standards. Note that the large difference 
between the per ton-mile values for long and short trailers is due 
primarily to the large difference in assumed payload (19 tons compared 
to 10 tons) as seen in Table IV-7 and discussed further in the Chapter 
2.10.3. The alternative reference case shown in Table IV-11 impacts the 
long-term projections of benefits beyond 2027, which are analyzed in 
Chapters 5-7 of the draft RIA.

           Table IV-12--CO2 Emissions and Fuel Consumption Results for the Reference Tractor-Trailers
----------------------------------------------------------------------------------------------------------------
                                                              Dry van                    Refrigerated van
                     Length                      ---------------------------------------------------------------
                                                       Long            Short           Long            Short
----------------------------------------------------------------------------------------------------------------
CO2 Emissions (g/ton-mile)......................              85             147              87             151
Fuel Consumption (gal/1000 ton-miles)...........          8.3497         14.4401          8.5462         14.8330
----------------------------------------------------------------------------------------------------------------

(d) Projected Technology Adoption Rates for the Proposed Standards
    As described in Section IV. E., the agencies evaluated several 
alternatives for the proposed trailer program. Based on our analysis, 
and current information, the agencies are proposing the alternative we 
believe reflects the agencies' respective statutory authorities. The 
agencies are also considering an accelerated alternative with less lead 
time, requiring the same incremental stringencies for the proposed 
program, but becoming effective three years earlier. The agencies 
believe this alternative has the potential to be the maximum feasible 
alternative. However, based on the evidence currently before us, EPA 
and NHTSA have outstanding questions regarding relative risks and 
benefits of Alternative 4 due to the timeframe envisioned by that 
alternative. EPA and NHTSA are seriously considering this accelerated 
alternative in whole or in part for the trailer segment. In other 
words, the agencies could determine that less lead-time is maximum 
feasible in the final rule. We request comment on these two 
alternatives, including the proposed lead-times.
    Table IV-13 and Table IV-14 present a set of assumed adoption rates 
for aerodynamic, tire, and ATI technologies that a manufacturer could 
apply to meet the proposed standards. These adoption rates begin with 
60 percent of long box trailers achieving current SmartWay level 
aerodynamics (Bin IV) and progress to 90 percent achieving SmartWay 
Elite (Bin VI) or better over the following nine years. The adoption 
rates for short box trailers assume adoption of single aero devices in 
MY 2021 and combinations of devices by MY 2027. Although the shorter 
lengths of these trailers can restrict the design of aerodynamic 
technologies that fully match the SmartWay-like performance levels of 
long boxes, we nevertheless expect that trailer and device 
manufacturers would continue to innovate skirt, under-body, rear, and 
gap-reducing devices and combinations to achieve improved aerodynamic 
performance on these shorter trailers. The assumed adoption rates for 
aerodynamic technologies for both long and short refrigerated vans are 
slightly less than for dry vans, reflecting the more limited number of 
aerodynamic options due to the presence of their TRUs.
    The gradual increase in assumed adoption of aerodynamic 
technologies

[[Page 40269]]

throughout the phase-in to the MY 2027 standards recognizes that even 
though many of the technologies are available today and technologically 
feasible throughout the phase-period, their adoption on the scale of 
the proposed program would likely take time. The adoption rates we are 
assuming in the interim years--and the standards that we developed from 
these rates--represent steady and yet reasonable improvement in average 
aerodynamic performance.
    The agencies project that nearly all box trailers will adopt tire 
technologies to comply with the standards and the agencies projected 
consistent adoption rates across all lengths of dry and refrigerated 
vans, with more advanced (Level 2) low-rolling resistance tires assumed 
to replace Level 1 tire models in the 2024 time frame, as Level 2-type 
tires become more available and fleet experience with these tires 
develops. As mentioned previously, the agencies did not include weight 
reduction in their technology adoption projections, but certain types 
of weight reduction could be used as a compliance pathway, as discussed 
in Section IV.D.1.d above.
    The adoption rates shown in these tables are one set of many 
possible combinations that box trailer manufacturers could apply to 
achieve the same average stringency. If a manufacturer chose these 
adoption rates, a variety of technology options exist within the 
aerodynamic bins, and several models of LRR tires exist for the levels 
shown. Alternatively, technologies from other aero bins and tire levels 
could be used to comply. It should be noted that manufacturers are not 
limited to aerodynamic and tire technologies, since these are 
performance-based standards, and manufacturers would not be constrained 
to adopt any particular way to demonstrate compliance. Certain types of 
weight reduction, for example, may be used as a compliance pathway, as 
discussed in Section IV.D.1.d above.
    Similar to our analyses of the reference cases, the agencies 
derived a single set of performance parameters for each subcategory by 
weighting the performance levels included in Table IV-8 by the 
corresponding adoption rates. These performance parameters represent an 
average compliant vehicle for each trailer subcategory and we present 
these values in the tables. The 2024 MY adoption rates would continue 
to apply for the partial-aero box trailers in 2027 and later model 
years.

                             Table IV-13--Projected Adoption Rates and Average Performance Parameters for Long Box Trailers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           Technology                                          Long box dry vans                      Long box refrigerated vans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           Model year                                2018       2021       2024       2027       2018       2021       2024       2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aerodynamic Technologies:
    Bin I.......................................................         5%  .........  .........  .........         5%  .........  .........  .........
    Bin II......................................................  .........  .........  .........  .........  .........  .........  .........  .........
    Bin III.....................................................        30%         5%  .........  .........        30%         5%  .........  .........
    Bin IV......................................................        60%        55%        25%  .........        60%        55%        25%  .........
    Bin V.......................................................         5%        10%        10%        10%         5%        10%        10%        20%
    Bin VI......................................................  .........        30%        65%        50%  .........        30%        65%        60%
    Bin VII.....................................................  .........  .........  .........        40%  .........  .........  .........        20%
    Bin VIII....................................................  .........  .........  .........  .........  .........  .........  .........  .........
        Average Delta CDA (m\2\) \a\............................        0.4        0.7        0.8        1.1        0.4        0.7        0.8        1.0
Trailer Tire Rolling Resistance:
    Baseline tires..............................................        15%         5%         5%         5%        15%         5%         5%         5%
    Level 1 tires...............................................        85%        95%  .........  .........        85%        95%  .........  .........
    Level 2 tires...............................................  .........  .........        95%        95%  .........  .........        95%        95%
        Average CRR (kg/ton) \a\................................        5.2        5.1        4.8        4.8        5.2        5.1        4.8        4.8
Tire Inflation System:
    ATI.........................................................         85         95         95         95         85         95         95         95
        Average ATI Reduction (%) \a\...........................       1.3%       1.4%       1.4%       1.4%       1.3%       1.4%       1.4%       1.4%
Weight Reduction (lbs):
    Weight \b\..................................................  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: A blank cell indicates a zero value.
\a\ Combines projected adoption rates with performance levels shown in Table IV-8.
\b\ This set of proposed adoption rates did not apply any assumed weight reduction to meet the proposed standards for these trailers.

                             Table IV-14--Projected Adoption Rates and Average Performance Parameters for Short Box Trailers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           Technology                                         Short box dry vans                      Short box refrigerated vans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           Model year                                2018       2021       2024       2027       2018       2021       2024       2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aerodynamic Technologies: \a\
    Bin I.......................................................       100%         5%  .........  .........       100%         5%  .........  .........
    Bin II......................................................  .........        95%        70%        30%  .........        95%        70%        55%
    Bin III.....................................................  .........  .........        30%        60%  .........  .........        30%        40%
    Bin IV......................................................  .........  .........  .........        10%  .........  .........  .........         5%
    Bin V.......................................................  .........  .........  .........  .........  .........  .........  .........  .........
    Bin VI......................................................  .........  .........  .........  .........  .........  .........  .........  .........
    Bin VII.....................................................  .........  .........  .........  .........  .........  .........  .........  .........
    Bin VIII....................................................  .........  .........  .........  .........  .........  .........  .........  .........
        Average Delta CDA (m\2\) \b\............................        0.4        0.7        0.8        1.1        0.4        0.7        0.8        1.0
Trailer Tire Rolling Resistance:
    Baseline tires..............................................        15%         5%         5%         5%        15%         5%         5%         5%
    Level 1 tires...............................................        85%        95%  .........  .........        85%        95%  .........  .........
    Level 2 tires...............................................  .........  .........        95%        95%  .........  .........        95%        95%
        Average CRR (kg/ton) \b\................................        5.2        5.1        4.8        4.8        5.2        5.1        4.8        4.8

[[Page 40270]]

 
Tire Inflation System:
ATI.............................................................        85%        95%        95%        95%        85%        95%        95%        95%
        Average ATI Reduction (%) \c\...........................       1.3%       1.4%       1.4%       1.4%       1.3%       1.4%       1.4%       1.4%
Weight Reduction (lbs):
    Weight \b\..................................................  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: A blank cell indicates a zero value.
\a\ The majority of short box trailers are 28 feet in length. We recognize that they are often operated in tandem, which limits the technologies that
  can be applied (for example, boat tails).
\b\ Combines projected adoption rates with performance levels shown in Table IV-8.
\c\ This set of proposed adoption rates did not apply any assumed weight reduction to meet the proposed standards for these trailers.

    Non-aero box trailers, with two or more work-related special 
components, and non-box trailers are not shown in the tables above. We 
are proposing that manufacturers of these trailers meet design-based 
(i.e., technology-based) standards, instead of performance-based 
standards that would apply to other trailers. That is, manufacturers of 
these trailers would not need to use aerodynamic technologies, but they 
would need to use appropriate lower rolling resistance tires and ATI 
systems, based on our assessments of the typical CO2 and 
fuel consumption performance of this equipment (see Section IV.2.c). 
Thus, we are projecting 100 percent adoption rates of these 
technologies at each stage of the program. Compared to manufacturers 
that needed aerodynamic technologies to comply, the approach for non-
aero box trailers and non-box trailers would result in a significantly 
lower compliance burden for manufacturers by reducing the amount of 
tracking and eliminating the need to calculate a compliance value (see 
Section IV. F.). The agencies are proposing these design standards in 
two stages. In 2018, the proposed standards would require manufacturers 
to use tires meeting a rolling resistance of Level 1 or better and to 
install ATI systems on all non-box and non-aero box trailers. In 2024, 
the proposed standards would require manufacturers to use LRR tires at 
a Level 2 or better, and to still install ATI systems. We seek comment 
on all aspects of this design-based standards concept. We also seek 
comment on providing manufacturers with the option of adopting Level 2 
tires in the early years of the program (MY 2018-2023) and avoiding the 
use of ATI systems if they chose.

 Table IV-15--Projected Adoption Rates and Average Performance Parameters for Non-Aero Box and Non-Box Trailers
----------------------------------------------------------------------------------------------------------------
                   Technology                                     Non-aero box & non-box trailers
----------------------------------------------------------------------------------------------------------------
                   Model year                          2018            2021            2024            2027
----------------------------------------------------------------------------------------------------------------
Aerodynamic Technologies:
    Bin I.......................................            100%            100%            100%            100%
    Bin II......................................  ..............  ..............  ..............  ..............
    Bin III.....................................  ..............  ..............  ..............  ..............
    Bin IV......................................  ..............  ..............  ..............  ..............
    Bin V.......................................  ..............  ..............  ..............  ..............
    Bin VI......................................  ..............  ..............  ..............  ..............
    Bin VII.....................................  ..............  ..............  ..............  ..............
    Bin VIII....................................  ..............  ..............  ..............  ..............
        Average Delta CDA (m\2\) \a\............             0.0             0.0             0.0             0.0
Trailer Tire Rolling Resistance:
    Baseline tires..............................  ..............  ..............  ..............  ..............
    Level 1 tires...............................            100%            100%  ..............  ..............
    Level 2 tires...............................  ..............  ..............            100%            100%
        Average CRR (kg/ton) \a\................             5.1             5.1             4.7             4.7
Tire Inflation System:
    ATI.........................................            100%            100%            100%            100%
        Average ATI Reduction (%) \a\...........            1.5%            1.5%            1.5%            1.5%
Weight Reduction (lbs):
    Weight \b\..................................  ..............  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
Notes: A blank cell indicates a zero value.
\a\ Combines projected adoption rates with performance levels shown in Table IV-8.
\b\ This set of adoption rates did not apply weight reduction to meet the proposed standards for these trailers.

    We request comment and any data related to our projections of 
technology adoption rates. The following section (d) explains how the 
agencies combined these adoption rates with the performance values 
shown previously to calculate the proposed standards.
(e) Derivation of the Proposed Standards
    The average performance parameters from Table IV-14, and Table IV-
15 were applied as input values to the GEM vehicle simulation to derive 
the

[[Page 40271]]

proposed HD Phase 2 fuel consumption and CO2 emissions 
standards for each subcategory of trailers. The proposed standards are 
shown in Table IV-16. The proposed standards for partial-aero trailers, 
which are not explicitly shown in Table IV-16, would be the same as 
their full-aero counterparts through MY 2026. In MY 2027 and later, 
partial aero trailers would continue to meet the MY 2024 standards.
    Over the four stages of the proposed rule, box trailers longer than 
50 feet would, on average, reduce their CO2 emissions and 
fuel consumption by two percent, four percent, seven percent and eight 
percent compared to their reference cases. Box trailers 50-feet and 
shorter would achieve reductions of two percent, three percent and four 
percent compared to their reference cases. The tire technologies used 
on non-box and non-aero box trailers would provide reductions of two 
percent in the first two stages and achieve three percent by 2027.

                                Table IV-16--Proposed Standards for Box Trailers
----------------------------------------------------------------------------------------------------------------
                                   Subcategory                Dry van                    Refrigerated van
          Model year           ---------------------------------------------------------------------------------
                                     Length            Long            Short           Long            Short
----------------------------------------------------------------------------------------------------------------
2018--2020....................  EPA Standard                  83             144              84             147
                                 (CO2 Grams per
                                 Ton-Mile).
                                Voluntary NHTSA           8.1532         14.1454          8.2515         14.4401
                                 Standard
                                 (Gallons per
                                 1,000 Ton-Mile).
2021--2023....................  EPA Standard                  81             142              82             146
                                 (CO2 Grams per
                                 Ton-Mile).
                                NHTSA Standard            7.9568         13.9489          8.0550         14.3418
                                 (Gallons per
                                 1,000 Ton-Mile).
2024--2026....................  EPA Standard                  79             141              81             144
                                 (CO2 Grams per
                                 Ton-Mile).
                                NHTSA Standard            7.7603         13.8507          7.9568         14.1454
                                 (Gallons per
                                 1,000 Ton-Mile).
2027 +........................  EPA Standard                  77             140              80             144
                                 (CO2 Grams per
                                 Ton-Mile).
                                NHTSA Standard            7.5639         13.7525          7.8585         14.1454
                                 (Gallons per
                                 1,000 Ton-Mile).
----------------------------------------------------------------------------------------------------------------

    It should be noted that the proposed standards are based on highway 
cruise cycles that include road grade to better reflect real world 
driving and to help recognize engine and driveline technologies. See 
Section III.E. The agencies have evaluated some alternate road grade 
profiles recommended by the National Renewable Energy Laboratory (NREL) 
and have prepared possible alternative trailer vehicle standards based 
on these profiles. The agencies request comment on this analysis, which 
is available in a memorandum to the docket.\240\
---------------------------------------------------------------------------

    \240\ Memorandum dated May 2015 on Analysis of Possible Tractor, 
Trailer, and Vocational Vehicle Standards Based on Alternative Road 
Grade Profiles. Docket EPA-HQ-OAR-2014-0827.
---------------------------------------------------------------------------

(f) Technology Costs for the Proposed Standards
    The agencies evaluated the technology costs for 53-foot dry and 
refrigerated vans and 28-foot dry vans, which we believe are 
representative of the majority of trailers in the 50-foot and longer 
and shorter than 50-foot categories, respectively. We identified costs 
for each technology package evaluated and projected the costs for each 
year of the program. A summary of the technology costs is included in 
Table IV-17 through Table IV-20 for MYs 2018 through 2027, with 
additional details available in the draft RIA Chapter 2.12. Costs shown 
in the following tables are for the specific model year indicated and 
are incremental to the average reference case costs, which includes 
some level of adoption of these technologies as shown in Table IV-13. 
Therefore, the technology costs in the following tables reflect the 
average cost expected for each of the indicated trailer classes. Note 
that these costs do not represent actual costs for the individual 
components because some fraction of the component costs has been 
subtracted to reflect some use of these components in the reference 
case. For more on the estimated technology costs exclusive of adoption 
rates, refer to Chapter 2.12 of the draft RIA. These costs include 
indirect costs via markups and reflect lower costs over time due to 
learning impacts. For a description of the markups and learning impacts 
considered in this analysis and how technology costs for other years 
are thereby affected, refer to Chapter 7 of the draft RIA. We welcome 
comment on the technology costs, markups, and learning impacts.

                    Table IV-17--Trailer Technology Incremental Costs in the 2018 Model Year
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                      53-foot
                                                   53-foot  dry    refrigerated    28-foot  dry     Non-aero  &
                                                        van             van             van           non-box
----------------------------------------------------------------------------------------------------------------
Aerodynamics....................................            $285            $285              $0              $0
Tires...........................................              65              65              78             185
Tire inflation system...........................             239             239             435             683
                                                 ---------------------------------------------------------------
    Total.......................................             588             588             514             868
----------------------------------------------------------------------------------------------------------------

[[Page 40272]]

                    Table IV-18--Trailer Technology Incremental Costs in the 2021 Model Year
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                      53-foot
                                                   53-foot  dry    refrigerated    28-foot  dry     Non-aero  &
                                                        van             van             van           non-box
----------------------------------------------------------------------------------------------------------------
Aerodynamics....................................            $602            $602            $468              $0
Tires...........................................              65              65              79             175
Tire inflation system...........................             234             234             426             632
                                                 ---------------------------------------------------------------
    Total.......................................             901             901             974             807
----------------------------------------------------------------------------------------------------------------

                    Table IV-19--Trailer Technology Incremental Costs in the 2024 Model Year
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                      53-foot
                                                   53-foot  dry    refrigerated    28-foot  dry     Non-aero  &
                                                        van             van             van           non-box
----------------------------------------------------------------------------------------------------------------
Aerodynamics....................................            $836            $836            $608              $0
Tires...........................................              61              61              76             160
Tire inflation system...........................             220             220             412             578
                                                 ---------------------------------------------------------------
    Total.......................................           1,116           1,116           1,097             739
----------------------------------------------------------------------------------------------------------------

                    Table IV-20--Trailer Technology Incremental Costs in the 2027 Model Year
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                      53-foot
                                                   53-foot  dry    refrigerated    28-foot  dry     Non-aero  &
                                                        van             van             van           non-box
----------------------------------------------------------------------------------------------------------------
Aerodynamics....................................          $1,163          $1,034            $788              $0
Tires...........................................              54              54              74             155
Tire inflation system...........................             192             192             391             549
                                                 ---------------------------------------------------------------
    Total.......................................           1,409           1,280           1,253             704
----------------------------------------------------------------------------------------------------------------

(4) Consistency of the Proposed Trailer Standards With the Agencies' 
Legal Authority
    The agencies' initial determination, subject to consideration of 
public comment, is that the standards presented in the Section IV.C.2, 
are the maximum feasible and appropriate under the agencies' respective 
authorities, considering lead time, cost, and other factors. The 
agencies' proposed decisions on the stringency and timing of the 
proposed standards focused on available technology and the consequent 
emission reductions and fuel efficiency improvements associated with 
use of the technology, while taking into account the circumstances of 
the trailer manufacturing sector. Trailer manufacturers would be 
subject to first-time emission control and fuel consumption regulation 
under the proposed standards. These manufacturers are in many cases 
small businesses, with limited resources to master the mechanics of 
regulatory compliance. Thus, the agencies' proposal seeks to provide a 
reasonable time for trailer manufacturers to become familiar with the 
requirements and the proposed new compliance regime, given the unique 
circumstances of the industry and the compliance flexibilities and 
optional compliance mechanisms specially adapted for this industry 
segment that we are proposing.
    The stringency of the standard is predicated on more widespread 
deployment of aerodynamic and tire technologies that are already in 
commercial use. The availability, feasibility, and level of 
effectiveness of these technologies are well-documented. Thus the 
agencies do not believe that there is any issue of technological 
feasibility of the proposed standards. Among the issues reflected in 
the agencies' proposal are considerations of cost and sufficiency of 
lead-time--including lead-time not only to deploy technological 
improvements, but also this industry sector to assimilate for the first 
time the compliance mechanisms of the proposed rule.
    The highest cost shown in Table IV-20 is associated with the long 
dry vans. We project that the average cost per trailer to meet the 
proposed MY 2027 standards for these trailers would be about $1,400, 
which is less than 10 percent of the cost of a new dry van trailer 
(estimated to be about $20,000). Other trailer types have lower 
projected technology costs, and many have higher purchase prices. As a 
result, we project that the per-trailer costs for all trailers covered 
in this regulation will be less than 10 percent of the cost of a new 
trailer. This trend is consistent with the expected average control 
costs for Phase 2 tractors, which are also less than 10 percent of 
typical tractor costs (see Section III).
    The agencies believe these technologies can be adopted at the rates 
the standards are predicated on within the proposed lead-time, as 
discussed above in Section IV.C.(3). Moreover, we project that most 
owners would rapidly recover the initial cost of these technologies due 
to the associated fuel savings, usually in less than two years, as 
shown in the payback analysis in Section IX. This payback period is 
generally considered reasonable in the

[[Page 40273]]

trailer industry for investments that reduce fuel consumption.\241\
---------------------------------------------------------------------------

    \241\ Roeth, Mike, et al. ``Barriers to Increased Adoption of 
Fuel Efficiency Technologies in Freight Trucking''. July 2013. 
International Council for Clean Transportation. Available here: 
http://www.theicct.org/sites/default/files/publications/ICCT-NACFE-CSS_Barriers_Report_Final_20130722.pdf.
---------------------------------------------------------------------------

    Overall, as discussed above in IV.D.3.c in the context of our 
assumed technology adoption rates, the gradual increase in stringency 
of the proposed trailer program over the phase-in period recognizes two 
important factors that the agencies carefully considered in developing 
this proposed rule. One factor is that assumed adoption of technologies 
many of the aerodynamic technologies that box trailer manufacturers 
would likely choose are available today and clearly technologically 
feasible throughout the phase-period. At the same time, we recognize 
that the adoption of these technologies across the industry scale 
envisioned by the proposed program would likely take time. The 
standards we are proposing in the interim years represent steady 
improvement in average aerodynamic performance toward the final MY 2027 
standards.

E. Alternative Standards and Feasibility Considered

    As discussed in Section X, the agencies evaluated several different 
regulatory alternatives representing different levels of stringency for 
the Phase 2 program. The results of the analysis of these proposed 
alternatives are discussed below in Section X of the preamble. The 
agencies believe each alternative is feasible from a technical 
standpoint. However, each successive alternative increases costs and 
complexity of compliance for the manufacturers, which can be a 
prohibitive burden on the large number of small businesses in the 
industry. Table IV-21 provides a summary of the alternatives considered 
in this proposal.

    Table IV-21--Summary of Alternatives Considered for the Proposed
                               Rulemaking
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Alternative 1........................  No action alternative.
Alternative 2........................  Expand the use of aerodynamic and
                                        tire technologies at SmartWay
                                        levels to all 53-foot box
                                        trailers.
Alternative 3 (Proposed Alternative).  Adoption of advanced aerodynamic
                                        and tire technologies on all box
                                        trailers.
                                       Adoption of tire technologies on
                                        non-box trailers.
Alternative 4........................  Same technology and application
                                        assumptions as Alternative 3
                                        with an accelerated introduction
                                        schedule.
Alternative 5........................  Aggressive adoption of advance
                                        aerodynamic and tire
                                        technologies for all box
                                        trailers.
                                       Adoption of aerodynamic and tire
                                        technologies for some tank,
                                        flatbed, and container chassis
                                        trailers.
                                       Adoption of tire technologies for
                                        the remaining non-box trailers.
------------------------------------------------------------------------

    While we welcome comment on any of these alternatives, we are 
specifically requesting comment on Alternative 4 for the trailer 
program identified as Alternative 4 above and in Section X. The same 
general technology effectiveness values were considered and much of the 
feasibility analysis was the same in this alternative and in the 
proposed alternative, but Alternative 4 applies the adoption rates of 
higher-performing aerodynamic technologies from Alternative 3 at 
earlier stages for box trailers. This accelerated alternative achieves 
the same final fuel consumption and CO2 reductions as our 
proposed alternative three years in advance. The following sections 
detail the adoption rates, reductions and costs projected for this 
alternative.
(1) Effectiveness, Adoption Rates, and Technology Costs for Alternative 
4
    Alternative 4 includes the same trailer subcategories and same 
trailer technologies as the proposed alternative. Therefore, the zero-
technology baseline trailers (Table IV-7), reference case trailers 
(Table IV-10) and performance levels (Table IV-8) described in Section 
IV. D. apply for this analysis as well. The following sections describe 
the adoption rates of this accelerated alternative and the associated 
benefits and costs.
(a) Projected Technology Adoption Rates for Alternative 4
    The adoption rates and average performance parameters projected by 
the agencies for Alternative 4 are shown in Table IV-22 and Table IV-
23. Adoption rates for non-aero box and non-box trailers remain 
unchanged from the proposed standards and they are not repeated in this 
section. From the tables, it can be seen that the 2018 MY aerodynamic 
technology adoption rates and the tire technology adoption rates for 
all model years are identical to those presented previously for the 
proposed standards. The aerodynamic projections for MY 2021 and MY 2024 
in this accelerated alternative are the same as those projected for MY 
2024 and MY 2027 of the proposed standards, but are applied three years 
earlier. In this alternative, the 2021 MY adoption rates would continue 
to apply for the partial-aero box trailers in 2024 and later model 
years.

                        Table IV-22--Adoption Rates and Average Performance Parameters for the Long Box Trailers in Alternative 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Technology                                        Long box dry vans                          Long box refrigerated vans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Model year                              2018            2021            2024            2018            2021            2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aerodynamic Technologies: \a\
    Bin I...............................................              5%  ..............  ..............              5%  ..............  ..............
    Bin II..............................................  ..............  ..............  ..............  ..............  ..............  ..............
    Bin III.............................................             30%  ..............  ..............             30%  ..............  ..............
    Bin IV..............................................             60%             25%  ..............             60%             25%  ..............
    Bin V...............................................              5%             10%             10%              5%             10%             20%
    Bin VI..............................................  ..............             65%             50%  ..............             65%             60%

[[Page 40274]]

 
    Bin VII.............................................  ..............  ..............             40%  ..............  ..............             20%
    Bin VIII............................................  ..............  ..............  ..............  ..............  ..............  ..............
        Average Delta CDA (m2) a........................             0.4             0.8             1.1             0.4             0.8             1.0
Trailer Tire Rolling Resistance:
    Baseline tires......................................              15               5               5              15               5               5
    Level 1 tires.......................................              85              95  ..............              85              95  ..............
    Level 2 tires.......................................  ..............  ..............              95  ..............  ..............              95
        Average CRR (kg/ton) a..........................             5.2             5.1             4.8             5.2             5.1             4.8
Tire Inflation System:
    ATI.................................................             85%             95%             95%             85%             95%             95%
        Average ATI Reduction (%)a......................            1.3%            1.4%            1.4%            1.3%            1.4%            1.4%
Weight Reduction (lbs):
    Weight b............................................  ..............  ..............  ..............  ..............  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: A blank cell indicates a zero value.
a Combines adoption rates with performance levels shown in Table IV-8.
b This set of adoption rates did not apply weight reduction to meet the proposed standards for these trailers.

                       Table IV-23--Adoption Rates and Average Performance Parameters for the Short Box Trailers in Alternative 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Technology                                       Short box dry vans                          Short box refrigerated vans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Model Year                              2018            2021            2024            2018            2021            2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aerodynamic Technologies a
    Bin I...............................................            100%  ..............  ..............            100%  ..............  ..............
    Bin II..............................................  ..............             70%             30%  ..............             70%             55%
    Bin III.............................................  ..............             30%             60%  ..............             30%             40%
    Bin IV..............................................  ..............  ..............             10%  ..............  ..............              5%
    Bin V...............................................  ..............  ..............  ..............  ..............  ..............  ..............
    Bin VI..............................................  ..............  ..............  ..............  ..............  ..............  ..............
    Bin VII.............................................  ..............  ..............  ..............  ..............  ..............  ..............
    Bin VIII............................................  ..............  ..............  ..............  ..............  ..............  ..............
        Average Delta CDA (m2) b........................             0.4             0.8             1.1             0.4             0.8             1.0
Trailer Tire Rolling Resistance:
    Baseline tires......................................             15%              5%              5%             15%              5%              5%
    Level 1 tires.......................................             85%             95%  ..............             85%             95%  ..............
    Level 2 tires.......................................  ..............  ..............             95%  ..............  ..............             95%
        Average CRR (kg/ton) b..........................             5.2             5.1             4.8             5.2             5.1             4.8
Tire Inflation System:
    ATI.................................................             85%             95%             95%             85%             95%             95%
        Average ATI Reduction (%) b.....................            1.3%            1.4%            1.4%            1.3%            1.4%            1.4%
Weight Reduction (lbs):
    Weight c............................................  ..............  ..............  ..............  ..............  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: A blank cell indicates a zero value.
a The majority of short box trailers are 28 feet in length. We recognize that they are often operated in tandem, which limits the technologies that can
  be applied (for example, boat tails).
b Combines adoption rates with performance levels shown in Table IV-8.
c This set of adoption rates did not apply weight reduction to meet the proposed standards for these trailers.

(b) Derivation of the Standards for Alternative 4
    Similar to the proposed standards of Section IV. D. (3) (d), the 
agencies applied the technology performance values from Table IV-22 and 
Table IV-23 as GEM inputs to derive the proposed standards for each 
subcategory.
    Table IV-24 shows the resulting standards for Alternative 4. Over 
the three phases of the alternative, box trailers longer than 50 feet 
would, on average, reduce their CO2 emissions and fuel 
consumption by two percent, six percent and eight percent. Box trailers 
50-foot and shorter would achieve reductions of two percent, three 
percent, and four percent compared to the reference case. Partial-aero 
box trailers would continue to be subject to the 2021 MY standards for 
MY 2024 and later. The non-aero box and non-box trailers would meet the 
same standards as shown in the proposed Alternative 3 and achieve the 
same two and three percent benefits as shown in the proposed 
alternative.

[[Page 40275]]

            Table IV-24--Trailer CO2 and Fuel Consumption Standards for Box Trailers in Alternative 4
----------------------------------------------------------------------------------------------------------------
                                   Subcategory                Dry van                    Refrigerated van
          Model year           ---------------------------------------------------------------------------------
                                     Length            Long            Short           Long            Short
----------------------------------------------------------------------------------------------------------------
2018-2020.....................  EPA Standard....              83             144              84             147
                                (CO2 Grams per
                                 Ton-Mile).
                                Voluntary NHTSA           8.1532         14.1454          8.2515         14.4401
                                 Standard.
                                (Gallons per
                                 1,000 Ton-Mile).
2021-2023.....................  EPA Standard....              80             142              81             145
                                (CO2 Grams per
                                 Ton-Mile).
                                NHTSA Standard..          7.8585         13.9489          7.9568         14.2436
                                (Gallons per
                                 1,000 Ton-Mile).
2024+.........................  EPA Standard....              77             140              80             144
                                (CO2 Grams per
                                 Ton-Mile).
                                NHTSA Standard..          7.5639         13.7525          7.8585         14.1454
                                (Gallons per
                                 1,000 Ton-Mile).
----------------------------------------------------------------------------------------------------------------

(c) Costs Associated With Alternative 4
    A summary of the technology costs is included in Table IV-25 to 
Table IV-27for MYs 2018, 2021 and 2024, with additional details 
available in the draft RIA Chapter 2.12. Costs shown in the following 
tables are for the specific model year indicated and are incremental to 
the average reference case costs, which includes some level of adoption 
of these technologies as shown in Table IV-10. Therefore, the 
technology costs in the following tables reflect the average cost 
expected for each of the indicated trailer classes. Note that these 
costs do not represent actual costs for the individual components 
because some fraction of the component costs has been subtracted to 
reflect some use of these components in the reference case. For more on 
the estimated technology costs exclusive of adoption rates, refer to 
Chapter 2.12 of the draft RIA. These costs include indirect costs via 
markups and reflect lower costs over time due to learning impacts. For 
a description of the markups and learning impacts considered in this 
analysis and how it impacts technology costs for other years, refer to 
the draft RIA.

           Table IV-25--Trailer Technology Incremental Costs in the 2018 Model Year for Alternative 4
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                      53-foot
                                                    53-foot dry    refrigerated     28-foot dry   Non-aero & non-
                                                        van             van             van             box
----------------------------------------------------------------------------------------------------------------
Aerodynamics....................................            $285            $285              $0              $0
Tires...........................................              65              65              78             185
Tire inflation system...........................             239             239             435             683
                                                 ---------------------------------------------------------------
    Total.......................................             588             588             514             868
----------------------------------------------------------------------------------------------------------------

           Table IV-26--Trailer Technology Incremental Costs in the 2021 Model Year for Alternative 4
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                      53-foot
                                                    53-foot dry    refrigerated     28-foot dry   Non-aero & non-
                                                        van             van             van             box
----------------------------------------------------------------------------------------------------------------
Aerodynamics....................................            $908            $908            $641              $0
Tires...........................................              65              65              79             175
Tire inflation system...........................             234             234             426             632
                                                 ---------------------------------------------------------------
    Total.......................................           1,207           1,207           1,146             807
----------------------------------------------------------------------------------------------------------------

           Table IV-27--Trailer Technology Incremental Costs in the 2024 Model Year for Alternative 4
                                                     [2012$]
----------------------------------------------------------------------------------------------------------------
                                                                      53-foot
                                                    53-foot dry    refrigerated     28-foot dry   Non-aero & non-
                                                        van             van             van             box
----------------------------------------------------------------------------------------------------------------
Aerodynamics....................................           1,223           1,090             816               0
Tires...........................................              61              61              76             160
Tire inflation system...........................             220             220             412             578
                                                 ---------------------------------------------------------------
    Total.......................................           1,504           1,371           1,304             739
----------------------------------------------------------------------------------------------------------------

[[Page 40276]]

    The agencies believe Alternative 4 has the potential to be the 
maximum feasible and appropriate alternative. However, based on the 
evidence currently before us, EPA and NHTSA have outstanding questions 
regarding relative risks and benefits of Alternative 4 due to the 
timeframe envisioned by that alternative. As discussed earlier, the 
ability for manufacturers in this industry to broadly take the 
necessary technical steps while becoming familiar with first-time 
regulatory responsibilities may be significantly limited with three 
fewer years of lead-time. As reinforced in the SBAR Panel Report, this 
challenge would not be equal across the industry, often falling more 
heavily on smaller trailer manufacturers.
    The agencies request comment on the feasibility and costs for 
trailer manufacturers to achieve the Alternative 4 standards by 
applying advanced aerodynamic technologies with three years less lead-
time than Alternative 3 would provide. The agencies also request 
comment on particular burdens that these aggressive adoption rates 
could have on small business trailer manufacturers.

F. Trailer Standards: Compliance and Flexibilities

    Under the proposed structure, trailer manufacturers would be 
required to obtain a certificate of conformity from EPA before 
introducing into commerce new trailers subject to the proposed new 
trailer CO2 and fuel consumption standards. See CAA section 
206(a). The certification process the agencies are proposing for 
trailer manufacturers is very similar in its basic structure to the 
process for the tractor program. This structure involves pre-
certification activities, the certification application and its 
approval, and end-of-year reporting.
    In this section, the agencies first describe how we developed 
compliance equations based on the GEM vehicle simulation tool and the 
general certification process, followed by a discussion of the proposed 
test procedures for measuring the performance of tires and aerodynamic 
technologies and how manufacturers would apply test results toward 
compliance and certification. The section closes with discussions of 
several other proposed certification and compliance provisions as well 
as proposed provisions to provide manufacturers with compliance 
flexibility.
(1) Trailer Compliance Using a GEM-Based Equation
    The agencies are committed to introducing a compliance program for 
trailer manufacturers that is straightforward, technically robust, 
transparent, and that minimizes new administrative burdens on the 
industry. As described earlier in this section and in Chapter 4 of the 
draft RIA, GEM is a customized vehicle simulation model that EPA 
developed for the Phase 1 program to relate measured aerodynamic and 
tire performance values, as well as other parameters, to CO2 
and fuel consumption without performing full-vehicle testing. As with 
the Phase 1 and proposed Phase 2 tractor and vocational vehicle 
programs, the proposed trailer program uses GEM in evaluating emissions 
and fuel consumption in developing the proposed standards. However, 
unlike the tractor and vocational vehicle programs, we are not 
proposing to use GEM directly to demonstrate compliance with the 
trailer standards. Instead, we have developed an equation based on GEM 
that calculates CO2 and fuel consumption from performance 
inputs, but without running the model.
    For the proposed trailer program, the trailer characteristics that 
a manufacturer would supply to the equation are aerodynamic 
improvements (i.e., a change in the aerodynamic drag area, delta 
CDA), tire rolling resistance (i.e., coefficient of rolling 
resistance, CRR), the presence of an automatic tire 
inflation (ATI) system, and the use of light-weight components from a 
pre-determined list. The use of the equation would quantify the overall 
performance of the trailer in terms of CO2 emissions and 
fuel consumption on a per ton-mile basis.
    Chapter 2.10.6 of the draft RIA provides a full a description of 
the development and evaluation of the equation proposed for trailer 
compliance. Equation IV-1 is a single linear regression curve that can 
be used for all box trailers in this proposal. Unique constant values, 
C1 through C4, are applied for each of the 
trailer subcategories as shown in Table IV-28. Constant C5 
is equal to 0.985 for any trailer that installs an ATI system 
(accounting for the 1.5 percent reduction given for use of ATI) or 1.0 
for trailers without ATI systems. This equation was found to accurately 
reproduce the results of GEM for each of the four box van subcategories 
and the agencies are proposing that trailer manufacturers use Equation 
IV-1 when calculating CO2 for compliance. Manufacturers 
would use a conversion of 10,180 grams of CO2 per gallon of 
diesel to calculate the corresponding fuel consumption values for 
compliance with NHTSA's regulations. See 40 CFR 1037.515 and 49 CFR 
535.6.

y = [C1 + C2[middot](TRRL) + 
C3[middot]([Delta]CDA) + 
C4[middot](WR)][middot]C5 (IV-1)

                        Table IV-28--Constants for GEM-Based Trailer Compliance Equation
----------------------------------------------------------------------------------------------------------------
               Trailer subcategory                      C1              C2              C3              C4
----------------------------------------------------------------------------------------------------------------
Long Dry Van....................................            77.4             1.7            -6.1          -0.001
Long Refrigerated Van...........................            78.3             1.8            -6.0          -0.001
Short Dry Van...................................           134.0             2.2           -10.5          -0.003
Short Refrigerated Van..........................           136.3             2.4           -10.3          -0.003
----------------------------------------------------------------------------------------------------------------

    The constants for long vans apply for all dry or refrigerated vans 
longer than 50-feet and the constants for short vans apply for all dry 
or refrigerated vans 50-feet and shorter. These long and short van 
constants are based on GEM-simulated tractors pulling 53-foot and solo 
28-foot trailers, respectively. As a result, we are proposing that 
aerodynamic testing to obtain a trailer's performance parameters for 
Equation IV-1 be performed using consistent trailer sizes (i.e., all 
lengths of short vans be tested as a solo 28-foot van, and all lengths 
of long vans be tested as a 53-foot van). More information about 
aerodynamic testing is provided in Section IV. F. (3).
(2) General Certification Process
    Under the proposed process for certification, trailer manufacturers 
would be required to apply to EPA for certification and would provide 
performance test data (see 40 CFR 1037.205) in their applications.\242\ 
A

[[Page 40277]]

staff member from EPA's Compliance Division (in the Office of 
Transportation and Air Quality) would be assigned to each trailer 
manufacturer to help them through the compliance process. Although not 
required, we recommend that manufacturers arrange to meet with the 
agencies to discuss compliance plans and obtain any preliminary 
approvals (e.g., appropriate test methods) before applying for 
certification.
---------------------------------------------------------------------------

    \242\ As with the tractor program, manufacturers would submit 
their applications to EPA, which would then share them with NHTSA. 
Obtaining an approved certificate of conformity from EPA is the 
first step in complying with the NHTSA program.
---------------------------------------------------------------------------

    Trailer manufacturers would submit their applications through the 
EPA VERIFY electronic database, and EPA would issue certificates based 
on the information provided. At the end of the model year, trailer 
manufacturers would submit an end-of-year report to the agencies to 
complete their annual obligations.
    The proposed EPA certification provisions also contain provisions 
for applying to the NHTSA program. EPA and NHTSA would coordinate on 
any enforcement action required.
(a) Preliminary Considerations for Compliance
    Prior to submitting an application for a certificate, a 
manufacturer would choose the technologies they plan to offer their 
customers, obtain performance information for these technologies, and 
identify any trailers in their production line that qualify for 
exclusion from the program.\243\ Manufacturers that choose to perform 
aerodynamic or tire testing would obtain approval of test methods and 
perform preliminary testing as needed. During this time, the 
manufacturer would also decide the strategy they intend to use for 
compliance by identifying ``families'' for the trailers they produce. A 
family is a grouping of similar products that would all be subject to 
the same standard and covered by a single certificate.
---------------------------------------------------------------------------

    \243\ Trailers that meet the qualifications for exclusion do not 
require a certificate of conformity and manufacturers do not have to 
submit an application to EPA for these trailers.
---------------------------------------------------------------------------

    At its simplest, the program would allow all products in each of 
the trailer subcategories to be certified as separate families. That 
is, long box dry vans, short box dry vans, long refrigerated vans, 
short refrigerated vans, non-box trailers, partial-aero trailers (long 
and short box, dry and refrigerated vans), and non-aero trailers, could 
each be certified as separate trailer families. If a manufacturer 
chooses this approach, all products within a family would need to meet 
or do better than the standards for that trailer subcategory. This is 
not to say that, for example, every long box dry van model would need 
to have identical technologies like skirts, tires, and tire inflation 
systems, but that every model in that family would need to have a 
combination of technologies that had performance representative of 
testing demonstrated for that family. (Because the manufacturer would 
not be using averaging provisions, a trailer that ``over-complied'' 
could not offset a trailer that did not meet that family's emission 
limit).
    If a trailer manufacturer wishes to take advantage of the proposed 
averaging provisions, it could divide the trailer models in each of the 
standard box trailer categories (i.e., not including the non-box 
trailer or non-aero box trailer categories\244\) into subfamilies. Each 
subfamily could be a grouping of trailers that have with similar 
performance levels, even if they use different technologies. We call 
the performance levels for each subfamily as ``Family Emission Limits'' 
(FELs). A long box dry van manufacturer could choose, for example, to 
create two or more subfamilies in its long box dry van family. Trailers 
in one or more of these subfamilies could be allowed to under-comply 
with the standard (e.g., if the manufacturer chose not to apply ATI or 
chose tires with higher rolling resistance levels) as long as the 
performance of the other subfamilies over-comply with the standard 
(e.g., if the manufacturer applied higher-performing skirts) such that 
the average of all of the subfamilies' FELs met or did better than the 
stringency for that family on a production-weighted basis. Section 
IV.F.6.a below further discusses how the proposed averaging program 
would function for any such trailer subfamilies.
---------------------------------------------------------------------------

    \244\ The agencies are proposing that manufacturers implement 
100 percent of their non-box and special purpose box trailers with 
automatic tire inflation systems and tires meeting the specified 
rolling resistance levels. As a result, averaging provisions do not 
apply to these trailer subcategories.
---------------------------------------------------------------------------

b) Submitting a Certification Application and Request for a Certificate 
to EPA
    Once the preliminary steps are completed, the manufacturer can 
prepare and submit applications to EPA for certificate of conformity 
for each of its trailer families. The contents of the application are 
specified in 40 CFR 1037.205, though not all items listed in the 
regulation are applicable to each trailer manufacturer.
    For the early years of the program (i.e., 2018 through 2020), the 
application must specify whether the trailer manufacturer is opting 
into the NHTSA voluntary program to ensure the information is 
transferred between the agencies. It must also include a description of 
the emission controls that a manufacturer intends to offer. These 
emission controls could include aerodynamic features, tire models, tire 
inflation systems or components that qualify for weight reduction. 
Basic information about labeling, warranty, and recommended maintenance 
should also be included the application (see Section IV.F.5 for more 
information).
    The manufacturer would also provide a summary of the plans to 
comply with the standard. This information would include a description 
of the trailer family and subfamilies (if applicable) covered by the 
certificate and projected sales of its products. Manufacturers that do 
not participate in averaging would include information on the lowest 
level of CO2 and fuel consumption performance offered in the 
trailer family. Manufacturers that choose to average within their 
families would include performance information for the projected 
highest production trailer configuration, as well as the lowest and the 
highest performing configurations within that trailer family.
(c) End-of-Year Obligations
    After the end of each year, all manufacturers would need to submit 
a report to the agencies presenting production-related data for that 
year (see 40 CFR 1037.250 and 49 CFR 535.8). In addition, manufacturers 
participating in the averaging program would submit an end-of-year 
report containing both emissions and fuel consumption information for 
both agencies. This report would include the year's final compliance 
data (as calculated using the compliance equation) and actual sales in 
order to demonstrate that the trailers either met the standards for 
that year or that the manufacturer generated a deficit to be reconciled 
within the next three years under the averaging provisions (see 40 CFR 
1037.730, 40 CFR 1037.745, and 49 CFR 535.7). All certifying 
manufacturers would need to maintain records of all the data and 
information required to be supplied to EPA and NHTSA for eight years.
(3) Trailer Certification Test Protocols
    The Clean Air Act specifies that compliance with emission standards 
for motor vehicles be demonstrated using emission test data (see CAA 
section 206(a) and (b)). The Act does not require the use of specific 
technologies or designs. The agencies are proposing that the compliance 
equation shown in

[[Page 40278]]

Section IV. F. (1) function as the official ``test procedure'' for 
quantifying CO2 and fuel consumption performance for trailer 
compliance and certification (as opposed to GEM, which serves this 
function in the tractor and vocational vehicle programs). Manufacturers 
would insert performance information from the trailer technologies 
applied into the equation in order to calculate their impact on overall 
trailer performance. The agencies are proposing to assign performance 
levels to ATI systems and specific weight reduction values to pre-
determined component substitutions. Aerodynamic and tire rolling 
resistance performance would be obtained by the trailer manufacturers. 
The following sections describe the approved performance tests for tire 
rolling resistance and aerodynamic drag. Non-box and non-aero box 
trailers have tire requirements only. Manufacturers of these trailers 
will only need to obtain results from the tire performance tests. Long 
and short box trailers are expected to use aerodynamic and tire 
technologies to meet the proposed standards and will need to obtain 
test results from both procedures. See generally proposed 40 CFR part 
1037, subpart F, for full description of the proposed performance 
tests, and see in particular proposed section 40 CFR 1037.515.
(a) Trailer Tire Performance Testing
    Under Phase 1, tractor and vocational chassis manufacturers are 
required to input the tire rolling resistance coefficient into GEM and 
the agencies adopted the provisions in ISO 28580:2009(E) \245\ to 
determine the rolling resistance of tires. As described in 40 CFR 
1037.520(c), this measured value, expressed as CRR, is 
required to be the result of at least three repeat measurements of 
three different tires of a given design, giving a total of at least 
nine data points. Manufacturers specify a CRR value for GEM 
that may not be lower than the average of these nine results. Tire 
rolling resistance may be determined by either the vehicle or tire 
manufacturer. In the latter case, the tire manufacturer would provide a 
signed statement confirming that it conducted testing in accordance 
with this part.
---------------------------------------------------------------------------

    \245\ See http://www.iso.org/iso/iso_catalogue/catalogue_tc/catalogue_detail.htm?csnumber=44770.
---------------------------------------------------------------------------

    Similar to the tractor program, we propose to extend the Phase 1 
testing provisions for tire rolling resistance to apply to the Phase 2 
box trailer program, only without requiring the use of GEM. The average 
rolling resistance value obtained from this test would be used to 
specify the tire rolling resistance level (TRRL) for the trailer tires 
in the compliance equation. Based on the current practice for tractors, 
we expect the trailer manufacturers to obtain these data from tire 
manufacturers. We welcome comments regarding the proposed tire testing 
provisions as they relate to the proposed trailer program.
    For non-box trailers, the agencies are proposing to use the same 
test methods to evaluate tires, but are proposing to apply a single 
threshold standard instead of inputting the rolling resistance value 
into the GEM equation. Manufacturers of non-box trailers would comply 
with the rolling resistance standard by using tires with rolling 
resistance below the threshold. From the perspective of the trailer 
manufacturer, this would be equivalent to a design standard for the 
trailers, even though the standard would be expressed as a performance 
standard for the tires.
    The agencies are considering adopting a program for tire 
manufacturers similar to the provision described in Section IV. F. (3) 
(b)(iv) for aerodynamic device manufacturers. For aerodynamic devices, 
the agencies are proposing to allow device manufacturers to seek 
preliminary approval of the performance of their devices. Device 
manufacturers would perform the required testing of their device and 
submit the performance results directly to EPA. We are requesting 
comment on a similar provision for tires. Tire manufacturers could 
submit their test data directly to EPA to show they meet the rolling 
resistance requirements, and trailer manufacturers that choose to use 
approved tires would merely indicate that in their the certification 
applications.
    EPA is also considering adopting regulatory text addressing 
obligations for tire manufacturers. We note that CAA section 207(c)(1) 
requires ``the manufacturer'' to remedy certain in-use problems and 
does not limit this responsibility to certificate holders. The remedy 
process is generally called recall, and the regulations for this 
process are in 40 CFR part 1068, subpart F. In the case of in-use 
problems with trailer tires, EPA is requesting comment on adding 
regulatory text that would explicitly apply these provisions to tire 
manufacturers. In other words, if EPA determines that tires on 
certified trailers do not conform to the regulations in actual use, 
should EPA require the tire manufacturer to recall and replace the 
nonconforming tires? \246\
---------------------------------------------------------------------------

    \246\ EPA is considering such a requirement for trailer tire 
manufacturers, but not at this time for manufacturers of other 
heavy-duty vehicle components. This is because, for the trailer 
sector, we believe that the small business trailer manufacturers 
that make up a large fraction of companies in this industry could be 
uniquely challenged if they needed to recall trailers to replace 
tires.
---------------------------------------------------------------------------

(b) Trailer Aerodynamic Performance Testing
    Our proposed trailer aerodynamic test procedures are based on the 
current and proposed tractor procedures for testing aerodynamic control 
devices, including coastdown, constant speed, wind tunnel, and 
computational fluid dynamics (CFD) modeling. The purpose of the tests 
is to establish an estimate of the aerodynamic drag experienced by a 
tractor-trailer vehicle in real-world operation. In the tractor 
program, the resulting CdA value represents the aerodynamic drag of a 
tested tractor assumed to be pulling a specified standard trailer. In 
the proposed trailer program, the CDA value used in the 
compliance equation would represent the tested trailer pulled by a 
standard tractor.
    To minimize the number of tests required, the agencies are 
proposing that devices for long trailers be evaluated based on 53-foot 
trailers, and that devices for short trailers be evaluated based on 28-
foot trailers. Details of the test procedures can be found in 40 CFR 
1037.525 and a discussion of EPA's aerodynamic testing program as it 
relates to the proposed trailer program are provided in the draft RIA 
Chapter 3.2. The following sections outline the testing requirements 
proposed for the long term trailer program, as well as simpler testing 
provisions that would apply in the nearer term.
(i) A to B Testing for Trailer Aerodynamic Performance
    A key difference between the proposed tractor and trailer programs 
is that while the tractor procedures provide a direct measurement of an 
absolute CDA value for each tractor model, the agencies 
expect a majority of the aerodynamic improvements for trailers will be 
accomplished by adding bolt-on technologies. As a result, we are 
proposing to evaluate the aerodynamic improvements for trailers by 
measuring a change in CDA (delta CDA) relative to 
a baseline. Specifically, we propose that the trailer tests be 
performed as ``A to B'' tests, comparing the aerodynamic performance of 
a tractor-trailer without a trailer aerodynamic device to one with the 
device installed. See Draft RIA Chapter 2.10 for more information on 
this approach.
    As mentioned in Section IV. F. (1) that is consistent with the 
compliance

[[Page 40279]]

equations. See 40 CFR 1037.525 and 49 CFR 535.6. We believe that most 
trailers longer than 50 feet with comparable technologies would perform 
similarly in aerodynamic testing. We also recognize that devices used 
on some lengths of trailers in the short-van category may perform 
differently than those devices perform when used on a representative 
28-foot test trailer.
    The agencies are proposing that manufacturers have some flexibility 
in the devices (or packages of devices) that they use with box vans 
that have lengths different than those of the trailers on which the 
devices/packages were tested (i.e., trailers not 53 or 28 feet long). 
In such situations, a manufacturer could use devices that they believe 
would be more appropriate for the length of the trailer they are 
producing, consistent with good engineering judgement. For example, 
they could use longer or shorter side skirts than those tested on 53- 
or 28-foot trailers. No additional testing would be required in order 
to validate the appropriateness of using the alternate devices on these 
trailers.
    On average, we believe that testing of a device on a 28-foot test 
trailer would provide a conservative evaluation of the performance of 
that device on other lengths of short box trailers. We believe that the 
proposed compliance approach would effectively represent the 
performance of such devices on the majority of short van trailers, yet 
would limit the number of trailers a manufacturer would need to track 
and evaluate. We request comment, including data where possible, on 
additional approaches that could be used to address this issue of 
varying performance for devices across the range of short van lengths. 
Commenters supporting an allowance or requirement to test devices on 
short van trailers of other lengths than 28 feet are encouraged to also 
address how the agencies should consider such a provision in setting 
the levels of the standards, as well as how any additional compliance 
complexity would be justified.
    The agencies note that it was relatively straightforward in Phase 1 
to establish a standard trailer with enough specificity to ensure 
consistent testing of tractors, since there are relatively small 
differences in aerodynamic performance of base-model dry van trailers. 
However, as discussed in Chapter 2.10 of the draft RIA, small 
differences in tractor design can have a significant impact on overall 
tractor-trailer aerodynamic performance. An advantage of an A to B test 
approach for trailers is that many of the differences in tractor design 
are canceled-out, which allows a variety of standard tractors to be 
used in testing without compromising the evaluation of the trailer 
aerodynamic technology. Thus, the relative approach does not require 
the agencies to precisely specify a standard tractor, nor does it 
require trailer manufacturers to purchase, modify or retain a specific 
tractor model in order to evaluate their trailers.
    In essence, an A to B test is a set of tests: one test of a 
baseline tractor-trailer with zero trailer aerodynamic technologies 
(A), and one test that includes the aerodynamic devices to be tested 
(B). However, because an A test would relate to a B test only with 
respect to the test method and the test trailer length, one A test 
could be used for many different B tests. This type of testing would 
result in a delta CDA value instead of an absolute 
CDA value. For the trailer program, the vehicle 
configuration in the A test would include a standard tractor that meets 
specified characteristics,\247\ and a manufacturer's baseline trailer 
with no aerodynamic improvements. The entity conducting the testing 
(e.g., the trailer manufacturer or the trailer aerodynamic device 
manufacturer, as discussed below) would perform the test for this 
configuration according to the procedures in 40 CFR 1037.525 and repeat 
the test for the B configuration, which includes the trailer 
aerodynamic package/device(s) being tested. The delta CDA 
value for that trailer with that device would be the difference between 
the CDA values obtained in the A and B tests.
---------------------------------------------------------------------------

    \247\ As explained in Section IV. F. (3) (b)(ii), the standard 
tractor in GEM consists of a high roof sleeper cab for box trailers 
longer than 50 feet and a high roof day cab for box trailers 50 feet 
and shorter.
---------------------------------------------------------------------------

    In the event that a trailer manufacturer makes major changes to the 
aerodynamic design of its trailer in lieu of installing add-on devices, 
trailer manufacturers would use the same baseline trailer for the A 
configuration as would be used for bolt-on features. In both cases, the 
baseline trailer would be a manufacturer's standard box trailer. Thus, 
the manufacturer of a redesigned trailer would get full credit for any 
aerodynamic improvements it made. We request comment on this issue. In 
addition, we request comment on how the program could handle a 
situation in which a manufacturer made aerodynamic design changes to a 
trailer between 28 and 50 feet, which as proposed could only be 
compared to a 28-foot standard trailer.
    The agencies are proposing to determine the delta CDA 
for trailer aerodynamics using the zero-yaw (or head-on wind) values. 
The agencies are not proposing a reference method (i.e., the coastdown 
procedure in the tractor program). Instead, we are proposing to allow 
manufacturers to perform any of the proposed test procedures to 
establish a delta CDA. Since the proposed coastdown and 
constant speed procedures include wind restrictions, we are proposing 
to only accept the zero-yaw values from aerodynamic evaluation 
techniques that are capable of measuring drag at multiple yaw angles 
(e.g., wind tunnels and CFD) to allow cross-method comparison and 
certification. The agencies welcome comment on the pros and cons of 
exclusive use of zero-yaw data from trailer aerodynamic compliance 
testing. We recognize that the benefits of aerodynamic devices can be 
higher when measured considering wind from other yaw angles. We request 
comment on the possibility of allowing manufacturers to use wind-
averaged results for compliance if they choose to test using procedures 
that provide wind-averaged values. Chapter 2.10 of the draft RIA 
compares zero-yaw and wind-averaged results from EPA's wind tunnel 
testing. We request that commenters provide test data to support any 
preference for compliance test results. We also request comments on 
strategies that could be used to maintain consistency with other 
methods that cannot provide wind-averaged results.
(ii) Standard Tractor for Aerodynamic Testing in the Proposed Trailer 
Program
    We propose that the proposed compliance equation, based on GEM, be 
used to determine compliance with the trailer standards. Our discussion 
of the feasibility of our proposed standards (Section IV. D. (3) (a)) 
includes a description of the tractor-trailer vehicle used in GEM. We 
recognize the impact of the tractor and want to maintain consistency 
with GEM, but for the trailer program it is not necessary to address 
all aspects (e.g., the engine) of the tractor, because, as explained 
above, the impact of many of its features will be canceled-out with the 
use of an A to B test strategy. However, some aerodynamic design 
features of the tractor can influence the performance of trailer 
aerodynamic technologies and we want to ensure a level of consistency 
between tests of different trailer manufacturers.
    The agencies believe the A to B test strategy would reduce the 
degree of precision with which the standard tractor needs to be 
specified. Instead of identifying a specific make and model of a 
tractor to be used over the entire duration of the program, the 
agencies

[[Page 40280]]

would instead identify key characteristics of a standard tractor. EPA's 
trailer testing program investigated the impact of tractor aerodynamics 
on the performance of trailer aerodynamic technologies, as mentioned in 
Chapter 2.10 of the draft RIA. In order to maintain a minimal level of 
performance, we are proposing that tractors used in trailer aerodynamic 
tests meet Phase 2 Bin III or better tractor requirements (see Section 
III.D.). We believe the majority of tractors in the U.S. trucking fleet 
will be Bin III or better in the timeframe of this rulemaking, and 
trailer manufacturers have the option to choose higher-performing 
tractors in later years as tractor technology improves. The standard 
tractor for long-box trailers is a Class 8 high-roof sleeper cab. The 
standard tractor for short box trailers is a Class 8 high roof day cab. 
Trailer manufacturers are free to choose any standard tractor that 
meets these criteria in their aerodynamic performance testing. See 40 
CFR 1037.501.
(iii) Bins for Aerodynamic Performance
    As mentioned in Section IV. D. (1) (a), the agencies are proposing 
aerodynamic bins to account for testing variability and to provide 
consistency in the performance values used for compliance. These bins 
were developed in terms of delta CDA ranges, and designed to 
be broad enough to cover the range of uncertainty seen in our 
aerodynamic testing program in terms of test-to-test variability as 
well as variability due to differences in test method, tractor models, 
trailer models and device models.
    As discussed in Chapter 2.10 of the draft RIA, measured drag 
coefficients and drag areas vary depending on the test method used. In 
general, values measured using wind tunnels and CFD tend to be lower 
than values measured using the coastdown method. The Phase 1 and 
proposed Phase 2 tractor program use coastdown testing as the reference 
test method, and the agencies require tractor manufacturers to perform 
at least one test using that method to establish a correction factor 
(called ``Falt,aero'') to apply to any of the alternative 
test methods. For simplicity, the agencies are not proposing a similar 
approach for trailers. We believe that the size of the bins and the use 
of change in CDA (as opposed to absolute values) would 
minimize the significance of this variability. However, we recognize 
that this could be a problem in instances where a manufacturer using a 
method other than coastdown produces a trailer with performance near 
the upper end of a bin. In such cases, it is possible that adjusting 
for methodological differences using a Falt,aero would allow 
the manufacturer to achieve a more stringent bin.
    We request comment on the proposed approach for evaluating 
performance of trailers and establishing bins for trailer compliance. 
We specifically request that commenters address the need for an 
aerodynamic reference test for trailer performance or additional 
strategies for normalizing test methods. For example, would it be 
appropriate to allow all manufacturers using wind tunnel or CFD methods 
to apply an assigned Falt,aero of 1.10, or another value, to 
their results?

   Table IV-29--Aerodynamic Bins Used To Determine Inputs for Trailer
                              Certification
------------------------------------------------------------------------
                                                               Average
                                                              delta CDA
   Delta CDA measured in testing               Bin            input for
                                                                 gem
------------------------------------------------------------------------
0.09...............................  Bin I.................          0.0
0.10-0.19..........................  Bin II................          0.1
0.20-0.39..........................  Bin III...............          0.3
0.40-0.59..........................  Bin IV................          0.5
0.60-0.79..........................  Bin V.................          0.7
0.80-1.19..........................  Bin VI................          1.0
1.20-1.59..........................  Bin VII...............          1.4
[gteqt] 1.6........................  Bin VIII..............          1.8
------------------------------------------------------------------------

    A manufacturer that wished to perform testing would first identify 
a standard tractor (according to 40 CFR 1037.525) and a representative 
baseline trailer with no aerodynamic features, then perform the A to B 
tests with and without aerodynamic devices and obtain a delta 
CDA value. The manufacturer would use Table IV-29 to 
determine the appropriate bin based on their delta CDA. Each 
bin has a corresponding average delta CDA value which is the 
value manufacturers insert into the compliance equation.
(iv) Aerodynamic Device Testing Alternative
    The agencies recognize that much of the trailer manufacturing 
industry may have little experience with aerodynamic performance 
testing. As such, we are proposing an alternative compliance option 
that we believe will minimize the testing burden for trailer 
manufacturers, meet the requirements of the Clean Air Act and of EISA, 
and provide reasonable assurance that the anticipated CO2 
and fuel consumption benefits of the program will be realized in real-
world operation.
    The agencies are proposing to allow trailer aerodynamic device 
manufacturers to seek preliminary approval of the performance of their 
devices (or combinations of devices) based on the same performance 
tests described previously in Section IV. F. (3) (b)(i). Device 
manufacturers would perform the required A to B testing of their 
device(s) on a trailer that meets the requirements specified in 40 CFR 
1037.211 and 1037.525 and submit the performance results, in terms of 
delta CDA, directly to EPA.\248\ Trailer manufacturers could 
then choose to use these devices and apply their performance levels in 
the certification application for their trailer families. This approach 
would provide an opportunity for trailer manufacturers to choose 
technologies with pre-approved test data for installation on their new 
trailers without performing their own aerodynamic testing. We note that 
this proposed testing alternative is consistent with recommendations of 
the SBAR Panel. The Panel Report is summarized below in Section XV.D.
---------------------------------------------------------------------------

    \248\ Note that in the event a device manufacturer chooses to 
submit such data to EPA, it could incur liability for causing a 
regulated entity to commit a prohibited act. See 40 CFR 1068.101(c). 
This same potential liability exists with respect to information 
provided by a device manufacturer directly to a trailer 
manufacturer.
---------------------------------------------------------------------------

    If trailer manufacturers wish to use multiple devices with pre-
approved test data, the proposed program provides a process for 
combining the effects of multiple devices to determine an appropriate 
delta CDA value for compliance. More specifically, such 
manufacturers would fully count the technology with largest delta 
CDA value, discount the second by 10 percent, and discount 
each of the remaining additional technologies by 20 percent.\249\ This 
discounting would acknowledge the complex interactions among individual 
aerodynamic devices and would provide a conservative value for the 
impact of the combined devices. For example, a manufacturer applying 
three separately tested devices with delta CDA values of 
0.40, 0.30, and 0.10 would calculate the combined delta CDA 
as:
---------------------------------------------------------------------------

    \249\ A trailer manufacturer would need to use good engineering 
judgement in combining devices for compliance in order to avoid 
combinations that are not intended to work together (e.g., both a 
side skirt and an under-body device).

---------------------------------------------------------------------------
Delta CDA = 0.40 + 0.90*0.30 + 0.80*0.10 = 0.75 m\2\

    In addition, the agencies believe that discounting the delta 
CDA values of individually-tested devices used as a 
combination would provide a modest incentive for trailer or device 
manufacturers to test and get EPA pre-approval of the combination as an 
aerodynamic system for compliance. We propose that device manufacturers 
be

[[Page 40281]]

allowed to test and receive EPA pre-approval for combinations of 
devices, and that trailer manufacturers that wish to use those specific 
combinations be allowed to use the results from the tests of the 
combined devices.
    The agencies note that many of the largest box trailer 
manufacturers are already performing aerodynamic test procedures to 
some extent, and the agencies expect other box trailer manufacturers 
will increasingly be capable of performing these tests as the program 
progresses.
    The proposed alternative testing approach is intended to allow 
trailer manufacturers to focus on and become familiar with the 
certification process in the early years of the program and, if they 
wish, begin to perform testing in the later years, when it may be more 
appropriate for their individual companies. This approach would not 
preclude trailer manufacturers from performing their own testing at any 
time, even if the technologies they wish to install are already pre-
approved. For example, a manufacturer that believed a specific trailer 
actually performed in a more synergistic manner with a given device 
than the device's pre-approved delta CDA value suggested 
could perform its own testing and submit the results to EPA for 
certification. The process to obtain approval is outlined in the 
proposed 40 CFR 1037.211.
(4) Use of the Compliance Equation for Trailer Compliance
    The agencies are proposing standards for non-box and non-aero box 
trailers requiring the use of tires with rolling resistance levels at 
or below a threshold, and on ATI systems. As part of their 
certification application, manufacturers of these trailers would submit 
their tire rolling resistance levels and a description of their ATI 
system(s) to EPA. As long as the trailer manufacturer certifies that 
they will install the appropriate tires and ATI systems on all of their 
trailers, the agencies do not believe it is necessary to require these 
trailer manufacturers to use the equation and report the results of the 
model to the agencies to demonstrate compliance.
    Box trailer manufacturers who apply more than tire technologies to 
meet the standards would use the compliance equation to combine the 
effects of these technologies and quantify the overall performance of 
the vehicle to demonstrate compliance. Trailer manufacturers would 
obtain delta CDA and tire rolling resistance values from 
testing (either from their own testing or testing performed by another 
entity as described previously) and note if they installed a qualifying 
automatic tire inflation system or made a component substitution that 
qualifies for weight reduction. Manufacturers would directly apply the 
delta CDA and TRRL values into the equation, which would 
also recognize the use of an ATI system, applying a 1.5 percent 
reduction in CO2 and fuel consumption. Qualifying components 
for weight reduction can be found in 40 CFR 1037.515(d). Manufacturers 
that substitute one or more of these components on their box trailers 
would sum the weight reductions assigned to each component and enter 
that total into the equation. The equation would also account for the 
use of weight-reducing components, assigning one-third of that reduced 
weight to increase the payload and the remaining weight reduction to 
reduce the overall weight of the assumed vehicle.
    For this proposal, we are requiring that the equation be used if 
the manufacturer is to take advantage of the agencies' proposed 
averaging provisions. Prior to submitting a certificate application, 
manufacturers would decide which technologies to make available for 
their customers and use the equation to determine the range performance 
of the packages they will offer. Manufacturers would supply these 
results from the equation in their certificate application and those 
manufacturers that wish to perform averaging would continue to 
calculate emissions (and fuel consumption) with the equation throughout 
the model year and keep records of the results for each trailer package 
sold. As described in Section IV.F.2.c above, at the end of the year, 
manufacturers would submit two reports. One report would include their 
production volumes for each configuration. The second report, required 
for manufacturers using averaging, would summarize the families and 
subfamilies, and CO2 emissions and fuel consumption results 
from the equation for all of the trailer configurations they 
build.\250\
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    \250\ We are not proposing to allow manufacturers to ``bank'' 
credits to the following year if a manufacturer over-complies on 
average for a given model year. We are proposing to allow 
manufacturers to generate temporary deficits if they under-comply on 
average. These deficits would need to be resolved within three model 
years. See Section IV.F.7.a below and 40 CFR 1037.250, 40 CFR 
1037.730, and 49 CFR 535.7.
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    Box trailer manufacturers that do not participate in averaging 
would also use the compliance equation to ensure that all of the 
trailer configurations they offer would meet the standard for the given 
model year. These calculations using the equation could be performed by 
the manufacturer prior to submitting a certificate application, but it 
is not necessary for the manufacturer to continue to calculate 
emissions and fuel consumption throughout the model year unless a new 
technology package is offered. These manufacturers would submit a 
single end-of-year report that would include their production volumes 
and confirmation that all of their trailers applied the technology 
packages outlined in their application.
(5) Additional Certification and Compliance Provisions
(a) Trailer Useful Life
    Section 202(a)(1) of the CAA specifies that EPA is to propose 
emission standards that are applicable for the ``useful life'' of the 
vehicle. NHTSA also proposes to adopt EPA's useful life requirements 
for trailers to ensure manufacturers consider in the design process the 
need for fuel efficiency standards to apply for the same duration and 
mileage as EPA standards. Based on our own research and discussions 
with trailer manufacturers, EPA and NHTSA are proposing a regulatory 
useful life value for trailers of 10 years. This useful life represents 
the average duration of the initial use of trailers, before they are 
moved into less rigorous (e.g., limited use or storage) duty. We note 
that the useful life value is 10 years for other heavy-duty vehicles. 
However, unlike the other vehicles, we are not proposing to set a mile 
value for trailers because we do not require odometers for trailers.
    Thus, we propose that trailer manufacturers be responsible for 
meeting the CO2 emissions and fuel consumption standards for 
10 years after the trailer is produced. We believe that manufacturers 
would be able to demonstrate at certification that their trailers will 
comply for the useful life of the trailers without durability testing. 
The aerodynamic technologies that we expect manufacturers to use to 
comply with the proposed standards, including side skirts and boat 
tails, are designed to continue to provide their full potential benefit 
indefinitely as long as no serious damage occurs. See also Section 
IV.C.6 above describing why we are not proposing separate in-use 
standards.
    Regarding trailer tires, we recognize that the original lower 
rolling resistance tires will wear over time and will be replaced 
several times during the useful life of a trailer, either with new or 
retreaded tires. As with the Phase 1 tractor program, to help ensure 
that trailer owners have sufficient knowledge of which replacement 
tires to purchase in order to retain the as-certified emission and fuel 
consumption

[[Page 40282]]

performance of their trailer for its useful life, we are proposing to 
require that trailer manufacturers supply adequate information in the 
owner's manual to allow the trailer owner to purchase replacement tires 
meeting or exceeding the rolling resistance performance of the original 
equipment tires. We believe that the favorable fuel consumption benefit 
of continued use of LRR tires would generally result in proper 
replacements throughout the 10-year useful life. Finally, we are 
requiring that ATI systems remain effective for at least the 10 year 
useful life, although some servicing may be necessary. See the 
maintenance discussion in Section IV.D.4.e.
(b) Emission Control Labels
    Historically, EPA-certified vehicles are required to have a 
permanent emission control label affixed to the vehicle. The label 
facilitates the identification of the vehicle as a certified vehicle. 
For the trailer program, EPA proposes that the labels include the same 
basic information as we are proposing to require for tractor labels. 
For trailers, this information would include the manufacturer, a 
trailer identifier such as the Vehicle Identification Number, the 
trailer family and regulatory subcategory, the date of manufacture, and 
compliance statements. Although the proposed Phase 2 label for tractors 
would not include emission control system identifiers (as previously 
required for tractors in the Phase 1 program in 40 CFR 1037.135(c)(6)), 
we are proposing that these identifiers be included in the trailer 
labels. As for tractors, we would require manufacturers to maintain 
records that would allow us to verify that an individual trailer was in 
its certified configuration.
(c) Warranty
    Section 207 of the CAA requires manufacturers to warrant their 
products to be free from defects that would otherwise cause non-
compliance with emission standards. For purposes of the proposed 
trailer program, EPA would require trailer manufacturers to warrant all 
components that form the basis of the certification to the 
CO2 emission standards. The emission-related warranty would 
cover all aerodynamic devices, lower rolling resistance tires, 
automatic tire inflation systems, and other components that may be 
included in the certification application.
    The trailer manufacturer would need to warrant that these 
components and systems are designed to remain functional for the 
warranty period. Based on the historical practice of requiring 
emissions warranties to apply for half of the useful life, we propose 
that the warranty period for trailers be 5 years for everything except 
tires. For trailer tires, we propose to apply a warranty period of 1 
year. Manufacturers could offer a more generous warranty if they chose; 
however the emissions related warranty may not be shorter than any 
other warranty offered without charge for the vehicle. If aftermarket 
components were installed (unrelated to emissions performance) that 
offer a longer warranty, this would not impact emission related 
warranty obligations of the vehicle manufacturer. NHTSA is not 
proposing any warranty requirements relating to its trailer fuel 
consumption program.
    At the time of certification, manufacturers would need to supply a 
copy of the warranty statement that they would supply to the end 
customer. This document would outline what is covered under the GHG 
emissions related warranty as well as the duration of coverage. 
Customers would also have clear access to the terms of the warranty, 
the repair network, and the process for obtaining warranty service.
(d) Maintenance
    In general, EPA requires that vehicle manufacturers specify 
maintenance schedules to keep their product in compliance with emission 
standards throughout the useful life of the vehicle (CAA section 207). 
For trailers, such maintenance could include fairing adjustments or 
service to ATI systems. However, EPA believes that any such maintenance 
is likely to be performed by operators to maintain the fuel savings of 
the components, and we are not proposing that trailer manufacturers be 
required submit a maintenance schedule for these components as part of 
its application for certification.
    Since low rolling resistance tires are key emission control 
components under this program, and will likely require replacement at 
multiple points within the life of a vehicle, it is important to 
clarify how tires would fit into the emission-related maintenance 
requirements. Although the agencies encourage the exclusive use of LRR 
tires throughout the life of trailers vehicles, we do not propose to 
hold trailer manufacturers responsible for the actions of operators. We 
do not see this as problematic because we believe that trailer 
operators have a genuine financial motivation for ensuring their 
vehicles are as fuel efficient as possible, which includes purchasing 
LRR replacement tires. Therefore, as mentioned in Section IV.F.5.a 
above, to help ensure that trailer owners have sufficient knowledge of 
which replacement tires to purchase in order to retain the as-certified 
emission and fuel consumption performance of their trailer, we are 
proposing to require that trailer manufacturers supply adequate 
information in the owner's manual to allow the trailer owner to 
purchase tires meeting or exceeding the rolling resistance performance 
of the original equipment tires. We would require that these 
instructions be submitted to EPA as part of the application for 
certification.
(e) Post-Useful Life Modifications
    Under 40 CFR part 1037, EPA generally prohibits for any person from 
removing or rendering inoperative any emission control device installed 
to comply with the requirements of 40 CFR part 1037. However, in 40 CFR 
1037.655 EPA clarifies that certain vehicle modifications are allowed 
after a vehicle reaches the end of its regulatory useful life. EPA is 
proposing for this section to apply trailers, since it applies to all 
vehicles subject to 40 CFR part 1037, and requests comment on it.
    Generally, this section clarifies that owners may modify a vehicle 
for the purpose of reducing emissions, provided they have a reasonable 
technical basis for knowing that such modification will not increase 
emissions of any other pollutant. In the case of trailers, this 
essentially requires a trailer owner to have information that would 
lead an engineer or other person familiar with trailer design and 
function to reasonably believe that the modifications will not increase 
emissions of any regulated pollutant. Thus, this provision does not 
provide a blanket allowance for modifications after the useful life.
    This section does not apply with respect to modifications that 
occur within the useful life period, other than to note that many such 
modifications to the vehicle during the useful life are presumed to 
violate 42 U.S.C. 7522(a)(3)(A). EPA notes, however, that this is 
merely a presumption, and would not prohibit modifications during the 
useful life where the owner clearly has a reasonable technical basis 
for knowing the modifications would not cause the vehicle to exceed any 
applicable standard.
(6) Flexibilities
    The trailer program that the agencies are proposing incorporates a 
number of provisions that would have the effect of providing 
flexibility and easing the compliance burden on trailer manufacturers 
while maintaining the

[[Page 40283]]

expected CO2 and fuel consumption benefits of the program. 
Among these is the basic approach we used in setting the proposed 
standards, including the staged phase-in of the standards, which would 
gradually increase the CO2 and fuel consumption reductions 
that manufacturers would need to achieve over time as they also 
increase their experience with the program. As described in the general 
certification discussion above (Section IV.F.2), another proposed 
provision would allow trailer manufacturers to designate broad trailer 
families that would aggregate several models with similar technologies 
or performance, thus potentially limiting the number of families and 
the associated family-level compliance requirements.
    In addition to these provisions inherent to the proposed trailer 
program, the agencies are proposing additional options for 
certification that we believe would be very valuable to many trailer 
manufacturers. One of these is the proposed process for component 
manufacturers to submit test data directly to EPA for review by the 
agencies in advance of formal certification, allowing a trailer 
manufacturer to reduce the amount of testing needed to demonstrate 
compliance or avoid it altogether. See Section IV.F.4 above.
(a) Proposed Averaging Provisions
    The agencies are also proposing a limited averaging program as a 
part of the trailer compliance process for box trailers. This program 
would be similar to the Phase 1 averaging program for other sectors, 
but would be narrower in scope to reflect the unique competitive 
aspects of the trailer market. The trailer manufacturing industry is 
very competitive, and manufacturers must be highly responsive to their 
customers' diverse demands. Compared to other industry sectors, this 
reality can limit the value of the flexibility that averaging could 
provide to trailer manufacturers, since they can have little control 
over what kinds of trailer models their customers demand and thus 
limited ability to manage the mix and volume of different products. In 
addition, the majority of trailer manufacturers have very few basic 
trailer models to offer, potentially putting them at a competitive 
disadvantage to the small number of larger companies that would be in a 
position to meet market demands that the smaller companies could not. 
For example, one of the larger, more diverse manufacturers could 
potentially supply a customer with trailers that had few if any 
aerodynamic features, while offsetting this part of their business with 
over-complying trailers that they were able to sell to another 
customer; many smaller companies with limited product offerings might 
not be able to compete for those customers.
    Although we recognize that there might be potential negative 
impacts on at least some trailer manufacturers of an averaging program, 
we believe that there may be overall value to such a program. We 
propose that full-aero box trailer manufacturers may optionally comply 
with their standards on average for a trailer family in any given model 
year. We are not proposing to allow partial-aero box trailers to 
average. Instead, all trailers in partial-aero families would need to 
meet the standard for that subcategory. We are proposing to allow a 
trailer manufacturer to combine partial-aero box trailers with the 
corresponding full-aero trailer family and reduce the number of 
certification applications required. We expect this to be particularly 
beneficial to manufacturers in the early years of the program, when 
these two trailer categories have identical standards. Although this 
option should reduce the compliance paperwork, the partial-aero 
trailers would not be able to adopt enough technologies to meet the 
full-aero standards in the later years, and manufacturers would have 
the option of creating a separate family for these trailers. 
Additionally, we are proposing to allow refrigerated trailers to 
combine with the dry vans of the same length and meet the dry van 
standards and to allow short box vans to combine with their long box 
counterparts to meet the long box standards.
    Unlike averaging programs in other sectors, including those in this 
Phase 2 program, we propose that averaging be limited to a single model 
year, and manufacturer not be allowed to ``bank'' credits generated 
from over-compliance in one year for use in a future year. In other 
words, a manufacturer that produces some trailers in a family that 
perform better than required by the applicable standard would be 
allowed to produce a number of trailers that do not meet the standards, 
provided the average of the trailers it produces in any given model 
year is at or below the standards. A trailer family performing better 
than the standard would not be allowed to bank credits for a future 
model year.\251\ However, as a temporary recourse for unexpected 
challenges in a given model year, we propose that manufacturers be 
allowed to generate a deficit that would be resolved within the next 
three model years, and to allow the manufacturer to use credits they 
generate from over-compliance in subsequent years to address deficits 
from prior model years. As discussed below, we are not proposing this 
allowance for non-box trailers or non-aero trailers.
---------------------------------------------------------------------------

    \251\ Section IV.F.2 describes the process of identifying 
trailer families and sub-families based on basic trailer 
characteristics. Section 1037.710 of the proposed regulations 
describes the provisions for establishing subfamilies within a 
trailer family and the Family Emission Limits that would be averaged 
among the subfamilies.
---------------------------------------------------------------------------

    We recognize that at each stage of the program, there may be a 
small fraction of trailer applications for which the trailer 
manufacturers cannot easily apply all of the aerodynamic and tire 
technologies. Thus the proposed dry and refrigerated van standards are 
designed in the form of family average performance, meaning that each 
trailer manufacturer would comply on average across the trailer 
families it produces within each subcategory category (or family). The 
proposed program would allow a manufacturer, for example, to comply 
without full adoption of aerodynamic devices across 100 percent of its 
box trailer production in a trailer family, as long as it also produced 
a sufficient number of trailers within that family that performed 
better than the standard, such that the overall production-weighted 
CO2 and fuel consumption results of the trailer models in 
that family complied with the appropriate standard.
    In addition to the flexibility created by averaging, the proposed 
box trailer standards themselves are not predicated on a set adoption 
rate of any one technology. Manufacturers would be free under the 
proposed averaging program to choose to apply the appropriate number 
and type of technologies that met their customers' needs and the level 
of performance required within a particular trailer family. The 
proposed rules in general do not mandate inclusion of any particular 
technology or other means of emission control. The agencies believe 
that, ordinarily, averaging would create an incentive for manufacturers 
to promote high-performing technologies for some customers, beyond the 
requirements for that given year, in order to provide other customers 
with trailers with fewer aerodynamic technologies.
    The agencies also recognize, however, that an averaging program 
would inherently require a higher degree of data management, record 
keeping, and reporting than one without averaging. Recognizing that 
this could impose burdens, especially on small business manufacturers, 
the agencies are proposing that the averaging provisions be optional; a 
box trailer manufacturer could choose whether to use averaging

[[Page 40284]]

for any or all of its standard box trailer subcategories (families), or 
to forego averaging and simply meet the standards with 100 percent of 
the production within each family. Also, unlike some other regulated 
motor vehicle sectors, we are not proposing that credits from over-
compliance be able to be ``banked'' for use in a later model year, or 
to be ``traded'' among trailer manufacturers, since they would 
exacerbate the competitive issues, especially for small manufacturers, 
as discussed immediately below. However, we are proposing to apply to 
trailers the provisions of Phase 1 for tractors that allow for the 
generation of a compliance deficit that could be resolved over several 
years. Thus, a manufacturer that chose to use averaging, but by the end 
of the production year found that a trailer family's CO2 and 
fuel consumption values did not reach that year's standards, could 
carry a ``deficit'' that would need to be resolved by the third year 
following.
    The availability of averaging options also has the potential to be 
a disadvantage to some companies in a competitive market that is highly 
customer-driven. During the SBREFA process, several manufacturers 
expressed concern about their ability to manage their credit balances 
in a highly competitive market. Many believe that they would have 
little ability to essentially force their customers to purchase the 
technology, especially if other manufacturers that had credits were 
able to sell trailers without the technology. We see this as especially 
problematic for non-box trailers, which are much more likely to be 
produced by small businesses, and for which customers may have less 
interest in fuel savings technologies since they are less often used 
long-haul applications than are box trailers. For these reasons, we are 
proposing averaging only for dry and refrigerated vans.
    The agencies understand that averaging is unfamiliar to many 
trailer manufacturers and other stakeholders. We have drafted a 
supplementary document that includes example scenarios to illustrate 
the concept of averaging for a hypothetical box trailer 
manufacturer.\252\ Example adoption rates are provided for a standard 
compliance strategy (no averaging) and a strategy using the proposed 
averaging provisions.
---------------------------------------------------------------------------

    \252\ Memorandum dated March 2015 on Example Compliance 
Scenarios for the Proposed GHG Phase 2 Trailer Program. Docket EPA-
HQ-OAR-2014-0827.
---------------------------------------------------------------------------

    One value of averaging that the agencies have historically cited in 
several other motor vehicle regulatory programs is that the 
availability of averaging provisions made it possible for the agencies 
to propose and enact more stringent standards than would otherwise have 
been appropriate, recognizing that the expected flexibility of 
averaging provisions would ease the path to compliance by the more 
challenged members of the industry. In the case of trailer 
manufacturers, however, our decisions on the proposed stringency of the 
standards is essentially independent of the presence or absence of 
averaging, since, as discussed above, averaging provisions may have 
relatively less value to manufacturers in this customer-driven industry 
and we did not speculate about much or how little it might be used.
    We also request comment on whether the burden of managing an 
averaging program could be more trouble than the flexibility is worth. 
In the event that averaging were not allowed, the agencies would need 
to require that all trailers meeting specified characteristics meet a 
minimum stringency level without averaging. If we were to finalize such 
non-averaging standards, manufacturers would still be allowed to select 
the appropriate technology package that best achieved their emission 
performance level, but they would not have the ability to accommodate 
customers that may request trailers that perform less well on an 
individual trailer basis.
    It is also worth noting that the agencies are not proposing to 
allow any generation of early credits before MY 2018. It is clear to us 
that small businesses would be less prepared to begin complying early 
than larger businesses, and that allowing large manufacturers to 
generate early credits that could be used later could put small 
businesses at a competitive disadvantage. It does not appear to us that 
there would be a sufficient broader programmatic benefit from early 
credits to justify such an adverse impact on small businesses.
    We request comment on this proposed averaging option, including 
whether the program should allow credit and deficit banking and credit 
trading, as well as on any other potential provisions that could 
provide compliance flexibility for trailer manufacturers while 
achieving the goals of the overall program. Comments supporting 
averaging, banking, or trading should explain how these provisions 
would be valuable for trailer manufactures across the industry, 
including how the provisions would maintain a ``level playing field.''
(b) Proposed SmartWay-Based Certification
    Since many manufacturers have some experience with the SmartWay 
program, the agencies are proposing a gradual transition to the 
proposed approach that recognizes the parallel SmartWay Technology 
Program. The agencies expect aerodynamic device manufacturers to 
continue to submit test data to SmartWay for verification. Device 
manufacturers that also wish to have their technology available for 
trailer manufacturers to use in the Phase 2 program could, in parallel, 
submit their test data to EPA for pre-approval for Phase 2 (see Section 
IV.F.4). The information obtained by EPA from the device manufacturers 
would include the technology name, a description of its proper 
installation procedure, and its corresponding delta CDA 
derived from the approved test procedures. Any manufacturers that 
attained SmartWay verification prior to January 1, 2018 would be 
eligible to submit their previous data to EPA's Compliance Division for 
pre-approval, provided their test results come from SmartWay's 2014 
test protocols that measure a delta CDA. The protocols for 
coastdown, wind tunnel, and computational fluid dynamics analyses 
result in a CDA value. Note that SmartWay's 2014 protocols 
allow SAE J1321 Type 2 track testing, which generates fuel consumption 
results, not CDA values. The agencies request comment on 
whether we should pre-approve devices tested using SAE J1321 and also 
seek comment on an appropriate means of converting from the fuel 
consumption results of that test to the delta CDA values 
required for trailer compliance.
    Beginning on January 1, 2018, EPA would require that device 
manufacturers that wish to seek approval of new technologies for 
trailer certification use one of the approved test methods for Phase 2 
(i.e., coastdown, constant speed, wind tunnel or CFD) and the test 
procedures found in 40 CFR 1037.525. Technologies that were pre-
approved using SmartWay's 2014 Protocols would maintain their approved 
status until CY 2021. After January 1, 2021, we are proposing that all 
pre-approved aerodynamic trailer technologies be tested using the Phase 
2 test procedures.
(c) Off-Cycle Technologies
    The Phase 1 and proposed Phase 2 programs for tractors include 
provisions for manufacturers to request the use of off cycle 
technologies that are not recognized in GEM or were not in common use 
before MY 2010. In the

[[Page 40285]]

case of trailers, the agencies are not aware of any technologies that 
could improve CO2 and fuel consumption performance that 
would not be captured in the test protocols as proposed. We are 
therefore not proposing a process to evaluate off-cycle trailer 
technologies.
(d) Small Business Regulatory Flexibility Provisions
    As a part of our small business obligations under the Regulatory 
Flexibility Act, EPA and NHTSA have considered additional flexibility 
provisions aimed at this segment of the trailer manufacturing industry. 
EPA convened a Small Business Advocacy Review (SBAR) Panel as required 
by the Small Business Regulatory Enforcement Fairness Act (SBREFA), and 
much of the information gained and recommendations provided by this 
process form the basis of the flexibilities proposed.\253\ As in 
previous rulemakings, our justification for including provisions 
specific to small businesses is that these entities generally have a 
greater degree of difficulty in complying with the standards compared 
to other entities. Thus, as discussed below, we are proposing several 
regulatory flexibility provisions for small trailer manufacturers that 
we believe would reduce the burden on them while achieving the goals of 
the program.
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    \253\ Additional information regarding the findings and 
recommendations of the Panel are available in Section XIV, Chapter 
11 of the draft RIA, and in the Panel's final report titled ``Final 
Report of the Small Business Advocacy Review Panel on EPA's Planned 
Proposed Rule Greenhouse Gas Emissions and Fuel Efficiency Standards 
for Medium- and Heavy-Duty Engines and Vehicles: Phase 2'' (See 
Docket EPA-HQ-OAR-2014-0827).
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    We believe that the small business regulatory flexibilities 
discussed below and in Section XV.C could provide these entities with 
reduced compliance requirements and/or additional time to accumulate 
capital internally or to secure capital financing from lenders, and to 
acquire additional engineering and testing resources.
    The agencies designed many of the proposed program elements and 
flexibility provisions available to all trailer manufacturers with the 
large fraction of small business trailer manufacturers in mind. We 
believe the option to choose pre-approved aerodynamic devices would 
significantly reduce the compliance burden and eliminate the 
requirement for all manufacturers to perform testing.
    As noted above, the small trailer manufacturers raised concerns 
that their businesses could be harmed by provisions allowing averaging, 
banking, and trading of emissions and fuel consumption performance, 
since they would not be able to generate the same volume of credits as 
large manufacturers. The agencies are proposing not to include banking 
and trading provisions in any part of the program, and are limiting the 
option to average to manufacturers of dry and refrigerated box 
trailers. Since a majority of non-box trailer manufacturers are small 
businesses, we believe a requirement of specific tire technologies for 
all non-box trailers would create the most uniformity in requirements 
among manufacturers and would reduce the compliance burden by 
eliminating the use of the compliance equation.
    In addition to the provisions offered to trailer manufacturers of 
all sizes, the agencies are proposing or requesting comment on several 
additional provisions designed specifically to ease compliance burdens 
on small trailer manufacturers. For all small business trailer 
manufacturers, the agencies propose a one-year delay in the beginning 
of implementation of the program, until MY 2019. We believe (subject to 
consideration of public comment) that this would allow small businesses 
additional needed lead-time to make the proper staffing adjustments and 
process changes, and possibly add new infrastructure to meet the 
requirements. We also request comment about where there may be 
circumstances in later stages of the program, when the stringency of 
the standards increase in MY 2021 and 2024, when a similar 1-year delay 
in implementation could be warranted for small trailer manufacturers.
    As mentioned previously, we are proposing to offer averaging 
provisions for manufacturers of dry and refrigerated box trailers only. 
We recognize that the small box trailer manufacturers may not be able 
to fully take advantage of averaging and may be at a competitive 
disadvantage with larger manufacturers with larger sales volumes and 
more diverse product lines. We request comment on additional provisions 
that could ease the potential harm to and/or incentivize small business 
participation in an averaging program.
    The agencies also request comment on provisions for small 
manufacturers that might face a situation where the technologies needed 
for compliance are unavailable. This could be a particular concern for 
small business non-box and non-aero box trailers that require the use 
of LRR tires and ATI systems. We request that trailer manufacturers as 
well as tire and aerodynamic technology manufacturers provide 
information regarding the current projected availability of the 
technologies that trailer manufacturers can use to meet our proposed 
standards.

V. Class 2b-8 Vocational Vehicles

A. Summary of Phase 1 Vocational Vehicle Standards

    Class 2b-8 vocational vehicles include a wide variety of vehicle 
types, and serve a wide range of functions. Some examples include 
service for urban delivery, refuse hauling, utility service, dump, 
concrete mixing, transit service, shuttle service, school bus, 
emergency, motor homes, and tow trucks. In the HD Phase 1 Program, the 
agencies defined Class 2b-8 vocational vehicles as all heavy-duty 
vehicles that are not included in the Heavy-duty Pickup Truck and Van 
or the Class 7 and 8 Tractor categories. In effect, the rules classify 
heavy-duty vehicles that are not a combination tractor or a pickup 
truck or van as vocational vehicles. Class 2b-8 vocational vehicles and 
their engines emit approximately 20 percent of the GHG emissions and 
burn approximately 21 percent of the fuel consumed by today's heavy-
duty truck sector.\254\
---------------------------------------------------------------------------

    \254\ See Memorandum to the Docket ``Runspecs and Model Inputs 
for MOVES for HD GHG Phase 2 Emissions Modeling'' Docket Number EPA-
HQ-OAR-2014-0827. See also EPA's MOVES Web page at http://www.epa.gov/otaq/models/moves/index.htm.
---------------------------------------------------------------------------

    Most vocational vehicles are produced in a two-stage build process, 
though some are built from the ``ground up'' by a single entity. In the 
two-stage process, the first stage sometimes is completed by a chassis 
manufacturer that also builds its own proprietary components such as 
engines or transmissions. This is known as a vertically integrated 
manufacturer. The first stage can also be completed by a chassis 
manufacturer who procures all components, including the engine and 
transmission, from separate suppliers. The product completed at the 
first stage is generally either a stripped chassis, a cowled chassis, 
or a cab chassis. A stripped chassis may include a steering column, a 
cowled chassis may include a hood and dashboard, and a cab chassis may 
include an enclosed driver compartment. Many of the same companies that 
build Class 7 and 8 tractors also sell vocational chassis in the medium 
heavy- and heavy heavy-duty weight classes. Similarly, some of the 
companies that build Class 2b and 3 pickups and vans also sell 
vocational chassis in the light heavy-duty weight classes.

[[Page 40286]]

    The second stage is typically completed by a final stage 
manufacturer or body builder, which installs the primary load carrying 
device or other work-related equipment, such as a dump bed, delivery 
box, or utility boom. There are over 200 final stage manufacturers in 
the U.S., most of which are small businesses. Even the large final 
stage manufacturers are specialized, producing a narrow range of 
vehicle body types. These businesses also tend to be small volume 
producers. In 2011, the top four producers of truck bodies sold a total 
of 64,000 units, which is about 31 percent of sales in that year.\255\ 
In that same year, 74 percent of final stage manufacturers produced 
less than 500 units.
---------------------------------------------------------------------------

    \255\ Specialty Transportation.net, 2012. Truck Body 
Manufacturing in North America.
---------------------------------------------------------------------------

    The businesses that act both as the chassis manufacturer and the 
final stage manufacturer are those that build the vehicles from the 
``ground up.'' These entities generally produce custom products that 
are sold in lower volumes than those produced in large commercial 
processes. Examples of vehicles produced with this build process would 
include fire apparatus and transit buses.
    The diversity in the vocational vehicle segment can be primarily 
attributed to the variety of customer needs for specialized vehicle 
bodies and added equipment, rather than to the chassis. For example, a 
body builder can build either a Class 6 bucket truck or a Class 6 
delivery truck from the same Class 6 chassis. The aerodynamic 
difference between these two vehicles due to their bodies would lead to 
different in-use fuel consumption and GHG emissions. However, the 
baseline fuel consumption and emissions due to the components included 
in the common chassis (such as the engine, drivetrain, frame, and 
tires) would be the same between these two types of vehicles.
    Owners of vocational vehicles that are upfitted with high-priced 
bodies that are purpose-built for particular applications tend to keep 
them longer, on average, than owners of vehicles such as pickups, vans, 
and tractors, which are traded in broad markets that include many 
potential secondary markets. The fact that vocational vehicles also 
generally accumulate far fewer annual miles than tractors further 
contributes to lengthy trade cycles among owners of these vehicles. To 
the extent vocational vehicle owners may be similar to owners of 
tractors in terms of business profiles, they would be more likely to 
resemble private fleets or owner-operators than for-hire fleets. A 2013 
survey conducted by NACFE found that the trade cycle of private tractor 
fleets ranged from seven to 12 years.\256\
---------------------------------------------------------------------------

    \256\ See 2013 ICCT Barriers Report at Note 241, above.
---------------------------------------------------------------------------

    The Phase 1 standards for this vocational vehicle category 
generally apply at the chassis manufacturer level. For the same reasons 
given in Phase 1, the agencies propose to apply the Phase 2 vocational 
vehicle standards at the chassis manufacturer level.\257\
---------------------------------------------------------------------------

    \257\ See 76 FR 57120.
---------------------------------------------------------------------------

    The Phase 1 regulations prohibit the introduction into commerce of 
any heavy-duty vehicle without a valid certificate or exemption. 40 CFR 
1037.620, redesignated as 40 CFR 1037.622 in the proposed rule, allows 
for a temporary exemption for the chassis manufacturer if it produces 
the chassis for a secondary manufacturer that holds a certificate. 
Further discussion of temporary exemptions and possible obligations of 
secondary manufacturers can be found in Section V. E.
    In Phase 1, the agencies adopted two equivalent sets of standards 
for Class 2b-8 vocational vehicles. For vehicle-level (chassis) 
emissions, EPA adopted CO2 standards expressed in grams per 
ton-mile. For fuel efficiency, NHTSA adopted fuel consumption standards 
expressed in gallons per 1,000 ton-miles. The Phase 1 engine-based 
standards vary based on the expected weight class and usage of the 
vehicle into which the engine will be installed. We adopted Phase 1 
vehicle-based standards that vary according to one key attribute, GVWR, 
based on the same groupings of vehicle weight classes used for the 
engine standards--light heavy-duty (LHD, Class 2b-5), medium heavy-duty 
(MHD, Class 6-7), and heavy heavy-duty (HHD, Class 8).
    In Phase 1, the agencies defined a special regulatory category 
called vocational tractor, which generally operate more like vocational 
vehicles than line haul tractors.\258\ As described above in Section 
III.C.4, under the Phase 1 rules, a vocational tractor is certified 
under standards for vocational vehicles, not those for tractors. In 
Phase 2, the agencies propose to retain the vocational tractor 
definition, and to allow vocational tractors to certify over any of the 
proposed vocational vehicle duty cycles, following the same decision-
tree as other vocational chassis. Vocational tractors would continue to 
satisfy the proposed engine standard and vocational vehicle GEM-based 
standard, rather than the proposed tractor standard.
---------------------------------------------------------------------------

    \258\ See EPA's regulation at 40 CFR 1037.630 and NHTSA's 
regulation at 49 CFR 523.2.
---------------------------------------------------------------------------

    Manufacturers are required to use GEM to determine compliance with 
the Phase 1 vocational vehicle standards, where the primary vocational 
vehicle manufacturer-generated input is the measure of tire rolling 
resistance. The GEM assumes the use of a typical representative, 
compliant engine in the simulation, resulting in one overall value for 
CO2 emissions and one for fuel consumption. The 
manufacturers of engines intended for use in vocational vehicles are 
subject to separate Phase 1 engine-based standards. Manufacturers also 
may demonstrate compliance with the CO2 standards in whole 
or in part using credits reflecting CO2 reductions resulting 
from technologies not reflected in the GEM testing regime. See 40 CFR 
1037.610.
    In Phase 1, EPA and NHTSA also adopted provisions designed to give 
manufacturers a degree of flexibility in complying with the standards. 
Most significantly, we adopted an ABT program to allow manufacturers 
within the same averaging set to comply on average. See 40 CFR part 
1037, subpart H. These provisions enabled the agencies to adopt overall 
standards that are more stringent than we could have considered with a 
less flexible program.\259\
---------------------------------------------------------------------------

    \259\ As noted earlier, NHTSA notes that it has greater 
flexibility in the HD program to include consideration of credits 
and other flexibilities in determining appropriate and feasible 
levels of stringency than it does in the light-duty CAFE program. 
Cf. 49 U.S.C. 32902(h), which applies to light-duty CAFE but not to 
heavy-duty fuel efficiency under 49 U.S.C. 32902(k).
---------------------------------------------------------------------------

B. Proposed Phase 2 Standards for Vocational Vehicles

    The agencies have held dozens of meetings with manufacturers, 
suppliers, non-governmental organizations (NGOs), and other 
stakeholders to identify and understand the opportunities and 
challenges involved with regulating vocational vehicles. These meetings 
have helped us to better understand the performance demands of the 
customers, the fuel-saving and GHG reducing technologies that are being 
investigated, as well as some challenges that are being encountered. In 
addition, we updated our industry characterization to better understand 
the vocational vehicle manufacturing process, including the component 
suppliers and body builders.\260\ We believe these information 
exchanges have enabled us to develop this proposal with an appropriate 
balance of

[[Page 40287]]

reasonably achievable goals and a reasonably small risk of unintended 
consequences.
---------------------------------------------------------------------------

    \260\ September 2013, Heavy Duty Vocational Vehicle Industry 
Characterization, EPA Contract No. EP-C-12-011.
---------------------------------------------------------------------------

(1) Proposed Subcategories and Test Cycles

    The proposed Phase 2 vocational vehicle standards are based on the 
performance of a wider array of control technologies than the Phase 1 
rules. In particular, the agencies are proposing to recognize detailed 
characteristics of powertrains and drivelines in the proposed Phase 2 
vocational vehicle standards. As described below, 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 
would be equally suitable for the majority of 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 build 
processes, ranging from a purpose built custom chassis to a commercial 
chassis that may be intended as a multi-purpose stock vehicle. Further, 
the wide range of applications and driving patterns of these vehicles 
leads manufacturers to offer a variety of drivelines, as each performs 
differently in use. For example, depending on whether the transmission 
has an overdrive gear, drive axle ratios for Class 7 and 8 tractors can 
be found in the range of 2.5:1 to 4.1:1. By contrast, across all types 
of vocational vehicles, drive axle ratios can be as low as 3.1:1 
(delivery vehicle) and as high as 9.8:1 (transit bus).\261\ Other 
components of the driveline also have a broader range of product in 
vocational vehicles than in tractors, including transmission gears, 
tire sizes, and engine speeds. Each of these design features affects 
the GHG emission rate and fuel consumption of the vehicle. It therefore 
is reasonable to define more than one baseline configuration of 
vocational vehicle, to encompass a range of drivelines and recognize 
that the agencies cannot use a one-size-fits-all approach. A detailed 
list of the technologies the agencies project could be adopted to meet 
the proposed vocational vehicle standards is described in Section V.C, 
and in the draft RIA Chapter 2. The agencies have determined that these 
technologies perform differently depending on the drivelines and 
driving patterns, further supporting the need to subcategorize this 
segment.
---------------------------------------------------------------------------

    \261\ See Dana Spicer Drive Axle Application Guidelines, 
available at http://www.dana.com/wps/wcm/connect/133007004bd8422b9ea8be14e7b6dae0/DEXT-daag2012_0712_DriveAxlesAppGuide_LR.pdf?MOD=AJPERES&CONVERT_TO=url&CACHEID=133007004bd8422b9ea8be14e7b6dae0. See also ZF Driveline and 
Chassis Technology brochure, available at http://www.zf.com/media/media/en/document/corporate_2/downloads_1/flyer_and_brochures/bus_driveline_technology_flyer/Busbroschuere_12_DE_final.pdf
---------------------------------------------------------------------------

    For these reasons, the agencies are proposing to create additional 
subcategories of vocational vehicles in Phase 2. By creating additional 
subcategories we would essentially be setting separate baselines and 
separate numerical performance standards for different groups of 
vocational vehicle chassis over different test cycles. This would 
enable the technologies that perform best at highway speeds and those 
that perform best in urban driving to each to be fully recognized over 
appropriate test cycles, while avoiding the unintended consequence of 
forcing vocational vehicles that are designed to serve in a wide 
variety of applications to be measured against a single baseline. The 
attributes we believe could define these chassis groups are described 
below.
    The agencies are proposing to split groups of chassis into 
subcategories based generally on vehicle use patterns in which the 
CO2 emissions and fuel consumption standards vary as a 
consequence. Compliance with these standards would be demonstrated 
through test cycles reflecting these use patterns, to best assure that 
actual in-use benefits occur. An ideal test cycle is one in which the 
performance improvements achieved by the adopted technologies are 
recognized over the cycle. As described in Section V.C and in the draft 
RIA Chapter 2.9, the agencies have found that most of the technologies 
considered do perform differently under different driving conditions. 
For example, the effectiveness of lower tire rolling resistance is 
different depending on the degree of highway or transient driving, but 
the differences are very small compared to the difference in 
effectiveness for a hybrid drivetrain under different driving 
conditions. The agencies have found that the measurable changes in 
performance of a majority of the technologies are significant enough to 
merit creation of different subcategories with different test cycles.
    Idle reduction technology is one type of technology that is 
particularly duty-cycle dependent. The composite test cycle for 
vocational vehicles in Phase 1 includes a 42 percent weighting on the 
ARB Transient test cycle, which comprises nearly 17 percent of idle 
time. However, no single idle event in this test cycle is longer than 
36 seconds, which may not be enough time to adequately recognize the 
benefits of some idle reduction technologies.\262\ For Phase 2, the 
agencies propose to recognize this important fuel saving technology by 
evaluating workday idle reduction technologies through a new idle-only 
cycle as described in the draft RIA Chapter 3.
---------------------------------------------------------------------------

    \262\ However, as noted above, emission improvements due to 
workday idle technology can be recognized under Phase 1 as an 
innovative credit under 40 CFR 1037.610 and 49 CFR 535.7.
---------------------------------------------------------------------------

    The agencies are proposing three different composite test cycles 
for vocational vehicles in Phase 2: Regional, Multi-Purpose, and Urban. 
The agencies believe these three cycles balance the competing pressures 
to recognize the varying performance of technologies, serve the varying 
needs of customers, and maintain reasonable regulatory simplicity. 
Table V-1 below presents the nine proposed subcategories of vocational 
vehicles: Three weight class groupings, each with three composite duty 
cycles. Each of these proposed composite duty cycles has a different 
weighting of the new idle cycle, the highway cruise cycles, and the ARB 
Transient cycle, as shown in Table V-2. The CALSTART HD Truck Fuel 
Economy Task Group met in June 2013 to discuss vocational vehicle 
segmentation, and suggested an approach very similar to this. The task 
group generally supported a limited number of duty cycles that would be 
sufficient to cover the basic applications while allowing new 
technology to demonstrate its worth. They recognized that a few 
meaningful duty cycles could ``bound'' how vocational vehicles are 
generally used, while recognizing that this approach would not 
perfectly match how every vocational vehicle is actually used. Their 
recommendations included three vocational vehicle duty-cycle-based 
subcategories: Urban, Regional, and Work Site. A detailed discussion of 
the CALSTART recommendations, as well as reasoning why the agencies 
selected the proposed composite cycle weightings can be found in the 
draft RIA Chapter 2. Continuing the averaging scheme from Phase 1, each 
manufacturer would be able to average within each vehicle weight class.

[[Page 40288]]

                      Table V-1--Proposed Regulatory Subcategories for Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                              Light heavy-duty class 2b-  Medium heavy-duty class 6-
        Weight class                       5                           7               Heavy heavy-duty class 8
----------------------------------------------------------------------------------------------------------------
Duty Cycle..................  Regional..................  Regional..................  Regional.
                              Multi-Purpose.............  Multi-Purpose.............  Multi-Purpose.
                              Urban.....................  Urban.....................  Urban.
----------------------------------------------------------------------------------------------------------------

            Table V-2--Proposed Composite Test Cycle Weightings (in Percent) for Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                   55 mph cruise   65 mph cruise
                                                   ARB transient     with road       with road         Idle
                                                                     grade \a\       grade \a\
----------------------------------------------------------------------------------------------------------------
Regional........................................              50              28              22              10
Multi-Purpose...................................              82              15               3              15
Urban...........................................              94               6               0              20
----------------------------------------------------------------------------------------------------------------
Note:
\a\ As described in Section III.E.2.b, the agencies are proposing to add road grade to the highway cruise test
  cycles.

    The agencies are proposing criteria for determining the 
applicability of these subcategories. This is not as straightforward an 
exercise as with tractors, where attributes such as cab type are 
obvious physical properties that indicate reasonably well how a vehicle 
is intended to be used. The agencies have identified the final drive 
ratio of a vocational vehicle as a possible attribute that may indicate 
how the vehicle is intended to be used. As described in Section 
V.E.(1)(d), we expect that most vocational chassis could be assigned to 
a duty cycle by estimating the percent of maximum engine test speed 
that is achieved over highway cruise cycles, by use of an equation that 
relates engine speed to vehicle speed. To simplify this assignment 
process, the agencies propose that a vocational chassis would be 
presumed to certify using the Multi-Purpose duty cycle unless some 
criteria were met that indicated either the Regional or Urban cycle 
would be more appropriate. Those criteria could include the objective 
calculation described in Section V.E., or a mix of physical attributes 
and knowledge of intended use. The agencies are also proposing that 
chassis manufacturers would be able to request a different duty cycle.
    We understand that even within certain vocational vehicle types, 
vehicle use varies significantly. By employing the agencies' 
recommended assignment process, it is our expectation that a delivery 
truck and a dump truck could both be certified over the same duty cycle 
while still yielding accurate technology effectiveness, if they had 
similar chassis and driveline characteristics. Further, while intended 
service class may help a manufacturer decide how to classify some 
vehicles, we do not believe that intended service class would be a 
sufficient indicator by itself. An example of this is the refuse 
service class. A neighborhood collection refuse truck would not need to 
be assigned to the same subcategory as a roll-off refuse straight/dump 
truck that makes daily highway trips to a landfill.
    The agencies request comment on the method for assigning vocational 
chassis to regulatory subcategories. We believe the proposed approach 
is aligned with the objective to allow manufacturers to certify their 
chassis over appropriate duty cycles, while maintaining the ability of 
the market to offer a variety of products to meet customer demand.
(2) Alternative Approach to Subcategorization
    The U.S. Department of Energy and EPA are partnering to support a 
project aimed at evaluating, refining and/or developing duty cycles for 
tractors and vocational vehicles to be used in the certification of 
heavy-duty vehicles to GHG emission standards. This project is underway 
at the National Renewable Energy Laboratory (NREL) and includes a task 
to develop alternative subcategorization options for vocational 
vehicles, along with new drive cycles and/or cycle composite 
weightings. NREL is continuing to collate available vehicle activity 
data and vehicle characteristics, and the public is invited to submit 
information to the docket in support of this work to identify possible 
alternative GEM test cycles and segmentation options for vocational 
vehicles. Preliminary work under this project indicates that two or 
three test cycles may adequately represent most vocational vehicles. 
Depending on how many distinct vehicle driving patterns can be 
identified with correlation to vehicle attributes, the agencies may 
finalize a vocational subcategorization approach that includes as few 
as two or as many as five composite GEM duty cycles. It is also 
possible that some test cycles may not apply to all subcategories. It 
is further possible that the approach to assignment of vocational 
chassis to subcategories in the final rules may be based on different 
attributes than those proposed, including different engine and 
driveline characteristics and different indicators of vehicle purpose. 
Preliminary work from NREL indicates that in-use drive cycles may 
include more idle operation for all types of vocational vehicles than 
is represented by the currently proposed GEM test cycles. Depending on 
comments and additional information received during the comment period, 
it may be within the agencies' discretion to adopt one or more 
alternative vocational vehicle test cycles, or re-weight the current 
test cycles, to better represent real world driving and better reflect 
performance of the technology packages.
(3) Proposed GHG and Fuel Consumption Standards for Vocational Vehicles
    EPA is proposing CO2 standards and NHTSA is proposing 
fuel consumption standards for manufacturers of chassis for new 
vocational vehicles. As described in Sections II.C.1 and II.D.1 above, 
the agencies are proposing test procedures so that engine performance 
would be evaluated within the GEM simulation tool. These test 
procedures include corrections for the test fuel, enabling vocational 
vehicles to be certified with many different types of CI and SI 
engines. In addition, EPA is proposing to establish HFC leakage 
standards for air conditioning systems in vocational vehicles, as 
described

[[Page 40289]]

below and in the draft RIA Chapters 2 and 5.
    This section describes the standards and implementation dates that 
the agencies are proposing for the nine subcategories of vocational 
vehicles. The agencies have performed a technology analysis to 
determine the level of standards that we believe would be available at 
reasonable cost, and would be cost-effective, technologically feasible, 
and appropriate in the lead time provided. More details of this 
analysis are described in the draft RIA Chapter 2. This analysis 
considered the following for each of the proposed regulatory 
subcategories:
     The level of technology that is incorporated in current 
new vehicles,
     forecasts of manufacturers' product redesign schedules,
     the available data on CO2 emissions and fuel 
consumption for these vehicles,
     technologies that would reduce CO2 emissions 
and fuel consumption and that are judged to be feasible and appropriate 
for these vehicles through the 2027 model year,
     the effectiveness and cost of these technologies,
     a projection of the technologically feasible application 
rates of these technologies, in this time frame, and
     projections of future U.S. sales for different types of 
vehicles and engines.
    The proposal described here and throughout the rulemaking documents 
is the preferred alternative, referred to as Alternative 3 in Section X 
and the draft RIA Chapter 11. However, the agencies are seriously 
considering another alternative for all segments, including vocational 
vehicles, referred to as Alternative 4. The agencies believe that 
Alternative 4 has the potential to be the maximum feasible and 
reasonable alternative. However, based on the evidence currently before 
the agencies, EPA and NHTSA have outstanding questions regarding 
relative risks and benefits of Alternative 4 due to the time frame 
envisioned by that alternative. Alternative 4 is predicated on the same 
general market adoption rates of the same technologies as the proposal, 
but would provide three years less lead time than the proposal. Details 
of Alternative 4 are presented in Section V.D, Section X, and in the 
draft RIA Chapter 11.
    The agencies seek comment on the feasibility of Alternative 4 for 
vocational vehicles, including empirical data on its appropriateness, 
cost-effectiveness, and technological feasibility. It would be helpful 
if comments addressed these issues separately for each type of 
technology.
    Additional information and feedback could further inform our 
assumptions and, by extension, our analysis of feasibility. The 
agencies believe it is possible that it could be within the agencies' 
discretion to determine in the final rules that Alternative 4 could be 
maximum feasible and appropriate under CAA section 202(a)(1) and (2). 
If the agencies receive relevant information supporting the feasibility 
of Alternative 4, or regarding technology pathways different than those 
in Alternatives 3 and 4, the agencies may consider establishing final 
fuel consumption and GHG emission standards at levels that provide more 
overall reductions than what we are proposing if we deem them to be 
maximum feasible and reasonable for NHTSA and EPA, respectively.
(a) Proposed Fuel Consumption and CO2 Standards
    The agencies are proposing standards that would phase in over a 
period of seven years, beginning in the 2021 model year, consistent 
with the requirement in EISA that NHTSA's standards provide four full 
model years of regulatory lead time and three full model years of 
regulatory stability, and provide sufficient time ``to permit the 
development and application of the requisite technology'' for purposes 
of CAA section 202(a)(2). The proposed Phase 2 program would progress 
in three-year stages with an intermediate set of standards in MY 2024 
and would continue to reduce fuel consumption and CO2 
emissions well beyond the full implementation year of MY 2027. The 
agencies have identified a technology path for each of these levels of 
improvement, as described below.
    Combining engine and vehicle technologies, vocational vehicles 
powered by CI engines would be projected to achieve improvements of 16 
percent in MY 2027 over the MY 2017 baseline, as described below and in 
the draft RIA Chapter 2. The agencies project up to 13 percent 
improvement in fuel consumption and CO2 emissions in MY 2027 
from SI-powered vocational vehicles, as shown in Table V-3. The 
incremental Phase 2 vocational vehicle standards would ensure steady 
progress toward the MY 2027 standards, with improvements in MY 2021 of 
up to seven percent and improvements in MY 2024 of up to 11 percent 
over the MY 2017 baseline vehicles, as shown in Table V-3.
    The agencies' analyses, as discussed in this preamble and in the 
draft RIA Chapter 2, show that the proposed standards would be 
appropriate under each agency's respective statutory authority.

       Table V-3--Projected Vocational Vehicle CO2 and Fuel Use Reductions (in Percent) From 2017 Baseline
----------------------------------------------------------------------------------------------------------------
                                                                                                   Light heavy-
              Model year                       Engine type         Heavy heavy-    Medium heavy-  duty class  2b-
                                                                   duty class 8   duty class 6-7         5
----------------------------------------------------------------------------------------------------------------
2021..................................  CI Engine...............               7               7               6
                                        SI Engine...............               5               5               4
2024..................................  CI Engine...............              11              11              10
                                        SI Engine...............               7               7               7
2027..................................  CI Engine...............              16              16              16
                                        SI Engine...............              12              13              12
----------------------------------------------------------------------------------------------------------------

    Based on our analysis and research, the agencies believe that the 
improvements in vocational vehicle fuel consumption and CO2 
emissions can be achieved through deployment and utilization of a 
greater set of technologies than formed the technology basis for the 
Phase 1 standards. In developing the proposed standards, the agencies 
have evaluated the current levels of fuel consumption and emissions, 
the kinds of technologies that could be utilized by manufacturers to 
reduce fuel consumption and emissions, the associated lead time, the 
associated costs for the industry, fuel savings for the owner/operator, 
and the magnitude of the CO2 reductions and fuel savings 
that may be achieved. After examining the possibilities of vehicle 
improvements, the agencies are basing the proposed standards on the 
performance of workday idle reduction technologies, improved 
transmissions

[[Page 40290]]

including hybrid powertrains, axle technologies, weight reduction, and 
further tire rolling resistance improvements. The EPA-only air 
conditioning standard is based on leakage improvements.
    The agencies' evaluation indicates that some of the above vehicle 
technologies are commercially available today, though often in limited 
volumes. Other technologies would need additional time for development. 
Those that we believe are available today and may be adopted to a 
limited extent in some vehicles include improved tire rolling 
resistance, weight reduction, some types of conventional transmission 
improvements, neutral idle, and air conditioning leakage improvements. 
However, EPA is not proposing standards predicated on performance of 
these technologies until MY 2021.\263\ The agencies consider any 
potential benefits that could be achieved by implementing rules 
requiring some technologies on vocational vehicles earlier than MY 2021 
to be outweighed by several disadvantages. For one, manufacturers would 
need lead time to develop compliance tracking tools. Also, if the Phase 
2 vocational vehicle standards began in a different year than the 
tractor standards, this could create unnecessary added complexity, and 
could strongly detract from the fuel savings and GHG emission 
reductions that could otherwise be achieved. Therefore we anticipate 
that the Phase 1 standards will continue to apply in model years 2018 
to 2020.
---------------------------------------------------------------------------

    \263\ NHTSA is unable to adopt mandatory amended standards in 
those model years since there would be less than the statutorily-
prescribed amount of lead time available. 49 U.S.C. 32902(k)(3)(A).
---------------------------------------------------------------------------

    Vehicle technologies that we believe will become available in the 
near term include improved axle lubrication and 6x2 axles. Vehicle 
technologies that we understand would benefit from even more 
development time include stop-start idle reduction and hybrid 
powertrains. The agencies have analyzed the technological feasibility 
of achieving the fuel consumption and CO2 standards, based 
on projections of what actions manufacturers would be expected to take 
to reduce fuel consumption and emissions to achieve the standards, and 
believe that the standards would be technologically feasible throughout 
the regulatory useful life of the program. EPA and NHTSA estimated 
vehicle package costs are found in Section V.C.(2).
    Table V-4 and Table V-5 present EPA's proposed CO2 
standards and NHTSA's proposed fuel consumption standards, 
respectively, for chassis manufacturers of Class 2b through Class 8 
vocational vehicles for the beginning model year of the program, MY 
2021. As in Phase 1, the standards would be in the form of the mass of 
emissions, or gallons of fuel, associated with carrying a ton of cargo 
over a fixed distance. The EPA standards would be measured in units of 
grams CO2 per ton-mile and the NHTSA standards would be in 
gallons of fuel per 1,000 ton-miles. With the mass of freight in the 
denominator of this term, the program is designed to measure improved 
efficiency in terms of freight efficiency. As in Phase 1, the Phase 2 
program would assign a fixed default payload in GEM for each vehicle 
weight class group (heavy heavy-duty, medium heavy-duty, and light 
heavy-duty). Even though this simplification does not allow individual 
vehicle freight efficiencies to be recognized, the general capacity for 
larger vehicles to carry more payload is represented in the numerical 
values of the proposed standards for each weight class group.
    EPA's proposed vocational vehicle CO2 standards and 
NHTSA's proposed fuel consumption standards for the MY 2024 stage of 
the program are presented in Table V-6 and Table V-7, respectively. 
These reflect broader adoption rates of vehicle technologies already 
considered in the technology basis for the MY 2021 standards. The 
standards for vehicles powered by CI engines also reflect that in MY 
2024, the separate engine standard would be more stringent, so the 
vehicle standard keeps pace with the engine standard.
    EPA's proposed vocational vehicle CO2 standards and 
NHTSA's proposed fuel consumption standards for the full implementation 
year of MY 2027 are presented in Table V-8 and Table V-9, respectively. 
These reflect even greater adoption rates of the same vehicle 
technologies considered in the basis for the previous stages of the 
Phase 2 standards. The proposed MY 2027 standards for vocational 
vehicles powered by CI engines reflect additional engine technologies 
consistent with those on which the separate proposed MY 2027 CI engine 
standard is based. The proposed MY 2027 standards for vocational 
vehicles powered by SI engines reflect improvements due to additional 
engine friction reduction technology, which is not among the 
technologies on which the separate SI engine standard is based.
    The proposed standards are based on highway cruise cycles that 
include road grade, to better reflect real world driving and to help 
recognize engine and driveline technologies. See Section III.E. The 
agencies have evaluated some alternate road grade profiles, including 
several recommended by NREL and two developed independently by the 
agencies, and have prepared possible alternative vocational vehicle 
standards based on these profiles. The agencies request comment on this 
analysis, which is available in a memorandum to the docket.\264\
---------------------------------------------------------------------------

    \264\ See Memorandum dated May 2015 on Possible Tractor, 
Trailer, and Vocational Vehicle Standards Derived from Alternative 
Road Grade Profiles.
---------------------------------------------------------------------------

    As described in Section I, the agencies are proposing to continue 
the Phase 1 approach to averaging, banking and trading (ABT), allowing 
ABT within vehicle weight classes. For Phase 2, continuing this 
approach means allowing averaging between CI-powered vehicles and SI-
powered vehicles that belong to the same weight class group and have 
the same regulatory useful life.

                Table V-4--Proposed EPA CO2 Standards for MY 2021 Class 2b-8 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-
                           Duty cycle                             duty class 2b-   Medium heavy-   Heavy heavy-
                                                                         5        duty class 6-7   duty class 8
----------------------------------------------------------------------------------------------------------------
                  EPA Standard for Vehicle with CI Engine Effective MY 2021 (gram CO2/ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................             296             188             198
Multi-Purpose...................................................             305             190             200
Regional........................................................             318             186             189
----------------------------------------------------------------------------------------------------------------
                  EPA Standard for Vehicle with SI Engine Effective MY 2021 (gram CO2/ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................             320             203             214

[[Page 40291]]

 
Multi-Purpose...................................................             329             205             216
Regional........................................................             343             201             204
----------------------------------------------------------------------------------------------------------------

         Table V-5--Proposed NHTSA Fuel Consumption Standards for MY 2021 Class 2b-8 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-
                           Duty cycle                             duty class 2b-   Medium heavy-   Heavy heavy-
                                                                         5        duty class 6-7   duty class 8
----------------------------------------------------------------------------------------------------------------
    NHTSA Standard for Vehicle with CI Engine Effective MY 2021 (Fuel Consumption gallon per 1,000 ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         29.0766         18.4676         19.4499
Multi-Purpose...................................................         29.9607         18.6640         19.6464
Regional........................................................         31.2377         18.2711         18.5658
----------------------------------------------------------------------------------------------------------------
    NHTSA Standard for Vehicle with SI Engine Effective MY 2021 (Fuel Consumption gallon per 1,000 ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         36.0077         22.8424         24.0801
Multi-Purpose...................................................         37.0204         23.0674         24.3052
Regional........................................................         38.5957         22.6173         22.9549
----------------------------------------------------------------------------------------------------------------

                Table V-6--Proposed EPA CO2 Standards for MY 2024 Class 2b-8 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-
                           Duty cycle                             duty class 2b-   Medium heavy-   Heavy heavy-
                                                                         5        duty class 6-7   duty class 8
----------------------------------------------------------------------------------------------------------------
                  EPA Standard for Vehicle with CI Engine Effective MY 2024 (gram CO2/ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................             284             179             190
Multi-Purpose...................................................             292             181             192
Regional........................................................             304             178             182
----------------------------------------------------------------------------------------------------------------
                  EPA Standard for Vehicle with SI Engine Effective MY 2024 (gram CO2/ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................             312             197             208
Multi-Purpose...................................................             321             199             210
Regional........................................................             334             196             199
----------------------------------------------------------------------------------------------------------------

         Table V-7--Proposed NHTSA Fuel Consumption Standards for MY 2024 Class 2b-8 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-
                           Duty cycle                             duty class 2b-   Medium heavy-   Heavy heavy-
                                                                         5        duty class 6-7   duty class 8
----------------------------------------------------------------------------------------------------------------
    NHTSA Standard for Vehicle with CI Engine Effective MY 2024 (Fuel Consumption gallon per 1,000 ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         27.8978         17.5835         18.6640
Multi-Purpose...................................................         28.6837         17.7800         18.8605
Regional........................................................         29.8625         17.4853         17.8782
----------------------------------------------------------------------------------------------------------------
    NHTSA Standard for Vehicle with SI Engine Effective MY 2024 (Fuel Consumption gallon per 1,000 ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         35.1075         22.1672         23.4050
Multi-Purpose...................................................         36.1202         22.3923         23.6300
Regional........................................................         37.5830         22.0547         22.3923
----------------------------------------------------------------------------------------------------------------

                Table V-8--Proposed EPA CO2 Standards for MY 2027 Class 2b-8 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-
                           Duty cycle                             duty class 2b-   Medium heavy-   Heavy heavy-
                                                                         5        duty class 6-7   duty class 8
----------------------------------------------------------------------------------------------------------------
                  EPA Standard for Vehicle with CI Engine Effective MY 2027 (gram CO2/ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................             272             172             182
Multi-Purpose...................................................             280             174             183

[[Page 40292]]

 
Regional........................................................             292             170             174
----------------------------------------------------------------------------------------------------------------
                  EPA Standard for Vehicle with SI Engine Effective MY 2027 (gram CO2/ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................             299             189             196
Multi-Purpose...................................................             308             191             198
Regional........................................................             321             187             188
----------------------------------------------------------------------------------------------------------------

         Table V-9--Proposed NHTSA Fuel Consumption Standards for MY 2027 Class 2b-8 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-
                           Duty cycle                             duty class 2b-   Medium heavy-   Heavy heavy-
                                                                         5        duty class 6-7   duty class 8
----------------------------------------------------------------------------------------------------------------
    NHTSA Standard for Vehicle with CI Engine Effective MY 2027 (Fuel Consumption gallon per 1,000 ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         26.7191         16.8959         17.8782
Multi-Purpose...................................................         27.5049         17.0923         17.9764
Regional........................................................         28.6837         16.6994         17.0923
----------------------------------------------------------------------------------------------------------------
    NHTSA Standard for Vehicle with SI Engine Effective MY 2027 (Fuel Consumption gallon per 1,000 ton-mile)
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         33.6446         21.2670         22.0547
Multi-Purpose...................................................         34.6574         21.4921         22.2797
Regional........................................................         36.1202         21.0420         21.1545
----------------------------------------------------------------------------------------------------------------

    As with the other regulatory categories of heavy-duty vehicles, 
NHTSA and EPA are are proposing standards that apply to Class 2b-8 
vocational vehicles at the time of production, and EPA is proposing 
standards for a specified period of time in use (e.g., throughout the 
regulatory useful life of the vehicle). The derivation of the standards 
for these vehicles, as well as details about the proposed provisions 
for certification and implementation of these standards, are discussed 
in more detail later in this notice and in the draft RIA.
(b) Proposed HFC Leakage Standards
    The Phase 1 GHG standards do not include standards to control 
direct HFC emissions from air conditioning systems on vocational 
vehicles. EPA deferred such standards due to ``the complexity in the 
build process and the potential for different entities besides the 
chassis manufacturer to be involved in the air conditioning system 
production and installation''. See 76 FR 57194. During our stakeholder 
outreach conducted for Phase 2, we learned that the majority of 
vocational vehicles are sold as cab-completes with the dashboard-
mounted air conditioning systems installed by the chassis manufacturer. 
For those vehicles that have A/C systems installed by a second stage 
manufacturer, EPA is proposing revisions to our regulations that would 
resolve the issues identified in Phase 1, in what we believe is a 
practical and feasible manner, as described below in Section V.E.
    For the above reasons, in Phase 2, EPA now believes that it is 
reasonable to propose A/C refrigerant leakage standards for Class 2b-8 
vocational vehicles, beginning with the 2021 model year. Chassis sold 
as cab-completes typically have air conditioning systems installed by 
the chassis manufacturer. For these configurations, the process for 
certifying that low leakage components are used would follow the system 
in place currently for comparable systems in tractors. In the case 
where a chassis manufacturer would rely on a second stage manufacturer 
to install a compliant air conditioning system, the chassis 
manufacturer must follow the proposed delegated assembly provisions 
described below in Section V.E.
(4) Proposed Exemptions and Exclusions
(a) Proposed Standards for Emergency Vehicles
    Emergency vehicles are covered by the Phase 1 program at the same 
level of stringency as any other vocational vehicle. In discussions 
with representatives of the Fire Apparatus Manufacturers Association, 
the agencies have learned that chassis manufacturers of fire apparatus 
are currently able to obtain compliant engines and tires with the 
coefficient of rolling resistance allowing compliance with the Phase 1 
standards. The agencies are proposing in Phase 2 to allow emergency 
vehicles to meet less stringent standards than other vocational 
vehicles. There are two reasons for doing so. First, as the level of 
complexity of Phase 2 would increase with the need for additional 
technologies aimed to improve driveline efficiency, the compliance 
burden would be disproportionately high for a company that manufactures 
small volumes of specialized chassis. The ability of such a company to 
benefit from averaging would be limited, as would be the ability to 
spread compliance costs across many vehicles. The second and more 
important reason is that emergency vehicles, which are necessarily 
built for high levels of performance and reliability, would likely 
sacrifice some levels of function to attain the proposed Phase 2 
standards. For example, vehicles with large engines, high-torque 
powertrains, and tires designed with deep tread would likely be 
deficit-producing vehicles if manufacturers needed to certify an 
emergency vehicle family to the primary proposed standards.
    In the MY 2017-2025 light-duty rule, the agencies adopted an 
exclusion for emergency and police vehicles from GHG and fuel economy 
standards.\265\ As described in that rule, the unique features of 
purpose-built emergency vehicles, such as high rolling resistance

[[Page 40293]]

tires, reinforced suspensions, and special calibrations of engines and 
transmissions, have the effect of raising their GHG emissions. The 
agencies determined in that rule that an exemption was appropriate 
because the technological feasibility issues for emergency vehicles 
went beyond those of other high-performance vehicles, and vehicles with 
these performance characteristics must continue to be made available in 
the market. The agencies do not believe that non-emergency vocational 
vehicles are designed for the severe duty cycles that are experienced 
by emergency vehicles, and therefore do not face the same potential 
constraints in terms of vehicle design and the application of 
technology.
---------------------------------------------------------------------------

    \265\ See 77 FR 62653, October 12, 2012.
---------------------------------------------------------------------------

    In conducting an independent technological feasibility assessment 
for heavy-duty emergency vehicles, the agencies believe that some GHG 
and fuel saving technologies could reasonably be applied without 
compromising vehicle utility. However, these vehicles are designed, 
built, and operated so differently than other vocational vehicles that 
we believe keeping them in the same averaging sets as other vocational 
vehicles in Phase 2 would not be appropriate and thus a separate 
standard (evaluated from a baseline specific to these vehicles) is 
warranted.
    Our feasibility analysis and the available tire data indicate that 
emergency vehicle manufacturers can reasonably continue to apply tires 
with the Phase 1 level tire CRR performance, in the Phase 2 program. We 
have also learned that a variety of vehicle-level technologies are 
being developed specifically for emergency vehicles, to maintain on-
board electronics without excessive idling. Modern fire apparatus and 
ambulances typically have multiple computers and other electronic 
devices on-board, each of which requires power and continues to draw 
electricity when the vehicle is parked and the crew is responding to an 
emergency, which could take several hours. Most on-board batteries and 
alternators are not capable of sustaining these power demands for any 
length of time, so emergency vehicles must either operate in a high-
idle mode or adopt one of several possible technologies that can assist 
with electrical load management. Some of these technologies can enable 
an emergency vehicle to shut down the main engine and drastically 
reduce idle emissions.\266\ NHTSA and EPA have not based the proposed 
emergency vehicle standards on use of idle reduction technologies 
because we do not believe the regular neutral idle and stop-start 
technologies we project for other vocational vehicles could apply 
equally to emergency vehicles, and we do not have enough information 
about this subset of idle reduction technologies that is designed for 
extended electrical load management to either estimate an effectiveness 
value or determine an appropriate market adoption rate. The agencies 
request comment on whether we should include any market adoption rate 
of idle reduction technologies for emergency vehicles, as part of the 
basis for the Phase 2 emergency vocational vehicle standard.
---------------------------------------------------------------------------

    \266\ See ``How to solar power a fire truck or ambulance,'' 
available at http://www.firerescue1.com/fire-products/apparatus-accessories/articles/1934440-How-to-solar-power-a-fire-truck-or-ambulance/, accessed November 2014.
---------------------------------------------------------------------------

    To address both the technical feasibility and the compliance 
burden, the agencies are proposing less stringent standards that also 
have a simplified compliance method. Because the potential trade-offs 
between performance and fuel efficiency apply equally to any emergency 
vehicle manufacturer, the agencies propose that these less stringent 
standards would apply for commercial chassis manufacturers of emergency 
vehicles, as well as for custom chassis manufacturers. The standard for 
vehicles identified at the time of certification as being intended for 
emergency service would be predicated solely on the continued use of 
lower rolling resistance tires, at the Phase 2 baseline level (i.e. 
compliant with Phase 1).\267\
---------------------------------------------------------------------------

    \267\ See 40 CFR 86.1803-01 for the applicable definition of 
emergency vehicle.
---------------------------------------------------------------------------

    With respect to standards for engines used in these emergency 
vehicles, based on what we have learned from discussions with engine 
manufacturers, we understand that engines designed for heavy-duty 
emergency vehicles are generally higher-emitting than other engines. 
However, if we maintain a separate engine standard and regulatory 
flexibility such as ABT, fire apparatus manufacturers would be able to 
obtain engines that, on average, meet the proposed Phase 2 engine 
standards. The agencies further recognize that the proposed engine map 
inputs to GEM in the primary program would pose a difficulty for 
emergency vehicle manufacturers. If we required engine-specific inputs 
then these manufacturers would have to apply extra vehicle technologies 
to compensate for the necessary but higher-emitting engine. The 
agencies are therefore not proposing to recognize engine performance as 
part of the vehicle standard for emergency vehicles. Manufacturers of 
these vehicles would be expected to install an engine that is certified 
to the applicable separate Phase 2 engine standard. However, under the 
simplified compliance method we are proposing, emergency vehicle 
manufacturers would not follow the otherwise applicable Phase 2 
proposed approach of entering an engine map in GEM. Instead a Phase 1 
style GEM interface would be made available, where an EPA default 
engine specified by rule would be simulated in GEM. The agencies 
request comments on the merits of using an equation-based compliance 
approach for emergency vehicle manufacturers, similar to the approach 
proposed for trailer manufacturers and described in Section IV.F.
    This approach is consistent with the approach recommended by the 
Small Business Advocacy Review Panel, which believed it would be 
feasible for small emergency vehicle manufacturers to install a Phase 
2-compliant engine, but recommended a simplified certification approach 
to reduce the number of required GEM inputs. Consistent with the 
recommendations of this panel, the agencies are asking for comments on 
whether there would be enough fuel consumption and CO2 
emissions benefits achieved by use of LRR tires in emergency vehicles 
to justify requiring small business emergency chassis manufacturers to 
adopt them.
    We expect some commercial chassis manufacturers that serve the 
emergency vehicle market may have the ability to meet the proposed 
Phase 2 standards of our primary program when including emergency 
vehicles in their averaging sets. Even so, we are proposing that they 
have the option to comply with the less stringent standards, because 
there are fewer opportunities to improve fuel efficiency on emergency 
vehicles, which (as noted) are designed for high levels of performance 
and severe duty. The agencies expect that this compliance path would be 
most needed by custom chassis manufacturers who serve the emergency 
vehicle market. Custom chassis manufacturers typically offer a narrow 
range of products with low sales volumes. Therefore, fleet averaging 
would provide a lower level of compliance flexibility, and there would 
be less opportunity to spread the costs of developing advanced 
technologies across a large number of vehicles. Further, many custom 
chassis manufacturers do not qualify as small entities under the SBA 
regulations. Thus, the agencies believe that existence of program-wide 
ABT does not vitiate

[[Page 40294]]

the need to propose alternative, less stringent standards for emergency 
vehicles.
    Table V-10 below presents the proposed numerical standards to which 
an emergency vehicle chassis would be certified under this provision. 
Emergency vehicles certified to these proposed emergency vehicle 
standards would be ineligible to generate credits. The proposed 
standards shown below were derived by building a model of three 
baseline vehicles (LHD, MHD, HHD) using attributes similar to those 
developed for the primary program as assigned to the Urban drive cycle 
subcategories. By modeling a 2021-compliant engine and tires with CRR 
of 7.7, the MY 2021 standards were derived using GEM. Details of these 
configurations are provided in the draft RIA Chapter 2.

             Table V-10--Proposed Standards for Class 2b-8 Emergency Vehicles for MY 2021 and Later
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-
                       Implementation year                        duty class 2b-   Medium heavy-   Heavy heavy-
                                                                         5        duty class 6-7   duty class 8
----------------------------------------------------------------------------------------------------------------
                           Proposed EPA Emergency Vehicle Standard (gram CO2/ton-mile)
----------------------------------------------------------------------------------------------------------------
MY2021..........................................................             312             195             215
----------------------------------------------------------------------------------------------------------------
             Proposed NHTSA Emergency Vehicle Standard (Fuel Consumption gallon per 1,000 ton-mile)
----------------------------------------------------------------------------------------------------------------
MY2021..........................................................         30.6483         19.1552         21.1198
----------------------------------------------------------------------------------------------------------------

    The agencies have estimated the costs of vocational vehicle 
technology packages, as presented below in Table V-20 to Table V-22. 
The technologies on which the proposed emergency vehicle standards are 
based include engines, LRR tires, and leak-tight air conditioning 
systems. Using the estimated costs of those technologies as presented, 
the agencies estimate that the average cost for a heavy heavy-duty or 
medium-heavy-duty emergency vehicle to meet the proposed emergency 
vehicle standards would be approximately $463 in MY 2027, and the 
average cost for a light heavy-duty emergency vehicle would be 
approximately $497 in MY 2027. To derive these estimates, the agencies 
have combined the $7 cost of LRR tires that is presented in Table V-20 
with the engine and air conditioning costs presented in Table V-22. The 
agencies are not aware of any emergency vehicle manufacturer that 
produces engines, thus most of these costs would be borne by engine 
manufacturers. While some of the added engine costs may be passed on to 
emergency vehicle manufacturers and vehicle owners/operators, the 
overall costs of these technologies are on the order of the Phase 1 
vocational vehicle program costs, which are highly cost-effective.
    To ensure that only emergency vehicle chassis would be able to 
certify to these less stringent standards, the agencies propose that 
manufacturers identify vehicles using the definition at 40 CFR 86.1803-
01, which for Phase 2 purposes would be an ambulance or a fire truck. 
Manufacturers have informed us that it is feasible to identify such 
vehicles using sales codes or the presence of specialty attributes. The 
agencies request comment on the merits and drawbacks of aligning the 
definition of emergency vehicle for purposes of the Phase 2 program 
with the definition of emergency vehicle for purposes of the light-duty 
GHG provisions under 40 CFR 86.1818, which includes additional vehicles 
such as those used by law enforcement.
    According to the International Council on Clean Transportation 
(ICCT), less than one percent of all new heavy-duty truck registrations 
from 2003 to 2007 were emergency vehicles.\268\ On average, the ICCT's 
data suggest that approximately 5,700 new emergency vehicles are sold 
in the U.S. each year; about 0.8 percent of the 3.4 million new heavy-
duty trucks registered between 2003 and 2007. According to the Fire 
Apparatus Manufacturers Association, the annual VMT of the newest 
emergency vehicles ranges from approximately 2,000 to 8,000 miles, as 
documented in their 2004 Fire Apparatus Duty Cycle White Paper.\269\ 
Because there are relatively few of these vehicles and they travel a 
relatively small number of miles, the agencies believe that setting 
less stringent GHG and fuel consumptions standards for these vehicles 
would not detract from the greater benefits of this rulemaking, and 
such separate standards are warranted in any case.
---------------------------------------------------------------------------

    \268\ ICCT, May 2009, ``Heavy-Duty Vehicle Market Analysis: 
Vehicle Characteristics & Fuel Use, Manufacturer Market Shares.''
    \269\ Fire Apparatus Manufacturer's Association, Fire Apparatus 
Duty Cycle White Paper, August 2004, available at http://www.deepriverct.us/firehousestudy/reports/Apparatus-Duty-Cycle.pdf.
---------------------------------------------------------------------------

(b) Possible Standards for Other Custom Chassis Manufacturers
    The agencies request comment on extending the above simplified 
compliance procedure and less stringent Phase 2 standards to other 
custom chassis manufacturers--those who offer such a narrow range of 
products that averaging is not of practical value as a compliance 
flexibility, and for whom there are not large sales volumes over which 
to distribute technology development costs. Custom chassis 
manufacturers that are not small businesses must comply with the Phase 
1 standards and are generally doing so, by installing tires with the 
required coefficient of rolling resistance. We are aware of a handful 
of U.S. chassis manufacturers serving the recreational vehicle and bus 
markets who we believe would have a disproportionate compliance burden, 
should we require compliance with the primary proposed Phase 2 
standards.
    According to the MOVES model forecast, there will be approximately 
1,000 commercial intercity coach buses, 5,000 transit buses, 40,000 
school buses, and 90,000 recreational vehicles manufactured new for MY 
2018.\270\ In each of these markets, specialty chassis manufacturers 
compete with large vertically integrated manufacturers. We request 
comment on the merits of offering less stringent standards to small 
volume chassis manufacturers, and seek comment as well as to other 
factors the agencies should consider to ensure this

[[Page 40295]]

approach would not have unintended consequences for businesses 
competing in the vocational vehicle market.
---------------------------------------------------------------------------

    \270\ Vehicle populations are estimated using MOVES2014. More 
information on projecting populations in MOVES is available in the 
following report: USEPA (2015). ``Population and Activity of On-road 
Vehicles in MOVES2014--Draft Report'' Docket No. EPA-HQ-OAR-2014-
0827.
---------------------------------------------------------------------------

    If the agencies were to adopt less stringent standards for custom 
non-emergency chassis manufacturers, we would expect to limit this by 
setting a maximum number of eligible vocational chassis annually for 
each such manufacturer. The agencies request comment on an appropriate 
sales volume to qualify for these possible standards, and also request 
comment as to whether the sales volume thresholds should be different 
for different markets. We further request comment on whether it would 
adversely affect business competitiveness if custom chassis 
manufacturers were held to a different standard than commercial chassis 
manufacturers, and whether the agencies should consider allowing 
commercial chassis manufacturers competing in these markets to sell a 
limited number of chassis certified to a less stringent standard.
    As an alternative approach, the agencies request comment on 
providing custom chassis manufacturers with additional lead time to 
comply. For example, we could allow such manufacturers an additional 
one or two years to meet each level of the primary proposed vocational 
vehicle standards.
    If the agencies pursued the approach of less stringent standards, 
we would likely adopt a simplified compliance procedure similar to the 
one proposed for emergency vehicles. Custom chassis manufacturers would 
not follow the otherwise applicable Phase 2 proposed approach of 
entering an engine map in GEM. Instead, a Phase 1 style GEM interface 
would be made available, where an EPA default engine specified by rule 
would be simulated in GEM. The vehicle-level standard would be 
predicated on a simpler set of technologies than the primary proposed 
Phase 2 standard, most likely lower rolling resistance tires and idle 
reduction. Because these would not be emergency vehicles, we believe 
the performance of these vehicles would not be compromised by requiring 
improvement in tire CRR beyond that of the Phase 1 level. The agencies 
request comment on whether we should develop separate standards for 
different vehicle types such as recreational vehicles and buses.
    The Small Business Advocacy Review Panel recommended that EPA seek 
comment on how to design a small business vocational vehicle exemption 
by means of a custom chassis volume exemption and what sales volume 
would be an appropriate threshold. The agencies seek comments on all 
aspects of an approach for custom vocational vehicle chassis 
manufacturers that would enable us to adopt a final Phase 2 program 
that would be consistent with the recommendations of the panel.
(c) Off-Road and Low-Speed Vocational Vehicle Exemptions
    The agencies are proposing to continue the exemptions in Phase 1 
for off-road and low-speed vocational vehicles, with revision. See 
generally 76 FR 57175. These provisions currently apply for vehicles 
that are defined as ``motor vehicles'' per 40 CFR 85.1703, but may 
conduct most of their operations off-road, such as drill rigs, mobile 
cranes and yard hostlers. Vehicles qualifying under these provisions 
must be built with engines certified to meet the applicable engine 
standard, but need not comply with a vehicle-level GHG or fuel 
consumption standard. In Phase 1, this typically means not needing to 
install tires with a lower coefficient of rolling resistance. Because 
manufacturers choosing to exempt vehicles (but not engines) based on 
the criteria for heavy-duty off road vehicles at 40 CFR 1037.631 and 49 
CFR 523.2 will for the first time provide a description to the agencies 
of how they meet the qualifications for this exemption in their end-of-
the year reports in the spring of 2015, we do not have information 
beyond what we knew at the time of the Phase 1 rules regarding how 
broadly this provision is being used. Nonetheless, we are proposing to 
discontinue the criterion for exemption based solely on use of tires 
with maximum speed rating at or below 55 mph. The agencies are 
concerned that tires are so easily replaced that this would be an 
unreliable way to identify vehicles that truly need special 
consideration. We are proposing to retain the qualifying criteria 
related to design and use of the vehicle. We invite comments on the 
proposed revisions to the qualifying criteria in the regulations, 
including whether the rated speed of the tires should be retained, and 
whether vehicles intended to be covered by this provision have 
characteristics that are captured by the proposed criteria.

C. Feasibility of the Proposed Vocational Vehicle Standards

    This section describes the agencies' technological feasibility and 
cost analysis in greater detail. Further detail on all of these 
technologies can be found in the draft RIA Chapter 2.4 and Chapter 2.9. 
The variation in the design and use of vocational vehicles has led the 
agencies to project different technology solutions for each regulatory 
subcategory. Manufacturers may also find additional means to reduce 
emissions and lower fuel consumption than the technologies identified 
by the agencies, and of course may adopt any compliance path they deem 
most advantageous. The focus of this section is on the feasibility of 
the proposed standards for non-emergency vocational vehicles. Further, 
the agencies project that these technology packages would also be 
feasible for vocational tractors. With typical driving patterns having 
limited operation at highway speeds, vocational tractors would 
appropriately be classified as vocational vehicles, with proposed 
standards that would not be predicated on the performance of 
aerodynamic devices. The agencies propose to allow vocational tractors 
to follow the same subcategory assignment process as other vocational 
vehicles. For example, a beverage tractor intended for local delivery 
routes may have a driving pattern that is reasonably represented by the 
proposed Urban test cycle. The agencies request comment on whether 
vocational tractors would be deficit-generating vehicles if certified 
as vocational vehicles, where performance would be measured against the 
proposed vocational vehicle baseline configurations. For example, if a 
tractor were designed with a higher power engine to carry a heavier 
payload than presumed in the GEM baseline for that subcategory, would 
GEM return a value that poorly represents the real world performance of 
that vehicle, and if so, would that merit a different certification 
approach for vocational tractors?
    NHTSA and EPA collected information on the cost and effectiveness 
of fuel consumption and CO2 emission reducing technologies 
from several sources. The primary sources of information were the 
Southwest Research Institute evaluation of heavy-duty vehicle fuel 
efficiency and costs for NHTSA,\271\ the 2010 National Academy of 
Sciences report of Technologies and Approaches to Reducing the Fuel 
Consumption of Medium- and Heavy-Duty Vehicles,\272\ TIAX's assessment 
of technologies to support the NAS panel report,\273\ the technology 
cost analysis conducted by

[[Page 40296]]

ICF for EPA,\274\ and the 2009 report from Argonne National Laboratory 
on Evaluation of Fuel Consumption Potential of Medium and Heavy Duty 
Vehicles through Modeling and Simulation.\275\
---------------------------------------------------------------------------

    \271\ Reinhart, T, 2015. Commercial Medium- and Heavy-Duty (MD/
HD) Truck Fuel Efficiency Technology Study--Reports #1 and #2. 
Washington, DC: National Highway Traffic Safety Administration; and 
Schubert, R., Chan, M., Law, K. 2015, Commercial Medium- and Heavy-
Duty (MD/HD) Truck Fuel Efficiency Cost Study. Washington, DC: 
National Highway Traffic Safety Administration.
    \272\ See NAS Report, Note 136, above.
    \273\ See TIAX 2009, Note 137, above.
    \274\ See ICF 2010, Note 139, above.
    \275\ Argonne National Laboratory, ``Evaluation of Fuel 
Consumption Potential of Medium and Heavy Duty Vehicles through 
Modeling and Simulation.'' October 2009
---------------------------------------------------------------------------

(1) What technologies are the agencies considering to reduce the 
CO2 emissions and fuel consumption of vocational vehicles?
    In assessing the feasibility of the proposed Phase 2 vocational 
vehicle standards, the agencies evaluated a suite of technologies, 
including workday idle reduction, improved tire rolling resistance, 
improved transmissions, improved axles, and weight reduction, as well 
as their impact on reducing fuel consumption and GHG emissions. The 
agencies also evaluated aerodynamic technologies and full electric 
vehicles.
    As discussed above, vocational vehicles may be powered by either SI 
or CI engines. The technologies and feasibility of the proposed engine 
standards are discussed in Section II. At the vehicle level, the 
agencies have considered the same suite of technologies and have 
applied the same reasoning for including or rejecting these vehicle-
level technologies as part of the basis for the proposed standards, 
regardless of whether the vehicle is powered by a CI or SI engine. With 
the exception of the MY 2027 proposed standards, the analysis below 
does not distinguish between vehicles with different types of engines. 
The resulting proposed vehicle standards do reflect the differences 
arising from the performance of different types of engines over the GEM 
cycles.
(a) Vehicle Technologies Considered in Standard-Setting
    The agencies note that the effectiveness values estimated for the 
technologies may represent average values, and do not reflect the 
potentially-limitless combination of possible values that could result 
from adding the technology to different vehicles. For example, while 
the agencies have estimated an effectiveness of 0.5 percent for low 
friction axle lubricants, each vehicle could have a unique 
effectiveness estimate depending on the baseline axle's oil viscosity 
rating. For purposes of this proposed rulemaking, NHTSA and EPA believe 
that employing average values for technology effectiveness estimates is 
an appropriate way of recognizing the potential variation in the 
specific benefits that individual manufacturers (and individual 
vehicles) might obtain from adding a given technology. There may be 
real world effectiveness that exceeds or falls short of the average, 
but on-balance the agencies believe this is the most practicable 
approach for determining the wide ranging effectiveness of technologies 
in the diverse vocational vehicle arena.
(i) Transmissions
    Transmission improvements present a significant opportunity for 
reducing fuel consumption and CO2 emissions from vocational 
vehicles. Transmission efficiency is important for many vocational 
vehicles as their duty cycles involve high percentages of driving under 
transient operation. The three categories of transmission improvements 
the agencies considered for Phase 2 are driveline optimization, 
architectural improvements, and hybrid powertrain systems.
    The agencies believe an effective way to derive efficiency 
improvements from a transmission is by optimizing it with the engine 
and other driveline components to balance both performance needs and 
fuel savings. However, many vocational vehicles today are not operating 
with such optimized systems. Because customers are able to specify 
their preferred components in a highly customized build process, many 
vocational vehicles are assembled with components that were designed 
more for compatibility than for optimization. To some extent, 
vertically integrated manufacturers are able to optimize their 
drivelines. However, this is not widespread in the vocational vehicle 
sector, resulting primarily, from the multi-stage manufacture process. 
The agencies project transmission and driveline optimization will yield 
a substantial proportion of vocational vehicle fuel efficiency and GHG 
emissions reduction improvements for Phase 2. On average, we anticipate 
that efficiency improvements of about five percent can be achieved from 
optimization, or deep integration of drivelines. However, we are not 
assigning a fixed level of improvement; rather we have developed a test 
procedure, the powertrain test, for manufacturers to use to obtain 
improvement factors representative of their systems. See Section V.E 
and the draft RIA Chapter 3 for a discussion of this proposed test 
procedure. Depending on the test cycle and level of integration, the 
agencies believe improvement factors greater than ten percent above the 
baseline vehicle performance could be achieved. To obtain such benefits 
across more of the vocational vehicle fleet, the agencies believe there 
is opportunity for manufacturers to form strategic partnerships and to 
explore commercial pathways to deeper driveline integration. For 
example, one partnership of an engine manufacturer and a transmission 
manufacturer has led to development of driveline components that 
deliver improved fuel efficiency based on optimization that could not 
be realized without sharing of critical data.\276\
---------------------------------------------------------------------------

    \276\ See Cummins-Eaton partnership at http://smartadvantagepowertrain.com/
---------------------------------------------------------------------------

    The agencies project other related transmission technologies would 
be recognized over the powertrain test along with driveline 
optimization. These include improved mechanical gear efficiency, more 
sophisticated shift strategies, more aggressive torque converter 
lockups, transmission friction reduction, and reduced parasitic losses, 
as described in the 2009 TIAX report at 4.5.2. Each of these attributes 
would be simulated in GEM using default values, unless the powertrain 
test were utilized by the certifying manufacturer. The draft RIA 
Chapter 4 explains each parameter that would be set as a fixed value in 
GEM. The expected benefits of improved gear efficiency, shift logic, 
and torque converter lockup are included in the total projected 
effectiveness of optimized conventional transmissions using the 
powertrain test.
    Transmission efficiency could also be improved in the time frame of 
the proposed rules by changes in the architecture of conventional 
transmissions. Most vocational vehicles currently use torque converter 
automatic transmissions (AT), especially in Classes 2b-6. According to 
the 2009 TIAX report, approximately 70 percent of Class 3-6 box and 
bucket trucks use AT, and all refuse trucks, urban buses, and motor 
coaches use AT.\277\ Automatic transmissions offer acceleration 
benefits over drive cycles with frequent stops, which can enhance 
productivity. However, with the diversity of vocational vehicles and 
drive cycles, other kinds of transmission architectures can meet 
customer needs, including automated manual transmissions (AMT) and even 
some manual transmissions (MT).\278\
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    \277\ See TIAX 2009, Note 137, above.
    \278\ See http://www.truckinginfo.com/channel/equipment/article/story/2014/10/2015-medium-duty-trucks-the-vehicles-and-trends-to-look-for/page/3.aspx (downloaded November 2014).
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    One type of architectural improvement the agencies project will be 
developed by manufacturers of all transmission architectures is 
increased number of gears. The benefit of adding

[[Page 40297]]

more gears varies depending on whether the gears are added in the range 
where most operation occurs. The TIAX 2009 report projected that 8-
speed transmissions could incrementally reduce fuel consumption by 2 to 
3 percent over a 6-speed automatic transmission, for Class 3-6 box and 
bucket trucks, refuse haulers, and transit buses.\279\ Although the 
agencies estimate the improvement could on average be about two percent 
for the adding of two gears in the range where significant vehicle 
operation occurs, we are not assigning a fixed improvement based solely 
on number of transmission gears. Manufacturers would enter the number 
of gears and gear ratios into GEM and the model would simulate the 
efficiency benefit over the applicable test cycle. Because a public 
version of proposed GEM is being released with these proposed rules, 
stakeholders are free to use this tool to explore the effectiveness of 
different numbers of gears and gear ratios over the proposed test 
cycles. The agencies request comment on all aspects of the GEM tool, 
including how it models transmissions and shifting strategies. More 
details on GEM are available in the draft RIA Chapter 4.
---------------------------------------------------------------------------

    \279\ See TIAX 2009, Note 137, Table 4-48.
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    Other architectural changes that the agencies project will offer 
efficiency improvements include improved automated manual transmissions 
(AMT) and introduction of dual clutch transmissions (DCT). Newer 
versions of AMT are showing significant improvements in reliability, 
such that the current generation of transmissions with this 
architecture is more likely to retain resale value and win customer 
acceptance than early models.\280\ The agencies believe AMT generally 
compare favorably to manual transmissions in fuel efficiency, and while 
the degree of improvement is highly driver-dependent, it can be two 
percent or greater, depending on the drive cycle. See Section III for 
additional discussion of AMT. The agencies are not assigning fixed 
average performance levels to compare an AMT with a traditional 
automatic transmission. Although the lack of a torque converter offers 
AMT an efficiency advantage in one respect, the lag in power during 
shifts is a disadvantage. For Phase 2, the agencies have developed 
validated models of both AMT and AT, as described in the draft RIA 
Chapter 4. Manufacturers installing AMT or AT would enter the relevant 
inputs to GEM and the simulation would calculate the performance. Dual 
clutch transmissions (DCT) designed for medium heavy-duty vocational 
vehicles are already in production, and could reasonably be expected to 
be adapted for other weight classes of vocational vehicles during the 
time frame of Phase 2.\281\ Based on supplier conversations, 
manufacturers intend to match varying DCT designs with the diverse 
needs of the heavy-duty market. The agencies do not yet have a 
validated DCT model in GEM, and we are not assigning a fixed 
performance level for DCT, though we expect the per-vehicle fuel 
efficiency improvement due to switching from automatic to DCT to be in 
the range of three percent over the GEM vocational vehicle test cycles. 
Selection of transmission architecture type (Manual, AMT, AT, DCT) 
would be made by manufacturers at the time of certification, and GEM 
would either use this input information to simulate that transmission 
using algorithms as described in the draft RIA Chapter 4, or fixed 
improvements may be assigned. The agencies are assigning fixed levels 
of improvement that vary by test cycle in GEM for AMT when replacing a 
manual, which for vocational vehicles would be in the HHD Regional 
subcategory. If a manufacturer elected not to conduct powertrain 
testing to obtain specific improvements for use of a DCT, GEM would 
simulate a DCT as if it were an AMT, with no fixed assigned benefit. 
The draft RIA at Chapter 2.9 describes the projected effectiveness of 
each type of transmission improvement for each vocational vehicle test 
cycle.
---------------------------------------------------------------------------

    \280\ See NACFE Confidence Report: Electronically Controlled 
Transmissions, at http://www.truckingefficiency.org/powertrain/automated-manual-transmissions (January 2015). See also http://www.overdriveonline.com/auto-vs-manual-transmission-autos-finding-solid-ground-by-sharing-data-with-engines/ (accessed November 2014).
    \281\ See Eaton Announcement September 2014, available at http://www.ttnews.com/articles/lmtbase.aspx?storyid=2969&t=Eaton-Unveils-Medium-Duty-Procision-Transmission.
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    Hybrid powertrain systems are included under transmission 
technologies because, depending on the design and degree of 
hybridization, they may either replace a conventional transmission or 
be deeply integrated with a conventional transmission. Further, these 
systems are often manufactured by companies that also manufacture 
conventional transmissions.
    The agencies are including hybrid powertrains as a technology on 
which some of the proposed vocational vehicle standards are predicated. 
We project a variety of mild and strong hybrid systems, with a wide 
range of effectiveness. Mild hybrid systems that offer an engine stop-
start feature are discussed below under workday idle reduction. For 
hybrid powertrains, we are estimating a 22 to 25 percent fuel 
efficiency improvement over the powertrain test, depending on the duty 
cycle in GEM for the applicable subcategory. The agencies obtained 
these estimates by projecting a 27 percent effectiveness over the ARB 
Transient cycle, and zero percent over the constant-speed highway 
cruise cycles. With the proposed cycle weightings, this calculates to a 
25 percent improvement over the Urban cycle, and 22 percent over the 
Multi-Purpose cycle. According to the NREL Final Evaluation of UPS 
Diesel Hybrid-Electric Delivery Vans, the improvement of a hybrid over 
a conventional diesel in gallons per ton-mile on a chassis dynamometer 
over the NYC Composite test cycle was 28 percent.\282\ NREL 
characterizes the NYC Composite cycle as more aggressive than most of 
the observed field data points from the study, and may represent an 
ideal hybrid cycle in terms of low average speed, high stops per mile, 
and high kinetic intensity. NREL noted that most of the observed field 
data points were reasonably represented by the HTUF4 cycle, over which 
the chassis dynamometer results showed a 31 percent improvement in 
gallons per ton-mile. In units of grams CO2 per mile, NREL 
reported these test results as 22 percent improvement over the NYC 
Composite cycle and 26 percent improvement over the HTUF4 cycle. Based 
on these results, and the fact that any improvement from strong hybrids 
in Phase 2 would not be simulated in GEM, but rather would be evaluated 
using the powertrain test, the agencies deemed it reasonable to 
estimate a conservative 27 percent effectiveness over the ARB Transient 
in setting the stringency of the proposed standards.
---------------------------------------------------------------------------

    \282\ Lammert, M., Walkowivz, K., NREL, Eighteen-Month Final 
Evaluation of UPS Second Generation Diesel Hybrid-Electric Delivery 
Vans, September 2012, NREL/TP-5400-55658.
---------------------------------------------------------------------------

    The Phase 1 standards were not predicated on any adoption of hybrid 
powertrains in the vocational vehicle sector. Because the first 
implementation year of Phase 1 came just three years after 
promulgation, there was insufficient lead time for development and 
deployment of the technology.\283\ In addition, our proposed Phase 2

[[Page 40298]]

vocational vehicle GEM test cycles are expected to better recognize 
hybrid technology effectiveness than the Phase 1 hybrid test cycle, 
especially in the Urban subcategory. Further, our Phase 2 cost analysis 
shows that hybrid systems designed for LHD and MHD vocational vehicles 
would cost less than the costs we were projecting in Phase 1. The 
agencies believe the Phase 2 rulemaking timeframes would offer 
sufficient lead time to develop, demonstrate, and conduct reliability 
testing for technologies that are still maturing, including these 
hybrid technologies.
---------------------------------------------------------------------------

    \283\ In addition to concerns over adequacy of lead time, the 
agencies described concerns over ``modest'' emission reductions. See 
76 FR 57234. Even so, in Phase 1 the agencies adopted provisions for 
hybrids to generate advanced technology credits.
---------------------------------------------------------------------------

    Several types of vocational vehicles are well suited for hybrid 
powertrains, and are among the early adopters of this technology. 
Vehicles such as utility or bucket trucks, delivery vehicles, refuse 
haulers, and buses have operational usage patterns with either a 
significant amount of stop-and-go activity or spend a large portion of 
their operating hours idling the main engine to operate a PTO unit.
    The industry is currently developing many variations of hybrid 
powertrain systems. There are a few hybrid systems in the market today 
and several more under development. In addition, energy storage systems 
are improving.\284\ Heavy-duty customers are getting used to these 
systems with the number of demonstration products on the road. Even so, 
some manufacturers may be uncertain how much investment to make in this 
technology without clear signals about future market demand. A list of 
hybrid manufacturers and their products intended for the vocational 
market is provided in the draft RIA Chapter 2.9.
---------------------------------------------------------------------------

    \284\ Green Fleet Magazine, The Latest Developments in EV 
Battery Technology, November 2013, available at http://www.greenfleetmagazine.com/article/story/2013/12/the-latest-developments-in-ev-battery-technology-grn/page/1.aspx.
---------------------------------------------------------------------------

    Some low cost products on the simple end of the hybrid spectrum are 
available that minimize battery demand through the use of 
ultracapacitors or only provide power assist at low speeds. Our 
regulations define a hybrid system as one that has the capacity for 
energy storage.\285\ In the light-duty GHG program a mild hybrid is 
defined as including an integrated starter generator, a high-voltage 
battery (above 12v), and a capacity to recover at least 15 percent of 
the braking energy. In such systems some accessories are usually 
electrified. Strong hybrids are typically referred to as those that 
have larger energy recovery and storage capacity, defined at 65 percent 
braking energy recovery in the light-duty GHG program. Although 
integration of a strong hybrid system may enable installation of a 
downsized engine in some cases, the agencies have not projected any 
vocational engine downsizing for any hybrid systems as part of our 
Phase 2 technology assessment. This is in part to be conservative in 
our cost estimates, and in part because in some applications a smaller 
engine may not be acceptable if it would risk that performance could be 
sacrificed during some portion of a work day. Depending on the drive 
cycle and units of measurement, strong hybrids developed to date have 
seen fuel consumption and CO2 emissions reductions between 
20 and 50 percent in the field.\286\
---------------------------------------------------------------------------

    \285\ EPA's and NHTSA's regulations define a hybrid vehicle as 
one that ``includes energy storage features . . . in addition to an 
internal combustion engine or other engine using consumable chemical 
fuel. . . .'' at 40 CFR 1037.801 and 49 CFR 535.4.
    \286\ Van Amburg, Bill, CALSTART, Status Report: Alternative 
Fuels and High-Efficiency Vehicles, Presentation to National 
Association of Fleet Administrators (NAFA) 2014 Institute and Expo, 
April 8, 2014.
---------------------------------------------------------------------------

    The agencies are working to reduce barriers related to hybrid 
vehicle certification. In Phase 1, there is a significant test burden 
associated with demonstrating the GHG and fuel efficiency performance 
of vehicles with hybrid powertrain systems. Manufacturers must obtain a 
conventional vehicle that is identical to the hybrid vehicle in every 
way except the transmission, test both, and compare the results.\287\ 
In Phase 2, the agencies are proposing that manufacturers would conduct 
powertrain testing on the hybrid system, and the results of that 
testing would become inputs to GEM for simulation of the non-powertrain 
features of the hybrid vehicle, removing a significant test burden.
---------------------------------------------------------------------------

    \287\ See test procedures at 40 CFR 1037.555.
---------------------------------------------------------------------------

    In discussions with manufacturers during the development of Phase 
2, the agencies have learned that meeting the on-board diagnostic 
requirements for criteria pollutant engine certification continues to 
be a potential impediment to adoption of hybrid systems. See Section 
XIV.A.1 for a discussion of regulatory changes proposed to reduce the 
non-GHG certification burden for engines paired with hybrid powertrain 
systems. The agencies have also received a letter from the California 
Air Resources Board requesting consideration of supplemental 
NOX testing of hybrids. The agencies request comment on the 
Air Resources Board's letter and recommendations.\288\
---------------------------------------------------------------------------

    \288\ California Air Resources Board. Letter from Michael Carter 
to Matthew Spears dated December 29, 2014. CARB Request for 
Supplemental NOX Emission Check for Hybrid Vehicles. 
Docket EPA-HA-OAR-2014-0827.
---------------------------------------------------------------------------

(ii) Axles
    The agencies are considering two axle technologies for the 
vocational vehicle sector. The first is advanced low friction axle 
lubricants. Under contract with NHTSA, SwRI tested improved driveline 
lubrication and found measurable improvements by switching from current 
mainstream products to newer formulations focusing on modified 
viscometric effects.\289\ Synthetic lubricant formulations can offer 
superior thermal and oxidative stability compared to petroleum or 
mineral based lubricants. The agencies believe that a 0.5 percent 
improvement in vocational vehicle efficiency (as for tractors) is 
achievable through the application of low friction axle lubricants, and 
have included that value as a fixed value in GEM. Beyond the use of 
different lubricant formulations, some axle manufacturers are offering 
products that achieve efficiency improvements by varying the 
lubrication levels with vehicle speed, reducing churning losses. The 
agencies request comment on whether we could accept these systems as 
qualifying for a fixed GEM improvement value. If a manufacturer wishes 
to demonstrate the benefit of a specific axle technology, an off-cycle 
technology credit would be necessary. To support such an application, 
manufacturers could conduct a rear axle efficiency test, as described 
in the draft RIA Chapter 3.8. Proposed regulations for this test 
procedure can be found at 40 CFR 1037.560. Our estimated axle 
lubricating costs do not include operational costs such as refreshing 
lubricants on a periodic basis. Based on supplier information, it is 
likely that some advanced lubricants may have a longer drain interval 
than traditional lubricants. We are estimating the axle lubricating 
costs for HHD to be the same as for tractors since those vehicles 
likewise typically have three axles. However, for LHD and MHD 
vocational vehicles, we scaled down the cost of this technology to 
reflect the presence of a single rear axle.
---------------------------------------------------------------------------

    \289\ Reinhart, T.E. (June 2015). Commercial Medium- and Heavy-
Duty Truck Fuel Efficiency Technology Study--Report #1. (Report No. 
DOT HS 812 146). Washington, DC: National Highway Traffic Safety 
Administration (the 2015 NHTSA Technology Study). For axle 
improvements see T-270 Delivery Truck Vehicle Technology Results.
---------------------------------------------------------------------------

    The second axle technology the agencies are considering is a design 
that enables one of the rear axles to disconnect or otherwise behave as 
if it's a non-driven axle, on vehicles with two rear (drive) axles, 
commonly referred to as a 6x2 configuration. The agencies have 
considered two types of 6x2 configurations for vocational vehicles:

[[Page 40299]]

Those that are engaged full time on a vehicle, and those that may be 
engaged only during some types of vehicle operation, such as only when 
operating at highway cruise speeds. Some early versions of 6x2 
technology offered by manufacturers were not accepted by vehicle 
owners. When the second drive axle is no longer powered, traction may 
be sacrificed in some cases. Vehicles with earlier versions of this 
technology have seen reduced residual values in the secondary market. 
Over the model years covered by the Phase 2 rules, the agencies expect 
the market to offer significantly improved versions of this technology, 
with traction control maintained at lower speeds and efficiency gains 
at highway cruise speeds.\290\ Further information about this 
technology is provided in the feasibility of the tractor standards, 
Section III, as well as in draft RIA Chapter 2.4.
---------------------------------------------------------------------------

    \290\ NACFE, Confidence Findings on the Potential of 6x2 Axles, 
available at http://nacfe.org/wp-content/uploads/2014/01/Trucking-Efficiency-6x2-Confidence-Report-FINAL-011314.pdf, January 2014 
(downloaded November 2014).
---------------------------------------------------------------------------

    The efficiency benefit of a 6x2 axle configuration can be duty-
cycle dependent. In many instances, vocational vehicles need to operate 
off-highway, such as at a construction site delivering materials or 
dumping at a refuse collection facility. In these cases, vehicles with 
two drive axles may need the full tractive benefit of both drive axles. 
The part-time 6x2 axle technology is not expected to measurably improve 
a vehicle's efficiency for vehicles whose normal duty cycle involves 
performing significant off-highway work, but the agencies do expect 
this technology to be recognized over a highway cruise cycle.
    Some vocational vehicles in the HHD Regional subcategory may see a 
6x2 axle configuration as a reasonable option for improving fuel 
efficiency. As in Phase 1, our vehicle simulation model assumes that 
only HHD vehicles have two rear axles, so only these could be 
recognized for adopting this technology. Further, the agencies don't 
believe the Multipurpose and Urban subcategories include a significant 
enough highway cycle weighting in the composite cycle for vehicles that 
operate in this manner to experience a benefit from adopting this 
technology. The agencies project this can achieve 2 percent benefit at 
highway cruise; \291\ thus, we propose to assign a fixed value in GEM 
for part-time 6x2 technology of 2.5 percent over the highway cruise 
cycles, where the specific improvement would be calculated according to 
the composite weighting of the applicable vocational vehicle test 
cycle. We request comment on the best way to recognize this technology 
in Phase 2, either through a GEM calculation or a fixed assigned value, 
for vocational vehicles.
---------------------------------------------------------------------------

    \291\ See 2015 NHTSA Technology Study, Note 289, T-700 Class 8 
Tractor-Trailer Vehicle Technology Results.
---------------------------------------------------------------------------

(iii) Lower Rolling Resistance Tires
    Tires are the second largest contributor to energy losses of 
vocational vehicles, as found in the energy audit conducted by Argonne 
National Lab.\292\ There is a wide range of rolling resistance of tires 
used on vocational vehicles today. This is in part due to the fact that 
the competitive pressure to improve rolling resistance of vocational 
vehicle tires has been less than that found in the line haul tire 
market. In addition, the drive cycles typical for these applications 
often lead vocational vehicle buyers to value tire traction and 
durability more heavily than rolling resistance. The agencies 
acknowledge there can be tradeoffs when designing a tire for reduced 
rolling resistance. These tradeoffs can include characteristics such as 
wear resistance, cost and scuff resistance. However, based on input 
from tire suppliers, the agencies expect that the LRR tires that will 
be available in the Phase 2 timeframe will not compromise performance 
parameters such as traction, handling, wear, retreadability, or 
structural durability.
---------------------------------------------------------------------------

    \292\ See Argonne National Laboratory 2009 report, Note 275, 
page 91.
---------------------------------------------------------------------------

    After the Phase 1 rules were promulgated, NHTSA and EPA conducted 
supplemental tire testing. Other data that have become available to the 
agencies since Phase 1 include pre-certification data provided to 
manufacturers by tire suppliers in preparation for MY 2014 vehicle 
certification.\293\ The agencies categorized the data by tire position 
and vehicle application, so that we have a representation of the 
variety of LRR vocational vehicle tires that are available in the 
market for the drive position, steer and all-position tires, as well as 
wide base singles in all positions. Based on our data set that includes 
results from multiple laboratories, drive tires that are intended for 
vocational vehicles have an average CRR of 7.8, and steer and all-
position tires that are intended for vocational vehicles have an 
average CRR of 6.7. The results also indicate that there are a variety 
of wide based single tires that are intended for vocational vehicles, 
with an average CRR of 6.6. Each of these data sets shows several 
models of commercial tires are available at levels of CRR ranging 
generally from 20 percent worse than average to 20 percent better than 
average. Further details are presented in the draft RIA Chapter 2.
---------------------------------------------------------------------------

    \293\ See memorandum dated May 2015 on Vocational Vehicle Tire 
Rolling Resistance Test Data Evaluation.
---------------------------------------------------------------------------

    According to the 2015 NHTSA Technology Study, vocational vehicles 
are likely to see the most benefits from reduced tire rolling 
resistance when they are driving at 55 mph.\294\ This report also found 
an influence of vehicle weight on the benefits of LRR tires. The study 
found that both vocational vehicles tested had greater benefits of LRR 
tires at 100 percent payload than when empty. Also, the T270 delivery 
box truck that was 4,000 lbs heavier when fully loaded saw slightly 
greater efficiency gains from LRR tires than the F650 flatbed tow truck 
over the same cycles. At higher speeds, aerodynamic drag grows, which 
reduces the rolling resistance share of total vehicle power demand. In 
highly transient cycles, the power required to accelerate the vehicle 
inertia overshadows the rolling resistance power demand. In simulation, 
GEM represents vocational vehicles with fixed vehicle weights, payloads 
and aerodynamic coefficients. Thus, the benefit of LRR tires will be 
reflected in GEM differently for vehicles of different weight classes. 
There will also be further differences arising from the different test 
cycles. Based on preliminary simulations, it appears the vehicles in 
GEM most likely to see the greatest fuel efficiency gains from use of 
LRR tires are those in the MHD weight classes tested over the Regional 
or Multipurpose duty cycles, where one percent efficiency improvement 
could be achieved by reducing CRR by four to five percent. Those seeing 
the least benefit from LRR tires would likely be Class 8 vehicles 
tested over the Urban or Multipurpose cycles, where one percent 
efficiency improvement could be achieved by reducing CRR by seven to 
eight percent.
---------------------------------------------------------------------------

    \294\ See 2015 NHTSA Technology Study, Note 289, T-270 Delivery 
Truck Vehicle Technology Results
---------------------------------------------------------------------------

    The agencies propose to continue the light truck (LT) tire CRR 
adjustment factor that was adopted in Phase 1. See generally 76 FR 
57172-57174. In Phase 1, the agencies developed this adjustment factor 
by dividing the overall vocational test average CRR of 7.7 by the LT 
vocational average CRR of 8.9. This yielded an adjustment factor of 
0.87. After promulgation of the Phase 1 rules, the agencies conducted 
additional tire CRR testing on a variety of LT tires, most of which 
were designated as all-

[[Page 40300]]

position tires. In addition, manufacturers have submitted to the 
agencies pre-certification data that include CRR values provided by 
tire suppliers. For the small subset of newer test tires that were 
designated as steer tires, the average CRR was 7.8 kg/ton. For the 
subset of newer test tires that were designated as drive tires, the 
average CRR was 8.6 kg/ton. However all-position tires had an average 
CRR of 8.9 kg/ton.\295\ Therefore, for LT vocational vehicle tires, we 
propose to continue allowing the measured CRR values to be multiplied 
by a 0.87 adjustment factor before entering the values in the GEM for 
compliance, because this additional testing has not revealed compelling 
information that a change is needed. We request comment on whether the 
adjustment factor should be retained, as well as data on which to base 
a possible update of its numerical value.
---------------------------------------------------------------------------

    \295\ See tire memorandum, Note 293.
---------------------------------------------------------------------------

    As described above in V. B. (4) (c), the agencies are proposing to 
continue the Phase 1 off-road and low speed exemptions in Phase 2, with 
the proposed revision of discontinuing the option to qualify for this 
exemption solely if the vehicle is fitted with tires that have a 
maximum speed rating at or below 55 mph. The agencies welcome comments 
on this revision.
(iv) Workday Idle Reduction
    The Phase 2 idle reduction technologies considered for vocational 
vehicles are those that reduce workday idling, unlike the overnight 
idling of combination tractors. There are many potential technologies. 
The agencies in particular evaluated neutral idle and stop-start 
technologies, and the proposed standards are predicated on projected 
amounts of penetrations of these technologies, described in Section V. 
C. (2) . While neutral idle is necessarily a transmission technology, 
stop-start could range from an engine technology to one that would be 
installed by a secondary manufacturer under a delegated assembly 
agreement.
    The agencies are aware that for a vocational vehicle's engine to 
turn off during workday driving conditions, there must be a reserve 
source of energy to maintain functions such as power steering, cabin 
heat, and transmission pressure, among others. Stop-start systems can 
be viewed as having a place on the low-cost end of the hybridization 
continuum. As described in Section V. C. (2) and in the draft RIA 
Chapter 2.9, the agencies are including the cost of energy storage 
sufficient to maintain critical onboard systems and restart the engine 
as part of the cost of vocational vehicle stop-start packages. The 
technologies to capture this energy could include a system of 
photovoltaic cells on the roof of a box truck, or regenerative braking. 
The technologies to store the captured energy could include a battery 
or a hydraulic pressure bladder. More discussion of stop-start 
technologies is found in the draft RIA Chapter 2.4.
    The agencies intend for the technologies that would qualify to be 
recognized in GEM as stop-start to be broadly defined, including those 
that may be installed at different stages in the manufacturing process. 
The agencies request comment on an appropriate definition of stop-start 
technologies for vocational vehicles.
    The agencies are also proposing a certification test cycle that 
measures the amount of fuel saved and CO2 reduced by these 
two primary types of idle reduction technologies: neutral idle and 
stop-start. Vocational vehicles frequently also idle while cargo is 
loaded or unloaded, and while operating a PTO such as compacting 
garbage or operating a bucket. In these rules, the agencies are 
proposing that the Regional duty cycle have ten percent idle, the 
Multi-purpose cycle have 15 percent idle, and the Urban cycle have 20 
percent idle. These estimates are based on publically available data 
published by NREL.\296\ To bolster this information, EPA entered into 
an interagency agreement with NREL to characterize workday idle among 
vocational vehicles. One task of this agreement is to estimate the 
nationally representative fraction of idle operation for vocational 
vehicles for each proposed regulatory subcategory including a 
distinction between idling while driving or stopping in gear, and 
idling while parked. The preliminary range of total daily idle 
operation per vehicle indicated by this work is about 18 percent to 33 
percent when combining the data from all available vehicles. The 
agencies request comment regarding the nature of vocational workday 
idle operation, including how much of it is in traffic and how much is 
while the vehicle is parked. Depending on comments and additional 
information received during the comment period, it may be within the 
agencies' discretion to adopt different final test cycles, or re-weight 
the current test cycles, to better represent real world driving and 
better reflect performance of the technology packages. An analysis of 
possible vocational vehicle standards derived from alternate 
characterizations of idle operation has been prepared by the agencies, 
and is available for review in the public docket for this 
rulemaking.\297\
---------------------------------------------------------------------------

    \296\ See NREL data at http://www.nrel.gov/vehiclesandfuels/fleettest/research_fleet_dna.html.
    \297\ See memorandum dated May 2015 on Analysis of Possible 
Vocational Vehicle Standards Based on Alternative Idle Cycle 
Weightings.
---------------------------------------------------------------------------

    Based on GEM simulations using the currently proposed vocational 
vehicle test cycles, the agencies estimate neutral idle for automatic 
transmissions to provide fuel efficiency improvements ranging from one 
percent to nearly four percent, depending on the regulatory 
subcategory. The agencies estimate stop-start to provide fuel 
efficiency improvements ranging from 0.5 percent to nearly seven 
percent, depending on the regulatory subcategory. Because of the higher 
idle weighting factor in the Urban test cycle, vehicles certified in 
these subcategories would derive the greatest benefit from applying 
idle reduction technologies.
    Although the primary program would not simulate vocational vehicles 
over a test cycle that includes PTO operation, the agencies are 
proposing to continue, with revisions, the hybrid-PTO test option that 
was in Phase 1. See 76 FR 57247 and 40 CFR 1037.525 (proposed to be 
redesignated as 40 CFR 1037.540). Recall that we are proposing to 
regulate vocational vehicles at the incomplete stage when a chassis 
manufacturer may not know at the time of certification whether a PTO 
will be installed or how the vehicle will be used. Based on stakeholder 
input, chassis manufacturers are expected to know whether a vehicle's 
transmission is PTO-enabled. However, that is very different from 
knowing whether a PTO will actually be installed and how it will be 
used. Chassis manufacturers may rarely know whether the PTO-enabled 
vehicle will use this capability to maneuver a lift gate on a delivery 
vehicle, to operate a utility boom, or merely to keep it as a reserve 
item to add value in the secondary market. In cases where a 
manufacturer can certify that a PTO with an idle-reduction technology 
will be installed either by the chassis manufacturer or by a second 
stage manufacturer, the hybrid-PTO test cycle may be utilized by the 
certifying manufacturer to measure an improvement factor over the GEM 
duty cycle that would otherwise apply to that vehicle. In addition, the 
delegated assembly provisions would apply. See Section V.E for a 
description of the delegated assembly provisions. See draft RIA Chapter 
3 for a discussion of the proposed revisions to the PTO test cycle.

[[Page 40301]]

    The agencies have reason to believe there may be a NOX 
co-benefit to stop-start idle reduction technologies, e-PTO, and 
possibly also to neutral idle. For this to be true, the benefits of 
reduced fuel consumption and retained aftertreatment temperature would 
have to outweigh any extra emissions due to re-starts. In the draft RIA 
Chapter 2.9, there is a more detailed discussion of the relationship 
between idle reduction and NOX co-benefits. The agencies 
request comments and relevant test data that can help inform this 
issue.
(v) Weight Reduction
    The agencies believe there is opportunity for weight reduction in 
some vocational vehicles. According to the 2009 TIAX report, there are 
freight-efficiency benefits to reducing weight on vocational vehicles 
that carry heavy cargo, and tax savings potentially available to 
vocational vehicles that remain below excise tax weight thresholds. 
This report also estimates that the cost effectiveness of weight 
reduction over urban drive cycles is potentially greater than the cost 
effectiveness of weight reduction for long haul tractors and trailers. 
On a city duty cycle, 89 percent of the vehicle's road load is weight 
dependent, compared to 38 percent on a steady-state 55 mph duty 
cycle.\298\ The 2015 NHTSA Technology Study found that weight reduction 
provides a greater fuel efficiency benefit for vehicles driving under 
transient conditions than for those operating under constant speeds. In 
simulation, the study found that the two Class 6 trucks improved fuel 
efficiency by over two percent on the ARB transient cycle by removing 
1,100 lbs. Further, SwRI observed that the improvements due to weight 
reduction behaved linearly.\299\ The proposed menu of components 
available for a vocational vehicle weight credit in GEM is presented in 
Section V.E and in the draft RIA Chapter 2.9. It includes fewer options 
than for tractors, but the agencies believe there are a number of 
feasible material substitution choices at the chassis level, which 
could add up to weight savings on the order of a few hundred lbs. The 
agencies project that refuse trucks, construction vehicles, and weight-
limited regional delivery vehicles could reasonably apply material 
substitution for weight reduction. We do not expect this to be broadly 
applicable across many types of vocational vehicles. Based on the 
assumed payload in GEM, and depending on the vocational vehicle 
subcategory, the agencies believe a reduction of 200 lbs may offer a 
fuel efficiency improvement of approximately 1 to 2 percent.
---------------------------------------------------------------------------

    \298\ Helms 2003 as referenced in TIAX 2009.
    \299\ See 2015 NHTSA Technology Study, Note 289, T-270 Delivery 
Truck Vehicle Technology Results and Vehicle Performance in the F-
650 Truck.
---------------------------------------------------------------------------

    Without more specific data on which to base our assumptions, the 
agencies are proposing to allocate 50 percent of any mass reduction to 
increased payload, and 50 percent to reduce the chassis weight. We 
considered the data on which the tractor weight allocation (1/3:2/3) is 
based, but determined this would not be valid for vocational vehicles, 
as the underlying data pertained only to long haul tractor-trailers. 
The agencies propose that 50 percent of weight removed from vocational 
vehicle chassis would be added back as additional payload in GEM. This 
suggests an equal likelihood that a vehicle would be reducing weight 
for benefits of being lighter, or reducing weight to carry more 
payload. The agencies welcome data that could better inform the 
fraction of weight reduced for vocational vehicles that is added back 
as payload.
    The agencies request comment on whether the HD Phase 2 program 
should recognize that weight reduction of rotating components provides 
an enhanced fuel efficiency benefit over weight reduction on static 
components. In theory, as components such as brake rotors, brake drums, 
wheels, tires, crankshafts, camshafts, and piston assemblies become 
lighter, the power consumption to rotate the masses would be directly 
proportional to the mass decrease. Using physical properties of a 
rotating component such as a wheel, it is relatively straightforward to 
calculate an equivalent mass. However, we do not have enough 
information to derive industry average values for equivalent mass, nor 
have we evaluated the best way for GEM to account for this.
(vi) HFC Refrigerant From Cabin Air Conditioning (A/C) Systems
    Manufacturers can reduce direct A/C leakage emissions by utilizing 
leak-tight components. EPA's proposed HFC direct emission leakage 
standard would be independent of the CO2 vehicle standard. 
Manufacturers could choose components from a menu of leak-reducing 
technologies sufficient to comply with the standard, as opposed to 
using a test to measure performance. See 76 FR 57194.
    In Phase 1, EPA adopted a HFC leakage standard to assure that high-
quality, low-leakage components are used in each air conditioning 
system installed in HD pickup trucks, vans, and combination tractors 
(see 40 CFR 1037.115). We did not adopt a HFC leakage standard in Phase 
1 for systems installed in vocational vehicles. EPA is proposing in 
Phase 2 to extend the HFC leakage standard that exists due to Phase 1 
requirements to all vocational vehicles. Beginning in the 2021 model 
year, EPA proposes that vocational vehicle air conditioning systems 
with a refrigerant capacity of greater than 733 grams meet a leakage 
rate of 1.50 percent leakage per year and systems with a refrigerant 
capacity of 733 grams or lower meet a leakage standard of 11.0 grams 
per year. EPA believes this proposed approach of having a leak rate 
standard for lower capacity systems and a percent leakage per year 
standard for higher capacity systems would result in reduced 
refrigerant emissions from all air conditioning systems, while still 
allowing manufacturers the ability to produce low-leak, lower capacity 
systems in vehicles which require them.
    EPA believes that reducing A/C system leakage is both highly cost-
effective and technologically feasible. The availability of low leakage 
components is being driven by the air conditioning program in the 
light-duty GHG rule which began in the 2012 model year and the HD Phase 
1 rule that began in the 2014 model year. The cooperative industry and 
government Improved Mobile Air Conditioning program has demonstrated 
that new-vehicle leakage emissions can be reduced by 50 percent by 
reducing the number and improving the quality of the components, 
fittings, seals, and hoses of the A/C system.\300\ All of these 
technologies are already in commercial use and exist on some of today's 
systems, and EPA does not anticipate any significant improvements in 
sealing technologies for model years beyond 2021. However, EPA has 
recognized some manufacturers utilize an improved manufacturing process 
for air conditioning systems, where a helium leak test is performed on 
100 percent of all o-ring fittings and connections after final 
assembly. By leak testing each fitting, the manufacturer or supplier is 
verifying the o-ring is not damaged during assembly (which is the 
primary source of leakage from o-ring fittings), and when calculating 
the yearly leak rate for a system, EPA will allow a relative emission 
value equivalent to a `seal washer' can be used in place of the value 
normally used for an o-ring fitting, when 100 percent helium leak 
testing is performed on those fittings. The agencies request comment on 
other

[[Page 40302]]

possible improvements in the design of air conditioning systems that 
EPA could recognize for the purposes of compliance with this proposed 
standard. For example, should the agency recognize electrified 
compressors as having a zero leak rate, and should we allow vehicles 
fitted with electrified compressors to use a simplified version of the 
compliance reporting form? Please see Section I.F.1 (b) of this 
preamble for a description of proposed program-wide revisions to EPA's 
HFC leakage standards that would address air conditioning systems 
designed for alternative refrigerants.
---------------------------------------------------------------------------

    \300\ Team 1-Refrigerant Leakage Reduction: Final Report to 
Sponsors, SAE, 2007.
---------------------------------------------------------------------------

    The HFC control costs presented in the draft RIA Chapter 2.9 and 
2.12 are applied to all heavy-duty vocational vehicles. EPA views these 
costs as minimal and the reductions of potent GHGs to be easily 
feasible and reasonable in the lead times provided by the proposed 
rules.
(b) Engine Technologies Considered in Vehicle Standard-Setting
    Section II explains the technical basis for the agencies' proposed 
separate engine standards. The agencies are not proposing to predicate 
the vocational vehicle standards on different diesel engine technology 
packages than those presumed for compliance with the separate diesel 
engine standards. However, for the proposed MY 2027 vocational vehicle 
standards, the agencies are predicating the SI-powered vocational 
vehicle standards on a gasoline engine technology package that includes 
additional friction reduction beyond that presumed for compliance with 
the MY 2016 gasoline engine standard. Chapter 2 of the draft RIA 
provides more details on each of the technologies that can be applied 
to both gasoline and diesel engines.
    The vehicle-level standards would vary depending on whether the 
engines powering those vehicles are compression-ignition or spark-
ignition.\301\ In Phase 1, this was not the case because GEM used a 
default engine that was the same for every vehicle configuration, 
regardless of the actual engine being installed. As described above in 
Section II, the Phase 2 vehicle certification tool, GEM, would require 
manufacturers to enter specific engine performance data, where 
emissions and fuel consumption profiles would differ significantly 
depending on the engine's architecture.\302\
---------------------------------------------------------------------------

    \301\ Specifically, EPA is proposing CO2, 
N2O, and CH4 emission standards for new heavy-
duty engines over an EPA specified useful life period (See Section 
II).
    \302\ See Section II.D.5 for an explanation of which engine 
architecture would need to meet which standard.
---------------------------------------------------------------------------

    As explained in Section II.A.2, engines would continue to be 
certified over the FTP test cycle. The FTP test cycle that is 
applicable for bare vocational engines is very different than the 
proposed test cycles for vocational vehicles in GEM. The FTP is a very 
demanding transient cycle that exercises the engine over its full range 
of capabilities. In contrast, the cycles evaluated by GEM measure 
emissions over more frequently used engine operating ranges. The ARB 
Transient vehicle cycle represents city driving, and the highway cruise 
cycles measure engine operation that is closer to steady state. Each of 
these cycles is described in the draft RIA Chapter 3. A consequence of 
recognizing engine performance at the vehicle level would be that 
further engine improvements (i.e. improvements measureable by duty 
cycles that more precisely represent driving patterns for specific 
subcategories of vocational vehicles) could be evaluated as possible 
components of a technical basis for a vocational vehicle standard.\303\ 
For this reason, the agencies considered whether any different engine 
technologies should be included in the feasibility analysis for the 
vehicle standards (and potentially, in the proposed standard 
stringency).
---------------------------------------------------------------------------

    \303\ As noted in II.B.2 above, manufacturers also have greater 
flexibility to meet a vehicle standard if engine improvements can be 
evaluated as part of compliance testing.
---------------------------------------------------------------------------

    One CI engine technology that might be recognized over a vehicle 
highway cruise cycle would be waste heat recovery (WHR). However, the 
agencies do not consider this to be a feasible technology for 
vocational engines. As described in Section II of this preamble and 
Chapter 2.3 of the draft RIA, there currently are no commercially 
available WHR systems for diesel engines, although most engine 
manufacturers are exploring this technology. While it would be possible 
to capture excess heat from a vocational engine operating at highway 
speeds, many vocational vehicles spend insufficient time at highway 
speeds to generate enough excess heat to make this technology 
worthwhile. As explained in Section II.D, the agencies are projecting a 
very small adoption rate of WHR even in the tractor engine market. 
Because the research is currently being conducted to apply this 
technology for tractors, it is logical that future research may reveal 
ways to adapt this technology for those vocational engines that are 
intended for on-highway applications. The agencies do not believe this 
technology will be developed to the point of commercial readiness for 
vocational vehicles in the time frame of these proposed rules.
    The agencies assessed three SI engine technologies for possible 
inclusion in the vocational vehicle technology packages: cylinder 
deactivation, variable valve timing, and advanced friction reduction. 
These might be recognized over the proposed vocational vehicle test 
cycles in GEM through use of the proposed engine mapping procedures. To 
the extent either cylinder deactivation or variable valve timing would 
be adopted for complete heavy-duty pickups and vans, they would be 
recognized over the complete chassis test specified for that segment 
and possibly over the GEM highway cruise cycles, however the aggressive 
bare engine FTP test is unlikely to put the engine into operating modes 
that activate either of those technologies. Based on stakeholder input, 
the agencies project that the SI engines certified over the FTP and 
fitted into vocational vehicles would most likely be designed as 
overhead valve engines, for which the only kind of VVT available is 
dual cam phasing.\304\ Dual cam phasing is already included at 100 
percent adoption rate in the feasibility and stringency of the MY 2016 
bare engine standard. If manufacturers choose to fit vocational 
vehicles with coaxial camshaft SI engines, additional VVT options would 
be feasible and could be recognized over the vocational vehicle test 
cycles. Based on stakeholder input, the agencies project that some SI 
engines certified over the FTP and fitted into vocational vehicles may 
be designed with cylinder deactivation by MY 2021. However, the 
agencies do not have enough information at this time to quantify the 
potential fuel efficiency improvements over the vocational vehicle test 
cycles for engines with cylinder deactivation or various designs 
implementing VVT. Therefore we are not proposing to predicate the SI-
powered vocational vehicle standards on use of these technologies.
---------------------------------------------------------------------------

    \304\ See preamble Section VI.C.5.(a) under Coupled Cam Phasing.
---------------------------------------------------------------------------

    In Section II.D, the agencies explain why we are not proposing a 
more stringent separate SI vocational engine standard in Phase 2 based 
on additional engine technologies beyond those assumed for the Phase 1 
MY 2016 standard. The agencies are instead proposing to include 
adoption and performance of advanced engine friction reduction 
technology as a basis for the

[[Page 40303]]

proposed SI-powered vocational vehicle standards. Based on Volpe model 
results presented in preamble Section VI, the agencies project that 
manufacturers of some SI engines for complete HD pickups would apply 
advanced friction reduction. Level 2 engine friction reduction is 
listed in Table VI-3, and costs are presented in the draft RIA Chapter 
2.12. We expect some engines with this technology would be engine-
certified and sold for use in vocational vehicles. We are projecting an 
overall effectiveness of 0.6 percent improvement over the GEM cycles 
for this technology, calculated using a per-vehicle effectiveness of 
1.1 percent and a vocational vehicle adoption rate of 56 percent. We 
request comment on the merits of setting a SI-based vocational vehicle 
standard predicated on adoption of SI engine technologies.
(c) Technologies the Agencies Assessed but Did Not Use in Standard-
Setting
(i) Aerodynamics
    The Argonne National lab work shows that aerodynamics has less of 
an impact on vocational vehicle energy losses than do engines or 
tires.\305\ Further, when a vehicle spends significant time at slower 
speeds, the disbenefit of the added weight of the aero devices 
diminishes the benefit obtained when driving at high speeds. In 
addition, the aerodynamic performance of a complete vehicle is 
significantly influenced by the body of the vehicle. As noted above, 
the agencies are not proposing to regulate body builders for the 
reasons discussed in Phase 1.
---------------------------------------------------------------------------

    \305\ See Argonne National Laboratory 2009 report, Note 275, 
above.
---------------------------------------------------------------------------

    The NAS 2010 report estimated a one percent fuel efficiency 
improvement could be achieved from a full aerodynamic package on a box 
truck with an average speed of 30 mph.\306\ Both from the NAS 2010 
report and from experiences of EPA's SmartWay team, the agencies expect 
the potential benefits of aerodynamics at an average speed of 60 mph 
would be diminished by 50 percent or more when average speeds are 
closer to 40 mph. The proposed Regional composite duty cycle in GEM for 
vocational vehicles (the test cycle with the most highway weighting) 
has a weighted average speed of 39 mph.
---------------------------------------------------------------------------

    \306\ See Table 5-10 of the NAS 2010 report, Note 136.
---------------------------------------------------------------------------

    The 2015 NHTDA Technology Study simulated a Class 6 box truck with 
a coefficient of aerodynamic drag that had been improved by 15 percent. 
Over transient test cycles, this produced a one percent fuel efficiency 
benefit, though this produced results of approximately seven percent 
improvement over the 55 mph and eight percent over the 65 mph cycle. 
SwRI conducted coastdown testing to determine the baseline 
CDA of the truck, of 5.0.\307\ However, it is unknown what 
aerodynamic technologies could be applied to yield a 15 percent 
improvement in CDA. Using these simulation results and the 
proposed Regional cycle weightings of 22 percent at 65 mph and 28 
percent at 55 mph, the agencies estimate the fuel efficiency benefit of 
improving the CdA of a Class 6 box truck by 15 percent could be 
approximately four percent. This assumes no penalty for carrying the 
weight of the aerodynamic devices while operating under transient 
driving conditions.
---------------------------------------------------------------------------

    \307\ See 2015 NHTSA Technology Study, Note 289, Appendix C.
---------------------------------------------------------------------------

    Because we do not have information on specific technologies that 
could be applied to vocational vehicles to yield a 15 percent 
improvement in CdA, or their costs, we are not basing any of the 
proposed standards for vocational vehicles on aerodynamic improvements. 
Nonetheless, we are working with CARB to incorporate into GEM some data 
from testing that is being conducted by CARB through NREL. A test plan 
is underway to assess the fuel efficiency benefit of three different 
devices to improve the aerodynamic performance of a Class 6 box truck 
and one device on a Class 4 box truck. The agencies request comment on 
allowing a manufacturer to obtain an improved GEM result by certifying 
that a final vehicle configuration will closely match one of the 
configurations on which this testing was conducted, where the 
improvement would be based on installation of specific aerodynamic 
devices for which we have pre-defined effectiveness through this 
testing program. The amount of improvement would be set by EPA and 
NHTSA based on NREL's test results. This credit provision would apply 
only to vocational vehicles certified over the Regional duty cycle. 
Manufacturers wishing to receive credit for other aerodynamic 
technologies or on other vehicle configurations would be able to seek 
credit for it as an off-cycle technology. See Section V.E, for a 
description of regulatory flexibilities such as off-cycle technology 
credits.
    A description of vehicles and aerodynamic technologies that could 
be eligible for this option, as well as a description of the testing 
conducted to obtain the assigned GEM improvements due to these 
technologies, can be found in a memorandum to the docket.\308\ The 
agencies seek comment on this potential approach to providing credits 
for aerodynamic aids to vocational box trucks.
---------------------------------------------------------------------------

    \308\ See May 2015 memorandum to the docket titled Vocational 
Vehicle Aerodynamic Testing Program.
---------------------------------------------------------------------------

(ii) Full Electric Trucks
    Some heavy-duty vehicles can be powered exclusively by electric 
motors. Electric motors are efficient and able to produce high torque, 
giving e-trucks strong driving characteristics, particularly in stop-
and-go or urban driving situations, and are well-suited for moving 
heavy loads. Electric motors also offer the ability to operate with 
very low noise, an advantage in certain applications. Currently, e-
trucks have some disadvantages over conventional vehicles, primarily in 
cost, weight and range. Components are relatively expensive, and 
storing electricity using currently available technology is expensive, 
bulky, and heavy.
    The West Coast Collaborative, a public-private partnership, has 
estimated the incremental costs for electric Class 3-6 trucks in the 
Los Angeles, CA, area.\309\ Compared to a conventional diesel, the WCC 
estimates a BEV system would cost between $70,000 and $90,000 more than 
a conventional diesel system. The CalHEAT Technology Roadmap includes 
an estimate that the incremental cost for a fully-electric medium- or 
heavy- duty vehicle would be between $50,000 and $100,000. This roadmap 
report also presents several actions that must be taken by 
manufacturers and others, before heavy-duty e-trucks can reach what 
they call Stage 3 Deployment.\310\
---------------------------------------------------------------------------

    \309\ See http://westcoastcollaborative.org/files/sector-fleets/WCC-LA-BEVBusinessCase2011-08-15.pdf.
    \310\ Silver, Fred, and Brotherton, Tom. (CalHEAT) Research and 
Market Transformation Roadmap to 2020 for Medium- and Heavy-Duty 
Trucks. California Energy Commission, June 2013.
---------------------------------------------------------------------------

    Early adopters of electric drivetrain technology are medium-heavy-
duty vocational vehicles that are not weight-limited and have drive 
cycles where they don't need to go far from a central garage. Examples 
include Frito-Lay. CalHEAT has published results of a comprehensive 
performance evaluation of three battery electric truck models using 
information and data from in-use data collection, on road testing and 
chassis dynamometer testing.\311\
---------------------------------------------------------------------------

    \311\ Gallo, Jean-Baptiste, and Jasna Tomic (CalHEAT). 2013. 
Battery Electric Parcel Delivery Truck Testing and Demonstration. 
California Energy Commission.

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

[[Page 40304]]

    Given the high costs and the developing nature of this technology, 
the agencies do not project fully electric vocational vehicles to be 
widely commercially available in the time frame of the proposed rules. 
For this reason, the agencies have not based the proposed Phase 2 
standards on adoption of full-electric vocational vehicles. To the 
extent this technology is able to be brought to market in the time 
frame of the Phase 2 program, there is currently a certification path 
for these chassis from Phase 1, as described in Section V.E and in 
EPA's regulations at 40 CFR 1037.150 and NHTSA's regulations at 49 CFR 
535.8.
(iii) Electrified Accessories
    Accessories that are traditionally gear- or belt-driven by a 
vehicle's engine can be optimized and/or converted to electric power. 
Examples include the engine water pump, oil pump, fuel injection pump, 
air compressor, power-steering pump, cooling fans, and the vehicle's 
air-conditioning system. Optimization and improved pressure regulation 
may significantly reduce the parasitic load of the water, air and fuel 
pumps. Electrification may result in a reduction in power demand, 
because electrically-powered accessories (such as the air compressor or 
power steering) operate only when needed if they are electrically 
powered, but they impose a parasitic demand all the time if they are 
engine-driven. In other cases, such as cooling fans or an engine's 
water pump, electric power allows the accessory to run at speeds 
independent of engine speed, which can reduce power consumption. 
Electrification of accessories can individually improve fuel 
consumption, regardless of whether the drivetrain is a strong hybrid. 
The TIAX study used 2 to 4 percent fuel consumption improvement for 
accessory electrification, with the understanding that electrification 
of accessories will have more effect in short haul/urban applications 
and less benefit in line-haul applications.\312\
---------------------------------------------------------------------------

    \312\ TIAX 2009, Note 137, pp. 3-5.
---------------------------------------------------------------------------

    Electric power steering (EPS) or Electrohydraulic power steering 
(EHPS) provides a potential reduction in CO2 emissions and fuel 
consumption over hydraulic power steering because of reduced overall 
accessory loads. This eliminates the parasitic losses associated with 
belt-driven power steering pumps which consistently draw load from the 
engine to pump hydraulic fluid through the steering actuation systems 
even when the wheels are not being turned. EPS is an enabler for all 
vehicle hybridization technologies since it provides power steering 
when the engine is off. EPS is feasible for most vehicles with a 
standard 12V system. Some heavier vehicles may require a higher voltage 
system which may add cost and complexity.
    The agencies are projecting that some electrified accessories will 
be necessary as part of the development of stop-start idle reduction 
systems for vocational vehicles. However, the agencies have not 
developed a pre-defined credit-generating option for manufacturers to 
directly receive credit in GEM for electrified accessories on 
vocational vehicles. Manufacturers wishing to conduct independent 
testing may apply for off-cycle credits derived from electrified 
accessories.
(iv) E-PTO
    There are products available today that can provide auxiliary 
power, usually electric, to a vehicle that needs to work in PTO mode 
for an extended time, to avoid idling the main engine. There are 
different designs of electrified PTO systems on the market today. Some 
designs have auxiliary power sources, typically batteries, with 
sufficient energy storage to power an onboard tool or device for a 
short period of time, and are intended to be recharged during the 
workday by operating the main engine, either while driving between work 
sites, or by idling the engine until a sufficient state of charge is 
reached that the engine may shut off. Other designs have sufficient 
energy storage to power an onboard tool or device for many hours, and 
are intended to be recharged as a plug-in hybrid at a home garage. The 
agencies are proposing to continue the hybrid-PTO test option that was 
available in Phase 1, with a few revisions. See the proposed 
regulations at 40 CFR 1037.540. The current test procedure is a charge-
sustaining procedure, meaning the test is not complete until the energy 
storage system is depleted and brought back to its original state of 
charge. The agencies request comment and data relating to the 
population and energy storage capacity of plug-in e-PTO systems, for 
which a charge-depleting test cycle may be more appropriate. For the 
reasons described above in Section V.C.1.a.iv, the agencies are not 
basing the proposed vocational vehicle standards on use of electrified 
PTO or hybrid PTO technology. Manufacturers wishing to conduct testing 
as specified may apply for off-cycle credits derived from e-PTO or 
hybrid PTO technologies.
(2) Projected Vehicle Technology Package Effectiveness and Cost
(a) Baseline Vocational Engine and Vehicle Performance
    The proposed baseline vocational vehicle configurations for each of 
the nine proposed regulatory subcategories are described in draft RIA 
Chapter 2.9 and Chapter 4.4. The agencies propose to set the baseline 
rolling resistance coefficient for the 2017 vocational vehicle fleet at 
7.7 kg/metric ton, which assumes 100 percent of tires meet the Phase 1 
standard.
    In the agencies' proposed baseline configurations, we include 
torque converter automatics with five forward gears in eight of the 
nine subcategories. In the Regional HHD subcategory, the baseline 
includes a manual transmission with ten forward gears. No additional 
vehicle-level efficiency-improving technology is included in the 
baseline vehicles, nor in the agencies' analyses for the no-action 
reference case. Specifically, we have assumed zero adoption rates for 
other types of transmissions, increased numbers of gears, idle 
reduction, and technologies other than Phase 1 compliant LRR tires in 
both the nominally flat baseline and the dynamic baseline reference 
cases. Technology adoption rates for Alternative 1a (nominally flat 
baseline) can be found in the draft RIA Chapter 2.12. Chapter 2.12.8 
presents the adoption rates for tires on vocational vehicles with 
different levels of rolling resistance, including the 100 percent 
adoption rate of tires with Level 1 CRR in the reference case and in 
model years preceding Phase 2. In this manner, we have defined a 
reference vocational vehicle fleet that meets the Phase 1 standards and 
includes reasonable representations of vocational vehicle technology 
and configurations. Details of the vehicle configurations, including 
reasons why they are reasonably included as baseline technologies, are 
discussed in the draft RIA Chapter 2.9.
    The agencies note that the baseline performance derived for the 
proposed rules varies between regulatory subcategories--as noted above, 
this is the reason the agencies are proposing the further 
subcategories. The range of performance at baseline is due to the range 
of attributes and modeling parameters, such as transmission 
characteristics, final drive ratio, and vehicle weight, which were 
selected to represent a range of performance across this diverse 
segment. The agencies request comment on whether the proposed 
configurations adequately represent a reasonable range of vocational 
chassis configurations likely

[[Page 40305]]

to be manufactured in the implementation years of the Phase 2 program. 
We especially are interested in comments regarding the following 
driveline parameters: Transmission gear ratios, axle ratios, and tire 
radii.
    The baseline engine fuel consumption represents improvements beyond 
currently available engines to achieve the efficiency of what the 
agencies believe would be a 2017 model year diesel engine, as described 
in the draft RIA Chapter 2. Using the values for compression-ignition 
engines, the baseline performance of vocational vehicles is shown in 
Table V-11.
    Different types of diesel engines are used in vocational vehicles, 
depending on the application. They fall into the categories of Light, 
Medium, and Heavy Heavy-duty Diesel engines. The Light Heavy-duty 
Diesel engines typically range between 4.7 and 6.7 liters displacement. 
The Medium Heavy-duty Diesel engines typically have some overlap in 
displacement with the Light Heavy-duty Diesel engines and range between 
6.7 and 9.3 liters. The Heavy Heavy-duty Diesel engines typically are 
represented by engines between 10.8 and 16 liters. Because of these 
differences, the GEM simulation of baseline vocational CI engines 
includes four engines--one for LHD, one for MHD, and two for HHD. 
Detailed descriptions can be seen in Chapter 4 of the draft RIA. These 
four engine models have been employed in setting the vocational vehicle 
baselines, as described in the draft RIA Chapter 2.9.

                       Table V-11--Baseline Vocational Vehicle Performance With CI Engines
----------------------------------------------------------------------------------------------------------------
                                                                   Light heavy-
                           Duty cycle                             duty class 2b-   Medium heavy-   Heavy heavy-
                                                                         5        duty class 6-7   duty class 8
----------------------------------------------------------------------------------------------------------------
                            Baseline Emissions Performance in CO[bdi2] gram/ton-mile
----------------------------------------------------------------------------------------------------------------
Urban...........................................................             316             201             212
Multi-Purpose...................................................             325             203             214
Regional........................................................             339             199             203
----------------------------------------------------------------------------------------------------------------
                        Baseline Fuel Efficiency Performance in gallon per 1,000 ton-mile
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         31.0413         19.7446         20.8251
Multi-Purpose...................................................         31.9253         19.9411         21.0216
Regional........................................................         33.3006         19.5481         19.9411
----------------------------------------------------------------------------------------------------------------

    The agencies intend to develop a model in GEM of a MY 2016-
compliant gasoline engine, but we have been unable to obtain sufficient 
information to complete this process. The agencies request comments on 
the process for mapping gasoline engines for simulation purposes, as 
well as information about the power rating and displacement that should 
be considered as a baseline SI engine for vocational vehicle standard-
setting purposes. In lieu of a SI engine map, the agencies have applied 
a correction factor to the GEM CI vocational simulation results, to 
approximate the baseline performance of a SI-powered vocational 
vehicle. The SI-powered vocational vehicle baseline performance shown 
in Table V-12 was calculated from applying an adjustment factor to the 
respective CI-powered vocational vehicle baseline values. This CI to SI 
baseline adjustment factor is derived from the Phase 1 HD pickup and 
van stringency curves, as described in the draft RIA Chapter 2.9.1. The 
correction factor approach is not the agencies' preferred approach, as 
it has many drawbacks. One key drawback with this approach is that it 
does not account for the fact that SI engines operate very differently 
than CI engines at idle. Our current model includes information on CI 
engine idle performance, and assumes transmissions and torque 
converters appropriate for CI engines. We expect these driveline 
parameters would be very different for SI powered vehicles, which would 
affect performance over all the GEM duty cycles.
    The baseline performance levels for HHD vocational vehicles powered 
by SI engines were derived using the same procedures described above 
for the MHD and LHD vehicles, adjusting the performance of the HHD CI 
powered vocational vehicles by the same degree as for the other 
vehicles. However, we expect that any gasoline Class 8 vocational 
vehicle would be powered by a MHD SI engine, as there are no HHD 
gasoline engines on the market. Further, we expect that if we were to 
develop an engine map for use in simulating heavier SI vocational 
vehicles in GEM, we could establish a more representative baseline 
performance level by calculating the work done by the MHD engine to 
move the heavier vehicle over the test cycles. The agencies request 
comments on the merits of developing separate baseline levels and 
numerical standards for HHD vocational vehicles powered by SI engines, 
including any benefits that could be obtained by addressing this 
unlikely occurrence and other ways in which the agencies could avoid 
the instance of an orphaned SI vocational vehicle. Commenters who favor 
separate numerical standards are encouraged to submit information 
related to appropriate default vehicle characteristics such as weight 
and payload. Depending on comments, the agencies could choose to 
require all Class 8 vocational vehicles to certify to the standards for 
CI powered HHD vocational vehicles, or we could require SI powered 
Class 8 vocational vehicles to certify to the MHD standards for SI 
vocational vehicles.

                       Table V-12--Baseline Vocational Vehicle Performance With SI Engines
----------------------------------------------------------------------------------------------------------------
                                                     Light heavy-duty    Medium heavy-duty     Heavy heavy-duty
                    Duty cycle                          Class 2b-5           Class 6-7             Class 8
----------------------------------------------------------------------------------------------------------------
                            Baseline Emissions Performance in CO[bdi2] gram/ton-mile
----------------------------------------------------------------------------------------------------------------
Urban............................................                  334                  213                  224

[[Page 40306]]

 
Multi-Purpose....................................                  344                  215                  226
Regional.........................................                  358                  211                  214
----------------------------------------------------------------------------------------------------------------
                        Baseline Fuel Efficiency Performance in gallon per 1,000 ton-mile
----------------------------------------------------------------------------------------------------------------
Urban............................................              37.5830              23.9676              25.2054
Multi-Purpose....................................              38.7082              24.1926              25.4304
Regional.........................................              40.2836              23.7425              24.0801
----------------------------------------------------------------------------------------------------------------

(b) Technology Packages for Derivation of Proposed Standards
    Prior to developing the numerical values for the proposed 
standards, the agencies projected the mix of new technologies and 
technology improvements that would be feasible within the proposed lead 
time. We note that for some technologies, the adoption rates and 
effectiveness may be very similar across subcategories. However, for 
other technologies, either the adoption rate, effectiveness, or both 
differ across subcategories. The standards being proposed reflect the 
technology projected for each service class. Where a technology 
performs differently over different test cycles, these differences are 
reflected to some extent in the derivation of the stringency of the 
proposed standard. However, the proposed standard stringency does 
reflect, to some extent, the ability of manufacturers to utilize 
credits. For example, we project that hybrid vehicles would generally 
be certified in the Urban subcategory and would generate emission 
credits that would most likely be used in the other subcategories 
within the weight class group.\313\
---------------------------------------------------------------------------

    \313\ See averaging sets at 40 CFR 1037.740.
---------------------------------------------------------------------------

    As part of the derivation of the numerical standards, we performed 
a benchmarking analysis to inform our development of standards that 
would have roughly equivalent stringency among the duty-cycle-based 
subcategories within each weight class group. To do this, the agencies 
assessed the performance of broadly applicable technologies, such as 
low rolling resistance tires, on each of the selected baseline vehicles 
over each of the duty cycles. We then evaluated how much improvement 
could be achieved over the various duty cycles for a vehicle that 
incorporated all the broadly applicable technologies, but which did not 
include a hybrid powertrain. We simulated neutral idle for benchmarked 
vehicles for MY 2021 and MY 2024, and simulated stop-start idle 
reduction on the benchmarked MY 2027 vehicles. From this, we learned 
that a vehicle with neutral idle and a deeply integrated conventional 
powertrain, with moderately low rolling resistance tires and some 
weight reduction could easily meet the proposed standards in the early 
implementation years of the program, in any weight class or duty cycle. 
We also learned how the effectiveness of tire rolling resistance and 
weight reduction vary in GEM (i.e. and therefore likely in actual 
operation) across the different subcategories. We also found that a 
vehicle with a deeply integrated conventional powertrain, tires with 
even lower CRR, some weight reduction, and stop-start idle reduction 
could achieve the MY 2027 proposed standards. However, our technology 
feasibility does not presume that 100 percent of vocational vehicles 
can reasonably apply deep powertrain integration, nor do we project 100 
percent adoption of LRR tires or weight reduction.
    The technologies assumed for the benchmarked vehicles are 
summarized in Table V-13, Table V-14, and Table V-15. Note that the 
agencies are not projecting that these are the vehicles that would 
actually be produced. Rather, these theoretical vehicles are being 
evaluated to compare the relative stringency of the standards for each 
subcategory.

                       Table V-13--GEM Inputs for Benchmarked MY 2021 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
              Class 2b-5                             Class 6-7                              Class 8
----------------------------------------------------------------------------------------------------------------
                Multi-                                 Multi-                               Multi-
   Urban       purpose      Regional      Urban       purpose      Regional      Urban      purpose    Regional
----------------------------------------------------------------------------------------------------------------
                                                  Transmission
----------------------------------------------------------------------------------------------------------------
                  100% Deep Transmission Integration for 7% Urban, 6% Multipurpose, 5% Regional
----------------------------------------------------------------------------------------------------------------
     5s AT        5s AT        5s AT        5s AT        5s AT        5s AT       5s AT       5s AT     10s AMT
----------------------------------------------------------------------------------------------------------------

[[Page 40307]]

 
                                                  CI Engine \a\
----------------------------------------------------------------------------------------------------------------
      2021 MY 7L, 22021 MY 7L, 270 hp Engine
                2021 MY 11L, 345 hp    2021 MY 15L
                      Engine                455hp
                                           Engine
----------------------------------------------------------------------------------------------------------------
                                       100% Idle Reduction = Neutral Idle
----------------------------------------------------------------------------------------------------------------
                                      100% improved axle lubrication: 0.5%
----------------------------------------------------------------------------------------------------------------
                                   100% Steer Tires with CRR 6.9 kg/metric ton
----------------------------------------------------------------------------------------------------------------
                                   100% Drive Tires with CRR 7.3 kg/metric ton
----------------------------------------------------------------------------------------------------------------
                                             Weight Reduction 200 lb
----------------------------------------------------------------------------------------------------------------
Note:
\a\ SI engines were not simulated in GEM.

                       Table V-14--GEM Inputs for Benchmarked MY 2024 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
              Class 2b-5                             Class 6-7                              Class 8
----------------------------------------------------------------------------------------------------------------
                Multi-                                 Multi-                               Multi-
   Urban       purpose      Regional      Urban       purpose      Regional      Urban      purpose    Regional
----------------------------------------------------------------------------------------------------------------
                                                  Transmission
----------------------------------------------------------------------------------------------------------------
                  100% Deep Transmission Integration for 7% Urban, 6% Multipurpose, 5% Regional
----------------------------------------------------------------------------------------------------------------
     5s AT        5s AT        5s AT        5s AT        5s AT        5s AT       5s AT       5s AT     10s AMT
----------------------------------------------------------------------------------------------------------------
                                                  CI Engine \a\
----------------------------------------------------------------------------------------------------------------
      2024 MY 7L, 22024 MY 7L, 270 hp Engine
                2024 MY 11L, 345 hp    2024 MY 15L
                      Engine                455hp
                                           Engine
----------------------------------------------------------------------------------------------------------------
                                       100% Idle Reduction = Neutral Idle
----------------------------------------------------------------------------------------------------------------
                                      100% improved axle lubrication: 0.5%
----------------------------------------------------------------------------------------------------------------
                                   100% Steer Tires with CRR 6.7 kg/metric ton
----------------------------------------------------------------------------------------------------------------
                                   100% Drive Tires with CRR 7.1 kg/metric ton
----------------------------------------------------------------------------------------------------------------
                                             Weight Reduction 200 lb
----------------------------------------------------------------------------------------------------------------
Note:
\a\ SI engines were not simulated in GEM.

                       Table V-15--GEM Inputs for Benchmarked MY 2027 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
              Class 2b-5                             Class 6-7                              Class 8
----------------------------------------------------------------------------------------------------------------
                Multi-                                 Multi-                               Multi-
   Urban       purpose      Regional      Urban       purpose      Regional      Urban      purpose    Regional
----------------------------------------------------------------------------------------------------------------
                                                  Transmission
----------------------------------------------------------------------------------------------------------------
                  100% Deep Transmission Integration for 7% Urban, 6% Multipurpose, 5% Regional
----------------------------------------------------------------------------------------------------------------
     5s AT        5s AT        5s AT        5s AT        5s AT        5s AT       5s AT       5s AT     10s AMT
----------------------------------------------------------------------------------------------------------------

[[Page 40308]]

 
                                                  CI Engine \a\
----------------------------------------------------------------------------------------------------------------
      2027 MY 7L, 22027 MY 7L, 270 hp Engine
                2027 MY 11L, 345 hp    2027 MY 15L
                      Engine                455hp
                                           Engine
----------------------------------------------------------------------------------------------------------------
                                        100% Idle Reduction = Stop-Start
----------------------------------------------------------------------------------------------------------------
                                   100% Steer Tires with CRR 6.4 kg/metric ton
----------------------------------------------------------------------------------------------------------------
                                   100% Drive Tires with CRR 7.0 kg/metric ton
----------------------------------------------------------------------------------------------------------------
                                             Weight Reduction 200 lb
----------------------------------------------------------------------------------------------------------------
Note:
\a\ SI engines were not simulated in GEM.

    Next we identified the best performing baseline vehicle in each 
weight class group (one for HHD, one for MHD and one for LHD) and 
normalized the baseline GEM results to the performance of that vehicle. 
A complete description of this normalization process is found in the 
draft RIA Chapter 2. We then applied our actual projected technology 
adoption rates, including hybrid powertrains and stop-start idle 
reduction, to normalized-benchmarked vehicles in each of the nine 
subcategories. The proposed standards then were calculated by 
multiplying the normalized baseline vehicle GEM result by an average 
percent improvement for each weight class group. For example, the GEM 
results from applying the projected technology mix for MY 2021 MHD CI 
vocational vehicles were a 5 percent improvement in the Regional MHD 
subcategory, 7 percent improvement in the MHD Multipurpose subcategory, 
and 8 percent improvement in the MHD Urban subcategory. To achieve 
standards with equivalent stringency, we multiplied each normalized 
baseline vehicle's GEM performance by the numerical average of those 
simulated improvements, 6.6 percent. Without comparable stringency 
across the subcategories, manufacturers could have an incentive to 
select a subcategory strategically to have a less stringent standard, 
rather than to certify vehicles in the subcategory that best matches 
the vehicles' expected use patterns. By setting the standards at the 
same percent reduction from each weight class group of normalized-
benchmarked vehicles, we would expect to minimize any incentive for a 
manufacturer to certify a vocational vehicle in an inappropriate 
subcategory.
    We request comment on using this approach to normalize the 
standards. Commenters are encouraged to address both the approach in 
general and the specific technology assumed for the benchmark vehicles.
    We are aware that in this approach, some of the projected 
technology packages would not provide a direct path to compliance for 
manufacturers, such as in the example above of the MHD Regional 
vehicle. Using the technologies adopted at projected rates, it would 
fall short of the standard by 1.5 percent. The agencies believe that 
the Phase 2 program has enough regulatory flexibility (averaging, 
banking, and trading provisions in particular) to enable such a vehicle 
to be certified.
    In the package descriptions that follow, individual technology 
costs are not presented, rather these can be found in the draft RIA 
Chapter 2.9 and 2.12. Section V. C. (2) (d) includes the costs 
estimated for packages of technologies the agencies project would 
enable vocational vehicles to meet the proposed Phase 2 standards.
(i) Transmission Packages
    The agencies project that 30 percent of vocational vehicles would 
have one or more of the transmission technologies identified above in 
this section applied by MY 2021, increasing to nearly 60 percent by MY 
2024 and over 80 percent by MY 2027. Most of this increase is due to a 
projected increase in adoption of technologies that represent deep 
driveline integration. The agencies project an adoption rate of 15 
percent in MY 2021 and 30 percent in MY 2024 for manufacturers using 
the powertrain test to be recognized for non-hardware upgrades such as 
gear efficiencies, shift strategies, and torque converter lockups, as 
well as other technologies that enable driveline optimization. Due to 
the relatively high efficiency gains available from driveline 
optimization for relatively low costs, the agencies are projecting a 70 
percent application rate of driveline optimization by MY 2027 across 
all subcategories. We do not have information about the extent to which 
integration may be deterred by barriers to information-sharing between 
component suppliers. Therefore we are projecting that major 
manufacturers would work to overcome these barriers, integrate and 
optimize their drivelines, and use the powertrain test on all eligible 
configurations, while smaller manufacturers may not adopt these 
technologies at all, or not to a degree that they would find value in 
this optional test procedure.
    For the technology of adding two gears, we are predicating the 
proposed MY 2021 standard on a five percent adoption rate, except zero 
in the HHD Regional subcategory, which is modeled with a 10-speed 
transmission. This adoption rate is projected to essentially remain at 
this level throughout the program, with an increase to ten percent only 
for two subcategories (Regional LHD and MHD) in MY 2027. This is 
because the manufacturers most likely to develop 8-speed transmissions 
are those that are also developing transmissions for HD pickups and 
vans, and the GEM-certified vocational market share among those 
manufacturers is relatively small.
    The HHD Regional subcategory is the only one where we assume a 
manual transmission in the baseline configuration. For these vehicles, 
the agencies project upgrades to electronic transmissions such as 
either AMT, DCT, or automatic, at collective adoption rates of 51 
percent in MY 2021, 68 percent in MY 2024, and five percent in MY 2027. 
The decrease in MY 2027 reflects a projection that a greater number of 
deeply integrated HHD powertrains would be used by MY 2027 (one 
consequence being that fewer HHD

[[Page 40309]]

powertrains would be directly simulated in GEM in that year). The 
larger numbers in the phase-in years reflect powertrains that have been 
automated or electrified but not deeply integrated. The agencies have 
been careful to account for the cost of both electrifying and deeply 
integrating the MY 2027 powertrains. In draft RIA Chapter 11, the 
technology adoption rates for the HHD Regional subcategory presented in 
Table 11-42, Table 11-45, and Table 11-48 account for the assumption 
that a manual transmission cannot be deeply integrated, so there must 
also be an automation upgrade. These tables are inputs to the agencies' 
cost analysis, thus the costs of both upgrading and integrating HHD 
powertrains are included. The adoption rates of the upgraded but not 
integrated transmission architectures represent a projection of three 
percent of all vocational vehicles in MY 2021 and four percent in MY 
2024. This is based on an estimate that seven percent of the vocational 
vehicles would be in the HHD Regional subcategory. For more information 
about the assumptions that were made about the populations of vehicles 
in different subcategories, see the agencies' inventory estimates in 
draft RIA Chapter 5.
    In the eight subcategories in which automatic transmissions are the 
base technology, the agencies project that five percent would upgrade 
to a dual clutch transmission in MY 2021. This projection increases to 
15 percent in MY 2024 and decreases in MY 2027 to ten percent for two 
subcategories (Regional LHD and MHD) and five percent for the remaining 
6 subcategories. The low projected adoption rates of DCT reflect the 
fact that this is a relatively new technology for the heavy-duty 
sector, and it is likely that broader market acceptance would be 
achieved once fleets have gained experience with the technology. 
Similar to the pattern described for the HHD Regional subcategory, the 
decrease in MY 2027 reflects a projection of greater use of deeply 
integrated powertrains.
    In setting the proposed standard stringency, we have projected that 
hybrids on vehicles certified in the Multipurpose subcategories would 
achieve on average 22 percent improvement, and those in the Urban 
subcategories would see a 25 percent improvement. We have also 
projected zero hybrid adoption rate by vehicles in the Regional 
subcategories, expecting that the benefit of hybrids for those vehicles 
would be too low to merit use of that type of technology. However, 
there is no fixed hybrid value assigned in GEM and the actual 
improvement over the applicable test cycle would be determined by 
powertrain testing. By the full implementation year of MY 2027, the 
agencies are projecting an overall vocational vehicle adoption rate of 
ten percent hybrids, which we estimate would be 18 percent of vehicles 
certified in the Multi-Purpose and Urban subcategories. We are 
projecting a low adoption rate in the early years of the Phase 2 
program, just four percent in these subcategories in MY 2021, and seven 
percent in MY 2024 for vehicles certified in the Multi-Purpose and 
Urban subcategories. Based on our assumptions about the populations of 
vehicles in different subcategories, these hybrid adoption rates are 
about two percent overall in MY 2021 and four percent overall in MY 
2024.
    Considering the combination of the above technologies and adoption 
rates, we project the CO2 and fuel efficiency improvements 
for all transmission upgrades to be approximately seven percent on a 
fleet basis by MY 2027. One subcategory in which we are projecting a 
very large advanced transmission adoption rate is the HHD Regional 
subcategory, in which we are projecting 75 percent of the transmissions 
would be either automated or automatic (upgraded from a manual) with 70 
percent of those also being deeply integrated by MY 2027. By 
comparison, the agencies are projecting that HHD day cab tractors would 
have 90 percent adoption of automated or automatic transmissions by MY 
2027. Although we are not prepared to predict what fraction of these 
would be upgraded in the absence of Phase 2, the draft RIA Chapter 2.9 
explains why the agencies are confident that durable transmissions will 
be widely available in the Phase 2 time frame to support manufacture of 
HHD vocational vehicles.
    If the above technologies do not reach the expected level of market 
adoption, the vocational vehicle Phase 2 program has several other 
technology options that manufacturers could choose to meet the proposed 
standards.
(ii) Axle Packages
    The agencies project that 75 percent of vocational vehicles in all 
subcategories would adopt advanced axle lubricant formulations in all 
implementation years of the Phase 2 program. Fuel efficient lubricant 
formulations are widespread across the heavy-duty market, though 
advanced synthetic formulations are currently less popular.\314\ Axle 
lubricants with improved viscosity and efficiency-enhancing performance 
are projected to be widely adopted by manufacturers in the time frame 
of Phase 2. Such formulations are commercially available and the 
agencies see no reason why they could not be feasible for most 
vehicles. Nonetheless, we have refrained from projecting full adoption 
of this technology. The agencies do not have specific information 
regarding reasons why axle manufacturers may specify a specific type of 
lubricant over another, and whether advanced lubricant formulations may 
not be recommended in all cases. The agencies request comment on 
information regarding any vocational vehicle applications for which use 
of advanced lubricants would not be feasible.
---------------------------------------------------------------------------

    \314\ Based on conversations with axle suppliers.
---------------------------------------------------------------------------

    The agencies estimate that 45 percent of HHD Regional vocational 
vehicles would adopt either full time or part time 6x2 axle technology 
in MY 2021. This technology is most likely to be applied to Class 8 
vocational vehicles (with 2 rear axles) that are designed for frequent 
highway trips. The agencies project a slightly higher adoption rate of 
60 percent combined for both full and part time 6x2 axle technologies 
in MY 2024 and MY 2027. Based on our estimates of vehicle populations, 
this is about four percent of all vocational vehicles.
(iii) Tire Packages
    The agencies estimate that the per-vehicle average level of rolling 
resistance from vocational vehicle tires could be reduced by 11 percent 
by full implementation of the Phase 2 program in MY 2027, based on the 
tire development achievements expected over the next decade. This is 
estimated by weighting the projected improvements of steer tires and 
drive tires using an assumed axle load distribution of 30 percent on 
the steer tires and 70 percent on the drive tires, as explained in the 
draft RIA Chapter 2.9. The projected adoption rates and expected 
improvements in CRR are presented in Table V-16. By applying the 
assumed axle load distribution, the average vehicle CRR improvements 
projected for the proposed MY 2021 standards would be four percent, 
which we project would achieve up to one percent reduction in fuel use 
and CO2 emissions, depending on the vehicle subcategory. 
Using that same method, the agencies estimate the average vehicle CRR 
in MY 2024 would be seven percent, yielding reductions in fuel use and 
CO2 emissions of between one and two percent, depending on 
the vehicle subcategory.
    The agencies understand that the vocational vehicle segment has 
access to

[[Page 40310]]

a large variety of tires, including some that are designed for 
tractors, some that are designed for HD pickups and vans, and some with 
multiple use designations. In spite of the likely availability of LRR 
tires during the Phase 2 program, the projected adoption rates are 
intended to be conservative. The agencies believe that these tire 
packages recognize the variety of tire purposes and performance levels 
in the vocational vehicle market, and maintain choices for 
manufacturers to use the most efficient tires (i.e. those with least 
rolling resistance) only where it makes sense given these vehicles' 
differing purposes and applications.

                                  Table V-16--Projected LRR Tire Adoption Rates
----------------------------------------------------------------------------------------------------------------
                                          Level of rolling         MY 2021          MY 2024          MY 2027
            Tire position                    resistance         adoption rate    adoption rate    adoption rate
----------------------------------------------------------------------------------------------------------------
Drive...............................  Baseline CRR (7.7).....               50               20               10
Steer...............................  Baseline CRR (7.7).....               20               10                0
Drive...............................  5% Lower CRR (7.3).....               50               50               25
Steer...............................  10% Lower CRR (6.9)....               80               30               20
Drive...............................  10% Lower CRR (6.9)....                0               30               50
Steer...............................  15% Lower CRR (6.5)....                0               60               30
Drive...............................  15% Lower CRR (6.5)....                0                0               15
Steer...............................  20% Lower CRR (6.2)....                0                0               50
Drive...............................  Average Improvement in                3%               6%               9%
                                       CRR.
Steer...............................  Average Improvement in                8%              12%              17%
                                       CRR.
----------------------------------------------------------------------------------------------------------------

    For comparison purposes, the reader may note that these levels of 
tire CRR generally correspond with levels of tire CRR projected for 
tractors built for the Phase 1 standards. For example, the baseline 
level CRR for vocational tires is very similar to the baseline tractor 
steer tire CRR. Vocational vehicle tires with 10 percent better CRR 
have a similar CRR level as tractor tires of Drive Level 1. Vocational 
vehicle tires with 15 percent better CRR have a similar CRR level as 
tractor tires of Steer Level 1. Vocational vehicle tires with 20 
percent better CRR have a similar CRR level as tractor tires of Drive 
Level 2, as described in Section III.D.2.
(iv) Idle Reduction Packages
    In this proposal, we are projecting a progression of idle reduction 
technology development that begins with 70 percent adoption rate of 
neutral idle for the MY 2021 standards, which by MY 2027 is replaced by 
a 70 percent adoption rate of stop-start idle reduction technology. 
Although it is possible that a vehicle could have both neutral idle and 
stop-start, we are only considering emissions reductions for vehicles 
with one or the other of these technologies. Also, as the program 
phases in, we do not see a reduction in the projected adoption rate of 
neutral idle to be a concern in terms of stranded investment, because 
it is a very low cost technology that could be an enabler for stop-
start systems in some cases.
    We are not projecting any adoption of neutral idle for the HHD 
Regional subcategory, because any vehicle with a manual transmission 
must shift to neutral when stopped to avoid stalling the engine, so 
that vehicles in the HHD Regional subcategory would already essentially 
be idling in neutral and no additional technology would be needed to 
achieve this. A similar case can be made for any vocational vehicle 
with an automated manual transmission, since these share inherently 
similar architectures with manuals. The agencies are not projecting an 
adoption rate of 85 percent neutral idle until MY 2024, because it may 
take some additional development time to apply this technology to high-
torque automatic transmissions designed for the largest vocational 
vehicles. Based on stakeholder input, the designs needed to avoid an 
uncomfortable re-engagement bump when returning to drive from neutral 
may require some engineering development time as well as some work to 
enable two-way communication between engines and transmissions.
    We are projecting a five percent adoption rate of stop-start in the 
six MHD and LHD subcategories for MY 2021 and zero for the HHD 
vehicles, because this technology is still developing for vocational 
vehicles and is most likely to be feasible in the early years of Phase 
2 for vehicles with lower power demands and lower engine inertia. 
Stopping a heavy-duty engine is not challenging. The real challenge is 
designing a robust system that can deliver multiple smooth restarts 
daily without loss of function while the engine is off. Many current 
light-duty products offer this feature, and some heavy-duty 
manufacturers are exploring this.\315\ The agencies are projecting an 
adoption rate of 15 percent stop-start across all subcategories in the 
intermediate year of MY 2024. The agencies are projecting this 
technology to have a relatively high adoption rate (70 percent as 
stated above) by MY 2027 because we see it being technically feasible 
on the majority of vocational vehicles, and especially effective on 
those with the most time at idle in their workday operation. Although 
we are not prepared to predict what fraction of vehicles would adopt 
stop-start in the absence of Phase 2, the draft RIA Chapter 2.9 
explains why the agencies are confident that this technology, which is 
on the entry-level side of the hybrid and electrification spectrum, 
will be widely available in the Phase 2 time frame.
---------------------------------------------------------------------------

    \315\ See Ford announcement December 2013, https://
media.ford.com/content/fordmedia/fna/us/en/news/2013/12/12/70-
percent-of-ford-lineup-to-have-auto-start-stop-by-2017--fuel-.html. 
See also Allison-Cummins announcement July 2014, http://www.oemoffhighway.com/press_release/12000208/allison-stop-start?utm_source=OOH+Industry+News+eNL&utm_medium=email&utm_campaign=RCL140723006.
---------------------------------------------------------------------------

    Based on these projected adoption rates and the effectiveness 
values described above in this section, we expect overall GHG and fuel 
consumption reductions from workday idle on vocational vehicles to be 
approximately three percent in MY 2027.
(v) Weight Reduction Packages
    As described in the draft RIA Chapter 2.12, weight reduction is a 
relatively costly technology, at approximately $3 to $4 per pound for a 
200-lb package. Even so, for vehicles in service classes where dense, 
heavy loads are frequently carried, weight reduction can translate 
directly to additional payload. The agencies project weight reduction 
would most likely be used for vocational vehicles in the refuse and 
construction service classes, as well as some regional delivery 
vehicles. The agencies are

[[Page 40311]]

predicating the proposed standards on an adoption rate of five to eight 
percent, depending on the subcategory, in MY 2027, with slightly lower 
adoption rates in MY 2021 and MY 2024.
    For this technology package, NHTSA and EPA project manufacturers 
would use material substitution in the amount of 200 lbs. An example of 
how this weight could be reduced would be a complete set of aluminum 
wheels for a Class 8 vocational vehicle, or an aluminum transmission 
case plus high strength steel wheels, frame rails, and suspension 
brackets on a MHD or LHD vocational vehicle. The agencies have limited 
information about how popular the use of aluminum components is in the 
vocational vehicle sector. We request comments with information on 
whether any lightweight vocational vehicle components are in such 
widespread use that we should exclude them from the list of components 
for which a GEM improvement value would be available.
(c) GEM Inputs for Derivation of Proposed Vocational Vehicle Standards
    To derive the stringency of the proposed vocational vehicle 
standards, the agencies developed a suite of fuel consumption maps for 
use with the GEM: One set of maps that represent engines meeting the 
proposed MY 2021 vocational diesel engine standards, a second set of 
maps representing engines meeting the proposed MY 2024 vocational 
diesel engine standards, and a third set of maps representing engines 
meeting the proposed MY 2027 vocational diesel engine standards.\316\ 
By incorporating the engine technology packages projected to be adopted 
to meet the proposed Phase 2 vocational CI engine standards, the 
agencies employed GEM engine models in deriving the stringency of the 
proposed Phase 2 CI-powered vocational vehicle standards. As noted 
above, because the agencies did not have enough information to develop 
a robust GEM-based gasoline engine fuel map, the stringency of the 
proposed SI-powered vocational vehicle standards is derived as an 
adjustment from the CI-powered vocational vehicle standards. See the 
draft RIA Chapter 2.9 for more details about this adjustment process.
---------------------------------------------------------------------------

    \316\ See Section II.D.2 of this preamble for the derivation of 
the engine standards.
---------------------------------------------------------------------------

    Depending on the particular technology, either the effectiveness 
was assigned by the agencies using an accepted average value, or the 
GEM tool was used to assess the proposed technology effectiveness, as 
discussed above. The agencies derived a scenario vehicle for each 
subcategory using the adoption rate and assigned or modeled improvement 
values of transmission, axle, and idle reduction technologies. For 
example, the MY 2021 CRR values for each subcategory scenario case were 
derived as follows: For steer tires--20 percent times 7.7 plus 80 
percent times 6.9 yields an average CRR of 7.1 kg/metric ton; and for 
drive tires--50 percent times 7.7 plus 50 percent times 7.3 yields an 
average CRR of 7.5 kg/metric ton. Similar calculations were done for 
weight reduction, transmission improvements, and axle improvements. The 
set of tire CRR, idle reduction, weight reduction, engine and 
transmission input parameters that was modeled in GEM in support of the 
proposed MY 2021 vocational vehicle standards is shown in Table V-17. 
The agencies derived the level of the proposed MY 2024 standards by 
using the tire, weight reduction, engine and transmission GEM inputs 
shown in Table V-18, below. The agencies derived the level of the 
proposed MY 2027 standards by using the tire, weight reduction, engine 
and transmission GEM inputs shown in Table V-19, below. As post-
processing, the respective adoption rates and assigned improvement 
values of transmission, axle, and idle reduction technologies were 
calculated for each subcategory.
    The agencies have not directly transferred the GEM results from 
these inputs as the proposed standards. Rather, the proposed standards 
are the result of the normalizing and benchmarking analysis described 
above. The proposed standards are presented in Table V-4 through Table 
V-9. Additional detail is provided in the RIA Chapter 2.9.

               Table V-17--GEM Inputs Used To Derive Proposed MY 2021 Vocational Vehicle Standards
----------------------------------------------------------------------------------------------------------------
              Class 2b-5                             Class 6-7                              Class 8
----------------------------------------------------------------------------------------------------------------
                Multi-                                 Multi-                               Multi-
   Urban       purpose      Regional      Urban       purpose      Regional      Urban      purpose    Regional
----------------------------------------------------------------------------------------------------------------
                                                  CI Engine \a\
----------------------------------------------------------------------------------------------------------------
      2021 MY 7L, 200 hp E2021 MY 7L,
                   2021 MY 11L,        2021 MY 15L
            200 hp Engine270 hp Engine
                   345 hp Engine            455hp
                                           Engine
----------------------------------------------------------------------------------------------------------------
                                        Transmission (improvement factor)
----------------------------------------------------------------------------------------------------------------
     0.023        0.021        0.008        0.023        0.021        0.009       0.023       0.022       0.022
----------------------------------------------------------------------------------------------------------------
                                            Axle (improvement factor)
----------------------------------------------------------------------------------------------------------------
     0.004        0.004        0.004        0.004        0.004        0.004       0.004       0.004       0.012
----------------------------------------------------------------------------------------------------------------
                                           Stop-Start (adoption rate)
----------------------------------------------------------------------------------------------------------------
        5%           5%           5%           5%           5%           5%          0%          0%          0%
----------------------------------------------------------------------------------------------------------------
                                          Neutral Idle (adoption rate)
----------------------------------------------------------------------------------------------------------------
       70%          70%          70%          70%          70%          70%         70%         70%          0%
----------------------------------------------------------------------------------------------------------------
                                         Steer Tires (CRR kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       7.1          7.1          7.1          7.1          7.1          7.1         7.1         7.1         7.1
----------------------------------------------------------------------------------------------------------------

[[Page 40312]]

 
                                         Drive Tires (CRR kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       7.5          7.5          7.5          7.5          7.5          7.5         7.5         7.5         7.5
----------------------------------------------------------------------------------------------------------------
                                              Weight Reduction (lb)
----------------------------------------------------------------------------------------------------------------
         8            8           14            8            8           12           8           8          10
----------------------------------------------------------------------------------------------------------------
Note:
\a\ SI engines were not simulated in GEM, rather a gas/diesel adjustment factor was applied to the results.

               Table V-18--GEM Inputs Used To Derive Proposed MY 2024 Vocational Vehicle Standards
----------------------------------------------------------------------------------------------------------------
              Class 2b-5                             Class 6-7                              Class 8
----------------------------------------------------------------------------------------------------------------
                Multi-                                 Multi-                               Multi-
   Urban       purpose      Regional      Urban       purpose      Regional      Urban      purpose    Regional
----------------------------------------------------------------------------------------------------------------
                                                  CI Engine\a\
----------------------------------------------------------------------------------------------------------------
             2024 MY 7L,  2024 MY 11L,
                   2024 MY 15L,        2024 MY 15L
            270 hp Engine345 hp Engine
                   455hp Engine             455hp
                                           Engine
----------------------------------------------------------------------------------------------------------------
                                        Transmission (improvement factor)
----------------------------------------------------------------------------------------------------------------
     0.045         0.04        0.017        0.045        0.041        0.018       0.045       0.042       0.035
----------------------------------------------------------------------------------------------------------------
                                            Axle (improvement factor)
----------------------------------------------------------------------------------------------------------------
     0.004        0.004        0.004        0.004        0.004        0.004       0.004       0.004       0.014
----------------------------------------------------------------------------------------------------------------
                                           Stop-Start (adoption rate)
----------------------------------------------------------------------------------------------------------------
       15%          15%          15%          15%          15%          15%         15%         15%         15%
----------------------------------------------------------------------------------------------------------------
                                          Neutral Idle (adoption rate)
----------------------------------------------------------------------------------------------------------------
       85%          85%          85%          85%          85%          85%         85%         85%          0%
----------------------------------------------------------------------------------------------------------------
                                         Steer Tires (CRR kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       6.8          6.8          6.8          6.8          6.8          6.8         6.8         6.8         6.8
----------------------------------------------------------------------------------------------------------------
                                         Drive Tires (CRR kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       7.3          7.3          7.3          7.3          7.3          7.3         7.3         7.3         7.3
----------------------------------------------------------------------------------------------------------------
                                              Weight Reduction (lb)
----------------------------------------------------------------------------------------------------------------
         8            8           14            8            8           12           8           8          10
----------------------------------------------------------------------------------------------------------------
Note:
\a\ SI engines were not simulated in GEM, rather a gas/diesel adjustment factor was applied to the results.

               Table V-19--GEM Inputs Used To Derive Proposed MY 2027 Vocational Vehicle Standards
----------------------------------------------------------------------------------------------------------------
              Class 2b-5                             Class 6-7                              Class 8
----------------------------------------------------------------------------------------------------------------
                Multi-                                 Multi-                               Multi-
   Urban       purpose      Regional      Urban       purpose      Regional      Urban      purpose    Regional
----------------------------------------------------------------------------------------------------------------
                                                  CI Engine \a\
----------------------------------------------------------------------------------------------------------------
             2027 MY 7L,  2027 MY 7L,
                   2027 MY 11L,        2027 MY 15L
            200 hp Engine270 hp Engine
                   345 hp Engine            455hp
                                           Engine
----------------------------------------------------------------------------------------------------------------
                                        Transmission (improvement factor)
----------------------------------------------------------------------------------------------------------------
     0.096        0.085        0.034        0.096        0.088        0.037       0.097       0.089       0.036
----------------------------------------------------------------------------------------------------------------
                                            Axle (improvement factor)
----------------------------------------------------------------------------------------------------------------
     0.004        0.004        0.004        0.004        0.004        0.004       0.004       0.004       0.014
----------------------------------------------------------------------------------------------------------------

[[Page 40313]]

 
                                           Stop-Start (adoption rate)
----------------------------------------------------------------------------------------------------------------
       75%          70%          70%          75%          70%          70%         70%         70%         70%
----------------------------------------------------------------------------------------------------------------
                                          Neutral Idle (adoption rate)
----------------------------------------------------------------------------------------------------------------
       25%          30%          30%          25%          30%          30%         30%         30%          0%
----------------------------------------------------------------------------------------------------------------
                                         Steer Tires (CRR kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       6.4          6.4          6.4          6.4          6.4          6.4         6.4         6.4         6.4
----------------------------------------------------------------------------------------------------------------
                                         Drive Tires (CRR kg/metric ton)
----------------------------------------------------------------------------------------------------------------
       7.0          7.0          7.0          7.0          7.0          7.0         7.0         7.0         7.0
----------------------------------------------------------------------------------------------------------------
                                              Weight Reduction (lb)
----------------------------------------------------------------------------------------------------------------
        10           10           16           10           10           14          10          10          12
----------------------------------------------------------------------------------------------------------------
Note:
\a\ SI engines were not simulated in GEM, rather a gas/diesel adjustment factor was applied to the results.

(d) Technology Package Costs
    The agencies have estimated the costs of the technologies that 
could be used to comply with the proposed standards. The estimated 
costs are shown in Table V-20 for MY2021, in Table V-21 for MY2024, and 
Table V-22 for MY 2027. Fleet average costs are shown for light, medium 
and heavy HD vocational vehicles in each duty-cycle-based subcategory--
Urban, Multi-Purpose, and Regional. As shown in Table V-20, in MY 2021 
these range from approximately $600 for MHD and LHD Regional vehicles, 
up to $3,400 for HHD Regional vehicles. Those two lower-cost packages 
reflect zero hybrids, and the higher-cost package reflects significant 
adoption of automated transmissions. In the draft RIA Chapter 2.13.2, 
the agencies present vocational vehicle technology package costs 
differentiated by MOVES vehicle type. For example, intercity buses are 
estimated to have an average package cost of $2,900 and gasoline motor 
homes are estimated to have an average package cost of $450 in MY 2021. 
These costs do not indicate the per-vehicle cost that may be incurred 
for any individual technology. For more specific information about the 
agencies' estimates of per-vehicle costs, please see the draft RIA 
Chapter 2.12. For example, Chapter 2.12.7 describes why a complex 
technology such as hybridization is estimated to range between $15,000 
and $40,000 per vehicle for vocational vehicles in MY 2021. The engine 
costs listed represent the cost of an average package of diesel engine 
technologies as set out in Section II. Individual technology adoption 
rates for engine packages are described in Section II.D. The details 
behind all these costs are presented in draft RIA Chapter 2.12, 
including the markups and learning effects applied and how the costs 
shown here are weighted to generate an overall cost for the vocational 
segment. We welcome comments on our technology cost assessments.

[[Page 40314]]

                                           Table V-20--Vocational Vehicle Technology Incremental Costs for the Proposal in the 2021 Model Year\a\ \b\
                                                                                             [2012$]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Light HD                              Medium HD                               Heavy HD
                                                                 --------------------------------------------------------------------------------------------------------------------
                                                                                  Multi-                                 Multi-                                 Multi-
                                                                     Urban       purpose      Regional      Urban       purpose      Regional      Urban       purpose      Regional
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\......................................................         $293         $293         $293         $270         $270         $270         $270         $270         $270
Tires...........................................................            7            7            7            7            7            7            7            7            7
Transmission....................................................           81           81           81           81           81           81           81           81        2,852
Axle related....................................................           99           99           99           99           99           99          148          148          219
Weight Reduction................................................           27           27           48           27           27           41           27           27           34
Idle reduction..................................................           49           49           49           51           51           51            6            6            0
Electrification & hybridization.................................          547          547            0          861          861            0        1,437        1,437            0
Air Conditioning \d\............................................           22           22           22           22           22           22           22           22           22
                                                                 -------------------------------------------------------------------------------------------------------------------------------
    Total.......................................................        1,125        1,125          598        1,418        1,418          571        1,998        1,998        3,404
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2021 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect costs via markups along with learning
  impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft
  RIA 2.12).
\b\Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the indicated vehicle classes. To see the actual
  estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9 in particular).
\c\ Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting no additional costs beyond Phase 1 for gasoline vocational engines.
\d\ EPA's air conditioning standards are presented in Section V.C above.

[[Page 40315]]

    The estimated fleet average vocational vehicle package costs are 
shown in Table V-21 for MY 2024. As shown, these range from 
approximately $800 for MHD and LHD Regional vehicles, up to $4,800 for 
HHD Regional vehicles. The increased costs above the MY 2021 values 
reflect increased adoption rates of individual technologies, while the 
individual technology costs are generally expected to remain the same 
or decrease, as explained in the draft RIA Chapter 2.12. For example, 
Chapter 2.12.7 presents MY 2024 hybridization costs that range from 
$13,000 to $33,000 per vehicle for vocational vehicles. The engine 
costs listed represent the average costs associated with the proposed 
MY 2024 vocational diesel engine standard described in Section II.D.

[[Page 40316]]

                                           Table V-21--Vocational Vehicle Technology Incremental Costs for the Proposal in the 2024 Model Year\a\ \b\
                                                                                             [2012$]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Light HD                              Medium HD                               Heavy HD
                                                                 --------------------------------------------------------------------------------------------------------------------
                                                                                  Multi-                                 Multi-                                 Multi-
                                                                     Urban       purpose      Regional      Urban       purpose      Regional      Urban       purpose      Regional
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\......................................................         $437         $437         $437         $405         $405         $405         $405         $405         $405
Tires...........................................................           17           17           17           17           17           17           23           23           23
Transmission....................................................          123          123          123          123          123          123          123          123        3,915
Axle related....................................................           90           90           90           90           90           90          136          136          224
Weight Reduction................................................           24           24           43           24           24           37           24           24           30
Idle reduction..................................................          119          119          119          125          125          125          224          224          217
Electrification & hybridization.................................          906          906            0        1,423        1,423            0        2,377        2,377            0
Air Conditioning \d\............................................           20           20           20           20           20           20           20           20           20
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total.......................................................        1,737        1,737          849        2,228        2,228          817        3,332        3,332        4,834
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2024 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect costs via markups along with learning
  impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft
  RIA 2.12).
\b\Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the indicated vehicle classes. To see the actual
  estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9 in particular).
\c\ Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting no additional costs beyond Phase 1 for gasoline vocational engines.
\d\ EPA's air conditioning standards are presented in Section V.C above.

[[Page 40317]]

    The estimated fleet average vocational vehicle package costs are 
shown in Table V-22 for MY 2027. As shown, these range from 
approximately $1,400 for MHD and LHD Regional vehicles, up to $7,400 
for HHD Urban and Multipurpose vehicles. These two subcategories are 
projected to have the higher-cost packages in MY 2027 due to an 
estimated 18 percent adoption of HHD hybrids, which are estimated to 
cost $31,000 per vehicle in MY 2027, as shown in Chapter 2.12.7 of the 
draft RIA. These per-vehicle technology package costs were averaged 
using our projections of vehicle populations in the nine regulatory 
subcategories and do not correspond to the MOVES vehicle types. The 
engine costs shown represent the average costs associated with the 
proposed MY 2027 vocational diesel engine standard described in Section 
II.D. For gasoline vocational vehicles, the agencies are projecting 
adoption of Level 2 engine friction reduction with an estimated $68 
added to the average SI vocational vehicle package cost in MY 2027, 
which represents about 56 percent of those vehicles upgrading beyond 
Level 1 engine friction reduction. Further details on how these SI 
vocational vehicle costs were estimated are provided in the draft RIA 
Chapter 2.9.
    Purchase prices of vocational vehicles can range from $60,000 for a 
stake-bed landscape truck to over $400,000 for some transit buses. The 
costs of the vocational vehicle standards can be put into perspective 
by considering package costs estimated using MOVES vehicle types along 
with typical prices for those vehicles. For example, a package cost of 
$4,000 on a $60,000 short haul straight truck would represent an 
incremental increase of about six percent of the vehicle purchase 
price. Similarly, a package cost of $7,000 on a $200,000 refuse truck 
would represent an incremental increase of less than four percent of 
the vehicle purchase price. The vocational vehicle industry 
characterization report in the docket includes additional examples of 
vehicle prices for a variety of vocational applications.\317\
---------------------------------------------------------------------------

    \317\ See industry characterization, Note 260, above.

[[Page 40318]]

                                           Table V-22--Vocational Vehicle Technology Incremental Costs for the Proposal in the 2027 Model Year\a\ \b\
                                                                                             [2012$]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Light HD                              Medium HD                               Heavy HD
                                                                 --------------------------------------------------------------------------------------------------------------------
                                                                                  Multi-                                 Multi-                                 Multi-
                                                                     Urban       purpose      Regional      Urban       purpose      Regional      Urban       purpose      Regional
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\......................................................         $471         $471         $471         $437         $437         $437         $437         $437         $437
Tires...........................................................           20           20           20           20           20           20           29           29           29
Transmission....................................................          244          244          267          244          244          267          244          244        2,986
Axle related....................................................           86           86           86           86           86           86          129          129          215
Weight Reduction................................................           29           29           46           29           29           40           29           29           35
Idle reduction..................................................          498          499          499          526          526          526          964          964          962
Electrification & hybridization.................................        2,122        2,122            0        3,336        3,336            0        5,571        5,571            0
Air Conditioning \d\............................................           19           19           19           19           19           19           19           19           19
                                                                 -------------------------------------------------------------------------------------------------------------------------------
    Total.......................................................        3,489        3,490        1,407        4,696        4,696        1,395        7,422        7,422        4,682
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2024 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect costs via markups along with learning
  impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft
  RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the indicated vehicle classes. To see the actual
  estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9 in particular).
\c\ Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting no additional costs beyond Phase 1 for gasoline vocational engines.
\d\ EPA's air conditioning standards are presented in Section V.C above.

[[Page 40319]]

(3) Consistency of the Proposed Vocational Vehicle Standards With the 
Agencies' Legal Authority
    NHTSA and EPA project the proposed standards to be achievable 
within known design cycles, and we believe these standards, although 
technology-forcing, would allow many different paths to compliance in 
addition to the example outlined in this section. The proposed 
standards are predicated on manufacturers implementing technologies 
that we expect will be available in the time frame of these proposed 
rules, although in some instances these technologies are still under 
development or not widely deployed in the current vocational vehicle 
fleet. Under the proposal, manufacturers would need to apply a range of 
technologies to their vocational chassis, which the agencies believe 
would be consistent with the agencies' respective statutory 
authorities. We are projecting that most vehicles could adopt certain 
of the technologies. For example, we project a 70 to 75 percent 
application rate for stop-start idle reduction and advanced axle 
lubrication. However, for other technologies, such as strong hybrids 
and weight reduction, we are projecting adoption rates of ten percent 
or less overall, with individual subcategories having adoption rates 
greater or less than this. The proposed standards offer manufacturers 
the flexibility to apply the technologies that make sense for their 
business and customer needs.
    As discussed above, average per-vehicle costs associated with the 
proposed 2027 MY standards are projected to be generally less than six 
percent of the overall price of a new vehicle. The cost-effectiveness 
of these proposed vocational vehicle standards in dollars per ton is 
similar to the cost effectiveness estimated for light-duty trucks in 
the 2017-2025 light duty greenhouse gas standards, which the agencies 
have found to be highly cost effective.\318\ In addition, the 
vocational vehicle standards are clearly effective from a net benefits 
perspective (see draft RIA Chapter 11.2). Therefore, the agencies 
regard the cost of the proposed standards as reasonable.
---------------------------------------------------------------------------

    \318\ See Chapter 5.3 of the final RIA for the MY 2017-2025 
Light-Duty GHG Rule, available at http://www.epa.gov/otaq/climate/documents/420r12016.pdf.
---------------------------------------------------------------------------

    The agencies note that while the projected costs are significantly 
greater than the costs projected for Phase 1, we still consider these 
costs to be reasonable, especially given that the first vehicle owner 
may see the technologies pay for themselves in many cases. As discussed 
above, the usual period of ownership for a vocational vehicle reflects 
a lengthy trade cycle that may often exceed seven years. For most 
vehicle types evaluated, the cost of these technologies, if passed on 
fully to customers, would be recovered within five years or less due to 
the associated fuel savings, as shown in the payback analysis included 
in Section IX and in the draft RIA Chapter 7.1. Specifically, in Table 
7-30 of the draft RIA Chapter 7.1.3, a summary is presented with 
estimated payback periods for each of the MOVES vocational vehicle 
types, using the annual vehicle miles traveled from the MOVES model for 
each vehicle type. As shown, the vocational vehicle type with the 
shortest payback would be intercity buses (less than one year), while 
most other vehicles (with the exception of school buses and motor 
homes) are projected to see paybacks in the fifth year or sooner.
    The agencies note further that although the proposal is technology-
forcing (especially with respect to driveline improvements) and the 
estimated costs for each subcategory vary considerably (by a factor of 
five in some cases), these costs represent only one of many possible 
pathways to compliance for manufacturers. Manufacturers retain leeway 
to develop alternative compliance paths, increasing the likelihood of 
the standards' successful implementation. Based on available 
information, the agencies believe the proposed standards are 
technically feasible within the lead time provided, are cost effective 
while accounting for the fuel savings (see draft RIA Chapter 7.1.4), 
and have no apparent adverse collateral potential impacts (e.g., there 
are no projected negative impacts on safety or vehicle utility).
    The proposed standards thus appear to represent a reasonable choice 
under Section 202(a) of the CAA and the maximum feasible under NHTSA's 
EISA authority at 49 U.S.C. 32902(k)(2). The agencies believe that the 
proposed standards are consistent with their respective authorities. 
Based on the information currently before the agencies, we believe that 
the preferred alternative would be maximum feasible and reasonable for 
the vocational segment with a progression of standards reaching full 
implementation in MY 2027.
    Nevertheless, as discussed in Section I. A. (1) and in Section X 
(Alternatives), the agencies seek comment on the feasibility of 
Alternative 4, which the agencies may determine is maximum feasible and 
reasonable depending on comments and information received during the 
comment period. This alternative is discussed in detail below because 
it may be possible for manufacturers to accelerate product development 
cycles enough to reach the required levels by the 2024 model year. 
Thus, the agencies may conclude in the final rules that Alternative 4, 
or some elements of this alternative, would be maximum feasible and 
appropriate under CAA section 202 (a)(1) and (2), depending on 
information and comments received. The agencies seek comments to assist 
us in making that determination.

D. Alternative Vocational Vehicle Standards Considered

    The agencies have analyzed vocational vehicle standards other than 
the proposed standards. These alternatives, listed in Table III-22, are 
described in detail in Section X of this preamble and the draft RIA 
Chapter 11.

     Table V-23--Summary of Alternatives Considered for the Proposed
                               Rulemaking
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Alternative 1..........................  No action alternative
Alternative 2..........................  Less stringent than the
                                          proposed alternative, applying
                                          off-the-shelf technologies
Alternative 3 (Proposed Alternative)...  Proposed alternative fully
                                          phased-in by MY 2027
Alternative 4..........................  Same stringency as proposed
                                          alternative, except phasing in
                                          faster, by MY 2024
Alternative 5..........................  More stringent alternative,
                                          based on higher adoption rates
                                          of advanced technologies
------------------------------------------------------------------------

    NHTSA and EPA are considering an Alternative 4 that achieves the 
same level of stringency as the preferred alternative, except it would 
provide less lead time, reaching its most stringent level three years 
earlier than the

[[Page 40320]]

preferred alternative, that is in MY 2024. The agencies project that 
the same selection of technology options would be available to 
manufacturers regardless of what alternative is chosen. The preferred 
alternative would allow greater lead time to manufacturers to select 
and develop technologies for their vehicles.
    The agencies have outstanding questions regarding relative risks 
and benefits of Alternative 4 due to the time frame envisioned by that 
alternative. If the agencies receive relevant information supporting 
the feasibility of Alternative 4, the agencies may consider 
establishing vocational vehicle standards that provide more overall 
reductions than what we are proposing if we deem them to be maximum 
feasible and reasonable for NHTSA and EPA, respectively. See the draft 
RIA Chapter 11.2.2 for a summary of costs and benefits that compares 
the proposed Phase 2 vocational vehicle program with the costs and 
benefits of other vocational vehicle alternatives considered.
    In the paragraphs that follow, the agencies present the derivation 
of the Alternative 4 vocational vehicle standards. For currently 
developing technologies where we project an adoption rate that could 
present potential risks or challenges, we seek comment on the cost and 
effectiveness of such technology. Further, the agencies seek comment on 
the potential for adoption of developing technologies into the 
vocational vehicle fleet, as well as the extent to which the more 
accelerated alternative vocational vehicle standards may depend on such 
technology.
(1) Adoption Rates for Derivation of Alternative 4 Vocational Vehicle 
Standards
    In developing the Alternative 4 standards, the agencies are 
projecting a set of technology packages in MY 2024 that is identical to 
those projected for the final phase-in year of the preferred 
alternative. Because these are the same for each subcategory, the GEM 
inputs modeled to derive the level of the MY 2024 Alternative 4 
standards can be found in Table V-19, which presents the GEM inputs 
used to derive the level of the MY 2027 proposed standards. In the 
package descriptions below, the agencies outline technology-specific 
adoption rates in MY 2021 for Alternative 4 and offer insights on what 
market conditions could enable reaching adoption rates that would 
achieve the full implementation levels of stringency with less lead 
time.
    For transmissions including hybrids, the agencies project for 
Alternative 4 that 50 percent of vocational vehicles would have one or 
more of the transmission technologies identified above in this section 
applied by MY 2021. This includes 25 percent deeply integrated 
conventional transmissions that would be recognized over the powertrain 
test, 10 percent DCT, 11 percent adding two gears (except zero for HHD 
Regional), and nine percent hybrids for vehicles certified in the 
Multi-Purpose and Urban subcategories, which we estimate would be five 
percent overall. In this alternative, the agencies project 21 percent 
of the vocational vehicles with manual transmissions in the HHD 
Regional subcategory would upgrade to either an AMT, DCT, or automatic 
transmission. The increased projection of driveline integration would 
mean that more manufacturers would need to overcome data-sharing 
barriers. In this alternative, we project that manufacturers would need 
to conduct additional research and development to achieve overall 
application of five percent hybrids. In the draft RIA Chapter 7.1, the 
agencies have estimated costs for this additional accelerated research. 
Comments are requested on the expected costs to accelerate hybrid 
development to meet the projected adoption rates of this alternative.
    For advanced axle lubricants, the agencies are projecting the same 
75 percent adoption rate in MY 2021 as in the proposed program. For 
part time or full time 6x2 axles, the agencies project the HHD Regional 
vocational vehicles could apply this at the 60 percent adoption rate in 
MY 2021, where this level wouldn't be reached until MY 2024 in the 
proposed program. One action that could enable this to be achieved is 
if information on the reliability of these systems were to be 
disseminated to more fleet owners by trustworthy sources.
    For lower rolling resistance tires in this alternative, the 
agencies project the same adoption rates of LRR tires as in the 
proposed program for MY 2021, because we don't expect tire suppliers 
would be able to make greater improvements for the models that are 
fitted on vocational vehicles in that time frame. The tire research 
that is being conducted currently is focused on models for tractors and 
trailers, and we project further improved LRR tires would not be 
commercially available for vocational vehicles in the early 
implementation years of Phase 2.
    For the adoption rate of LRR tires in MY 2024 to reach the level 
projected for MY 2027 in the proposed program, tire suppliers could 
promote their most efficient products to vocational vehicle 
manufacturers to achieve equivalent improvements with less lead time. 
Depending on how tire manufacturers focus their research and product 
development, it is possible that more of the LRR tire advancements 
being applied for tractors and trailers could be applied to vocational 
vehicles. To see the specific projected adoption rates of different 
levels of LRR tires for Alternative 4, see columns three and five of 
Table V-16 above.
    For workday idle technologies, the agencies project an adoption 
rate of 12 percent stop-start in the six MHD and LHD subcategories for 
MY 2021 and zero for the HHD vehicles, on the expectation that 
manufacturers would have fewer challenges in the short term in bringing 
this technology to market for vehicles with lower power demands and 
lower engine inertia. In this alternative, the agencies project the 
overall workday idle adoption rate would approach 100 percent, such 
that any vehicle without stop-start (except HHD Regional) would apply 
neutral idle in MY 2021. These adoption raters consider a more 
aggressive investment by manufacturers in developing these 
technologies. Estimates of research and development costs for this 
alternative are presented in the draft RIA Chapter 7.1.
    For weight reduction, in this alternative, the agencies project the 
same adoption rates of a 200-lb lightweighting package as in the 
proposal for each subcategory in MY 2021, which is four to seven 
percent. Table V-24 shows the GEM inputs used to derive the level of 
the Alternative 4 MY 2021 standards.

[[Page 40321]]

                                Table V--24--GEM Inputs Used To Derive Alternative 4 MY 2021 Vocational Vehicle Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Class 2b-5                                                  Class 6-7                            Class 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Multi-                              Multi-                              Multi-
                          Urban                             purpose    Regional      Urban      purpose    Regional      Urban      purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Alternative 4 CI Engine a
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            2021 MY 7L, 200 hp Engine          2021 MY 7L, 270 hp Engine
                                                            2021 MY 11L, 345 hp     2021 MY
                                                                  Engine          15L 455hp
                                                                                     Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Transmission (improvement factor)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.045...................................................       0.04       0.014       0.045       0.041       0.015       0.045       0.041       0.018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Axle (improvement factor)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.004...................................................      0.004       0.004       0.004       0.004       0.004       0.004       0.004       0.015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Stop-Start (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
12%.....................................................        12%         12%         12%         12%         12%          0%          0%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Neutral Idle (adoption rate)
--------------------------------------------------------------------------------------------------------------------------------------------------------
88%.....................................................        88%         88%         88%         88%         88%         90%         90%          0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Steer Tires (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7.1.....................................................        7.1         7.1         7.1         7.1         7.1         7.1         7.1         7.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Drive Tires (CRR kg/metric ton)
--------------------------------------------------------------------------------------------------------------------------------------------------------
7.5.....................................................        7.5         7.5         7.5         7.5         7.5         7.5         7.5         7.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Weight Reduction (lb)
--------------------------------------------------------------------------------------------------------------------------------------------------------
8.......................................................          8          14           8           8          12           8           8          10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ SI engines were not simulated in GEM, rather a gas/diesel adjustment factor was applied to the results.

(2) Possible Alternative 4 Standards
    Because the MY 2024 Alternative 4 standards are the same as the 
proposed standards for MY 2027 for each subcategory, these numerical 
standards can be found in Table V-8 and Table V-9, which present EPA's 
and NHTSA's proposed MY 2027 standards, respectively. Table V-25 and 
Table V-26 present the Alternative 4 vocational vehicle standards for 
the initial year of MY 2021. These represent incremental improvements 
over the MY 2017 baseline of six to seven percent for SI-powered 
vocational vehicles and nine percent for CI-powered vocational 
vehicles.

   Table V-25--Alternative 4 EPA CO2 Standards for MY2021 Class 2\b\-8
                           Vocational Vehicles
------------------------------------------------------------------------
                                   Light heavy-    Medium    Heavy heavy-
            Duty cycle              duty Class   heavy-duty   duty Class
                                       2b-5      Class 6-7        8
------------------------------------------------------------------------
  Alternative EPA Standard for Vehicle with CI Engine Effective MY2021
                           (gram CO2/ton-mile)
------------------------------------------------------------------------
Urban............................          288          183          193
Multi-Purpose....................          297          185          196
Regional.........................          309          181          185
------------------------------------------------------------------------
  Alternative EPA Standard for Vehicle with SI Engine Effective MY2021
                           (gram CO2/ton-mile)
------------------------------------------------------------------------
Urban............................          313          199          210
Multi-Purpose....................          323          201          212
Regional.........................          336          197          201
------------------------------------------------------------------------

[[Page 40322]]

     Table V-26--Alternative 4 NHTSA Fuel Consumption Standards for MY2021 Class 2\b\-8 Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                     Light heavy-duty    Medium heavy-duty     Heavy heavy-duty
                    Duty cycle                          Class 2b-5           Class 6-7             Class 8
----------------------------------------------------------------------------------------------------------------
 Alternative NHTSA Standard for Vehicle with CI Engine Effective MY 2021 (Fuel Consumption gallon per 1,000 ton-
                                                      mile)
----------------------------------------------------------------------------------------------------------------
Urban............................................              28.2908              17.9764              18.9587
Multi-Purpose....................................              29.1749              18.1729              19.2534
Regional.........................................              30.3536              17.7800              18.1729
----------------------------------------------------------------------------------------------------------------
 Alternative NHTSA Standard for Vehicle with SI Engine Effective MY 2021 (Fuel Consumption gallon per 1,000 ton-
                                                      mile)
----------------------------------------------------------------------------------------------------------------
Urban............................................              35.2200              22.3923              23.6300
Multi-Purpose....................................              36.3452              22.6173              23.8551
Regional.........................................              37.8080              22.1672              22.6173
----------------------------------------------------------------------------------------------------------------

(3) Costs Associated With Alternative 4 Standards
    The agencies have estimated the costs of the technologies expected 
to be used to comply with the Alternative 4 standards, as shown in 
Table V-27 for MY2021. Fleet average costs are shown for light, medium 
and heavy HD vocational vehicles in each duty-cycle-based subcategory--
Urban, Multi-Purpose, and Regional. As shown in Table V-27, in MY 2021 
these range from approximately $800 for MHD and LHD Regional vehicles, 
to $4,300 for HHD Urban and Multipurpose vehicles. Those two 
subcategories are projected to have the higher-cost packages in MY 2021 
due to an estimated 9 percent adoption of HHD hybrids, which are 
estimated to cost $40,000 per vehicle in MY 2021, as shown in Chapter 
2.12.7 of the draft RIA. For more specific information about the 
agencies' estimates of per-vehicle costs, please see the draft RIA 
Chapter 2.12. The engine costs listed represent the cost of an average 
package of diesel engine technologies with Alternative 4 adoption rates 
described in Section II.D.2(e). The details behind all these costs are 
presented in draft RIA Chapter 2.12, including the markups and learning 
effects applied and how the costs shown here are weighted to generate 
an overall cost for the vocational segment.

                 Table V-27--Vocational Vehicle Technology Incremental Costs for Alternative 4 Standards in the 2021 Model Year \a\ \b\
                                                                         (2012$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Light HD                        Medium HD                         Heavy HD
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Multi-                           Multi-                           Multi-
                                                         Urban     purpose    Regional    Urban     purpose    Regional    Urban     purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\...........................................       $372       $372       $372       $345       $345       $345       $345       $345       $345
Tires................................................          7          7          7          7          7          7          7          7          7
Transmission.........................................        148        148        148        148        148        148        148        148      2,042
Axle related.........................................         99         99         99         99         99         99        148        148        243
Weight Reduction.....................................         27         27         48         27         27         41         27         27         34
Idle reduction.......................................        110        110        110        116        116        116          8          8          0
Electrification & hybridization......................      1,384      1,384          0      2,175      2,175          0      3,633      3,633          0
Air Conditioning \d\.................................         22         22         22         22         22         22         22         22         22
                                                      --------------------------------------------------------------------------------------------------
    Total............................................      2,169      2,169        805      2,938      2,938        777      4,337      4,337      2,693
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2021 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect
  costs via markups along with learning impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts
  technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the
  indicated vehicle classes. To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9
  in particular).
\c\ Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting no additional costs beyond Phase 1 for gasoline vocational
  engines.
\d\ EPA's air conditioning standards are presented in Section V.C above.

    The estimated costs of the technologies expected to be used to 
comply with the Alternative 4 standards for MY2024 are shown in Table 
V-28. As shown, these range from approximately $1,500 for MHD and LHD 
Regional vehicles to $7,900 for HHD Urban and Multipurpose vehicles. 
These two subcategories are projected to have the higher-cost packages 
in MY 2024 due to an estimated 18 percent adoption of HHD hybrids, 
which are estimated to cost $33,000 per vehicle in MY 2024, as shown in 
Chapter 2.12.7 of the draft RIA. The engine costs listed represent the 
cost of an average package of diesel engine technologies with 
Alternative 4 adoption rates described in Section II.D.2(e). For 
gasoline vocational vehicles, the agencies are projecting adoption of 
Level 2 engine friction reduction with an estimated $74 added to the 
average SI vocational vehicle package cost in MY 2024, which represents 
about 56 percent of those vehicles upgrading beyond Level 1 engine 
friction reduction. Further

[[Page 40323]]

details on how these SI vocational vehicle costs were estimated are 
provided in the draft RIA Chapter 2.9.

                   Table V-28--Vocational Vehicle Technology Incremental Costs for Alternative 4 Standards in the 2024 Model Year \a\
                                                                         (2012$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Light HD                        Medium HD                         Heavy HD
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Multi-                           Multi-                           Multi-
                                                         Urban     purpose    Regional    Urban     purpose    Regional    Urban     purpose    Regional
--------------------------------------------------------------------------------------------------------------------------------------------------------
Engine \c\...........................................       $493       $493       $493       $457       $457       $457       $457       $457       $457
Tires................................................         26         26         26         26         26         26         40         40         40
Transmission.........................................        256        256        280        256        256        280        256        256      3,123
Axle related.........................................         90         90         90         90         90         90        136        136        224
Weight Reduction.....................................         30         30         49         30         30         43         30         30         37
Idle reduction.......................................        561        524        524        592        553        553      1,014      1,014      1,011
Electrification & hybridization......................      2,264      2,264          0      3,559      3,559          0      5,943      5,943          0
Air Conditioning \d\.................................         20         20         20         20         20         20         20         20         20
                                                      --------------------------------------------------------------------------------------------------
    Total............................................      3,741      3,704      1,482      5,030      4,992      1,469      7,895      7,895      4,912
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Costs shown are for the 2024 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect
  costs via markups along with learning impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts
  technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
\b\ Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the
  indicated vehicle classes. To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9
  in particular).
\c\ Engine costs shown are for a light HD, medium HD or heavy HD diesel engine. For gasoline-powered vocational vehicles we are projecting $74 of
  additional engine-based costs beyond Phase 1.
\d\ EPA's air conditioning standards are presented in Section V.C above.

E. Compliance Provisions for Vocational Vehicles

    We welcome comment on all aspects of the compliance program, 
including those where we would adopt a provision without change in 
Phase 2.
(1) Application and Certification Process
    The agencies propose to continue to use GEM to determine compliance 
with the proposed vehicle fuel efficiency and CO2 standards. 
Because the agencies are proposing to modify GEM to recognize inputs in 
addition to those recognized under Phase 1, there is a consequent 
proposed requirement that manufacturers or component suppliers conduct 
component testing to generate those input values. See Section II for 
details of engine testing and GEM inputs for engines.
    As described above in Section I, the agencies propose to continue 
the Phase 1 compliance process in terms of the manufacturer 
requirements prior to the effective model year, during the model year, 
and after the model year. The information that would be required to be 
submitted by manufacturers is set forth in 40 CFR 1037.205, 49 CFR 
537.6, and 49 CFR 537.7. EPA would continue to issue certificates upon 
approval based on information submitted through the VERIFY database 
(see 40 CFR 1037.255). End of year reports would continue to include 
the GEM results for all of the configurations built, along with credit/
deficit balances, if applicable (see 40 CFR 1037.250 and 1037.730).
(a) GEM Inputs
    In Phase 1, there were two inputs to GEM for vocational vehicles:
     Steer tire coefficient of rolling resistance, and
     Drive tire coefficient of rolling resistance
    As discussed above in Section II and III.D, there are several 
additional inputs that are proposed for Phase 2. In addition to the 
steer and drive tire CRR, the proposed inputs include the following:
     Engine fuel map,
     Engine full-load torque curve,
     Engine motoring curve,
     Transmission type,
     Transmission gear ratios,
     Drive axle ratio,
     Loaded tire radius for drive and steer tires,
     Idle Reduction,
     Weight Reduction, and
     Other pre-defined off-cycle technologies.
(i) Driveline Inputs
    As with tractors, for each engine family, an engine fuel map, full 
load torque curve, and motoring curve would be generated by engine 
manufacturers as inputs to GEM. The test procedures for the torque and 
motoring curves are found in proposed 40 CFR part 1065. Section 
II.D.1.b describes these proposed procedures as well as the proposed 
new procedure for generating the engine fuel map. Also similar to 
tractors, transmission specifications would be input to GEM. Any number 
of gears could be entered with a numerical ratio for each, and 
transmission type would be selectable as either a Manual, Automated 
Manual, Automatic, or Dual Clutch transmission.
    As part of the driveline information needed to run GEM, drive axle 
ratio would be a user input. If a configuration has a two-speed axle, 
the agencies propose that a manufacturer may enter the ratio that is 
expected to be engaged most often. We request comment on whether the 
agencies should allow this choice. Two-speed axles are typically 
specified for heavy-haul vocational vehicles, where the higher 
numerical ratio axle would be engaged during transient driving 
conditions and to deliver performance needed on work sites, while the 
lower numerical ratio axle would be engaged during highway driving. The 
agencies request comment on whether we should require GEM to be run 
twice, once with each axle ratio, where the output over the highway 
cycles would be used from the run with the lower axle ratio, and the 
output over the transient cycle would be used from the run with the 
higher axle ratio.
    Tire size would be a new input to GEM that is necessary for the 
model to simulate the performance of the vehicle.

[[Page 40324]]

The draft RIA Chapter 3 includes a description of how to measure tire 
size. For each model and nominal size of a tire, there are numerous 
possible sizes that could be measured, depending on whether the tire is 
new or ``grown,'' meaning whether it has been broken in for at least 
200 miles. Size could also vary based on load and inflation levels, air 
temperature, and tread depth. The agencies request comment on aspects 
of measuring and reporting tire size that could be specified by rule, 
to avoid any unnecessary compliance burden of the Phase 2 program.
(ii) Idle Reduction Inputs
    Based on user inputs derived from engine testing described in 
Section II and draft RIA Chapter 3, GEM would calculate CO2 
emissions and fuel consumption at both zero torque (neutral idle) and 
with torque set to Curb-Idle Transmission Torque for automatic 
transmissions in ``drive'' (as defined in 40 CFR 1065.510(f)(4) for 
variable speed engines) for use in the CO2 emission 
calculation in 40 CFR 1037.510(b). The proposed regulations at 40 CFR 
part 1065 specify that that there must be two consecutive reference 
zero load idle points to establish periods of zero load idle for 
purposes of calculating total work over an engine test cycle. These two 
idle points from the engine test would be used in GEM for purposes of 
calculating emissions during vehicle idling over the vocational vehicle 
test cycles.
    The agencies welcome comments on the inclusion of these 
technologies into GEM in Phase 2.
(iii) Weight Reduction Inputs
    In Phase 1, the agencies adopted tractor regulations that provided 
manufacturers with the ability to utilize high strength steel and 
aluminum components for weight reduction without the burden of entering 
the curb weight of every tractor produced. In Phase 2, the agencies 
propose to apply relevant weights from the tractor lookup table to 
vocational vehicles. As noted above, the agencies are proposing to 
recognize weight reduction by allocating one half of the weight 
reduction to payload in the denominator, while one half of the weight 
reduction would be subtracted from the overall weight of the vehicle in 
GEM.
    To adapt the tractor table for vocational vehicles, the agencies 
propose to add lookup values for vehicles in lower weight classes. We 
believe it is appropriate to also recognize the weight reduction 
associated with 6x2 axles.\319\ Components available for vocational 
vehicle manufacturers to select for weight reduction are shown below in 
Table V-29, below. We are also proposing to assign a fixed weight 
increase to natural gas fueled vehicles to reflect the weight increase 
of natural gas fuel tanks versus gasoline or diesel tanks. These are 
shown as negative values in Table V-29 to indicate that GEM would 
internally compute these values in an inverse manner as would be 
computed for a weight reduction, for which the GEM input is a positive 
numerical value. We welcome comments on all aspects of weight reduction 
approaches and potential weight increases as a byproduct of technology 
application.
---------------------------------------------------------------------------

    \319\ See NACFE Confidence Findings on the Potential of 6x2 
Axles, Note 152 above.

               Table V--29 Proposed Phase 2 Weight Reduction Technologies for Vocational Vehicles
----------------------------------------------------------------------------------------------------------------
                                                                                  Vocational Vehicle Class
                 Component                             Material           --------------------------------------
                                                                            Class 2b-5   Class 6-7     Class 8
----------------------------------------------------------------------------------------------------------------
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..........              8                       8
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..........             5.5                     11
Clutch Housing............................  Aluminum.....................             34                      40
Clutch Housing............................  High Strength Steel..........              9                      10
Suspension Brackets, Hangers..............  Aluminum.....................             67                     100
Suspension Brackets, Hangers..............  High Strength Steel..........             20                      30
Transmission Case.........................  Aluminum.....................             45                      50
Transmission Case.........................  High Strength Steel..........             11                      12
 
Crossmember--Cab..........................  Aluminum.....................           10           14           15
Crossmember--Cab..........................  High Strength Steel..........            2            4            5
Crossmember--Non-Suspension...............  Aluminum.....................           15           18           21
Crossmember--Non-Suspension...............  High Strength Steel..........            5            6            7
Crossmember--Suspension...................  Aluminum.....................           15           20           25
Crossmember--Suspension...................  High Strength Steel..........            4            5            6
Driveshaft................................  Aluminum.....................           12           40           50
Driveshaft................................  High Strength Steel..........            5           10           12
Frame Rails...............................  Aluminum.....................          120          300          440
Frame Rails...............................  High Strength Steel..........           24           40           87
Wheels--Dual..............................  Aluminum.....................          126          126          210
Wheels--Dual..............................  High Strength Steel..........           48           48           80
Wheels--Dual..............................  Lightweight Aluminum.........          180          180          300
Wheels--Wide Base Single..................  Aluminum.....................          278          278          556
Wheels--Wide Base Single..................  High Strength Steel..........          168          168          336
Wheels--Wide Base Single..................  Lightweight Aluminum.........          294          294          588

[[Page 40325]]

 
Permanent 6x2 Axle Configuration..........  Multi........................          N/A          N/A          300
 
CI Liquified Natural Gas Vocational         Multi........................             \320\ \321\ -600
 Vehicle.
SI Compressed Natural Gas Vocational        Multi........................                   -525
 Vehicle.
CI Compressed Natural Gas Vocational        Multi........................                   -900
 Vehicle.
----------------------------------------------------------------------------------------------------------------

(b) Test Procedures
    Powertrain families aredefined in Section II.C.3.b, and powertrain 
test procedures are discussed in the draft RIA Chapter 3. The agencies 
propose that the results from testing a powertrain configuration using 
the matrix of tests described in draft RIA Chapter 3.6 could be applied 
broadly across all vocational vehicles in which that powertrain would 
be installed.
---------------------------------------------------------------------------

    \320\ See National Energy Policy Institute (2012), Note 200 
above.
    \321\ See Westport presentation (2013), Note 201, above.
---------------------------------------------------------------------------

    As in Phase 1, the rolling resistance of each tire would be 
measured using the ISO 28850 test method for drive tires and steer 
tires planned for fitment to the vehicle being certified. Once the test 
CRR values are obtained, a manufacturer would input the CRR values for 
the drive and steer tires separately into the GEM. For vocational 
vehicles in Phase 2, the agencies propose that the vehicle load would 
be distributed with 30 percent of the load over the steer tires and 70 
percent of the load over the drive tires. With these data entered, the 
amount of GHG reduction attributed to tire rolling resistance would be 
incorporated into the overall vehicle compliance value.
(c) Useful Life and In-Use Standards
    Section 202(a)(1) of the CAA specifies that emission standards are 
to be applicable for the useful life of the vehicle. The standards that 
EPA and NHTSA are proposing would apply to individual vehicles and 
engines at production and in use. NHTSA is not proposing in-use 
standards for vehicles and engines.
    Manufacturers may be required to submit, as part of the application 
for certification, an engineering analysis showing that emission 
control performance will not deteriorate during the useful life, with 
proper maintenance. If maintenance will be required to prevent or 
minimize deterioration, a demonstration may be required that this 
maintenance will be performed in use. See 40 CFR 1037.241.
    EPA is proposing to continue the Phase 1 approach to adjustment 
factors and deterioration factors. The technologies on which the Phase 
1 vocational vehicle standards were predicated were not expected to 
have any deterioration of GHG effectiveness in use. However, the 
regulations provided a process for manufacturers to develop 
deterioration factors (DF) if they needed. We anticipate that some 
hybrid powertrain systems may experience some deterioration of 
effectiveness with age of the energy storage device. We believe the 
regulations in place currently provide adequate instructions to 
manufacturers for developing DF where needed. We request comment on 
whether any changes to the DF process are needed.
    As with engine certification, a manufacturer must provide evidence 
of compliance through the regulatory useful life of the vehicle. 
Factors influencing vehicle-level GHG performance over the life of the 
vehicle fall into two basic categories: Vehicle attributes and 
maintenance items. Each category merits different treatment from the 
perspective of assessing useful life compliance, as each has varying 
degrees of manufacturer versus owner/operator responsibility.
    For vocational vehicles, attributes generally refers to components 
that are installed by the manufacturer to meet the standard, whose 
reduction properties are assessed at the time of certification, and 
which are expected to last the full life of the vehicle with 
effectiveness maintained as new for the life of the vehicle with no 
special maintenance requirements. To assess useful life compliance, we 
are proposing to follow a design-based approach that would ensure that 
the manufacturer has robustly designed these features so they can 
reasonably be expected to last the useful life of the vehicle.
    For vocational vehicles, maintenance items generally refers to 
items that are replaced, renewed, cleaned, inspected, or otherwise 
addressed in the preventative maintenance schedule specified by the 
vehicle manufacturer. Replacement items that have a direct influence on 
GHG emissions are primarily tires and lubricants, but may also include 
hybrid system batteries. Synthetic engine oil may be used by vehicle 
manufacturers to reduce the GHG emissions of their vehicles. 
Manufacturers may specify that these fluids be changed throughout the 
useful life of the vehicle. If this is the case, the manufacturer 
should have a reasonable basis that the owner/operator will use fluids 
having the same properties. This may be accomplished by requiring (in 
service documentation, labeling, etc.) that only these fluids can be 
used as replacements. In this proposal, the only maintenance costs we 
have quantified are those for tire replacement, as described in Section 
IX.C.3 and the draft RIA Chapter 7.1. The agencies invite comments with 
information related to maintenance costs that the agencies should 
quantify for the final rules.
    For current non-hybrid technologies, if the vehicle remains in its 
original certified condition throughout its useful life, it is not 
believed that GHG emissions would increase as a result of service 
accumulation. As in Phase 1, the agencies propose allowing the use of 
an assigned deterioration factor of zero where appropriate in Phase 2; 
however this does not negate the responsibility of the manufacturer to 
ensure compliance with the emission standards throughout the useful 
life. The vehicle manufacturer would be primarily responsible for 
providing engineering analysis demonstrating that vehicle attributes 
will last for the full useful life of the vehicle. We anticipate this 
demonstration would show that components are constructed of 
sufficiently robust materials and design practices so as not to become 
dysfunctional under normal operating conditions.
    In Phase 1, EPA set the useful life for engines and vehicles with 
respect to GHG emissions equal to the respective useful life periods 
for criteria pollutants. In April 2014, as part of the Tier 3 light-
duty vehicle final rule, EPA extended the regulatory useful life period 
for criteria pollutants to 150,000 miles or 15 years, whichever comes 
first, for Class

[[Page 40326]]

2b and 3 pickup trucks and vans and some light-duty trucks (79 FR 
23414, April 28, 2014). Class 2 through Class 5 heavy-duty vehicles 
subject to the GHG standards described in this section for vocational 
applications generally use the same kinds of engines, transmissions, 
and emission controls as the Class 2b and 3 vehicles that are chassis-
certified to the criteria standards under 40 CFR part 86, subpart S. 
EPA and NHTSA are therefore proposing that the Phase 2 GHG and fuel 
consumption standards for vocational vehicles at or below 19,500 lbs 
GVWR apply over the same useful life of 150,000 miles or 15 years. In 
many cases, this will result in aligned useful-life values for criteria 
and GHG standards. Where this longer useful life is not aligned with 
the useful life that applies for criteria standards (generally in the 
case of engine-based certification under 40 CFR part 86, subpart A), 
EPA may revisit the useful-life values for both criteria and GHG 
standards in a future rulemaking. For medium heavy-duty vehicles 
(19,500 to 33,000 lbs GVWR) and heavy heavy-duty vehicles (above 33,000 
lbs GVWR) EPA is proposing to keep the useful-life values from Phase 1, 
which are 185,000 miles (or 10 years) and 435,000 miles (or 10 years), 
respectively. EPA requests comment on this approach, including the 
proposed values and the overall process envisioned for achieving the 
long-term goal of adopting harmonized useful-life specifications for 
criteria and GHG standards that properly represent the manufacturers' 
obligation to meet emission standards over the expected service life of 
the vehicles. EPA may also revisit the useful-life values that apply 
for medium heavy-duty vehicles and heavy heavy-duty vehicles.
    One technology option for vocational vehicle manufacturers to 
reduce GHG emissions is to use a smaller engine, perhaps in conjunction 
with a hybrid powertrain. This could lead to a situation where the 
engine and the vehicle are subject to emission standards over different 
useful-life periods. For example, an urban bus (heavy heavy-duty 
vehicle), might be able to use a medium heavy-duty engine, or even a 
light heavy-duty engine. While such a mismatch in useful life values 
could be confusing, we don't believe it poses any particular policy 
problem that we need to address. EPA requests comment on the 
possibility of mismatched engine and vehicle useful-life values and on 
any possible implications this may have for manufacturers' ability to 
design, certify, produce, and sell their engines and vehicles.
(d) Assigning Vehicles to Test Cycles
    The agencies propose the following logic for deciding which chassis 
configurations would be assigned to each of the three proposed 
vocational duty cycles and thus regulatory subcategories:
     A vehicle would be certified over the Multipurpose Duty 
Cycle, unless one of the following conditions warrants certifying over 
either the Regional or Urban cycle.
     If the vehicle is powered by a CI engine, use the Regional 
Duty Cycle if the resulting value from the calculation described in 
Equation V-1 is less than 75 percent.
     If the vehicle is powered by a SI engine, use the Regional 
Duty Cycle if the resulting value from the calculation described in 
Equation V-1 is less than 45 percent.
[GRAPHIC] [TIFF OMITTED] TP13JY15.004

Where:

CutpointRegional is the percent of maximum engine test 
speed that is achieved at a vehicle speed of 65 mph,
SLR is the static loaded tire radius entered into GEM as specified 
in the regulations,
Axle ratio is the drive axle ratio that entered into GEM as 
specified in the regulations,
Trans ratio is the ratio of the top transmission gear that is not 
permanently locked out,
fntest is the maximum engine test speed as defined at 40 
CFR 1065.610, and C is a constant equal to:
[GRAPHIC] [TIFF OMITTED] TP13JY15.005

     If a vehicle is powered by a CI engine, use the Urban Duty 
Cycle if the resulting value from the calculation described in Equation 
V-2 is greater than 90 percent.
     If a vehicle is powered by a SI engine, use the Urban Duty 
Cycle if the resulting value from the calculation described in Equation 
V-2 is greater than 50 percent.
[GRAPHIC] [TIFF OMITTED] TP13JY15.006

[[Page 40327]]

Where:
CutpointUrban is the percent of maximum engine test speed 
that is achieved at a vehicle speed of 55 mph,
SLR is the static loaded tire radius entered into GEM as specified 
in the regulations,
Axle ratio is the drive axle ratio that is entered into GEM as 
specified in the regulations,
Trans ratio is the ratio of the top transmission gear that is not 
permanently locked out,
fntest is the maximum engine test speed as defined at 40 
CFR 1065.610, and C is a constant equal to:
[GRAPHIC] [TIFF OMITTED] TP13JY15.007

    The agencies ran GEM with many vocational vehicle configurations to 
develop a data set with which we could assess appropriate cutpoints for 
the above equations. The configurations varied primarily by the engine 
model, fuel type, and axle ratio. See the draft RIA Chapter 2.9.2 for 
further details on the assessment process for these proposed cutpoints.
    The agencies realize that there are vocational vehicles for which 
the above logic may not result in an appropriate assignment of test 
cycle. Therefore we are proposing an exception that would enable any 
vehicle with a hybrid drivetrain to certify over the Urban test cycle. 
Further, we are proposing that the following vehicles must be certified 
using the Regional cycle: intercity coach buses, recreational vehicles, 
and vehicles whose engine is exclusively certified over the SET. We are 
also proposing to allow manufacturers to request a different duty 
cycle. We request comment on this approach, and whether we should allow 
manufacturers to have complete freedom to select a test cycle without 
any need for EPA or NHTSA approval.
(2) Other Compliance Provisions
(a) Emission Control Labels
    The agencies consider it crucial that authorized compliance 
inspectors are able to identify whether a vehicle is certified, and if 
so whether it is in its certified condition. To facilitate this 
identification in Phase 1, EPA adopted labeling provisions for 
vocational vehicles that included several items. The Phase 1 vocational 
vehicle label must include the manufacturer, vehicle identifier such as 
the Vehicle Identification Number, vehicle family, regulatory 
subcategory, date of manufacture, compliance statements, and emission 
control system identifiers (see 40 CFR 1037.135). In Phase 1, the 
vocational vehicle emission control system identifier is tire rolling 
resistance, plus any innovative and advanced technologies.
    The number of proposed emission control systems for greenhouse gas 
emissions in Phase 2 has increased significantly. For example, the 
engine, transmission, axle configuration, tire radius, and idle 
reduction system are control systems that can be evaluated on-cycle in 
Phase 2 (i.e. these technologies' performance can now be input to GEM), 
but could not be evaluated in Phase 1. Due to the complexity in 
determining greenhouse gas emissions as proposed in Phase 2, the 
agencies do not believe that we can unambiguously determine whether or 
not a vehicle is in a certified condition through simply comparing 
information that could be made available on an emission control label 
with the components installed on a vehicle. Therefore, EPA proposes to 
remove the requirement to include the emission control system 
identifiers required in 40 CFR 1037.135(c)(6) and in Appendix III to 40 
CFR part 1037 from the emission control labels for vocational vehicles 
certified to the primary Phase 2 standards. However, the agencies may 
finalize requirements to maintain some label content to facilitate a 
limited visual inspection of key vehicle parameters that can be readily 
observed. Such requirements may be very similar to the labeling 
requirements from the Phase 1 rulemaking, though we would want to more 
carefully consider the list of technologies that would allow for the 
most effective inspection. We request comment on an appropriate list of 
candidate technologies that would properly balance the need to limit 
label content with the interest in providing the most useful 
information for inspectors to confirm that vehicles have been properly 
built. EPA is not proposing to modify the existing emission control 
labels for vocational vehicles certified for MYs 2014-2020 (Phase 1) 
CO2 standards.
    Under the agencies' existing authorities, manufacturers must 
provide detailed build information for a specific vehicle upon our 
request. Our expectation is that this information should be available 
to us via email or other similar electronic communication on a same-day 
basis, or within 24 hours of a request at most. We request comment on 
any practical limitations in promptly providing this information. We 
also request comment on approaches that would minimize burden for 
manufacturers to respond to requests for vehicle build information and 
would expedite an authorized compliance inspector's visual inspection. 
For example, the agencies have started to explore ideas that would 
provide inspectors with an electronic method to identify vehicles and 
access on-line databases that would list all of the engine-specific and 
vehicle-specific emissions control system information. We believe that 
electronic and Internet technology exists today for using scan tools to 
read a bar code or radio frequency identification tag affixed to a 
vehicle that would then lead to secure on-line access to a database of 
manufacturers' detailed vehicle and engine build information. Our 
exploratory work on these ideas has raised questions about the level of 
effort that would be required to develop, implement and maintain an 
information technology system to provide inspectors real-time access to 
this information. We have also considered questions about privacy and 
data security. We request comment on the concept of electronic labels 
and database access, including any available information on similar 
systems that exist today and on burden estimates and approaches that 
could address concerns about privacy and data security. Based on new 
information that we receive, we may consider initiating a separate 
rulemaking effort to propose and request comment on implementing such 
an approach.
(b) End of Year Reports
    In the Phase 1 program, manufacturers participating in the ABT 
program provided 90 day and 270 day reports to EPA and NHTSA after the 
end of the model year. The agencies adopted two reports for the initial 
program to help manufacturers become familiar with the reporting 
process. For the HD Phase 2 program, the agencies propose to simplify 
reporting such that

[[Page 40328]]

manufacturers would only be required to submit one end of the year 
report 120 days after the end of the model year with the potential to 
obtain approval for a delay up to 30 days. We welcome comment on this 
proposed revision.
(c) Delegated Assembly
    The proposed standards for vocational vehicles are based on the 
application of a wide range of technologies. Certifying vehicle 
manufacturers manage their compliance demonstration to reflect this 
range of technologies by describing their certified configurations in 
the application for certification. In many cases, these technologies 
are designed and assembled (or installed) directly by the certifying 
vehicle manufacturer, which is typically the chassis manufacturer. In 
these cases, it is straightforward to assign the responsibility to the 
certifying vehicle manufacturer for ensuring that vehicles are in their 
proper certified configuration when sold to the ultimate user. In Phase 
1, the only vehicle technology available for certified vocational 
vehicles was LRR tires. Because these are generally installed by the 
chassis manufacturer, there would have been no need to rely on a second 
stage manufacturer for purposes of certification.
    In Phase 2, the agencies are considering certain technologies where 
the certifying vehicle manufacturer may want or need to rely on a 
downstream manufacturing company (a secondary vehicle manufacturer) to 
take steps to assemble or install certain components or technologies to 
bring the vehicle into a certified configuration. A similar 
relationship between manufacturers applies with aftertreatment devices 
for certified engines. EPA has adopted ``delegated assembly'' 
provisions for engines at 40 CFR 1068.261 to describe how manufacturers 
can share compliance responsibilities through these cooperative 
assembly procedures.
    We are proposing to take a similar approach for vehicle-based GHG 
standards in 40 CFR part 1037. The delegated assembly provisions as 
proposed for GHG standards are focused on add-on features to reduce 
aerodynamic drag, and on air conditioning systems. This may occur, for 
example, if the certifying manufacturer sells a cab-complete chassis to 
a secondary vehicle manufacturer, which in turn installs a box with the 
appropriate aerodynamic accessories to reduce drag losses. To the 
extent certifying manufacturers rely on secondary vehicle manufacturers 
to bring the vehicle into a certified configuration, the following 
provisions would apply:
     The certifying manufacturer would describe their approach 
to delegated assembly in the application for certification.
     The certifying manufacturer would create installation 
instructions to describe how the secondary vehicle manufacturer would 
bring the vehicle into a certified configuration.
     The certifying manufacturer would have a contractual 
agreement with each affected secondary vehicle manufacturer obligating 
the secondary vehicle manufacturer to build each vehicle into a 
certified configuration and to provide affidavits confirming proper 
assembly procedures, and to provide information regarding deployment of 
each type of technology (if there are technology options that relate to 
different GEM input values).
    The delegated assembly provisions are most relevant to vocational 
vehicles, but we are not proposing to limit these provisions to 
vocational vehicles. Similarly, we expect that aerodynamic devices and 
air conditioning systems are the most likely technologies for which 
delegated assembly is appropriate, but we are not proposing to limit 
the use of delegated assembly to these technologies.
    Secondary manufacturers (such as body builders) that build complete 
vehicles from certified chassis are obligated to comply with the 
emission-related installation instructions provided by the certifying 
manufacturer. Secondary manufacturers that build complete vehicles from 
exempted chassis are obligated to comply with all of the regulations.
    The draft regulations at 40 CFR 1037.621 describe further detailed 
provisions related to delegated assembly. We request comment on all 
aspects of these provisions. In particular, we request comment on how 
the procedures should be applied more broadly or more narrowly for 
specific technologies. We also request comment on any further 
modifications that should be made to the delegated assembly provisions 
to reflect the nature of manufacturing relationships or technologies 
that are specific to greenhouse gas standards for heavy-duty highway 
vehicles.
(d) Demonstrating Compliance With Proposed HFC Leakage Standards
    EPA is proposing requirements for vocational chassis manufacturers 
to demonstrate reductions in direct emissions of HFC in their A/C 
systems and components through a design-based method. The method for 
calculating A/C leakage is the same as was adopted in Phase 1 for 
tractors and HD pickups and vans. It is based closely on an industry-
consensus leakage scoring method, described below. This leakage scoring 
method is correlated to experimentally-measured leakage rates from a 
number of vehicles using the different available A/C components. As is 
done currently for other HD vehicles, vocational chassis manufacturers 
would choose from a menu of A/C equipment and components used in their 
vehicles in order to establish leakage scores, to characterize their A/
C system leakage performance. The percent leakage per year would then 
be calculated as this score divided by the system refrigerant capacity.
    Consistent with the light-duty rule and the Phase 1 program for 
other HD vehicles, EPA is proposing a requirement that vocational 
chassis manufacturers compare the components of a vehicle's A/C system 
with a set of leakage-reduction technologies and actions that is based 
closely on that developed through the Improved Mobile Air Conditioning 
program and SAE International (as SAE Surface Vehicle Standard J2727, 
``HFC-134a, Mobile Air Conditioning System Refrigerant Emission 
Chart,'' August 2008 version). See generally 75 FR 25426. The SAE J2727 
approach was developed from laboratory testing of a variety of A/C 
related components, and EPA believes that the J2727 leakage scoring 
system generally represents a reasonable correlation with average real-
world leakage in new vehicles. This approach associates each component 
with a specific leakage rate in grams per year that is identical to the 
values in J2727 and then sums together the component leakage values to 
develop the total A/C system leakage. Unlike the light-duty program, in 
the heavy-duty vehicle program, the total A/C leakage score is divided 
by the value of the total refrigerant system capacity to develop a 
percent leakage per year. EPA believes that the design-based approach 
results in estimates of likely leakage emissions reductions that are 
comparable to those that would result from performance-based testing.
    Consistent with HD GHG Phase 1, EPA is not proposing a specific in-
use standard for leakage, as neither test procedures nor facilities 
exist to measure refrigerant leakage from a vehicle's air conditioning 
system. However, consistent with the HD Phase 1 program and the light-
duty rule, where we propose to require that manufacturers attest to the 
durability of components and systems used to meet the CO2 
standards (see 75 FR 25689), we

[[Page 40329]]

propose to require that manufacturers of heavy-duty vocational vehicles 
attest to the durability of these systems, and provide an engineering 
analysis that demonstrates component and system durability.
(e) Glider Vehicles
    EPA is proposing to not exempt glider vehicles from the Phase 2 GHG 
emission and fuel consumption standards.\322\ Gliders and glider kits 
are exempt from NHTSA's Phase 1 fuel consumption standards. EPA's 
interim provisions of Phase 1 exempted glider vehicles produced by 
small businesses from the Phase 1 CO2 emission standards but 
did not include such a blanket exemption for other glider 
vehicles.\323\ Thus, some glider vehicles are already subject to the 
requirement to obtain a vehicle certificate prior to introduction into 
commerce as a new vehicle. However, the agencies believe glider 
manufacturers may not understand how these regulations apply to them, 
resulting in a number of uncertified vehicles.
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    \322\ Glider vehicles are new vehicles produced to accept 
rebuilt engines (or other used engines) along with used axles and/or 
transmissions. The common term ``glider kit'' is used here primarily 
to refer to an assemblage of parts into which the used/rebuilt 
engine is installed.
    \323\ Rebuilt engines used in glider vehicles are subject to EPA 
criteria pollutant emission standards applicable for the model year 
of the engine. See 40 CFR 86.004-40 for requirements that apply for 
engine rebuilding. Under existing regulations, engines that remain 
in their certified configuration after rebuilding may continue to be 
used.
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    EPA is concerned about adverse economic impacts on small businesses 
that assemble glider kits and glider vehicles. Therefore, EPA is 
proposing a new provision that would grandfather existing small 
businesses, but cap annual production based on recent sales. This 
approach is consistent with the approach recommended by the Small 
Business Advocacy Review Panel, which believed there should be an 
allowance to produce some glider vehicles for legitimate purposes. EPA 
requests comment on whether any special provisions would be needed to 
accommodate glider vehicles. See Section XIV.B for additional 
discussion of the proposed requirements for glider vehicles.
    Similarly, NHTSA is considering including gliders under its Phase 2 
program. The agencies request comment on their respective 
considerations. We believe that the agencies potentially having 
different policies for glider kits and glider vehicles under the Phase 
2 program would not result in problematic disharmony between the NHTSA 
and EPA programs, because of the small number of vehicles that would be 
involved. EPA believes that its proposed changes would result in the 
glider market returning to the pre-2007 levels, in which fewer than 
1,000 glider vehicles would be produced in most years. Given that a 
large fraction of these vehicles would be exempted from EPA regulations 
because they would be produced by qualifying small businesses, they 
would thus, in practice, be treated the same under EPA and NHTSA 
regulations. Only non-exempt glider vehicles would be subject to 
different requirements under the NHTSA and EPA regulations. However, we 
believe that this is unlikely to exceed a few hundred vehicles in any 
year, which would be few enough not to result in any meaningful 
disharmony between the two agencies.
    With regard to NHTSA's safety authority over gliders, the agency 
notes that it has become increasingly aware of potential noncompliance 
with its regulations applicable to gliders. NHTSA has learned of 
manufacturers who are creating glider vehicles that are new vehicles 
under 49 CFR 571.7(e); however, the manufacturers are not certifying 
them and obtaining a new VIN as required. NHTSA plans to pursue 
enforcement actions as applicable against noncompliant manufacturers. 
In addition to enforcement actions, NHTSA may consider amending 49 CFR 
571.7(e) and related regulations as necessary in the future. NHTSA 
believes manufacturers may not be using this regulation as originally 
intended.
(3) Proposed Compliance Flexibility Provisions
    EPA and NHTSA are proposing three flexibility provisions 
specifically for vocational vehicle manufacturers in Phase 2. These are 
an averaging, banking and trading program for CO2 emissions 
and fuel consumption credits, provisions for off-cycle credits for 
technologies that are not included as inputs to the GEM, and optional 
chassis certification. The agencies are also proposing to remove or 
modify several Phase 1 interim provisions, as described below. Program-
wide compliance flexibilities are discussed in Section I.B.3 to I.C.1.
(a) Averaging, Banking, and Trading (ABT) Program
    Averaging, banking, and trading of emission credits have been an 
important part of many EPA mobile source programs under CAA Title II. 
ABT provisions provide manufacturers flexibilities that assist in the 
efficient development and implementation of new technologies and 
therefore enable new technologies to be implemented at a more 
aggressive pace than without ABT. NHTSA and EPA propose to carry-over 
the Phase 1 ABT provisions for vocational vehicles into Phase 2, as it 
is an important way to achieve each agency's programmatic goals. ABT is 
also discussed in Section I and Section III.F.1.
    Consistent with the Phase 1 averaging sets, the agencies propose 
that chassis manufacturers may average SI-powered vocational vehicle 
chassis with CI-powered vocational vehicle chassis, within the same 
vehicle weight class group. In Phase 1, all vocational and tractor 
chassis within a vehicle weight class group were able to average with 
each other, regardless of whether they were powered by a CI or SI 
engine. The proposed Phase 2 approach would continue this. The only 
difference is that in Phase 2, there would be different numerical 
standards set for the SI-powered and CI-powered vehicles, but that 
would not need to alter the basis for averaging. This is consistent 
with the Phase 1 approach where, for example, Class 8 day cab tractors, 
Class 8 sleeper cab tractors and Class 8 vocational vehicles each have 
different numerical standards, while they all belong to the same 
averaging set.
    As discussed in V. E. (1) (c), EPA and NHTSA are proposing to 
change the useful life for LHD vocational vehicles for GHG emissions 
from the current 10 years/110,000 miles to 15 years/150,000 miles to be 
consistent with the useful life of criteria pollutants recently updated 
in EPA's Tier 3 rule. For the same reasons, EPA and NHTSA are also 
proposing a useful life adjustment for HD pickups and vans, as 
described in Section VI.E.(1). According to the credits calculation 
formula at 40 CFR 1037.705 and 49 CFR 535.7, useful life in miles is a 
multiplicative factor included in the calculation of CO2 and 
fuel consumption credits. In order to ensure that banked credits would 
maintain their value in the transition from Phase 1 to Phase 2, NHTSA 
and EPA propose an interim vocational vehicle adjustment factor of 1.36 
for credits that are carried forward from Phase 1 to the MY 2021 and 
later Phase 2 standards.\324\ Without this adjustment factor the 
proposed change in useful life would effectively result in a discount 
of banked credits that are carried forward from Phase 1 to Phase 2, 
which is not the intent of the change in the useful life. The agencies 
do not believe that this proposed adjustment would result in a loss of 
program benefits because

[[Page 40330]]

there is little or no deterioration anticipated for CO2 
emissions and fuel consumption over the life of the vehicles. Also, the 
carry-forward of credits is an integral part of the program, helping to 
smoothing the transition to the new Phase 2 standards. The agencies 
believe that effectively discounting carry-forward credits from Phase 1 
to Phase 2 would be unnecessary and could negatively impact the 
feasibility of the proposed Phase 2 standards. EPA and NHTSA request 
comment on all aspects of the averaging, banking, and trading program.
---------------------------------------------------------------------------

    \324\ See 40 CFR 1037.150(s) and 49 CFR 535.7.
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(b) Innovative and Off-Cycle Technology Credits
    In Phase 1, the agencies adopted an emissions and fuel consumption 
credit generating opportunity that applied to innovative technologies 
that reduce fuel consumption and CO2 emissions. These 
technologies were required to not be in common use with heavy-duty 
vehicles before the 2010MY and not reflected in the GEM simulation tool 
(i.e., the benefits are ``off-cycle''). See 76 FR 57253. The agencies 
propose to largely continue the Phase 1 innovative technology program 
but to redesignate it as an off-cycle program for Phase 2. The agencies 
propose to maintain that, in order for a manufacturer to receive 
credits for Phase 2, the off-cycle technology would still need to meet 
the requirement that it was not in common use prior to MY 2010.
    The agencies recognize that there are emerging technologies today 
that are being developed, but would not be accounted for in the GEM 
tool, and therefore would be considered off-cycle. These technologies 
could include systems such as electrified accessories, air conditioning 
system efficiency, and aerodynamics for vocational vehicles beyond 
those tested and pre-approved in the HD Phase 2 program. Such off-cycle 
technologies could include known, commercialized technologies if they 
are not yet widely utilized in a particular heavy-duty sector 
subcategory. Any credits for these technologies would need to be based 
on real-world fuel consumption and GHG reductions that can be measured 
with verifiable test methods using representative driving conditions 
typical of the engine or vehicle application. More information about 
off-cycle technology credits can be found at Section I.C.1.c.
    As in Phase 1, the agencies are proposing to continue to provide 
two paths for approval of the test procedure to measure the 
CO2 emissions and fuel consumption reductions of an off-
cycle technology used in vocational vehicles. See 40 CFR 1037.610 and 
49 CFR 535.7. The first path would not require a public approval 
process of the test method. A manufacturer could use ``pre-approved'' 
test methods for HD vehicles including the A-to-B chassis testing, 
powerpack testing or on-road testing. A manufacturer may also use any 
developed test procedure that has known quantifiable benefits. A test 
plan detailing the testing methodology would be required to be approved 
prior to collecting any test data. The agencies are also proposing to 
continue the second path, which includes a public approval process of 
any testing method that could have questionable benefits (i.e., an 
unknown usage rate for a technology). Furthermore, the agencies are 
proposing to modify their provisions to clarify what documentation must 
be submitted for approval, which would align them with provisions in 40 
CFR 86.1869-12. NHTSA is separately proposing to prohibit credits from 
technologies addressed by any of its crash avoidance safety rulemakings 
(i.e., congestion management systems). See also 77 FR 62733 (discussion 
of similar issue in the light duty greenhouse gas/fuel economy 
regulations). We welcome recommendations on how to improve or 
streamline the off-cycle technology approval process.
    There are some technologies that are entering the market today, and 
although our model does not have the capability to simulate the 
effectiveness over the test cycles, there are reliable estimates of 
effectiveness available to the agencies. These are proposed to be 
recognized in our HD Phase 2 certification procedures as pre-defined 
technologies, and would not be considered off-cycle. Examples of such 
technologies for vocational vehicles include 6x2 axles and axle 
lubricants. These default effectiveness values would be used as valid 
inputs to GEM. The projected effectiveness of each vocational vehicle 
technology is discussed in the draft RIA Chapter 2.9.
    The agencies propose that the approval for Phase 1 innovative 
technology credits (approved prior to 2021 MY) would be carried into 
the Phase 2 program on a limited basis for those technologies where the 
benefit is not accounted for in the Phase 2 test procedure. Therefore, 
the manufacturers would not be required to request new approval for any 
innovative credits carried into the off-cycle program, but would have 
to demonstrate the new cycle does not account for these improvements 
beginning in the 2021 MY. The agencies believe this is appropriate 
because technologies, such as those related to the transmission or 
driveline, may no longer be ``off-cycle'' because of the addition of 
these technologies into the Phase 2 version of GEM. The agencies also 
seek comments on whether off-cycle technologies in the Phase 2 program 
should be limited by infrequent common use and by what model years, if 
any. We also seek comments on an appropriate penetration rate for a 
technology not to be considered in common use.
(c) Optional Chassis Certification
    In Phase 2, the agencies are proposing to continue the Phase 1 
provisions allowing the optional chassis certification of vehicles over 
14,000 lbs GVWR. In Phase 1 the agencies allowed manufacturers the 
option to choose to comply with heavy-duty pickup or van standards, for 
incomplete vehicles that were identical to those on complete pickup 
truck or van counterparts, with respect to most components that affect 
GHG emissions and fuel consumption, such as engines, cabs, frames, 
transmissions, axles, and wheels. The incomplete vehicles would 
typically be produced as cab-complete vehicles. For example, a 
manufacturer could certify under this allowance an incomplete pickup 
truck that includes the cab, but not the bed. The Phase 1 program also 
includes provisions that allow manufacturers to include some Class 4 
and Class 5 vehicles in averaging sets subject to the chassis-based HD 
pickup and van standards, rather than the vocational vehicle 
program.\325\
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    \325\ See 76 FR 57259-57260, September 15, 2011 and 78 FR 36374, 
June 17, 2013.
---------------------------------------------------------------------------

    This optional chassis certification of vehicles over 14,000 lbs 
applies for greenhouse gas emission standards in Phase 1, but not for 
criteria pollutant emission standards. We revisited this issue in the 
recent Tier 3 final rule, where we revised the regulation to allow this 
same flexibility relative to exhaust emission standards for criteria 
pollutants. However, EPA is now seeking comment on the proper approach 
for certifying vehicles above 14,000 lbs GVWR, because there are 
lingering questions about how best to align the certification processes 
for GHG emissions and for criteria pollutants. The agencies are 
requesting comment on several issues on this topic, including whether 
there should be an upper weight limit to this allowance. See Section 
XIV.A.2 for the issues on which the agencies seek comment with respect 
to chassis and engine certification for GHG and criteria pollutants for 
vehicles opting into the HD pickup and van program.

[[Page 40331]]

(d) Phase 1 Flexibilities Not Proposed for Phase 2
    As described above in Section I, the agencies are not proposing to 
provide advanced technology credits in Phase 2. These technologies had 
been defined in Phase 1 as hybrid powertrains, Rankine cycle engines, 
all-electric vehicles, and fuel cell vehicles (see 40 CFR 1037.150(i)), 
at a 1.5 credit value with the purpose to promote the early 
implementation of advanced technologies that were not expected to be 
widely adopted in the market in the 2014 to 2018 time frame. Our 
feasibility assessment for the proposed Phase 2 vocational vehicle 
standards includes a projection of the use of hybrid powertrains as 
described earlier in this section; therefore the agencies believe it 
would no longer be appropriate to provide extra credit for this 
technology. As noted above, waste heat recovery is not projected to be 
utilized for vocational vehicles within the time frame of Phase 2. 
While the agencies are not proposing to premise the Phase 2 vocational 
vehicle standards on fuel cells or electric vehicles, we expect that 
any vehicle certified with this technology would provide such a large 
credit to a manufacturer that an additional incentive credit would not 
be necessary. We welcome comments on the need for such incentives, 
including information on why an incentive for specific technologies in 
this time frame may be warranted, recognizing that the incentive would 
result in reduced benefits in terms of CO2 emissions and 
fuel use due to the Phase 2 program.
    The agencies are not proposing to extend early credits to 
manufacturers who comply early with Phase 2 standards, because the ABT 
program from Phase 1 will be available to manufacturers and this 
displaces the need for early credits (see 40 CFR 1037.150(a)). Please 
see the more complete discussion of this above in Section I.
    Another Phase 1 interim flexibility that the agencies are not 
proposing to continue in Phase 2 is the flexibility known as the 
``loose engine'' provision, whereby SI engines sold to chassis 
manufacturers and intended for use in vocational vehicles need not meet 
the separate SI engine standard (see preamble Section II and draft RIA 
Chapter 2.6), and instead may be averaged with the manufacturer's HD 
pickup and van fleet. We believe the benefits this particular 
flexibility offers for manufacturers in the interim between Phase 1 and 
Phase 2 would diminish considerably in Phase 2. The agencies are 
proposing a Phase 2 SI engine standard that is no more stringent than 
the MY 2016 SI engine standard adopted in Phase 1, while the proposed 
Phase 2 standards for the HD pickup and van fleet would be 
progressively more stringent through MY 2027. The primary certification 
path designed in the Phase 1 program for both CI and SI engines sold 
separately and intended for use in vocational vehicles was that they be 
engine certified while the vehicle would be GEM certified under the GHG 
rules. In Phase 2 the agencies propose to continue this as the 
certification path for such engines intended for vocational vehicles. 
See the draft RIA Chapter 2.6 for further discussion of the separate 
engine standard for SI engines intended for vocational vehicles.
(e) Other Phase 1 Interim Provisions
    In HD Phase 1, EPA adopted provisions to delay the onboard 
diagnostics (OBD) requirements for heavy-duty hybrid powertrains (see 
40 CFR 86.010-18(q)). This provision delayed full OBD requirements for 
hybrids until MY 2016 and MY 2017. In discussion with manufacturers 
during the development of Phase 2, the agencies have learned that 
meeting the on-board diagnostic requirements for criteria pollutant 
engine certification continues to be a potential impediment to adoption 
of hybrid systems. See Section XIII.A.1 for a discussion of regulatory 
changes proposed to reduce the non-GHG certification burden for engines 
paired with hybrid powertrain systems.
    Also in Phase 1, EPA adopted provisions that reinforced the fact 
that we were setting GHG emissions from the tailpipe of heavy-duty 
vehicles. Therefore, we treated all electric vehicles as having zero 
emissions of CO2, CH4, and N2O (see 40 
CFR 1037.150(f)). Similarly, NHTSA adopted regulations in Phase 1 that 
set the fuel consumption standards based on the fuel consumed by the 
vehicle. The agencies also did not require emission testing for 
electric vehicles in Phase 1. The agencies considered the potential 
unintended consequence of ignoring upstream emissions from the charging 
of heavy-duty battery-electric vehicles. In our assessment, we have 
observed that the few all-electric heavy-duty vocational vehicles that 
have been certified are being produced in very small volumes in MY2014. 
As we look to the future, we project very limited adoption of electric 
vocational vehicles into the market; therefore, we believe that this 
provision is still appropriate. Unlike the MY2012-2016 light-duty rule, 
which adopted a cap whereby upstream emissions would be counted after a 
certain volume of sales (see 75 FR 25434-25436), we believe there is no 
need to propose a cap for vocational vehicles because of the infrequent 
projected use of EV technologies in the Phase 2 timeframe. In Phase 2, 
we propose to continue to deem electric vehicles as having zero 
CO2, CH4, and N2O emissions as well as 
zero fuel consumption. We welcome comments on this approach.

VI. Heavy-Duty Pickups and Vans

A. Introduction and Summary of Phase 1 HD Pickup and Van Standards

    In the Phase 1 rule, EPA and NHTSA established GHG and fuel 
consumption standards and a program structure for complete Class 2b and 
3 heavy-duty vehicles (referred to in these rules as ``HD pickups and 
vans''), as described below. The Phase 1 standards began to be phased-
in in MY 2014 and the agencies believe the program is working well. The 
agencies are proposing to retain most elements from the structure of 
the program established in the Phase 1 rule for the Phase 2 program 
while proposing more stringent Phase 2 standards for MY 2027, phased in 
over MYs 2021-2027, that would require additional GHG reductions and 
fuel consumption improvements. The MY 2027 standards would remain in 
place unless and until amended by the agencies.
    Heavy-duty vehicles with GVWR between 8,501 and 10,000 lb are 
classified in the industry as Class 2b motor vehicles. Class 2b 
includes vehicles classified as medium-duty passenger vehicles (MDPVs) 
such as very large SUVs. Because MDPVs are frequently used like light-
duty passenger vehicles, they are regulated by the agencies under the 
light-duty vehicle rules. Thus the agencies did not adopt additional 
requirements for MDPVs in the Phase 1 rule and are not proposing 
additional requirements for MDPVs in this rulemaking. Heavy-duty 
vehicles with GVWR between 10,001 and 14,000 lb are classified as Class 
3 motor vehicles. Class 2b and Class 3 heavy-duty vehicles together 
emit about 15 percent of today's GHG emissions from the heavy-duty 
vehicle sector.
    About 90 percent of HD pickups and vans are \3/4\-ton and 1-ton 
pickup trucks, 12- and 15-passenger vans, and large work vans that are 
sold by vehicle manufacturers as complete vehicles, with no secondary 
manufacturer making substantial modifications prior to registration and 
use. Most of these vehicles are produced by companies with major light-
duty markets in the

[[Page 40332]]

United States, primarily Ford, General Motors, and Chrysler. Often, the 
technologies available to reduce fuel consumption and GHG emissions 
from this segment are similar to the technologies used for the same 
purpose on light-duty pickup trucks and vans, including both engine 
efficiency improvements (for gasoline and diesel engines) and vehicle 
efficiency improvements.
    In the Phase 1 rule EPA adopted GHG standards for HD pickups and 
vans based on the whole vehicle (including the engine), expressed as 
grams of CO2 per mile, consistent with the way these 
vehicles are regulated by EPA today for criteria pollutants. NHTSA 
adopted corresponding gallons per 100 mile fuel consumption standards 
that are likewise based on the whole vehicle. This complete vehicle 
approach adopted by both agencies for HD pickups and vans was 
consistent with the recommendations of the NAS Committee in its 2010 
Report. EPA and NHTSA adopted a structure for the Phase 1 HD pickup and 
van standards that in many respects paralleled long-standing NHTSA CAFE 
standards and more recent coordinated EPA GHG standards for 
manufacturers' fleets of new light-duty vehicles. These commonalities 
include a new vehicle fleet average standard for each manufacturer in 
each model year and the determination of these fleet average standards 
based on production volume-weighted targets for each model, with the 
targets varying based on a defined vehicle attribute. Vehicle testing 
for both the HD and light-duty vehicle programs is conducted on chassis 
dynamometers using the drive cycles from the EPA Federal Test Procedure 
(Light-duty FTP or ``city'' test) and Highway Fuel Economy Test (HFET 
or ``highway'' test).\326\
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    \326\ The Light-duty FTP is a vehicle driving cycle that was 
originally developed for certifying light-duty vehicles and 
subsequently applied to HD chassis testing for criteria pollutants. 
This contrasts with the Heavy-duty FTP, which refers to the 
transient engine test cycles used for certifying heavy-duty engines 
(with separate cycles specified for diesel and spark-ignition 
engines).
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    For the light-duty GHG and fuel economy \327\ standards, the 
agencies factored in vehicle size by basing the emissions and fuel 
economy targets on vehicle footprint (the wheelbase times the average 
track width).\328\ For those standards, passenger cars and light trucks 
with larger footprints are assigned higher GHG and lower fuel economy 
target levels in acknowledgement of their inherent tendency to consume 
more fuel and emit more GHGs per mile. EISA requires that NHTSA study 
``the appropriate metric for measuring and expressing commercial 
medium- and heavy-duty vehicle and work truck fuel efficiency 
performance, taking into consideration, among other things, the work 
performed by such on-highway vehicles and work trucks . . .'' See 49 
U.S.C. 32902(k)(1)(B).\329\ For HD pickups and vans, the agencies also 
set standards based on vehicle attributes, but used a work-based metric 
as the attribute rather than the footprint attribute utilized in the 
light-duty vehicle rulemaking. Work-based measures such as payload and 
towing capability are key among the parameters that characterize 
differences in the design of these vehicles, as well as differences in 
how the vehicles will be utilized. Buyers consider these utility-based 
attributes when purchasing a HD pickup or van. EPA and NHTSA therefore 
finalized Phase 1 standards for HD pickups and vans based on a ``work 
factor'' attribute that combines the vehicle's payload and towing 
capabilities, with an added adjustment for 4-wheel drive vehicles. See 
generally 76 FR 57161-57162.
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    \327\ Light duty fuel economy standards are expressed as miles 
per gallon (mpg), which is inverse to the HD fuel consumption 
standards which are expressed as gallons per 100 miles.
    \328\ EISA requires CAFE standards for passenger cars and light 
trucks to be attribute-based; See 49 U.S.C. 32902(b)(3)(A).
    \329\ The NAS 2010 report likewise recommended standards 
recognizing the work function of HD vehicles. See 76 FR 57161.
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    For Phase 1, the agencies adopted provisions such that each 
manufacturer's fleet average standard is based on production volume-
weighting of target standards for all vehicles that in turn are based 
on each vehicle's work factor. These target standards are taken from a 
set of curves (mathematical functions). The Phase 1 curves are shown in 
the figures below for reference and are described in detail in the 
Phase 1 final rule.\330\ The agencies established separate curves for 
diesel and gasoline HD pickups and vans. The agencies are proposing to 
continue to use the work-based attribute and gradually declining 
standards approach for the Phase 2 standards, as discussed in Section 
VI.B. below. Note that this approach does not create an incentive to 
reduce the capabilities of these vehicles because less capable vehicles 
are required to have proportionally lower emissions and fuel 
consumption targets.
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    \330\ The Phase 1 Final Rule provides a full discussion of the 
standard curves including the equations and coefficients. See 76 FR 
57162-57165, September 15 2011. The standards are also provided in 
the regulations at 40 CFR 1037.104 (which is proposed to be 
redesignated as 40 CFR 86.1819-14).
---------------------------------------------------------------------------

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

    \331\ The NHTSA program provides voluntary standards for model 
years 2014 and 2015. Target line functions for 2016-2018 are for the 
second NHTSA alternative described in the Phase 1 preamble Section 
II.C (d)(ii).

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[[Page 40333]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.008

    EPA phased in its CO2 standards gradually starting in 
the 2014 model year, at 15-20-40-60-100 percent of the model year 2018 
standards stringency level in model years 2014-2015-2016-2017-2018, 
respectively. The phase-in takes the form of the set of target standard 
curves shown above, with increasing stringency in each model year. The 
final EPA Phase 1 standards for 2018 (including a separate standard to 
control air conditioning system leakage) represent an average per-
vehicle reduction in GHGs of 17 percent for diesel vehicles and 12 
percent for gasoline vehicles, compared to a common MY 2010 baseline. 
EPA also finalized a compliance alternative

[[Page 40334]]

whereby manufacturers can phase in different percentages: 15-20-67-67-
67-100 percent of the model year 2019 standards stringency level in 
model years 2014-2015-2016-2017-2018-2019, respectively. This 
compliance alternative parallels and is equivalent to NHTSA's first 
alternative described below.
    NHTSA's Phase 1 program allows manufacturers to select one of two 
fuel consumption standard alternatives for model years 2016 and later. 
The first alternative defines individual gasoline vehicle and diesel 
vehicle fuel consumption target curves that will not change for model 
years 2016-2018, and are equivalent to EPA's 67-67-67-100 percent 
target curves in model years 2016-2017-2018-2019, respectively. This 
option is consistent with EISA requirements that NHTSA provide 4 years 
lead-time and 3 years of stability for standards. See 49 U.S.C. 32902 
(k)(3). The second alternative uses target curves that are equivalent 
to EPA's 40-60-100 percent target curves in model years 2016-2017-2018, 
respectively. Stringency for the alternatives in Phase 1 was selected 
by the agencies to allow a manufacturer, through the use of the credit 
carry-forward and carry-back provisions that the agencies also 
finalized, to meet both NHTSA fuel efficiency and EPA GHG emission 
standards using a single compliance strategy. If a manufacturer cannot 
meet an applicable standard in a given model year, it may make up its 
shortfall by over-complying in a subsequent year. NHTSA also allows 
manufacturers to voluntarily opt into the NHTSA HD pickup and van 
program in model years 2014 or 2015. For these model years, NHTSA's 
fuel consumption target curves are equivalent to EPA's target curves. 
The Phase 1 phase-in options are summarized in Table VI-1.

                                 Table VI-1--Phase 1 Standards Phase-In Options
----------------------------------------------------------------------------------------------------------------
                                    2014 %          2015 %       2016 %       2017 %       2018 %       2019 %
----------------------------------------------------------------------------------------------------------------
EPA Primary Phase-in........                 15           20           40           60          100          100
EPA Compliance Option.......                 15           20           67           67           67          100
NHTSA First Option..........                  0            0           67           67           67          100
NHTSA Second Option.........                  0            0           40           60          100          100
----------------------------------------------------------------------------------------------------------------

    The form and stringency of the Phase 1 standards curves are based 
on the performance of a set of vehicle, engine, and transmission 
technologies expected (although not required) to be used to meet the 
GHG emissions and fuel economy standards for model year 2012-2016 
light-duty vehicles, with full consideration of how these technologies 
are likely to perform in heavy-duty vehicle testing and use. All of 
these technologies are already in use or have been announced for 
upcoming model years in some light-duty vehicle models, and some are in 
use in a portion of HD pickups and vans as well. The technologies 
include:

 advanced 8-speed automatic transmissions
 aerodynamic improvements
 electro-hydraulic power steering
 engine friction reductions
 improved accessories
 low friction lubricants in powertrain components
 lower rolling resistance tires
 lightweighting
 gasoline direct injection
 diesel aftertreatment optimization
 air conditioning system leakage reduction (for EPA program 
only)

B. Proposed HD Pickup and Van Standards

    As described in this section, NHTSA and EPA are proposing more 
stringent MY 2027 and later Phase 2 standards that would be phased in 
over model years 2021-2027. The agencies are proposing standards based 
on a year-over-year increase in stringency of 2.5 percent over MYs 
2021-2027 for a total increase in stringency for the Phase 2 program of 
about 16 percent compared to the MY 2018 Phase 1 standard. Note that an 
individual manufacturer's fleet-wide target may differ from this 
stringency increase due to changes in vehicle sales mix and changes in 
work factor. The agencies have analyzed several alternatives which are 
discussed in this section below and in Section X. In particular, we are 
requesting comment not only on the proposed standards but also 
particularly on the Alternative 4 standard which would result in 
approximately the same Phase 2 program stringency increase of about 16 
percent compared to Phase 1 but would do so two years earlier, in MY 
2025 rather than in MY 2027. The Alternative 4 phase in from 2021-2025 
would be based on a year-over-year increase in stringency of 3.5 
percent, as discussed below. While we believe the proposed preferred 
alternative is feasible in the time frame of this rule, and that 
Alternative 4 could potentially be feasible, the two phase-in schedules 
differ in the required adoption rate of advanced technologies for 
certain high volume vehicle segments. The agencies' analysis 
essentially shows that the additional lead-time provided by the 
preferred alternative would allow manufacturers to more fully utilize 
lower cost technologies thereby reducing the adoption rate of more 
advanced higher cost technologies such as strong hybrids. As discussed 
in more detail in C.8 below, both of the considered phase-ins require 
comparable penetration rates of several non-hybrid technologies with 
some approaching 100 percent penetration. However, as discussed below, 
the additional lead-time provided by Alternative 3 would allow 
manufacturers more flexibility to fully utilize these non-hybrid 
technologies to reduce the number of hybrids needed compared to 
Alternative 4. Alternative 4 would additionally require significant 
penetration of strong hybridization. We request comments, additional 
information, data, and feedback to determine the extent to which such 
adoption would be realistic within the MY 2025 timeframe.
    When considering potential Phase 2 standards, the agencies 
anticipate that the technologies listed above that were considered in 
Phase 1 will continue to be available in the future if not already 
applied under Phase 1 standards and that additional technologies will 
also be available:

 advanced engine improvements for friction reduction and low 
friction lubricants
 improved engine parasitics, including fuel pumps, oil pumps, 
and coolant pumps
 valvetrain variable lift and timing
 cylinder deactivation
 direct gasoline injection
 cooled exhaust gas recirculation
 turbo downsizing of gasoline engines
 Diesel engine efficiency improvements
 downsizing of diesel engines
 8-speed automatic transmissions
 electric power steering

[[Page 40335]]

 high efficiency transmission gear boxes and driveline
 further improvements in accessory loads
 additional improvements in aerodynamics and tire rolling 
resistance
 low drag brakes
 mass reduction
 mild hybridization
 strong hybridization

    Sections VI.C. and D below and Section 2 of the Draft RIA provide a 
detailed analysis of these and other potential technologies for Phase 
2, including their feasibility, costs, and effectiveness and projected 
application rates for reducing fuel consumption and CO2 
emissions when utilized in HD pickups and vans. Sections VI.C and D and 
Section X also discuss the selection of the proposed standards and the 
alternatives considered.
    In addition to EPA's CO2 emission standards and NHTSA's 
fuel consumption standards for HD pickups and vans, EPA in Phase 1 also 
finalized standards for two additional GHGs--N2O and 
CH4, as well as standards for air conditioning-related HFC 
emissions in the Phase 1 rule. EPA is proposing to continue these 
standards in Phase 2. Also, consistent with CAA Section 202(a)(1), EPA 
finalized Phase 1 standards that apply to HD pickups and vans in use 
and EPA is proposing in-use standards for these vehicles in Phase 2. 
All of the proposed standards for these HD pickups and vans are 
discussed in more detail below. Program flexibilities and compliance 
provisions related to the standards for HD pickups and vans are 
discussed in Section VI.E.
    A relatively small number of HD pickups and vans are sold by 
vehicle manufacturers as incomplete vehicles, without the primary load-
carrying device or container attached. A sizeable subset of these 
incomplete vehicles, often called cab-chassis vehicles, are sold by the 
vehicle manufacturers in configurations with complete cabs and many of 
the components that affect GHG emissions and fuel consumption identical 
to those on complete pickup truck or van counterparts--including 
engines, cabs, frames, transmissions, axles, and wheels. The Phase 1 
program includes provisions that allow manufacturers to include these 
incomplete vehicles as well as some Class 4 through 6 vehicles to be 
regulated under the chassis-based HD pickup and van program (i.e. 
subject to the standards for HD pickups and vans), rather than the 
vocational vehicle program.\332\ The agencies are proposing to continue 
allowing such incomplete vehicles the option of certifying under either 
the heavy duty pickup and van standards or the standards for vocational 
vehicles.
---------------------------------------------------------------------------

    \332\ See 76 FR 57259-57260, September 15, 2011 and 78 FR 36374, 
June 17, 2013.
---------------------------------------------------------------------------

    Phase 1 also includes optional compliance paths for spark-ignition 
engines identical to engines used in heavy-duty pickups and vans to 
comply with 2b/3 standards. See 40 CFR 1037.150(m) and 49 CFR 
535.5(a)(7). Manufacturers sell such engines as ``loose engines'' or 
install these engines in incomplete vehicles that are not cab-complete 
vehicles. The agencies are not proposing to retain the loose engine 
provisions for Phase 2. These program elements are discussed above in 
Section V.E. on vocational vehicles and XIV.A.2 on engines.
    NHTSA and EPA request comment on all aspects of the proposed HD 
pickup and van standards and program elements described below and the 
alternatives discussed in Section X.
(1) Vehicle-Based Standards
    For Phase 1, EPA and NHTSA chose to set vehicle-based standards 
whereby the entire vehicle is chassis-tested. The agencies propose to 
retain this approach for Phase 2. About 90 percent of Class 2b and 3 
vehicles are pickup trucks, passenger vans, and work vans that are sold 
by the original equipment manufacturers as complete vehicles, ready for 
use on the road. In addition, most of these complete HD pickups and 
vans are covered by CAA vehicle emissions standards for criteria 
pollutants (i.e., they are chassis tested similar to light-duty), 
expressed in grams per mile. This distinguishes this category from 
other, larger heavy-duty vehicles that typically have engines covered 
by CAA engine emission standards for criteria pollutants, expressed in 
grams per brake horsepower-hour. As a result, Class 2b and 3 complete 
vehicles share both substantive elements and a regulatory structure 
much more in common with light-duty trucks than with the other heavy-
duty vehicles.
    Three of these features in common are especially significant: (1) 
Over 95 percent of the HD pickups and vans sold in the United States 
are produced by Ford, General Motors, and Chrysler--three companies 
with large light-duty vehicle and light-duty truck sales in the United 
States; (2) these companies typically base their HD pickup and van 
designs on higher sales volume light-duty truck platforms and 
technologies, often incorporating new light-duty truck design features 
into HD pickups and vans at their next design cycle, and (3) at this 
time most complete HD pickups and vans are certified to vehicle-based 
rather than engine-based EPA criteria pollutant and GHG standards. 
There is also the potential for substantial GHG and fuel consumption 
reductions from vehicle design improvements beyond engine changes (such 
as through optimizing aerodynamics, weight, tires, and accessories), 
and a single manufacturer is generally responsible for both engine and 
vehicle design. All of these factors together suggest that it is still 
appropriate and reasonable to base standards on performance of the 
vehicle as a whole, rather than to establish separate engine and 
vehicle GHG and fuel consumption standards, as is being done for the 
other heavy-duty categories. The chassis-based standards approach for 
complete vehicles was also consistent with NAS recommendations and 
there was consensus in the public comments on the Phase 1 proposal 
supporting this approach. For all of these reasons, the agencies 
continue to believe that establishing chassis-based standards for Class 
2b and 3 complete vehicles is appropriate for Phase 2.
(a) Work-Based Attributes
    In developing the Phase 1 HD rulemaking, the agencies emphasized 
creating a program structure that would achieve reductions in fuel 
consumption and GHGs based on how vehicles are used and on the work 
they perform in the real world. Work-based measures such as payload and 
towing capability are key among the things that characterize 
differences in the design of vehicles, as well as differences in how 
the vehicles will be used. Vehicles in the 2b and 3 categories have a 
wide range of payload and towing capacities. These work-based 
differences in design and in-use operation are key factors in 
evaluating technological improvements for reducing CO2 
emissions and fuel consumption. Payload has a particularly important 
impact on the test results for HD pickup and van emissions and fuel 
consumption, because testing under existing EPA procedures for criteria 
pollutants and the Phase 1 standards is conducted with the vehicle 
loaded to half of its payload capacity (rather than to a flat 300 lb as 
in the light-duty program), and the correlation between test weight and 
fuel use is strong.
    Towing, on the other hand, does not directly factor into test 
weight as nothing is towed during the test. Hence, setting aside any 
interdependence between towing capacity and payload,

[[Page 40336]]

only the higher curb weight caused by any heavier truck components 
would play a role in affecting measured test results. However towing 
capacity can be a significant factor to consider because HD pickup 
truck towing capacities can be quite large, with a correspondingly 
large effect on vehicle design.
    We note too that, from a purchaser perspective, payload and towing 
capability typically play a greater role than physical dimensions in 
influencing purchaser decisions on which heavy-duty vehicle to buy. For 
passenger vans, seating capacity is of course a major consideration, 
but this correlates closely with payload weight.
    For these reasons, EPA and NHTSA set Phase 1 standards for HD 
pickups and vans based on a ``work factor'' attribute that combines 
vehicle payload capacity and vehicle towing capacity, in lbs, with an 
additional fixed adjustment for four-wheel drive (4wd) vehicles. This 
adjustment accounts for the fact that 4wd, critical to enabling many 
off-road heavy-duty work applications, adds roughly 500 lb to the 
vehicle weight. The work factor is calculated as follows: 75 percent 
maximum payload + 25 percent of maximum towing + 375 lbs if 4wd. Under 
this approach, target GHG and fuel consumption standards are determined 
for each vehicle with a unique work factor (analogous to a target for 
each discrete vehicle footprint in the light-duty vehicle rules). These 
targets will then be production weighted and summed to derive a 
manufacturer's annual fleet average standard for its heavy-duty pickups 
and vans. There was widespread support (and no opposition) for the work 
factor-based approach to standards and fleet average approach to 
compliance expressed in the comments we received on the Phase 1 rule. 
The agencies are proposing to continue using the work factor attribute 
for the Phase 2 standards and request comments on continuing this 
approach.
    Recognizing that towing is not reflected in the certification test 
for these vehicles, however, the agencies are requesting comment with 
respect to the treatment of towing in the work factor, especially for 
diesel vehicles. More specifically, does using the existing work factor 
equation create an inappropriate incentive for manufacturers to provide 
more towing capability than needed for some operators, or a 
disincentive for manufacturers to develop vehicles with intermediate 
capability. In other words, does it encourage ``surplus'' towing 
capability that has no value to vehicle owners and operators? We 
recognize that some owners and operators do actually use their vehicles 
to tow very heavy loads, and that some owners and operators who rarely 
use their vehicles to tow heavy loads nonetheless prefer to own 
vehicles capable of doing so. However, others may never tow such heavy 
loads and purchase their vehicles for other reasons, such as cargo 
capacity or off-road capability. Some of these less demanding (in terms 
of towing) users may choose to purchase gasoline-powered vehicles that 
are typically less expensive and have lower GCWR values, an indicator 
of towing capability. However, others could prefer a diesel engine more 
powerful than today's gasoline engines but less powerful than the 
typical diesel engines found in 2b and 3 pickups today. In this 
context, the agencies are considering (but have not yet evaluated) four 
possible changes to the work factor and how it is applied. First, the 
agencies are considering revising the work factor to weight payload by 
80 percent and towing by 20 percent. Second, we are considering capping 
the amount of towing that could be credited in the work factor. For 
example, the work factors for all vehicles with towing ratings above 
15,000 lbs could be calculated based on a towing rating of 15,000 lbs. 
It is important to be clear that such a provision would not limit the 
towing capability manufacturers could provide, but would only impact 
the extent to which the work factor would ``reward'' towing capability. 
Third, the agencies are considering changing the shape of the standard 
curve for diesel vehicles to become more flat at very high work 
factors. A flatter curve would mean that vehicles with very high work 
factors would be more similar to vehicles with lower work factors than 
is the case for the proposed curve. Thus, conceptually, flattening the 
curves at the high end might be appropriate if we were to determine 
that these high work factor vehicles actually operate in a manner more 
like the vehicles with lower work factors. For example, when not towing 
and when not hauling a full payload, heavy-duty pickup trucks with very 
different work factors may actually be performing the same amount of 
work. Finally, we are considering having different work factor formulas 
for pickups and vans, and are also further considering whether any of 
other changes should be applied differently to pickups than to vans. We 
welcome comments on both the extent to which surplus towing may be an 
issue and whether any of the potential changes discussed above would be 
appropriate. Commenters supporting such changes are encouraged to also 
address any potential accompanying changes. For example, if we reweight 
the work factor, would other changes to the coefficients defining the 
target curves be important to ensure that standards remain at the 
maximum feasible levels. (Commenters should, however, recognize that 
average requirements will, in any event, depend on fleet mix, and the 
agencies expect to update estimates of future fleet mix before issuing 
a final rule).
    As noted in the Phase 1 rule, the attribute-based CO2 
and fuel consumption standards are meant to be as consistent as 
practicable from a stringency perspective. Vehicles across the entire 
range of the HD pickup and van segment have their respective target 
values for CO2 emissions and fuel consumption, and therefore 
all HD pickups and vans will be affected by the standard. With this 
attribute-based standards approach, EPA and NHTSA believe there should 
be no significant effect on the relative distribution of vehicles with 
differing capabilities in the fleet, which means that buyers should 
still be able to purchase the vehicle that meets their needs.
(b) Standards
    The agencies are proposing Phase 2 standards based on analysis 
performed to determine the appropriate HD pickup and van Phase 2 
standards and the most appropriate phase in of those standards. This 
analysis, described below and in the Draft RIA, considered:

 Projections of future U.S. sales for HD pickup and vans
 the estimates of corresponding CO2 emissions and 
fuel consumption for these vehicles
 forecasts of manufacturers' product redesign schedules
 the technology available in new MY 2014 HD pickups and vans to 
specify preexisting technology content to be included in the analysis 
fleet (the fleet of vehicles used as a starting point for analysis) 
extending through MY 2030
 the estimated effectiveness, cost, applicability, and 
availability of technologies for HD pickup and vans
 manufacturers' ability to use credit carry-forward
 the levels of technology that are projected to be added to the 
analysis fleet through MY 2030 considering improvements needed in order 
to achieve compliance with the Phase 1 standards (thus defining the 
reference fleet-i.e., under the No-Action Alternative--relative to 
which to measure incremental impacts of Phase 2 standards), and
 the levels of technology that are projected to be added to the 
analysis fleet through MY2030 considering

[[Page 40337]]

further improvements needed in order to achieve compliance with 
standards defining each regulatory (action) alternative for Phase 2.

    Based on this analysis, EPA is proposing CO2 attribute-
based target standards shown in Figure VI-3 and Figure VI-4, and NHTSA 
is proposing the equivalent attribute-based fuel consumption target 
standards, also shown in Figure VI-3 and Figure VI-4, applicable in 
model year 2021-2027. As shown in these tables, these standards would 
be phased in year-by-year commencing in MY 2021. The agencies are not 
proposing to change the standards for 2018-2020 and therefore the 
standards would remain stable at the MY 2018 Phase 1 levels for MYs 
2019 and 2020. EISA requires four years of lead-time and three years 
stability for NHTSA standards and this period of lead-time and 
stability for 2018-2020 is consistent with the EISA requirements. For 
MYs 2021-2027, the agencies are proposing annual reductions in the 
standards as the primary phase-in of the Phase 2 standards. The 
proposed standards become 16 percent more stringent overall between MY 
2020 and MY 2027. This approach to the Phase 2 standards as a whole can 
be considered a phase-in or implementation schedule of the proposed MY 
2027 standards (which, as noted, would apply thereafter unless and 
until amended).
    For EPA, Section 202(a) provides the Administrator with the 
authority to establish standards, and to revise those standards ``from 
time to time,'' thus providing the Administrator with considerable 
discretion in deciding when to revise the Phase 1 MY 2018 standards. 
EISA requires that NHTSA provide four full model years of regulatory 
lead time and three full model years of regulatory stability for its 
fuel economy standards. See 49 U.S.C. 32902(k)(3). Consistent with 
these authorities, the agencies are proposing more stringent standards 
beginning with MY 2021 that consider the level of technology we predict 
can be applied to new vehicles in the 2021 MY. EPA believes the 
proposed Phase 2 standards are consistent with CAA requirements 
regarding lead-time, reasonable cost, and feasibility, and safety. 
NHTSA believes the proposed Phase 2 standards are the maximum feasible 
under EISA. Manufacturers in the HD pickup and van market segment have 
relatively few vehicle lines and redesign cycles are typically longer 
compared to light-duty vehicles. Also, the timing of vehicle redesigns 
differs among manufacturers. To provide lead time needed to accommodate 
these longer redesign cycles, the proposed Phase 2 GHG standards would 
not reach their highest stringency until 2027. Although the proposed 
standards would become more stringent over time between MYs 2021 and 
2027, the agencies expect manufacturers will likely strive to make 
improvements as part of planned redesigns, such that some model years 
will likely involve significant advances, while other model years will 
likely involve little change. The agencies also expect manufacturers to 
use program flexibilities (e.g., credit carry-forward provisions and 
averaging, banking, and trading provisions) to help balance compliance 
costs over time (including by allowing needed changes to align with 
redesign schedules). The agencies are proposing to provide stable 
standards in MYs 2019-2020 in order to provide necessary lead time for 
Phase 2. However, for some manufacturers, the transition to the Phase 2 
standards may begin earlier (e.g., as soon as MY 2017) depending on 
their vehicle redesign cycles. Although standards are not proposed to 
change in MYs 2019-2020, manufacturers may introduce additional 
technologies in order to carry forward corresponding improvements and 
perhaps generate credits under the 5 year credit carry-forward 
provisions established in Phase 1 and proposed to continue for Phase 2. 
Sections VI.C. and D below provides additional discussion of vehicle 
redesign cycles and the feasibility of the proposed standards.
    While it is unlikely that there is a phase-in approach that would 
equally fit with all manufacturers' unique product redesign schedules, 
the agencies recognize that there are other ways the Phase 2 standards 
could be phased in and request comments on other possible approaches. 
One alternative approach would be to phase in the standards in a few 
step changes, for example in MYs 2021, 2024 and 2027. Under this 
example, if the step changes on the order of 5 percent, 10 percent, and 
16 percent improvements from the MY 2020 baseline in MYs 2021, 2024 and 
2027 respectively, the program would provide CO2 reductions 
and fuel improvements roughly equivalent to the proposed approach. 
Among the factors the agencies would consider in assessing a different 
phase-in than that proposed would be impacts on lead time, feasibility, 
cost, CO2 reductions and fuel consumption improvements. The 
agencies request that commenters consider all of these factors in their 
recommendations on phase-in.
    As in Phase 1, the proposed Phase 2 standards would be met on a 
production-weighted fleet average basis. No individual vehicle would 
have to meet a particular fleet average standard. Nor would all 
manufacturers have to meet numerically identical fleet average 
requirement. Rather, each manufacturer would have its own unique fleet 
average requirement based on the production- weighted average of the 
heavy duty pickups and vans it chooses to produce. Moreover, averaging, 
banking, and trading provisions, just alluded to and discussed further 
below, would provide significant additional compliance flexibility in 
implementing the standards. It is important to note, however, that 
while the standards would differ numerically from manufacturer to 
manufacturer, effective stringency should be essentially the same for 
each manufacturer.
    Also, as with the Phase 1 standards, the agencies are proposing 
separate Phase 2 targets for gasoline-fueled (and any other Otto-cycle) 
vehicles and diesel-fueled (and any other diesel-cycle) vehicles. The 
targets would be used to determine the production-weighted fleet 
average standards that apply to the combined diesel and gasoline fleet 
of HD pickups and vans produced by a manufacturer in each model year. 
The above-proposed stringency increase for Phase 2 applies equally to 
the separate gasoline and diesel targets. The agencies considered 
different rates of increase for the gasoline and diesel targets in 
order to more equally balance compliance burdens across manufacturers 
with varying gasoline/diesel fleet mixes. However, at least among major 
HD pickup and van manufacturers, our analysis suggests limited 
potential for such optimization, especially considering uncertainties 
involved with manufacturers' future fleet mix. The agencies have thus 
maintained the equivalent rates of stringency increase. The agencies 
invite comment on this element.

[[Page 40338]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.009

[[Page 40339]]

    Described mathematically, EPA's and NHTSA's proposed target 
standards are defined by the following formulas:

EPA CO2 Target (g/mile) = [a x WF] + b
NHTSA Fuel Consumption Target (gallons/100 miles) = [c x WF] + d

Where:

WF = Work Factor = [0.75 x (Payload Capacity + xwd)] + [0.25 x 
Towing Capacity]
Payload Capacity = GVWR (lb) - Curb Weight (lb)
xwd = 500 lb if the vehicle is equipped with 4wd, otherwise equals 0 
lb.
Towing Capacity = GCWR (lb) - GVWR (lb)
Coefficients a, b, c, and d are taken from Table VI-2.

                Table VI-2--Proposed Phase 2 Coefficients for HD Pickup and Van Target Standards
----------------------------------------------------------------------------------------------------------------
             Model year                       a                  b                  c                  d
----------------------------------------------------------------------------------------------------------------
                                                 Diesel Vehicles
                                     ---------------------------------------------------------------------------
2018-2020 \ a\......................             0.0416                320          0.0004086              3.143
----------------------------------------------------------------------------------------------------------------
2021................................             0.0406                312          0.0003988              3.065
2022................................             0.0395                304          0.0003880              2.986
2023................................             0.0386                297          0.0003792              2.917
2024................................             0.0376                289          0.0003694              2.839
2025................................             0.0367                282          0.0003605              2.770
2026................................             0.0357                275          0.0003507              2.701
2027 and later......................             0.0348                268          0.0003418              2.633
----------------------------------------------------------------------------------------------------------------
                                                Gasoline Vehicles
                                     ---------------------------------------------------------------------------
2018-2020 \ a\......................              0.044                339          0.0004951              3.815
----------------------------------------------------------------------------------------------------------------
2021................................             0.0429                331          0.0004827              3.725
2022................................             0.0418                322          0.0004703              3.623
2023................................             0.0408                314          0.0004591              3.533
2024................................             0.0398                306          0.0004478              3.443
2025................................             0.0388                299          0.0004366              3.364
2026................................             0.0378                291          0.0004253              3.274
2027 and later......................             0.0369                284          0.0004152              3.196
----------------------------------------------------------------------------------------------------------------
Note:
\a\ Phase 1 primary phase-in coefficients. Alternative phase-in coefficients are different in MY2018 only.

    As noted above, the standards are not proposed to change from the 
final Phase 1 standards for MYs 2018-2020. The MY 2018-2020 standards 
are shown in the Figures and tables above for reference.
    NHTSA and EPA have also analyzed regulatory alternatives to the 
proposed standards, as discussed in Sections VI.C and D and Section X. 
below. The agencies request comments on all of the alternatives 
analyzed for the proposal, but request comments on Alternative 4 in 
particular. The agencies believe Alternative 4 has the potential to be 
the maximum feasible alternative; however, based on the evidence 
currently before us, EPA and NHTSA have outstanding questions regarding 
relative risks and benefits of Alternative 4 due to the timeframe 
envisioned by that alternative. Alternative 4 would provide less lead 
time for the complete phase-in of the proposed Phase 2 standards based 
on an annual improvement of 3.5 percent per year in MYs 2021-2025 
compared to the proposed Alternative 3 per year improvement of 2.5 
percent in MYs 2021-2027. The CO2 and fuel consumption 
attribute-based target standards for the Alternative 4 phase-in are 
shown in Figure VI-5 and Figure VI-6 below. As the target curves for 
Alternative 4 show in comparison to the target curves shown above for 
the proposed Alternative 3, the final Phase 2 standards would result in 
essentially the same level of stringency under either alternative. 
However, the Phase 2 standards would be fully implemented two years 
earlier, in MY 2025, under Alternative 4. The agencies are seriously 
considering whether this Alternative 4 (i.e., the proposed standards 
but with two years less lead-time) would be realistic and feasible, as 
described in Sections VI.C and D, Section X, and in the Draft RIA 
Chapter 11. Alternative 4 is predicated on shortened lead time that 
would result in accelerated and in some cases higher adoption rates of 
the same technologies on which the proposed Alternative 3 is 
predicated. The agencies request comments, data, and information that 
would help inform determination of the maximum feasible (for NHTSA) and 
appropriate (for EPA) stringency for HD pickups and vans and are 
particularly interested in information and data related to the expected 
adoption rates of different emerging technologies, such as mild and 
strong hybridization.

[[Page 40340]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.010

    As with Phase 1 standards, to calculate a manufacturer's HD pickup 
and van fleet average standard, the agencies are proposing that 
separate target curves be used for gasoline and diesel vehicles. The 
agencies' proposed

[[Page 40341]]

standards result in approximately 16 percent reductions in 
CO2 and fuel consumption for both diesel and gasoline 
vehicles relative to the MY 2018 Phase 1 standards for HD pickup trucks 
and vans. These target reductions are based on the agencies' assessment 
of the feasibility of incorporating technologies (which differ for 
gasoline and diesel powertrains) in the 2021-2027 model years, and on 
the differences in relative efficiency in the current gasoline and 
diesel vehicles.
    The agencies generally prefer to set standards that do not 
distinguish between fuel types where technological or market-based 
reasons do not strongly argue otherwise. However, as with Phase 1, we 
continue to believe that fundamental differences between spark ignition 
and compression ignition engines warrant unique fuel standards, which 
is also important in ensuring that our program maintains product 
choices available to vehicle buyers. In fact, gasoline and diesel fuel 
behave so differently in the internal combustion engine that they have 
historically required unique test procedures, emission control 
technologies and emission standards. These technological differences 
between gasoline and diesel engines for GHGs and fuel consumption exist 
presently and will continue to exist after Phase 1 and through Phase 2 
until advanced research evolves the gasoline fueled engine to diesel-
like efficiencies. This will require significant technological 
breakthroughs currently in early stages of research such as homogeneous 
charge compression ignition (HCCI) or similar concepts. Because these 
technologies are still in the early research stages, we believe the 
proposed separate fuel type standards are appropriate in the timeframe 
of this rule to protect for the availability of both gasoline and 
diesel engines and will result in roughly equivalent redesign burdens 
for engines of both fuel types as evidenced by feasibility and cost 
analysis in RIA Chapter 10. The agencies request comment on the level 
of stringency of the proposed standards, the continued separate targets 
for gasoline and diesel HD pickups and vans, and the continued use of 
the work-based attribute approach described above.
    The proposed NHTSA fuel consumption target curves and EPA GHG 
target curves are equivalent. The agencies established the target 
curves using the direct relationship between fuel consumption and 
CO2 using conversion factors of 8,887 g CO2/
gallon for gasoline and 10,180 g CO2/gallon for diesel fuel.
    It is expected that measured performance values for CO2 
will generally be equivalent to fuel consumption. However, Phase 1 
established a provision that EPA is not proposing to change for Phase 2 
that allows manufacturers, if they choose, to use CO2 
credits to help demonstrate compliance with N2O and 
CH4 emissions standards, by expressing any N2O 
and CH4 under compliance in terms of their CO2-
equivalent and applying CO2 credits as needed. For test 
families that do not use this compliance alternative, the measured 
performance values for CO2 and fuel consumption will be 
equivalent because the same test runs and measurement data will be used 
to determine both values, and calculated fuel consumption will be based 
on the same conversion factors that are used to establish the 
relationship between the CO2 and fuel consumption target 
curves (8,887 g CO2/gallon for gasoline and 10,180 g 
CO2/gallon for diesel fuel). For manufacturers that choose 
to use EPA provision for CO2 credit use in demonstrating 
N2O and CH4 compliance, compliance with the 
CO2 standard will not be directly equivalent to compliance 
with the NHTSA fuel consumption standard.
(2) What are the HD Pickup and Van Test Cycles and Procedures?
    The Phase 1 program established testing procedures for HD pickups 
and vans and NHTSA and EPA are not proposing to change these testing 
protocols. The vehicles would continue to be tested using the same 
heavy-duty chassis test procedures currently used by EPA for measuring 
criteria pollutant emissions from these vehicles, but with the addition 
of the highway fuel economy test cycle (HFET). These test procedures 
are used by manufacturers for certification and emissions compliance 
demonstrations and by the agencies for compliance verification and 
enforcement. Although the highway cycle driving pattern is identical to 
that of the light-duty test, other test parameters for running the 
HFET, such as test vehicle loaded weight, are identical to those used 
in running the current EPA Federal Test Procedure for complete heavy-
duty vehicles. Please see Section II.C (2) of the Phase 1 preamble (76 
FR 57166) for a discussion of how HD pickups and vans would be tested.
    One item that the agencies are considering to change is how 
vehicles are categorized into test weight bins. Under the current test 
procedures, vehicles are tested at 500 lb increments of inertial weight 
classes when testing at or above 5500 lbs test weight. For example, all 
vehicles having a calculated test weight basis of 11,251 to 11,750 lbs 
would be tested 11,500 lbs (i.e., the midpoint of the range). However, 
for some vehicles, the existence of these bins and the large intervals 
between bins may reduce or eliminate the incentive for mass reduction 
for some vehicles, as a vehicle may require significant mass reduction 
before it could switch from one test weight bin to the next lower bin. 
For other vehicles, these bins may unduly reward relatively small 
reductions of vehicle mass, as a vehicle's mass may be only slightly 
greater than that needed to be assigned a 500-pound lighter inertia 
weight class. For example, for a vehicle with a calculated test weight 
basis of 11,700 lbs, a manufacturer would receive no regulatory benefit 
for reducing the vehicle weight by 400 lbs, because the vehicle would 
stay within the same weight bracket. The agencies do recognize that the 
test weight bins allow for some reduction in testing burden as many 
vehicles can be grouped together under a single test. For Phase 2, the 
agencies seek comment on whether the test weight bins should be changed 
in order to allow for more realistic testing of HD pickups and vans and 
better capture of the improvements due to mass reduction. Some example 
changes could include reducing the five hundred pound interval between 
bins to smaller intervals similar to those allowed for vehicles tested 
below 5,500 lbs. test weight, or allowing any test weight value that is 
not fixed to a particular test weight bin. The latter scenario would 
still allow some grouping of vehicles to reduce test burden, and the 
agencies also seek comment on how vehicles would be grouped and how the 
test weight of this group of vehicles should be selected.
    We further seek comment as to whether there may be a more 
appropriate method such as allowing analytical adjustment of the 
CO2 levels and fuel consumption within a vehicle weight 
class to more precisely account for the individual vehicle models 
performance. For example, could an equation like the one specified in 
40 CFR 1037.104(g) for analytically adjusting CO2 emissions 
be used (note that this is proposed to be redesignated as 40 CFR 
86.1819-14(g)). The agencies are specifically considering an approach 
in which vehicles are tested in the same way with the same test 
weights, but manufacturers have the option to either accept the 
emission results as provided under the current regulations, or choose 
to adjust the emissions based on the actual test weight basis (actual 
curb plus

[[Page 40342]]

half payload) instead of the equivalent test weight for the 500 test 
weight interval. Should the agencies finalize this as an option, 
manufacturers choosing to adjust their emissions would be required to 
do so for all of their vehicles, and not just for those with test 
weights below the midpoint of the range.
(3) Fleet Average Standards
    NHTSA and EPA are proposing to retain the fleet average standards 
approach finalized in the Phase 1 rule and structurally similar to 
light-duty Corporate Average Fuel Economy (CAFE) and GHG standards. The 
fleet average standard for a manufacturer is a production-weighted 
average of the work factor-based targets assigned to unique vehicle 
configurations within each model type produced by the manufacturer in a 
model year. Each manufacturer would continue to have an average GHG 
requirement and an average fuel consumption requirement unique to its 
new HD pickup and van fleet in each model year, depending on the 
characteristics (payload, towing, and drive type) of the vehicle models 
produced by that manufacturer, and on the U.S.-directed production 
volume of each of those models in that model year. Vehicle models with 
larger payload/towing capacities and/or four-wheel drive have 
individual targets at numerically higher CO2 and fuel 
consumption levels than less capable vehicles, as discussed in Section 
VI.B(1).
    The fleet average standard with which the manufacturer must comply 
would continue to be based on its final production figures for the 
model year, and thus a final assessment of compliance would occur after 
production for the model year ends. The assessment of compliance also 
must consider the manufacturer's use of carry-forward and carry-back 
credit provisions included in the averaging, banking, and trading 
program. Because compliance with the fleet average standards depends on 
actual test group production volumes, it is not possible to determine 
compliance at the time the manufacturer applies for and receives an 
(initial) EPA certificate of conformity for a test group. Instead, at 
certification the manufacturer would demonstrate a level of performance 
for vehicles in the test group, and make a good faith demonstration 
that its fleet, regrouped by unique vehicle configurations within each 
model type, is expected to comply with its fleet average standard when 
the model year is over. EPA will issue a certificate for the vehicles 
covered by the test group based on this demonstration, and will include 
a condition in the certificate that if the manufacturer does not comply 
with the fleet average, then production vehicles from that test group 
will be treated as not covered by the certificate to the extent needed 
to bring the manufacturer's fleet average into compliance. As in the 
parallel program for light-duty vehicles, additional ``model type'' 
testing will be conducted by the manufacturer over the course of the 
model year to supplement the initial test group data. The emissions and 
fuel consumption levels of the test vehicles will be used to calculate 
the production-weighted fleet averages for the manufacturer, after 
application of the appropriate deterioration factor to each result to 
obtain a full useful life value. Please see Section II.C (3)(a) of the 
Phase 1 preamble (76 FR 57167) for further discussion of the fleet 
average approach for HD pickups and vans.
(4) In-Use Standards
    Section 202(a)(1) of the CAA specifies that EPA set emissions 
standards that are applicable for the useful life of the vehicle. EPA 
is proposing to continue the in-use standards approach for individual 
vehicles that EPA finalized for the Phase 1 program. NHTSA did not 
adopt Phase 1 in-use standards and is not proposing in-use standards 
for Phase 2. For the EPA program, compliance with the in-use standard 
for individual vehicles and vehicle models does not impact compliance 
with the fleet average standard, which will be based on the production-
weighted average of the new vehicles. Vehicles that fail to meet their 
in-use emission standards would be subject to recall to correct the 
noncompliance. NHTSA also proposes to adopt EPA's useful life 
requirements to ensure manufacturers consider in the design process the 
need for fuel efficiency standards to apply for the same duration and 
mileage as EPA standards. NHTSA seeks comment on the appropriateness of 
seeking civil penalties for failure to comply with its fuel efficiency 
standards in these instances. NHTSA would limit such penalties to 
situations in which it determined that the vehicle or engine 
manufacturer failed to comply with the standards.
    As with Phase 1, EPA proposes that the in-use Phase 2 standards for 
HD pickups and vans be established by adding an adjustment factor to 
the full useful life emissions used to calculate the GHG fleet average. 
EPA proposes that each model's in-use CO2 standard be the 
model-specific level used in calculating the fleet average, plus 10 
percent. No adverse comments were received on this provision during the 
Phase 1 rulemaking. Please see Section II.C (3)(b) of the Phase 1 
preamble (76 FR 57167) for further discussion of in-use standards for 
HD pickups and vans.
    For Phase 1, EPA aligned the useful life for GHG emissions with the 
useful life that was in place for criteria pollutants: 11 years or 
120,000 miles, whichever occurs first (40 CFR 86.1805-04(a)). Since the 
Phase 1 rule was finalized, EPA updated the useful life for criteria 
pollutants as part of the Tier 3 rulemaking.\333\ The new useful life 
implemented for Tier 3 is 150,000 miles or 15 years, whichever occurs 
first. EPA and NHTSA propose that the useful life for GHG emissions and 
fuel consumption also be updated to 150,000 miles/15 years starting in 
MY 2021 when the Phase 2 standards begin so that the useful life 
remains aligned for GHG and criteria pollutant standards long term. 
With the relatively flat deterioration generally associated with 
CO2 and fuel consumption and the proposed in-use standard 
adjustment factor discussed above, the agencies do not believe the 
proposed change in useful life would significantly affect the 
feasibility of the proposed Phase 2 standards.\334\ The agencies 
requests comments on the proposed change to useful life.
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    \333\ 79 FR 23492, April 28, 2014 and 40 CFR 86.1805-17.
    \334\ As discussed below in Section VI.D.1., EPA and NHTSA are 
proposing an adjustment factor of 1.25 for banked credits that are 
carried over from Phase 1 to Phase 2. The useful life is factored 
into the credits calculation and without the adjustment factor the 
change in useful life would effectively result in a discount of 
those carry-over credits.
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(5) Other GHG Standards for HD Pickups and Vans
    This section addresses greenhouse gases other than CO2. 
Note that since these are greenhouse gases not directly related to fuel 
consumption, NHTSA does not have equivalent standards.
(a) Nitrous Oxide (N2O) and Methane (CH4)
    In the Phase 1 rule, EPA established emissions standards for HD 
pickups and vans for both nitrous oxide (N2O) and methane 
(CH4). Similar to the CO2 standard approach, the 
N2O and CH4 emission levels of a vehicle are 
based on a composite of the light-duty FTP and HFET cycles with the 
same 55 percent city weighting and 45 percent highway weighting. The 
N2O and CH4 standards were both set by EPA at 
0.05 g/mile. Unlike the CO2 standards, averaging between 
vehicles is not allowed. The standards are designed to prevent 
increases in N2O and CH4 emissions

[[Page 40343]]

from current levels, i.e., a no-backsliding standard. EPA is not 
proposing to change the N2O or CH4 standards or 
related provisions established in the Phase 1 rule. Please see Phase 1 
preamble Section II.E. (76 FR 57188-57193) for additional discussion of 
N2O and CH4 emissions and standards.
    Across both current gasoline- and diesel-fueled heavy-duty vehicle 
designs, emissions of CH4 and N2O are relatively 
low and the intent of the cap standards is to ensure that future 
vehicle technologies or fuels do not result in an increase in these 
emissions. Given the global warning potential (GWP) of CH4, 
the 0.05 g/mile cap standard is equivalent to about 1.25 g/mile 
CO2, which is much less than 1 percent of the overall GHG 
emissions of most HD pickups and vans.\335\ The effectiveness of 
oxidation of CH4 using a three-way or diesel oxidation 
catalyst is limited by the activation energy, which tends to be higher 
where the number of carbon atoms in the hydrocarbon molecule is low and 
thus CH4 is very stable. At this time we are not aware of 
any technologies beyond the already present catalyst systems which are 
highly effective at oxidizing most hydrocarbon species for gasoline and 
diesel fueled engines that would further lower the activation energy 
across the catalyst or increase the energy content of the exhaust 
(without further increasing fuel consumption and CO2 
emissions) to further reduce CH4 emissions at the tailpipe. 
We note that we are not aware of any new technologies that would allow 
us to adopt more stringent CH4 and N2O standards 
at this time. The CH4 standard remains an important backstop 
to prevent future increases in CH4 emissions.
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    \335\ N2O has a GWP of 298 and CH4 has a 
GWP of 25 according to the IPCC AR4.
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    N2O is emitted from gasoline and diesel vehicles mainly 
during specific catalyst temperature conditions conducive to 
N2O formation. The 0.05 g/mile standard, which translates to 
a CO2-equivalent value of 14.9 g/mile, ensures that systems 
are not designed in a way that emphasizes efficient NOX 
control while allowing the formation of significant quantities of 
N2O. The Phase 1 N2O standard of 0.05 g/mile for 
pickups and vans was finalized knowing that it is more stringent than 
the Phase 1 N2O engine standard of 0.10 g/hp-hr, currently 
being revaluated as discussed in Section II.D.3. EPA continues to 
believe that the 0.05 g/mile standard provides the necessary assurance 
that N2O will not significantly increase, given the mix of 
gasoline and diesel fueled engines in this market and the upcoming 
implementation of the light-duty and heavy-duty (up to 14,000 lbs. 
GVWR) Tier 3 NOX standards. EPA knows of no technologies 
that would lower N2O emissions beyond the control provided 
by the precise emissions control systems already being implemented to 
meet EPA's criteria pollutant standards. Therefore, EPA continues to 
believe the 0.05 g/mile N2O standard remains appropriate.
    If a manufacturer is unable to meet the N2O or 
CH4 cap standards, the EPA program allows the manufacturer 
to comply using CO2 credits. In other words, a manufacturer 
may offset any N2O or CH4 emissions above the 
standard by taking steps to further reduce CO2. A 
manufacturer choosing this option would use GWPs to convert its 
measured N2O and CH4 test results that are in 
excess of the applicable standards into CO2eq to determine 
the amount of CO2 credits required. For example, a 
manufacturer would use 25 Mg of positive CO2 credits to 
offset 1 Mg of negative CH4 credits or use 298 Mg of 
positive CO2 credits to offset 1 Mg of negative 
N2O credits.\336\ By using the GWP of N2O and 
CH4, the approach recognizes the inter-correlation of these 
compounds in impacting global warming and is environmentally neutral 
for demonstrating compliance with the individual emissions caps. 
Because fuel conversion manufacturers certifying under 40 CFR part 85, 
subpart F, do not participate in ABT programs, EPA included in the 
Phase 1 rule a compliance option for fuel conversion manufacturers to 
comply with the N2O and CH4 standards that is 
similar to the credit program described above. See 76 FR 57192. The 
compliance option will allow conversion manufacturers, on an individual 
engine family basis, to convert CO2 over compliance into 
CO2 equivalents (CO2 eq) of N2O and/or 
CH4 that can be subtracted from the CH4 and 
N2O measured values to demonstrate compliance with 
CH4 and/or N2O standards. EPA did not include 
similar provisions allowing over compliance with the N2O or 
CH4 standards to serve as a means to generate CO2 
credits because the CH4 and N2O standards are cap 
standards representing levels that all but the worst vehicles should 
already be well below. Allowing credit generation against such cap 
standard would provide a windfall credit without any true GHG 
reduction. EPA proposes to maintain these provisions for Phase 2 as 
they provide important flexibility without reducing the overall GHG 
benefits of the program.
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    \336\ N2O has a GWP of 298 and CH4 has a 
GWP of 25 according to the IPCC AR4.
---------------------------------------------------------------------------

    EPA is requesting comment on updating GWPs used in the calculation 
of credits discussed above. Please see the full discussion of this 
issue and request for comments provided in Sections II.D and XI.D.
(b) Air Conditioning Related Emissions
    Air conditioning systems contribute to GHG emissions in two ways--
direct emissions through refrigerant leakage and indirect exhaust 
emissions due to the extra load on the vehicle's engine to provide 
power to the air conditioning system. HFC refrigerants, which are 
powerful GHG pollutants, can leak from the A/C system. This includes 
the direct leakage of refrigerant as well as the subsequent leakage 
associated with maintenance and servicing, and with disposal at the end 
of the vehicle's life.\337\ Currently, the most commonly used 
refrigerant in automotive applications--R134a, has a high GWP. Due to 
the high GWP of R134a, a small leakage of the refrigerant has a much 
greater global warming impact than a similar amount of emissions of 
CO2 or other mobile source GHGs.
---------------------------------------------------------------------------

    \337\ The U.S. EPA has reclamation requirements for refrigerants 
in place under Title VI of the Clean Air Act.
---------------------------------------------------------------------------

    In Phase 1, EPA finalized low leakage requirement for all air 
conditioning systems installed in 2014 model year and later HDVs, with 
the exception of Class 2b-8 vocational vehicles. As discussed in 
Section V.B.3, EPA is proposing to extend leakage standards to 
vocational vehicles for Phase 2. For air conditioning systems with a 
refrigerant capacity greater than 733 grams, EPA finalized a leakage 
standard which is a ``percent refrigerant leakage per year'' to assure 
that high-quality, low-leakage components are used in each air 
conditioning system design. EPA finalized a standard of 1.50 percent 
leakage per year for heavy-duty pickup trucks and vans and Class 7 and 
8 tractors. See Section II.E.5. of Phase 1 preamble (76 FR 57194-57195) 
for further discussion of the A/C leakage standard.
    In addition to use of leak-tight components in air conditioning 
system design, manufacturers could also decrease the global warming 
impact of leakage emissions by adopting systems that use alternative, 
lower global warming potential (GWP) refrigerants, to replace the 
refrigerant most commonly used today, HFC-134a (R-134a). The potential 
use of alternative refrigerants in HD vehicles and EPA's proposed 
revisions to 40 CFR 1037.115 so that use

[[Page 40344]]

of certain lower GWP refrigerants would cause an air conditioning 
system in a HD vehicle to be deemed to comply with the low leakage 
standard is discussed in Section I.F. above.
    In addition to direct emissions from refrigerant leakage, air 
conditioning systems also create indirect exhaust emissions due to the 
extra load on the vehicle's engine to provide power to the air 
conditioning system. These indirect emissions are in the form of the 
additional CO2 emitted from the engine when A/C is being 
used due to the added loads. Unlike direct emissions which tend to be a 
set annual leak rate not directly tied to usage, indirect emissions are 
fully a function of A/C usage. These indirect CO2 emissions 
are associated with air conditioner efficiency, since (as just noted) 
air conditioners create load on the engine. See 74 FR 49529. In Phase 
1, the agencies did not set air conditioning efficiency standards for 
vocational vehicles, combination tractors, or heavy-duty pickup trucks 
and vans. The CO2 emissions due to air conditioning systems 
in these heavy-duty vehicles were estimated to be minimal compared to 
their overall emissions of CO2. This continues to be the 
case. For this reason, EPA is not proposing to establish standards for 
A/C efficiency for Phase 2.
    NHTSA and EPA request comments on all aspects of the proposed HD 
pickup and van standards and program elements described in this 
section.

C. Feasibility of Pickup and Van Standards

    EPCA and EISA require NHTSA to ``implement a commercial medium- and 
heavy-duty on-highway vehicle and work truck fuel efficiency 
improvement program designed to achieve the maximum feasible 
improvement'' and to establish corresponding fuel consumption standards 
``that are appropriate, cost-effective, and technologically feasible.'' 
\338\ Section 202(a)(1) and (2) of the Clean Air Act require EPA to 
establish standards for emissions of pollutants from new motor vehicles 
and engines which emissions cause or contribute to air pollution which 
may reasonably be anticipated to endanger public health or welfare, 
which include GHGs. See section I.E. above. Under section 202(a)(1) and 
(2), EPA considers such issues as technology effectiveness, its cost 
(both per vehicle, per manufacturer, and per consumer), 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 of both GHGs and non-GHG 
emissions; the impacts of standards on oil conservation and energy 
security; the impacts of standards on fuel savings by customers; the 
impacts of standards on the truck industry; other energy impacts; as 
well as other relevant factors such as impacts on safety.
---------------------------------------------------------------------------

    \338\ 49 U.S.C. 32902(k)(2).
---------------------------------------------------------------------------

    As part of the feasibility analysis of potential standards for HD 
pickups and vans, the agencies have applied DOT's CAFE Compliance and 
Effects Modeling System (sometimes referred to as ``the CAFE model'' or 
``the Volpe model''), which DOT's Volpe National Transportation Systems 
Center (Volpe Center) developed, maintains, and applies to support 
NHTSA CAFE analyses and rulemakings.\339\ The agencies used this model 
to determine the range of stringencies that might be achievable through 
the use of technology that is projected to be available in the Phase 2 
time frame. From these runs, the agencies identified the stringency 
level that would be technology-forcing (i.e. reflect levels of 
stringency based on performance of merging as well as currently 
available control technologies), but leave manufacturers the 
flexibility to adopt varying technology paths for compliance and allow 
adequate lead time to develop, test, and deploy the range of 
technologies.
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    \339\ The CAFE model has been under ongoing development, 
application, review, and refinement since 2002. In five rulemakings 
subject to public review and comment, DOT has used the model to 
estimate the potential impacts of new CAFE standards. The model has 
also been subject to formal review outside the rulemaking process, 
and DOT anticipates comments on the model in mid-2015 as part of a 
broader report under development by the National Academy of Sciences 
(NAS). The model, underlying source code, inputs, and outputs are 
available at NHTSA's Web site, and some outside organizations are 
making use of the model. The agency anticipates that stakeholders 
will have comments on recent model changes made to accommodate 
standards for HD pickups and vans.
---------------------------------------------------------------------------

    As noted in Section I and discussed further below, the analysis 
considers two reference cases for HD pickups and vans, a flat baseline 
(designated Alternative 1a) where no improvements are modeled beyond 
those needed to meet Phase 1 standards and a dynamic baseline 
(designated Alternative 1b) where certain cost-effective technologies 
(i.e., those that payback within a 6 month period) are assumed to be 
applied by manufacturers to improve fuel efficiency beyond the Phase 1 
requirements in the absence of new Phase 2 standards. NHTSA considered 
its primary analysis to be based on the more dynamic baseline whereas 
EPA considered both reference cases. As shown below and in Sections VII 
through X, using the two different reference cases has little impact on 
the results of the analysis and would not lead to a different 
conclusion regarding the appropriateness of the proposed standards. As 
such, the use of different reference cases corroborates the results of 
the overall analysis.
    The proposed phase-in schedule of reduction of 2.5 percent per year 
in fuel consumption and CO2 levels relative to the 2018 MY 
Phase 1 standard level, starting in MY 2021 and extending through MY 
2027, was chosen to strike a balance between meaningful reductions in 
the early years and providing manufacturers with needed lead time via a 
gradually accelerating ramp-up of technology penetration. By expressing 
the phase-in in terms of increasing year to year stringency for each 
manufacturer, while also providing for credit generation and use 
(including averaging, carry-forward, and carry-back), we believe our 
proposed program would afford manufacturers substantial flexibility to 
satisfy the proposed phase-in through a variety of pathways: the 
gradual application of technologies across the fleet, greater 
application levels on only a portion of the fleet, and a sufficiently 
broad set of available technologies to account for the variety of 
current technology deployment among manufacturers and the lowest-cost 
compliance paths available to each.
    We decided to propose a phased implementation schedule that would 
be appropriate to accommodate manufacturers' redesign workload and 
product schedules, especially in light of this sector's limited product 
offerings \340\ and long product cycles. We did not estimate the cost 
of implementing the proposed standards immediately in 2021 without a 
phase-in, but we qualitatively assessed it to be somewhat higher than 
the cost of the phase-in we are proposing, due to the workload and 
product cycle disruptions it could cause, and also due to 
manufacturers' resulting need to develop some of these technologies for 
heavy-duty applications sooner than or simultaneously with light-duty 
development efforts. See 75 FR 25451 (May 7, 2010) (documenting types 
of drastic cost increases associated with trying to accelerate redesign 
schedules and concluding that ``[w]e believe that it would be an 
inefficient use of societal resources to incur such costs when they can 
be obtained much more cost effectively just one year later''). On the 
other hand, waiting until 2027 before applying any new standards could 
miss

[[Page 40345]]

the opportunity to achieve meaningful and cost-effective early 
reductions not requiring a major product redesign.
---------------------------------------------------------------------------

    \340\ Manufacturers generally have only one pickup platform and 
one van platform in this segment.
---------------------------------------------------------------------------

    The agencies believe that Alternative 4 has the potential to be the 
maximum feasible alternative, however, the agencies are uncertain that 
the potential technologies and market penetration rates included in 
Alternative 4 are currently technologically feasible. Alternative 4 
would ultimately reach the same levels of stringency as Alternative 3, 
but would do so with less lead time. This could require the application 
of a somewhat different (and possibly broader) application of the 
projected technologies depending on product redesign cycles. We expect, 
in fact, that some of these technologies may well prove feasible and 
cost-effective in this timeframe, and may even become technologies of 
choice for individual manufacturers.
    Additionally, Alternative 3 provides two more years of phase-in 
than Alternative 4, which eases compliance burden by having more 
vehicle redesigns and lower stringency during the phase-in period. 
Historically, the vehicles in this segment are typically only 
redesigned every 6-10 years, so many of the vehicles may not even be 
redesigned during the timeframe of the stringency increase. In this 
case, a manufacturer must either make up for any vehicle that falls 
short of its target through some combination of early compliance, 
overcompliance, credit carry-forward and carry-back, and redesigning 
vehicles more frequently. Each of these will increase technology costs 
to the manufacturers and vehicle purchasers, and early redesigns will 
significantly increases capital costs and product development costs. 
Also, the longer phase-in time for Alternative 3 means that any 
manufacturer will have a slightly lower target to meet from 2021-2026 
than for the shorter phase-in of Alternative 4, though by 2027 the 
manufacturers will have the same target in either alternative.
    Alternative 4 is projected to be met using a significantly higher 
degree of hybridization including the use of more strong hybrids, 
compared to the proposed preferred Alternative 3. In order to comply 
with a 3.5 percent per year increase in stringency over MYs 2021-2025, 
manufacturers would need to adopt more technology compared to the 2.5 
percent per year increase in stringency over MYs 2021-2027. The two 
years of additional lead time provided by Alternative 3 to achieve the 
proposed final standards reduces the potential number of strong hybrids 
projected to be used by allowing for other more cost effective 
technologies to be more fully utilized across the fleet. Alternative 4 
is also projected to result in higher costs and risks than the proposed 
Alternative 3 due to the projected higher technology adoption rates 
with the additional emission reductions and fuel savings predominately 
occurring only during the program phase-in period. The agencies' 
analysis is discussed in detail below.
    In some cases, the model selects strong hybrids as a more cost 
effective technology over certain other technologies including stop-
start and mild hybrid. In other words, strong hybrids are not a 
technology of last resort in the analysis. The agencies believe it is 
technologically feasible to apply hybridization to HD pickups and vans 
in the lead time provided. However, strong hybrids present challenges 
in this market segment compared to light-duty where there are several 
strong hybrids already available. The agencies do not believe that at 
this stage there is enough information about the viability of strong 
hybrid technology in this vehicle segment to assume that they can be a 
part of large-volume deployment strategies for regulated manufacturers. 
For example, we believe that hybrid electric technology could provide 
significant GHG and fuel consumption benefits, but we recognize that 
there is uncertainty at this time over the real world effectiveness of 
these systems in HD pickups and vans, and over customer acceptance of 
the technology for vehicles with high GCWR towing large loads. Further, 
the development, design, and tooling effort needed to apply this 
technology to a vehicle model is quite large, and might not be cost-
effective due to the small sales volumes relative to the light-duty 
sector. Additionally, the analysis does not project that engines would 
be down-sized in conjunction with hybridization for HD pickups and vans 
due to the importance pickup trucks buyers place on engine horsepower 
and torque necessary to meet towing objectives. Therefore, with no 
change projected for engine size, the strong hybrid costs do not 
include costs for engine changes. In light-duty, the use of smaller 
engines facilitates much of a hybrid's benefit.
    Due to these considerations, the agencies have conducted a 
sensitivity analysis that is based on the use of no strong hybrids. The 
results of the analysis are also discussed below. The analysis 
indicates that there would be a technology pathway that would allow 
manufacturers to meet both the proposed preferred Alternatives 3 and 
Alternative 4 without the use of strong hybrids. However, the analysis 
indicates that costs would be higher and the cost effectiveness would 
be lower under the no strong hybrid approach, especially for 
Alternative 4, which provides less lead time to manufacturers.
    We also considered proposing less stringent standards under which 
manufacturers could comply by deploying a more limited set of 
technologies. However, our assessment concluded with a high degree of 
confidence that the technologies on which the proposed standards are 
premised would be available at reasonable cost in the 2021-2027 
timeframe, and that the phase-in and other flexibility provisions allow 
for their application in a very cost-effective manner, as discussed in 
this section below.
    More difficult to characterize is the degree to which more or less 
stringent standards might be appropriate because of under- or over-
estimating the costs or effectiveness of the technologies whose 
performance is the basis of the proposed standards. For the most part, 
these technologies have not yet been applied to HD pickups and vans, 
even on a limited basis. We are therefore relying to some degree on 
engineering judgment in predicting their effectiveness. Even so, we 
believe that we have applied this judgment using the best information 
available, primarily from a NHTSA contracted study at SwRI \341\ and 
our recent rulemaking on light-duty vehicle GHGs and fuel economy, and 
have generated a robust set of effectiveness values. Chapter 10 of the 
draft RIA provides a detailed description of the CAFE Model and the 
analysis performed for the proposal.
---------------------------------------------------------------------------

    \341\ Reinhart, T.E. (June 2015). Commercial Medium- and Heavy-
Duty Truck Fuel Efficiency Technology Study--Report #1. (Report No. 
DOT HS 812 146). Washington, DC: National Highway Traffic Safety 
Administration.
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(1) Regulatory Alternatives Considered by the Agencies
    As discussed above, the agencies are proposing standards defined by 
fuel consumption and GHG targets that continue through model year 2020 
unchanged from model year 2018, and then increase in stringency at an 
annual rate of 2.5 percent through model year 2027. In addition to this 
regulatory alternative, the agencies also considered a no-action 
alternative under which standards remain unchanged after model year 
2018, as well as three other alternatives, defined by annual stringency 
increases of 2.0 percent, 3.5 percent, and 4.0 percent during 2021-
2025. For each of the ``action alternatives'' (i.e., those involving 
stringency increases beyond the no-

[[Page 40346]]

action alternative), the annual stringency increases are applied as 
follows: An annual stringency increase of r is applied by multiplying 
the model year 2020 target functions (identical to those applicable to 
model year 2018) by 1-r to define the model year 2021 target functions, 
multiplying the model year 2021 target functions by 1-r to define the 
model year 2022 target functions, continuing through 2025 for all 
alternatives except for the preferred Alternative 3 which extends 
through 2027. In summary, the agencies have considered the following 
five regulatory alternatives in Table VI-3.

                   Table VI-3 Regulatory Alternatives
------------------------------------------------------------------------
                                           Annual stringency  increase
        Regulatory  alternative         --------------------------------
                                         2019-2020  2021-2025  2026-2027
------------------------------------------------------------------------
1: No Action...........................      None       None       None
2: 2.0%/y..............................      None       2.0%       None
3: 2.5%/y..............................      None       2.5%       2.5%
4: 3.5%/y..............................      None       3.5%       None
5: 4.0%/y..............................      None       4.0%       None
------------------------------------------------------------------------

(2) DOT CAFE Model
    DOT developed the CAFE model in 2002 to support the 2003 issuance 
of CAFE standards for MYs 2005-2007 light trucks. DOT has since 
significantly expanded and refined the model, and has applied the model 
to support every ensuing CAFE rulemaking for both light-duty and heavy-
duty. For this analysis, the model was reconfigured to use the work 
based attribute metric of ``work factor'' established in the Phase 1 
rule instead of the light duty ``footprint'' attribute metric.
    Although the CAFE model can also be used for more aggregated 
analysis (e.g., involving ``representative vehicles'', single-year 
snapshots, etc.), NHTSA designed the model with a view toward (a) 
detailed simulation of manufacturers' potential actions given a defined 
set of standards, followed by (b) calculation of resultant impacts and 
economic costs and benefits. The model is intended to describe actions 
manufacturers could take in light of defined standards and other input 
assumptions and estimates, not to predict actions manufacturers will 
take in light of competing product and market interests (e.g. engine 
power, customer features, technology acceptance, etc.).
    For these rules, the agencies conducted coordinated and 
complementary analyses using two analytical methods for the heavy-duty 
pickup and van segment by employing both DOT's CAFE model and EPA's 
MOVES model. The agencies used EPA's MOVES model to estimate fuel 
consumption and emissions impacts for tractor-trailers (including the 
engine that powers the tractor), and vocational vehicles (including the 
engine that powers the vehicle). Additional calculations were performed 
to determine corresponding monetized program costs and benefits. For 
heavy-duty pickups and vans, the agencies performed complementary 
analyses, which we refer to as ``Method A'' and ``Method B''. In Method 
A, the CAFE model was used to project a pathway the industry could use 
to comply with each regulatory alternative and the estimated effects on 
fuel consumption, emissions, benefits and costs. In Method B, the CAFE 
model was used to project a pathway the industry could use to comply 
with each regulatory alternative, along with resultant impacts on per 
vehicle costs, and the MOVES model was used to calculate corresponding 
changes in total fuel consumption and annual emissions. Additional 
calculations were performed to determine corresponding monetized 
program costs and benefits. NHTSA considered Method A as its central 
analysis and Method B as a supplemental analysis. EPA considered the 
results of both methods. The agencies concluded that both methods led 
the agencies to the same conclusions and the same selection of the 
proposed standards. See Section VII for additional discussion of these 
two methods.
    As a starting point, the model makes use of an input file defining 
the analysis fleet--that is, a set of specific vehicle models (e.g., 
Ford F250) and model configurations (e.g., Ford F250 with 6.2-liter V8 
engine, 4WD, and 6-speed manual transmission) estimated or assumed to 
be produced by each manufacturer in each model year to be included in 
the analysis. The analysis fleet includes key engineering attributes 
(e.g., curb weight, payload and towing capacities, dimensions, presence 
of various fuel-saving technologies) of each vehicle model, engine, and 
transmissions, along with estimates or assumptions of future production 
volumes. It also specifies the extent to which specific vehicle models 
share engines, transmissions, and vehicle platforms, and describes each 
manufacturer's estimated or assumed product cadence (i.e., timing for 
freshening and redesigning different vehicles and platforms). This 
input file also specifies a payback period used to estimate the 
potential that each manufacturer might apply technology to improve fuel 
economy beyond levels required by standards. The file used for this 
analysis was created from 2014 manufacturer compliance reports for the 
base sales and technology information, and a future fleet projection 
created from a combination of data from a sales forecast that the 
agencies purchased from IHS Automotive and total volumes class 2b and 3 
fleet volumes from 2014 AEO Reference Case. A complete description of 
the future fleet is available in Draft RIA Chapter 10.
    A second input file to the model contains a variety of contextual 
estimates and assumptions. Some of these inputs, such as future fuel 
prices and vehicle survival and mileage accumulation (versus vehicle 
age), are relevant to estimating manufacturers' potential application 
of fuel-saving technologies. Some others, such as fuel density and 
carbon content, vehicular and upstream emission factors, the social 
cost of carbon dioxide emissions, and the discount rate, are relevant 
to calculating physical and economic impacts of manufacturers' 
application of fuel-saving technologies.
    A third input file contains estimates and assumptions regarding the 
future applicability, availability, efficacy, and cost of various fuel-
saving technologies. Efficacy is expressed in terms of the percentage 
reduction in fuel consumption, cost is expressed in dollars, and both 
efficacy and cost are expressed on an incremental basis (i.e., 
estimates for more advanced technologies are specified as increments 
beyond less advanced technologies). The input file also includes 
``synergy factors'' used to make adjustments accounting for the 
potential that some combinations of technologies may result fuel 
savings or costs different from those indicated by incremental values.
    Finally, a fourth model input file specifies standards to be 
evaluated. Standards are defined on a year-by-year basis separately for 
each regulatory class (passenger cars, light trucks, and heavy-duty 
pickups and vans). Regulatory alternatives are specified as discrete 
scenarios, with one scenario defining the no-action alternative or 
``baseline'', all other scenarios defining regulatory alternatives to 
be evaluated relative to that no-action alternative.
    Given these inputs, the model estimates each manufacturer's 
potential year-by-year application of fuel-saving technologies to each 
engine, transmission, and vehicle. Subject to a range of engineering 
and planning-related constraints (e.g., secondary axle disconnect can't 
be applied to 2-wheel drive vehicles, many major technologies can only 
be applied practicably as part

[[Page 40347]]

of a vehicle redesign, and applied technologies carry forward between 
model years), the model attempts to apply technology to each 
manufacturer's fleet in a manner that minimizes ``effective costs'' 
(accounting, in particular, for technology costs and avoided fuel 
outlays), continuing to add improvements as long as doing so would help 
toward compliance with specified standards or would produce fuel 
savings that ``pay back'' at least as quickly as specified in the input 
file mentioned above.
    After estimating the extent to which each manufacturer might add 
fuel-saving technologies under each specified regulatory alternative, 
the model calculates a range of physical impacts, such as changes in 
highway travel (i.e., VMT), changes in fleetwide fuel consumption, 
changes in highway fatalities, and changes in vehicular and upstream 
greenhouse gas and criteria pollutant emissions. The model also applies 
a variety of input estimates and assumptions to calculate economic 
costs and benefits to vehicle owners and society, based on these 
physical impacts.
    Since the manufacturers of HD pickups and vans generally only have 
one basic pickup truck and van with different versions ((i.e., 
different wheelbases, cab sizes, two-wheel drive, four-wheel drive, 
etc.) there exists less flexibility than in the light-duty fleet to 
coordinate model improvements over several years. As such, the CAFE 
model allows changes to the HD pickups and vans to meet new standards 
according to predefined redesign cycles included as a model input. As 
noted above, the opportunities for large-scale changes (e.g., new 
engines, transmission, vehicle body and mass) thus occur less 
frequently than in the light-duty fleet, typically at spans of eight or 
more years for this analysis. However, opportunities for gradual 
improvements not necessarily linked to large scale changes can occur 
between the redesign cycles (i.e., model refresh). Examples of such 
improvements are upgrades to an existing vehicle model's engine, 
transmission and aftertreatment systems. Given the long redesign cycle 
used in this analysis and the understanding with respect to where the 
different manufacturers are in that cycle, the agencies have initially 
determined that the full implementation of the proposed standards would 
be feasible and appropriate by the 2027 model year.
    This analysis reflects several changes made to the model since 
2012, when NHTSA used the model to estimate the effects, costs, and 
benefits of final CAFE standards for light-duty vehicles produced 
during MYs 2017-2021, and augural standards for MYs 2022-2025. Some of 
these changes specifically enable analysis of potential fuel 
consumption standards (and, hence, CO2 emissions standards 
harmonized with fuel consumption standards) for heavy-duty pickups and 
vans; other changes implement more general improvements to the model. 
Key changes include the following:
     Changes to accommodate standards for heavy-duty pickups 
and vans, including attribute-based standards involving targets that 
vary with ``work factor''.
     Explicit calculation of test weight, taking into account 
test weight ``bins'' and differences in the definition of test weight 
for light-duty vehicles (curb weight plus 300 pound) and heavy-duty 
pickups and vans (average of GVWR and curb weight).
     Procedures to estimate increases in payload when curb 
weight is reduced, increases in towing capacity if GVWR is reduced, and 
calculation procedures to correspondingly update calculated work 
factors.
     Inclusion of technologies not included in prior analyses.
     Changes to enable more explicit accounting for shared 
vehicle platforms and adoption and ``inheritance'' of major engine 
changes.
     Expansion of the Monte Carlo simulation procedures used to 
perform probabilistic uncertainty analysis.
    In addition to the inputs summarized above, the agencies' analysis 
of potential standards for HD pickups and vans makes use of a range of 
other estimates and assumptions specified as inputs to the CAFE 
modeling system. Some significant inputs (e.g., estimates of future 
fuel prices) also applicable to other HD segments are discussed below 
in Section IX. Others more specific to the analysis of HD pickups and 
vans are listed as follows, with additional details in section D:

 Vehicle survival and mileage accumulation
 VMT rebound
 On-road ``gap'' in fuel consumption
 Fleet population profile
 Past fuel consumption levels
 Long-term fuel consumption levels
 Payback period
 Coefficients for fatality calculations
 Compliance credits carried-forward
 Emission factors for non-CO2 emissions
 Refueling time benefits
 External Costs of travel
 Ownership and operating costs

    The CAFE model and its modifications for this rulemaking are 
described in more detail in Section VI. below as well as the Draft RIA 
Chapter 10.
(3) How Did the Agencies Develop the Analysis Fleet
    In order to more accurately estimate the impacts of potential 
standards, the agencies are estimating the composition of the future 
vehicle fleet. Projections of the future vehicle fleet are also done 
for both vocational vehicles and tractors. The procedure for pickups 
and vans is more detailed, though, in order to show the differences for 
each manufacturer in the segment. Doing so enables estimation of the 
extent to which each manufacturer may need to add technology in 
response to a given series of attribute-based standards, accounting for 
the mix and fuel consumption of vehicles in each manufacturer's 
regulated fleet. The agencies create an analysis fleet in order to 
track the volumes and types of fuel economy-improving and 
CO2-reducing technologies that are already present in the 
existing fleet of Class 2b and 3 vehicles. This aspect of the analysis 
fleet helps to keep the CAFE model from adding technologies to vehicles 
that already have these technologies, which would result in ``double 
counting'' of technologies' costs and benefits. An additional step 
involved projecting the fleet sales into MYs 2019-2030. This represents 
the fleet volumes that the agencies believe would exist in MYs 2019-
2030. The CAFE model considers the actual redesign years of each 
vehicle platform for each manufacturer. Due to credit banking, some 
manufacturers may not need to add technology to comply with the 
standards until later model years, which may be after the rulemaking 
period. Therefore, it is necessary to run the model until all of the 
vehicle technology changes have stabilized.
    Most of the information about the vehicles that make up the 2014 
analysis fleet was gathered from the 2014 Pre-Model Year Reports 
submitted to EPA by the manufacturers under Phase 1 of Fuel Efficiency 
and GHG Emission Program for Medium- and Heavy-Duty Trucks, MYs 2014-
2018. The major manufacturers of class 2b and class 3 trucks (Chrysler, 
Ford and GM) were asked to voluntarily submit updates to their Pre-
Model Year Reports. Updated data were provided by Chrysler and GM. The 
agencies used these updated data in constructing the analysis fleet for 
these manufacturers. The agencies agreed to treat this information as 
Confidential Business Information (CBI) until the publication of the 
proposed rule. This information can be made public at this

[[Page 40348]]

time because by now all MY2014 vehicle models have been produced, which 
makes data about them essentially public information.
    In addition to information about each vehicle, the agencies need 
additional information about the fuel economy-improving/CO2-
reducing technologies already on those vehicles in order to assess how 
much and which technologies to apply to determine a path toward future 
compliance. To correctly account for the cost and effectiveness of 
adding technologies, it is necessary to know the technology penetration 
in the existing vehicle fleet. Otherwise, ``double-counting'' of 
technology could occur. Thus, the agencies augmented this information 
with publicly-available data that include more complete technology 
descriptions, e.g. for specific engines and transmissions.
    The analysis fleet also requires projections of sales volumes for 
the years of the rulemaking analysis. The agencies relied on the MY 
2014 pre-model-year compliance submissions from manufacturers to 
provide sales volumes at the model level based on the level of 
disaggregation in which the models appear in the compliance data. 
However, the agencies only use these reported volumes without 
adjustment for MY 2014. For all future model years, we combine the 
manufacturer submissions with sales projections from the 2014 Annual 
Energy Outlook Reference Case and IHS Automotive to determine model 
variant level sales volumes in future years.
    For more detail on how the analysis fleet and sales volume 
projections were developed, please see Section D below as well as the 
draft RIA Chapter 10.
(4) What Technologies Did the Agencies Consider
    The agencies considered over 35 vehicle technologies that 
manufacturers could use to improve the fuel consumption and reduce 
CO2 emissions of their vehicles during MYs 2021-2027. The 
majority of the technologies described in this section are readily 
available, well known and proven in other vehicle sectors, and could be 
incorporated into vehicles once production decisions are made. Other 
technologies considered may not currently be in production, but are 
beyond the research phase and under development, and are expected to be 
in production in highway vehicles over the next few years. These are 
technologies that are capable of achieving significant improvements in 
fuel economy and reductions in CO2 emissions, at reasonable 
costs. The agencies did not consider technologies in the research stage 
because there is insufficient time for such technologies to move from 
research to production during the model years covered by this proposed 
action. However, we are considering and seek comment on advanced 
technology credits to encourage the development of such technologies, 
as discussed below in Section VI.E.
    The technologies considered in the agencies' analysis are briefly 
described below. They fall into five broad categories: Engine 
technologies, transmission technologies, vehicle technologies, 
electrification/accessory technologies, and hybrid technologies.
    In this class of trucks and vans, diesel engines are installed in 
about half of all vehicles. The buyer's decision to purchase a diesel 
versus gasoline engine depends on several factors including initial 
purchase price, fuel operating costs, durability, towing capability and 
payload capacity amongst other reasons. As discussed in IV.B. above, 
the agencies generally prefer to set standards that do not distinguish 
between fuel types where technological or market-based reasons do not 
strongly argue otherwise. However, as with Phase 1, we continue to 
believe that fundamental differences between spark ignition and 
compression ignition engines warrant unique fuel standards, which is 
also important in ensuring that our program maintains product choices 
available to vehicle buyers. Therefore, we are proposing separate 
standards for gasoline and diesel vehicles and in the context of our 
technology discussion for heavy-duty pickups and vans, we are treating 
gasoline and diesel engines separately so each has a set of baseline 
technologies. We discuss performance improvements in terms of changes 
to those baseline engines. Our cost and inventory estimates contained 
elsewhere reflect the current fleet baseline with an appropriate mix of 
gasoline and diesel engines. Note that we are not basing the proposed 
standards on a targeted switch in the mix of diesel and gasoline 
vehicles. We believe our proposed standards require similar levels of 
technology development and cost for both diesel and gasoline vehicles. 
Hence the proposed program is not intended to force, nor discourage, 
changes in a manufacturer's fleet mix between gasoline and diesel 
vehicles. Types of engine technologies that improve fuel efficiency and 
reduce CO2 emissions include the following:
     Low-friction lubricants--Low viscosity and advanced low 
friction lubricant oils are now available with improved performance and 
better lubrication. If manufacturers choose to make use of these 
lubricants, they would need to make engine changes and possibly conduct 
durability testing to accommodate the low-friction lubricants.
     Reduction of engine friction losses--Can be achieved 
through low-tension piston rings, roller cam followers, improved 
material coatings, more optimal thermal management, piston surface 
treatments, and other improvements in the design of engine components 
and subsystems that improve engine operation.
     Reduction of engine parasitic demand--Mechanical engine 
load reduction can be achieved by variable-displacement oil pumps, 
higher-efficiency direct injection fuel pumps, and variable speed/
displacement coolant pumps.
     Cylinder deactivation--Deactivates the intake and exhaust 
valves and prevents fuel injection into some cylinders during light-
load operation. The engine runs temporarily as though it were a smaller 
engine which substantially reduces pumping losses.
     Variable valve timing--Alters the timing of the intake 
valve, exhaust valve, or both, primarily to reduce pumping losses, 
increase specific power, and control residual gases.
     Variable valve lift--Alters the intake valve lift in order 
to reduce pumping losses and more efficiently ingest air.
     Stoichiometric gasoline direct-injection technology--
Injects fuel at high pressure directly into the combustion chamber to 
improve cooling of the air/fuel charge within the cylinder, which 
allows for higher compression ratios and increased thermodynamic 
efficiency.
     Cooled exhaust gas recirculation--Technology that 
conceptually involves utilizing EGR as a charge diluent for controlling 
combustion temperatures and cooling the EGR prior to its introduction 
to the combustion system.
     Turbocharging and downsizing--Technology 
approach that conceptually involves decreasing the displacement and 
cylinder count to improve efficiency when not demanding regular high 
loads and adding a turbocharger to recover any loss to the original 
larger engine peak operating power. This technology was limited in this 
analysis to vehicles that are not expected to operate at high trailer 
towing levels and instead are more akin to duty cycles of light duty 
(i.e. V6 vans).
     Lean-burn combustion--Concept that gasoline 
engines that are normally stoichiometric mainly for emission reasons 
can run lean over a range of

[[Page 40349]]

operating conditions and utilize diesel like aftertreatment systems to 
control NOX. For this analysis, we determined that the modal 
operation nature of this technology to currently only be beneficial at 
light loads would not be appropriate for a heavy duty application 
purchased specifically for its high work and load capability.
     Diesel engine improvements and diesel aftertreatment 
improvements--Improved turbocharger, EGR systems, and advanced timing 
can provide more efficient combustion and, hence, lower fuel 
consumption. Aftertreatment systems are a relatively new technology on 
diesel vehicles and, as such, improvements are expected in coming years 
that allow the effectiveness of these systems to improve while reducing 
the fuel and reductant demands of current systems.
    Types of transmission technologies considered include:
     Eight-speed automatic transmissions--The gear span, gear 
ratios, and control system are optimized for a broader range of 
efficient engine operating conditions.
     High efficiency transmission--Significant reduction of 
internal parasitic losses such as pumps gear bands, etc.
     Driveline friction reduction--Reduction in the driveline 
friction from improvements to bearings, seals and other machining 
tolerances in the axles and transfer cases.
     Secondary axle disconnect--Disconnecting of some rotating 
components in the front axle on 4wd vehicles when the secondary axle is 
not needed for traction.
    Types of vehicle technologies considered include:
     Low-rolling-resistance tires--Have characteristics that 
reduce frictional losses associated with the energy dissipated in the 
deformation of the tires under load, therefore improving fuel 
efficiency and reducing CO2 emissions.
     Aerodynamic drag reduction--is achieved by changing 
vehicle shape or reducing frontal area, including skirts, air dams, 
underbody covers, and more aerodynamic side view mirrors.
     Mass reduction and material substitution--Mass reduction 
encompasses a variety of techniques ranging from improved design and 
better component integration to application of lighter and higher-
strength materials. Mass reduction is further compounded by reductions 
in engine power and ancillary systems (transmission, steering, brakes, 
suspension, etc.). The agencies recognize there is a range of diversity 
and complexity for mass reduction and material substitution 
technologies and there are many techniques that automotive suppliers 
and manufacturers are using to achieve the levels of this technology 
that the agencies have modeled in our analysis for this program.
    Types of electrification/accessory and hybrid technologies 
considered include:
     Electric power steering--Are electrically-assisted 
steering systems that have advantages over traditional hydraulic power 
steering because it replaces a continuously operated hydraulic pump, 
thereby reducing parasitic losses from the accessory drive.
     Improved accessories--May include high efficiency 
alternators, electrically driven (i.e., on-demand) water pumps and 
cooling fans. This excludes other electrical accessories such as 
electric oil pumps and electrically driven air conditioner compressors.
     Mild hybrid--A small, engine-driven (through a belt or 
other mechanism) electric motor/generator/battery combination to enable 
features such as start-stop, energy recovery, and launch assist.
     Strong hybrid--A powerful electric motor/generator/battery 
system coupled to the powertrain to enable features such as start-stop, 
and significant levels of launch assist, electric operation, and brake 
energy recovery. For HD pickups and vans, the engine coupled with the 
strong hybrid system would remain unchanged in power and torque to 
ensure vehicle performance at all times, even if the hybrid battery is 
depleted.
     Air Conditioner Systems--These technologies include 
improved hoses, connectors and seals for leakage control. They also 
include improved compressors, expansion valves, heat exchangers and the 
control of these components for the purposes of improving tailpipe 
CO2 emissions as a result of A/C use.\342\
---------------------------------------------------------------------------

    \342\ See Draft RIA Chapter 2.3 for more detailed technology 
descriptions.
---------------------------------------------------------------------------

(5) How Did the Agencies Determine the Costs and Effectiveness of Each 
of These Technologies
    Building on the technical analysis underlying the 2017-2025 MY 
light-duty vehicle rule, the 2014-2018 MY heavy-duty vehicle rule, and 
the 2015 NHTSA Technology Study, the agencies took a fresh look at 
technology cost and effectiveness values for purposes of this proposal. 
For costs, the agencies reconsidered both the direct (or ``piece'') 
costs and indirect costs of individual components of technologies. For 
the direct costs, the agencies followed a bill of materials (BOM) 
approach employed by the agencies in the light-duty rule as well as 
referencing costs from the 2014-2018 MY heavy-duty vehicle rule and a 
new cost survey performed by Tetra Tech in 2014.
    For two technologies, stoichiometric gasoline direct injection 
(SGDI) and turbocharging with engine downsizing, the agencies relied to 
the extent possible on the available tear-down data and scaling 
methodologies used in EPA's ongoing study with FEV, Incorporated. This 
study consists of complete system tear-down to evaluate technologies 
down to the nuts and bolts to arrive at very detailed estimates of the 
costs associated with manufacturing them.\343\
---------------------------------------------------------------------------

    \343\ U.S. Environmental Protection Agency, ``Draft Report--
Light-Duty Technology Cost Analysis Pilot Study,'' Contract No. EP-
C-07-069, Work Assignment 1-3, September 3, 2009.
---------------------------------------------------------------------------

    For the other technologies, considering all sources of information 
and using the BOM approach, the agencies worked together intensively to 
determine component costs for each of the technologies and build up the 
costs accordingly. Where estimates differ between sources, we have used 
engineering judgment to arrive at what we believe to be the best cost 
estimate available today, and explained the basis for that exercise of 
judgment.
    Once costs were determined, they were adjusted to ensure that they 
were all expressed in 2012 dollars (see Section IX.B.1.e of this 
preamble), and indirect costs were accounted for using a methodology 
consistent with the new ICM approach developed by EPA and used in the 
Phase 1 rule, and the 2012-2016 and 2017-2025 light-duty rules. NHTSA 
and EPA also reconsidered how costs should be adjusted by modifying or 
scaling content assumptions to account for differences across the range 
of vehicle sizes and functional requirements, and adjusted the 
associated material cost impacts to account for the revised content. We 
present the individual technology costs used in this analysis in 
Chapter 2.12 of the Draft RIA.
    Regarding estimates for technology effectiveness, the agencies used 
the estimates from the 2014 Southwest Research Institute study as a 
baseline, which was designed specifically to inform this rulemaking. In 
addition, the agencies used 2017-2025 light-duty rule as a reference, 
and adjusted these estimates as appropriate, taking into account the 
unique requirement of the heavy-duty test cycles to test at curb weight 
plus half payload versus the light-duty requirement of curb plus 300

[[Page 40350]]

lb. The adjustments were made on an individual technology basis by 
assessing the specific impact of the added load on each technology when 
compared to the use of the technology on a light-duty vehicle. The 
agencies also considered other sources such as the 2010 NAS Report, 
recent CAFE compliance data, and confidential manufacturer estimates of 
technology effectiveness. The agencies reviewed effectiveness 
information from the multiple sources for each technology and ensured 
that such effectiveness estimates were based on technology hardware 
consistent with the BOM components used to estimate costs. Together, 
the agencies compared the multiple estimates and assessed their 
validity, taking care to ensure that common BOM definitions and other 
vehicle attributes such as performance and drivability were taken into 
account.
    The agencies note that the effectiveness values estimated for the 
technologies may represent average values applied to the baseline fleet 
described earlier, and do not reflect the potentially limitless 
spectrum of possible values that could result from adding the 
technology to different vehicles. For example, while the agencies have 
estimated an effectiveness of 0.5 percent for low friction lubricants, 
each vehicle could have a unique effectiveness estimate depending on 
the baseline vehicle's oil viscosity rating. Similarly, the reduction 
in rolling resistance (and thus the improvement in fuel efficiency and 
the reduction in CO2 emissions) due to the application of 
LRR tires depends not only on the unique characteristics of the tires 
originally on the vehicle, but on the unique characteristics of the 
tires being applied, characteristics which must be balanced between 
fuel efficiency, safety, and performance. Aerodynamic drag reduction is 
much the same--it can improve fuel efficiency and reduce CO2 
emissions, but it is also highly dependent on vehicle-specific 
functional objectives. For purposes of this proposed rule, the agencies 
believe that employing average values for technology effectiveness 
estimates is an appropriate way of recognizing the potential variation 
in the specific benefits that individual manufacturers (and individual 
vehicles) might obtain from adding a fuel-saving technology.
    The following contains a description of technologies the agencies 
considered in the analysis for this proposal.
(a) Engine Technologies
    The agencies reviewed the engine technology estimates used in the 
2017-2025 light-duty rule, the 2014-2018 heavy-duty rule, and the 2015 
NHTSA Technology Study. In doing so the agencies reconsidered all 
available sources and updated the estimates as appropriate. The section 
below describes both diesel and gasoline engine technologies considered 
for this program.
(i) Low Friction Lubricants
    One of the most basic methods of reducing fuel consumption in both 
gasoline and diesel engines is the use of lower viscosity engine 
lubricants. More advanced multi-viscosity engine oils are available 
today with improved performance in a wider temperature band and with 
better lubricating properties. This can be accomplished by changes to 
the oil base stock (e.g., switching engine lubricants from a Group I 
base oils to lower-friction, lower viscosity Group III synthetic) and 
through changes to lubricant additive packages (e.g., friction 
modifiers and viscosity improvers). The use of 5W-30 motor oil is now 
widespread and auto manufacturers are introducing the use of even lower 
viscosity oils, such as 5W-20 and 0W-20, to improve cold-flow 
properties and reduce cold start friction. However, in some cases, 
changes to the crankshaft, rod and main bearings and changes to the 
mechanical tolerances of engine components may be required. In all 
cases, durability testing would be required to ensure that durability 
is not compromised. The shift to lower viscosity and lower friction 
lubricants will also improve the effectiveness of valvetrain 
technologies such as cylinder deactivation, which rely on a minimum oil 
temperature (viscosity) for operation.
(ii) Engine Friction Reduction
    In addition to low friction lubricants, manufacturers can also 
reduce friction and improve fuel consumption by improving the design of 
both diesel and gasoline engine components and subsystems. 
Approximately 10 percent of the energy consumed by a vehicle is lost to 
friction, and just over half is due to frictional losses within the 
engine.\344\ Examples include improvements in low-tension piston rings, 
piston skirt design, roller cam followers, improved crankshaft design 
and bearings, material coatings, material substitution, more optimal 
thermal management, and piston and cylinder surface treatments. 
Additionally, as computer-aided modeling software continues to improve, 
more opportunities for evolutionary friction reductions may become 
available. All reciprocating and rotating components in the engine are 
potential candidates for friction reduction, and minute improvements in 
several components can add up to a measurable fuel efficiency 
improvement.
---------------------------------------------------------------------------

    \344\ ``Impact of Friction Reduction Technologies on Fuel 
Economy,'' Fenske, G. Presented at the March 2009 Chicago Chapter 
Meeting of the `Society of Tribologists and Lubricated Engineers' 
Meeting, March 18th, 2009. Available at: http://www.chicagostle.org/program/2008-2009/Impact%20of%20Friction%20Reduction%20Technologies%20on%20Fuel%20Economy%20-%20with%20VGs%20removed.pdf (last accessed July 9, 2009).
---------------------------------------------------------------------------

(iii) Engine Parasitic Demand Reduction
    In addition to physical engine friction reduction, manufacturers 
can reduce the mechanical load on the engine from parasitics, such as 
oil, fuel, and coolant pumps. The high-pressure fuel pumps of direct-
injection gasoline and diesel engines have particularly high demand. 
Example improvements include variable speed or variable displacement 
water pumps, variable displacement oil pumps, more efficient high 
pressure fuel pumps, valvetrain upgrades and shutting off piston 
cooling when not needed.
(iv) Coupled Cam Phasing
    Valvetrains with coupled (or coordinated) cam phasing can modify 
the timing of both the inlet valves and the exhaust valves an equal 
amount by phasing the camshaft of an overhead valve engine.\345\ For 
overhead valve engines, which have only one camshaft to actuate both 
inlet and exhaust valves, couple cam phasing is the only variable valve 
timing implementation option available and requires only one cam 
phaser.\346\
---------------------------------------------------------------------------

    \345\ Although couple cam phasing appears only in the single 
overhead cam and overhead valve branches of the decision tree, it is 
noted that a single phaser with a secondary chain drive would allow 
couple cam phasing to be applied to direct overhead cam engines. 
Since this would potentially be adopted on a limited number of 
direct overhead cam engines NHTSA did not include it in that branch 
of the decision tree.
    \346\ It is also noted that coaxial camshaft developments would 
allow other variable valve timing options to be applied to overhead 
valve engines. However, since they would potentially be adopted on a 
limited number of overhead valve engines, NHTSA did not include them 
in the decision tree.
---------------------------------------------------------------------------

(v) Cylinder Deactivation
    In conventional spark-ignited engines throttling the airflow 
controls engine torque output. At partial loads, efficiency can be 
improved by using cylinder deactivation instead of throttling. Cylinder 
deactivation can improve engine efficiency by disabling or deactivating 
(usually) half of the cylinders when the load is less than half of the 
engine's total torque capability--the valves are kept closed, and no 
fuel is injected--as a result, the trapped air

[[Page 40351]]

within the deactivated cylinders is simply compressed and expanded as 
an air spring, with reduced friction and heat losses. The active 
cylinders combust at almost double the load required if all of the 
cylinders were operating. Pumping losses are significantly reduced as 
long as the engine is operated in this ``part-cylinder'' mode.
    Cylinder deactivation control strategy relies on setting maximum 
manifold absolute pressures or predicted torque within a range in which 
it can deactivate the cylinders. Noise and vibration issues reduce the 
operating range to which cylinder deactivation is allowed, although 
manufacturers are exploring vehicle changes that enable increasing the 
amount of time that cylinder deactivation might be suitable. Some 
manufacturers may choose to adopt active engine mounts and/or active 
noise cancellations systems to address Noise Vibration and Harshness 
(NVH) concerns and to allow a greater operating range of activation.
    Cylinder deactivation has seen a recent resurgence thanks to better 
valvetrain designs and engine controls. General Motors and Chrysler 
Group have incorporated cylinder deactivation across a substantial 
portion of their V8-powered lineups.
(vi) Stoichiometric Gasoline Direct Injection
    SGDI engines inject fuel at high pressure directly into the 
combustion chamber (rather than the intake port in port fuel 
injection). SGDI requires changes to the injector design, an additional 
high pressure fuel pump, new fuel rails to handle the higher fuel 
pressures and changes to the cylinder head and piston crown design. 
Direct injection of the fuel into the cylinder improves cooling of the 
air/fuel charge within the cylinder, which allows for higher 
compression ratios and increased thermodynamic efficiency without the 
onset of combustion knock. Recent injector design advances, improved 
electronic engine management systems and the introduction of multiple 
injection events per cylinder firing cycle promote better mixing of the 
air and fuel, enhance combustion rates, increase residual exhaust gas 
tolerance and improve cold start emissions. SGDI engines achieve higher 
power density and match well with other technologies, such as boosting 
and variable valvetrain designs.
    Several manufacturers have recently introduced vehicles with SGDI 
engines, including GM and Ford and have announced their plans to 
increase dramatically the number of SGDI engines in their portfolios.
(vii) Turbocharging and Downsizing
    The specific power of a naturally aspirated engine is primarily 
limited by the rate at which the engine is able to draw air into the 
combustion chambers. Turbocharging and supercharging (grouped together 
here as boosting) are two methods to increase the intake manifold 
pressure and cylinder charge-air mass above naturally aspirated levels. 
Boosting increases the airflow into the engine, thus increasing the 
specific power level, and with it the ability to reduce engine 
displacement while maintaining performance. This effectively reduces 
the pumping losses at lighter loads in comparison to a larger, 
naturally aspirated engine.
    Almost every major manufacturer currently markets a vehicle with 
some form of boosting. While boosting has been a common practice for 
increasing performance for several decades, turbocharging has 
considerable potential to improve fuel economy and reduce 
CO2 emissions when the engine displacement is also reduced. 
Specific power levels for a boosted engine often exceed 100 hp/L, 
compared to average naturally aspirated engine power densities of 
roughly 70 hp/L. As a result, engines can be downsized roughly 30 
percent or higher while maintaining similar peak output levels. In the 
last decade, improvements to turbocharger turbine and compressor design 
have improved their reliability and performance across the entire 
engine operating range. New variable geometry turbines and ball-bearing 
center cartridges allow faster turbocharger spool-up (virtually 
eliminating the once-common ``turbo lag'') while maintaining high flow 
rates for increased boost at high engine speeds. Low speed torque 
output has been dramatically improved for modern turbocharged engines. 
However, even with turbocharger improvements, maximum engine torque at 
very low engine speed conditions, for example launch from standstill, 
is increased less than at mid and high engine speed conditions. The 
potential to downsize engines may be less on vehicles with low 
displacement to vehicle mass ratios for example a very small 
displacement engine in a vehicle with significant curb weight, in order 
to provide adequate acceleration from standstill, particularly up 
grades or at high altitudes.
    The use of GDI in combination with turbocharging and charge air 
cooling reduces the fuel octane requirements for knock limited 
combustion enabling the use of higher compression ratios and boosting 
pressures. Recently published data with advanced spray-guided injection 
systems and more aggressive engine downsizing targeted towards reduced 
fuel consumption and CO2 emissions reductions indicate that 
the potential for reducing CO2 emissions for turbocharged, 
downsized GDI engines may be as much as 15 to 30 percent relative to 
port-fuel-injected engines.14 15 16 17 18 Confidential 
manufacturer data suggests an incremental range of fuel consumption and 
CO2 emission reduction of 4.8 to 7.5 percent for 
turbocharging and downsizing. Other publicly-available sources suggest 
a fuel consumption and CO2 emission reduction of 8 to 13 
percent compared to current-production naturally-aspirated engines 
without friction reduction or other fuel economy technologies: a joint 
technical paper by Bosch and Ricardo suggesting fuel economy gain of 8 
to 10 percent for downsizing from a 5.7 liter port injection V8 to a 
3.6 liter V6 with direct injection using a wall-guided direct injection 
system; a Renault report suggesting a 11.9 percent NEDC fuel 
consumption gain for downsizing from a 1.4 liter port injection in-line 
4-cylinder engine to a 1.0 liter in-line 4-cylinder engine, also with 
wall-guided direct injection; and a Robert Bosch paper suggesting a 13 
percent NEDC gain for downsizing to a turbocharged DI engine, again 
with wall-guided injection. These reported fuel economy benefits show a 
wide range depending on the SGDI technology employed.
    Note that for this analysis we determined that this technology path 
is only applicable to heavy duty applications that have operating 
conditions more closely associated with light duty vehicles. This 
includes vans designed mainly for cargo volume or modest payloads 
having similar GCWR to light duty applications. These vans cannot tow 
trailers heavier than similar light duty vehicles and are largely 
already sharing engines of significantly smaller displacement and 
cylinder count compared to heavy duty vehicles designed mainly for 
trailer towing.
(viii) Cooled Exhaust-Gas Recirculation
    Cooled exhaust gas recirculation or Boosted EGR is a combustion 
concept that involves utilizing EGR as a charge diluent for controlling 
combustion temperatures and cooling the EGR prior to its introduction 
to the combustion system. Higher exhaust gas residual levels at part 
load conditions reduce pumping losses for increased fuel economy. The 
additional charge dilution enabled by cooled EGR reduces the incidence 
of knocking combustion

[[Page 40352]]

and obviates the need for fuel enrichment at high engine power. This 
allows for higher boost pressure and/or compression ratio and further 
reduction in engine displacement and both pumping and friction losses 
while maintaining performance. Engines of this type use GDI and both 
dual cam phasing and discrete variable valve lift. The EGR systems 
considered in this proposed rule, consistent with the proposal, would 
use a dual-loop system with both high and low pressure EGR loops and 
dual EGR coolers. The engines would also use single-stage, variable 
geometry turbocharging with higher intake boost pressure available 
across a broader range of engine operation than conventional 
turbocharged SI engines. Such a system is estimated to be capable of an 
additional 3 to 5 percent effectiveness relative to a turbocharged, 
downsized GDI engine without cooled-EGR. The agencies have also 
considered a more advanced version of such a cooled EGR system that 
employs very high combustion pressures by using dual stage 
turbocharging.
(b) Diesel Engine Technologies
    Diesel engines have several characteristics that give them superior 
fuel efficiency compared to conventional gasoline, spark-ignited 
engines. Pumping losses are much lower due to lack of (or greatly 
reduced) throttling. The diesel combustion cycle operates at a higher 
compression ratio, with a very lean air/fuel mixture, and turbocharged 
light-duty diesels typically achieve much higher torque levels at lower 
engine speeds than equivalent-displacement naturally-aspirated gasoline 
engines. Additionally, diesel fuel has a higher energy content per 
gallon.\347\ However, diesel fuel also has a higher carbon to hydrogen 
ratio, which increases the amount of CO2 emitted per gallon 
of fuel used by approximately 15 percent over a gallon of gasoline.
---------------------------------------------------------------------------

    \347\ Burning one gallon of diesel fuel produces about 15 
percent more carbon dioxide than gasoline due to the higher density 
and carbon to hydrogen ratio.
---------------------------------------------------------------------------

    Based on confidential business information and the 2010 NAS Report, 
two major areas of diesel engine design could be improved during the 
timeframe of this proposed rule. These areas include aftertreatment 
improvements and a broad range of engine improvements.
(i) Aftertreatment Improvements
    The HD diesel pickup and van segment has largely adopted the SCR 
type of aftertreatment system to comply with criteria pollutant 
emission standards. As the experience base for SCR expands over the 
next few years, many improvements in this aftertreatment system such as 
construction of the catalyst, thermal management, and reductant 
optimization may result in a reduction in the amount of fuel used in 
the process. However, due to uncertainties with these improvements 
regarding the extent of current optimization and future criteria 
emissions obligations, the agencies are not considering aftertreatment 
improvements as a fuel-saving technology in the rulemaking analysis.
(ii) Engine Improvements
    Diesel engines in the HD pickup and van segment are expected to 
have several improvements in their base design in the 2021-2027 
timeframe. These improvements include items such as improved combustion 
management, optimal turbocharger design, and improved thermal 
management.
(c) Transmission Technologies
    The agencies have also reviewed the transmission technology 
estimates used in the 2017-2015 light-duty and 2014-2018 heavy-duty 
final rules. In doing so, NHTSA and EPA considered or reconsidered all 
available sources including the 2015 NHTSA Technology Study and updated 
the estimates as appropriate. The section below describes each of the 
transmission technologies considered for the proposal.
(i) Automatic 8-Speed Transmissions
    Manufacturers can also choose to replace 6-speed automatic 
transmissions with 8-speed automatic transmissions. Additional ratios 
allow for further optimization of engine operation over a wider range 
of conditions, but this is subject to diminishing returns as the number 
of speeds increases. As additional gear sets are added, additional 
weight and friction are introduced requiring additional countermeasures 
to offset these losses. Some manufacturers are replacing 6-speed 
automatics already, and 7- and 8-speed automatics have entered 
production.
(ii) High Efficiency Transmission
    For this proposal, a high efficiency transmission refers to some or 
all of a suite of incremental transmission improvement technologies 
that should be available within the 2019 to 2027 timeframe. The 
majority of these improvements address mechanical friction within the 
transmission. These improvements include but are not limited to: 
shifting clutch technology improvements, improved kinematic design, dry 
sump lubrication systems, more efficient seals, bearings and clutches 
(reducing drag), component superfinishing and improved transmission 
lubricants.
(d) Electrification/Accessory Technologies
(i) Electrical Power Steering or Electrohydraulic Power Steering
    Electric power steering (EPS) or Electrohydraulic power steering 
(EHPS) provides a potential reduction in CO2 emissions and 
fuel consumption over hydraulic power steering because of reduced 
overall accessory loads. This eliminates the parasitic losses 
associated with belt-driven power steering pumps which consistently 
draw load from the engine to pump hydraulic fluid through the steering 
actuation systems even when the wheels are not being turned. EPS is an 
enabler for all vehicle hybridization technologies since it provides 
power steering when the engine is off. EPS may be implemented on most 
vehicles with a standard 12V system. Some heavier vehicles may require 
a higher voltage system which may add cost and complexity.
(ii) Improved Accessories
    The accessories on an engine, including the alternator, coolant and 
oil pumps are traditionally mechanically-driven. A reduction in 
CO2 emissions and fuel consumption can be realized by 
driving them electrically, and only when needed (``on-demand'').
    Electric water pumps and electric fans can provide better control 
of engine cooling. For example, coolant flow from an electric water 
pump can be reduced and the radiator fan can be shut off during engine 
warm-up or cold ambient temperature conditions which will reduce warm-
up time, reduce warm-up fuel enrichment, and reduce parasitic losses.
    Indirect benefit may be obtained by reducing the flow from the 
water pump electrically during the engine warm-up period, allowing the 
engine to heat more rapidly and thereby reducing the fuel enrichment 
needed during cold operation and warm-up of the engine. Faster oil 
warm-up may also result from better management of the coolant warm-up 
period. Further benefit may be obtained when electrification is 
combined with an improved, higher efficiency engine alternator used to 
supply power to the electrified accessories.
    Intelligent cooling can more easily be applied to vehicles that do 
not typically

[[Page 40353]]

carry heavy payloads, so larger vehicles with towing capacity present a 
challenge, as these vehicles have high cooling fan loads.\348\ However, 
towing vehicles tend to have large cooling system capacity and flow 
scaled to required heat rejection levels when under full load 
situations such as towing at GCWR in extreme ambient conditions. During 
almost all other situations, this design characteristic may result in 
unnecessary energy usage for coolant pumping and heat rejection to the 
radiator.
---------------------------------------------------------------------------

    \348\ In the CAFE model, improved accessories refers solely to 
improved engine cooling. However, EPA has included a high efficiency 
alternator in this category, as well as improvements to the cooling 
system.
---------------------------------------------------------------------------

    The agencies considered whether to include electric oil pump 
technology for the rulemaking. Because it is necessary to operate the 
oil pump any time the engine is running, electric oil pump technology 
has insignificant effect on efficiency. Therefore, the agencies decided 
to not include electric oil pump technology.
(iii) Mild Hybrid
    Mild hybrid systems offer idle-stop functionality and a limited 
level of regenerative braking and power assist. These systems replace 
the conventional alternator with a belt or crank driven starter/
alternator and may add high voltage electrical accessories (which may 
include electric power steering and an auxiliary automatic transmission 
pump). The limited electrical requirements of these systems allow the 
use of lead-acid batteries or supercapacitors for energy storage, or 
the use of a small lithium-ion battery pack.
(iv) Strong Hybrid
    A hybrid vehicle is a vehicle that combines two significant sources 
of propulsion energy, where one uses a consumable fuel (like gasoline), 
and one is rechargeable (during operation, or by another energy 
source). Hybrid technology is well established in the U.S. light-duty 
market and more manufacturers are adding hybrid models to their 
lineups. Hybrids reduce fuel consumption through three major 
mechanisms:
     The internal combustion engine can be optimized (through 
downsizing, modifying the operating cycle, or other control techniques) 
to operate at or near its most efficient point more of the time. Power 
loss from engine downsizing can be mitigated by employing power assist 
from the secondary power source.
     A significant amount of the energy normally lost as heat 
while braking can be captured and stored in the energy storage system 
for later use.
     The engine is turned off when it is not needed, such as 
when the vehicle is coasting or when stopped.
    Hybrid vehicles utilize some combination of the three above 
mechanisms to reduce fuel consumption and CO2 emissions. The 
effectiveness of fuel consumption and CO2 reduction depends 
on the utilization of the above mechanisms and how aggressively they 
are pursued. One area where this variation is particularly prevalent is 
in the choice of engine size and its effect on balancing fuel economy 
and performance. Some manufacturers choose not to downsize the engine 
when applying hybrid technologies. In these cases, overall performance 
(acceleration) is typically improved beyond the conventional engine. 
However, fuel efficiency improves less than if the engine was downsized 
to maintain the same performance as the conventional version. The non-
downsizing approach is used for vehicles like trucks where towing and/
or hauling are an integral part of their performance requirements. In 
these cases, if the engine is downsized, the battery can be quickly 
drained during a long hill climb with a heavy load, leaving only a 
downsized engine to carry the entire load. Because towing capability is 
currently a heavily-marketed truck attribute, manufacturers are 
hesitant to offer a truck with downsized engine which can lead to a 
significantly diminished towing performance when the battery state of 
charge level is low, and therefore engines are traditionally not 
downsized for these vehicles.
    Strong Hybrid technology utilizes an axial electric motor connected 
to the transmission input shaft and connected to the engine crankshaft 
through a clutch. The axial motor is a motor/generator that can provide 
sufficient torque for launch assist, all electric operation, and the 
ability to recover significant levels of braking energy.
(e) Vehicle Technologies
(i) Mass Reduction
    Mass reduction is a technology that can be used in a manufacturer's 
strategy to meet the Heavy Duty Greenhouse Gas Phase 2 standards. 
Vehicle mass reduction (also referred to as ``down-weighting'' or 
`light-weighting''), decreases fuel consumption and GHG emissions by 
reducing the energy demand needed to overcome inertia forces, and 
rolling resistance. Automotive companies have worked with mass 
reduction technologies for many years and a lot of these technologies 
have been used in production vehicles. The weight savings achieved by 
adopting mass reduction technologies offset weight gains due to 
increased vehicle size, larger powertrains, and increased feature 
content (sound insulation, entertainment systems, improved climate 
control, panoramic roof, etc.). Sometimes mass reduction has been used 
to increase vehicle towing and payload capabilities.
    Manufacturers employ a systematic approach to mass reduction, where 
the net mass reduction is the addition of a direct component or system 
mass reduction, also referred to as primary mass reduction, plus the 
additional mass reduction taken from indirect ancillary systems and 
components, also referred to as secondary mass reduction or mass 
compounding. There are more secondary mass reductions achievable for 
light-duty vehicles compared to heavy-duty vehicles, which are limited 
due to the higher towing and payload requirements for these vehicles.
    Mass reduction can be achieved through a number of approaches, even 
while maintaining other vehicle functionalities. As summarized by NAS 
in its 2011 light duty vehicle report,\349\ there are two key 
strategies for primary mass reduction: (1) Changing the design to use 
less material; (2) substituting lighter materials for heavier 
materials.
---------------------------------------------------------------------------

    \349\ Committee on the Assessment of Technologies for Improving 
Light-Duty Vehicle Fuel Economy; National Research Council, 
``Assessment of Fuel Economy Technologies for Light-Duty Vehicles'', 
2011. Available at http://www.nap.edu/catalog.php?record_id=12924 
(last accessed Jun 27, 2012).
---------------------------------------------------------------------------

    The first key strategy of using less material compared to the 
baseline component can be achieved by optimizing the design and 
structure of vehicle components, systems and vehicle structure. Vehicle 
manufacturers have long used these continually-improving CAE tools to 
optimize vehicle designs. For example, the Future Steel Vehicle (FSV) 
project \350\ sponsored by WorldAutoSteel used three levels of 
optimization: topology optimization, low fidelity 3G (Geometry Grade 
and Gauge) optimization, and subsystem optimization, to achieve 30 
percent mass reduction in the body structure of a vehicle with a mild 
steel unibody structure. Using less material can also be achieved 
through improving the manufacturing process, such as by using improved 
joining technologies and parts consolidation. This method is

[[Page 40354]]

often used in combination with applying new materials.
---------------------------------------------------------------------------

    \350\ SAE World Congress, ``Focus B-pillar `tailor rolled' to 8 
different thicknesses,'' Feb. 24, 2010. Available at http://www.sae.org/mags/AEI/7695 (last accessed Jun. 10, 2012).
---------------------------------------------------------------------------

    The second key strategy to reduce mass of an assembly or component 
involves the substitution of lower density and/or higher strength 
materials. Material substitution includes replacing materials, such as 
mild steel, with higher-strength and advanced steels, aluminum, 
magnesium, and composite materials. In practice, material substitution 
tends to be quite specific to the manufacturer and situation. Some 
materials work better than others for particular vehicle components, 
and a manufacturer may invest more heavily in adjusting to a particular 
type of advanced material, thus complicating its ability to consider 
others. The agencies recognize that like any type of mass reduction, 
material substitution has to be conducted not only with consideration 
to maintaining equivalent component strength, but also to maintaining 
all the other attributes of that component, system or vehicle, such as 
crashworthiness, durability, and noise, vibration and harshness (NVH).
    If vehicle mass is reduced sufficiently through application of the 
two primary strategies of using less material and material substitution 
described above, secondary mass reduction options may become available. 
Secondary mass reduction is enabled when the load requirements of a 
component are reduced as a result of primary mass reduction. If the 
primary mass reduction reaches a sufficient level, a manufacturer may 
use a smaller, lighter, and potentially more efficient powertrain while 
maintaining vehicle acceleration performance. If a powertrain is 
downsized, a portion of the mass reduction may be attributed to the 
reduced torque requirement which results from the lower vehicle mass. 
The lower torque requirement enables a reduction in engine 
displacement, changes to transmission torque converter and gear ratios, 
and changes to final drive gear ratio. The reduced powertrain torque 
enables the downsizing and/or mass reduction of powertrain components 
and accompanying reduced rotating mass (e.g., for transmission, 
driveshafts/halfshafts, wheels, and tires) without sacrificing 
powertrain durability. Likewise, the combined mass reductions of the 
engine, drivetrain, and body in turn reduce stresses on the suspension 
components, steering components, wheels, tires, and brakes, which can 
allow further reductions in the mass of these subsystems. Reducing the 
unsprung masses such as the brakes, control arms, wheels, and tires 
further reduce stresses in the suspension mounting points, which will 
allow for further optimization and potential mass reduction. However, 
pickup trucks have towing and hauling requirements which must be taken 
into account when determining the amount of secondary mass reduction 
that is possible and so it is less than that of passenger cars.
    Ford's MY 2015 F-150 is one example of a light duty manufacturer 
who has begun producing high volume vehicles with a significant amount 
of mass reduction identified, specifically 250 to 750 lb per vehicle 
\351\. The vehicle is an aluminum intensive design and includes an 
aluminum cab structure, body panels, and suspension components, as well 
as a high strength steel frame and a smaller, lighter and more 
efficient engine. The Executive Summary to Ducker Worldwide's 2014 
report \352\ states that state that the MY 2015 F-150 contains 1080 lbs 
of aluminum with at least half of this being aluminum sheet and 
extrusions for body and closures. Ford engine range for its light duty 
truck fleet includes a 2.7L EcoBoost V-6. It is possible that the 
strategy of aluminum body panels will be applied to the heavy duty F-
250 and F-350 versions when they are redesigned.\353\
---------------------------------------------------------------------------

    \351\ ``2008/9 Blueprint for Sustainability,'' Ford Motor 
Company. Available at: http://www.ford.com/go/sustainability (last 
accessed February 8, 2010).
    \352\ ``2015 North American Light Vehicle Aluminum Content 
Study--Executive Summary'', June 2014, http://www.drivealuminum.org/research-resources/PDF/Research/2014/2014-ducker-report (last 
accessed February 26, 2015).
    \353\ http://www.foxnews.com/leisure/2014/09/30/ford-confirms-increased-aluminum-use-on-next-gen-super-duty-pickups/.
---------------------------------------------------------------------------

    EPA recently completed a multi-year study with FEV North America, 
Inc. on the lightweighting of a light-duty pickup truck, a 2011 GMC 
Silverado, titled ``Mass Reduction and Cost Analysis -Light-Duty Pickup 
Trucks Model Years 2020-2025.'' \354\ Results contain a cost curve for 
various mass reduction percentages with the main solution being 
evaluated for a 21.4 percent (511 kg/1124 lb) mass reduction resulting 
in an increased direct incremental manufacturing cost of $2228. In 
addition, the report outlines the compounding effect that occurs in a 
vehicle with performance requirements including hauling and towing. 
Secondary mass evaluation was performed on a component level based on 
an overall 20 percent vehicle mass reduction. Results revealed 84 kg of 
the 511 kg, or 20 percent, were from secondary mass reduction. 
Information on this study is summarized in SAE paper 2015-01-0559. DOT 
has also sponsored an on-going pickup truck lightweighting project. 
This project uses a more recent baseline vehicle, a MY 2014 GMC 
Silverado, and the project will be finished by early 2016. Both 
projects will be utilized for the light-duty GHG and CAFE Midterm 
Evaluation mass reduction baseline characterization and may be used to 
update assumptions of mass reduction for HD pickups and vans for the 
final Phase 2 rulemaking.
---------------------------------------------------------------------------

    \354\ ``Mass Reduction and Cost Analysis--Light-Duty Pickup 
Trucks Model Years 2020-2025'', FEV, North America, Inc., April 
2015, Document no. EPA-420-R-15-006.
---------------------------------------------------------------------------

    In order to determine if technologies identified on light duty 
trucks are applicable to heavy-duty pickups, EPA also contracted with 
FEV North America, Inc. to perform a scaling study in order to evaluate 
the technologies identified for the light-duty truck would be 
applicable for a heavy-duty pickup truck, in this study a Silverado 
2500, a Mercedes Sprinter and a Renault Master. This report is 
currently being drafted and will be peer reviewed and finalized between 
the proposed rule and the final rule making. The specific results will 
be presented in the final rulemaking (FRM) and may be used to update 
assumptions of mass reduction for the FRM.
    The RIA for this rulemaking shows that mass reduction is assumed to 
be part of the strategy for compliance for HD pickups and vans. The 
assumptions of mass reduction for HD pickups and vans as used in this 
analysis were taken from the recent light-duty fuel economy/GHG 
rulemaking for light-duty pickup trucks, though they may be updated for 
the FRM based upon the on-going EPA and NHTSA lightweighting studies as 
well as other information received in the interim. The cost and 
effectiveness assumptions for mass reduction technology are described 
in the RIA.
(ii) Low Rolling Resistance Tires
    Tire rolling resistance is the frictional loss associated mainly 
with the energy dissipated in the deformation of the tires under load 
and thus influences fuel efficiency and CO2 emissions. Other 
tire design characteristics (e.g., materials, construction, and tread 
design) influence durability, traction (both wet and dry grip), vehicle 
handling, and ride comfort in addition to rolling resistance. A typical 
LRR tire's attributes would include: Increased tire inflation pressure, 
material changes, and tire construction with less hysteresis, geometry 
changes (e.g., reduced aspect ratios), and reduction in sidewall and 
tread deflection. These changes would generally be accompanied with

[[Page 40355]]

additional changes to suspension tuning and/or suspension design.
(iii) Aerodynamic Drag Reduction
    Many factors affect a vehicle's aerodynamic drag and the resulting 
power required to move it through the air. While these factors change 
with air density and the square and cube of vehicle speed, 
respectively, the overall drag effect is determined by the product of 
its frontal area and drag coefficient, Cd. Reductions in these 
quantities can therefore reduce fuel consumption and CO2 
emissions. Although frontal areas tend to be relatively similar within 
a vehicle class (mostly due to market-competitive size requirements), 
significant variations in drag coefficient can be observed. Significant 
changes to a vehicle's aerodynamic performance may need to be 
implemented during a redesign (e.g., changes in vehicle shape). 
However, shorter-term aerodynamic reductions, with a somewhat lower 
effectiveness, may be achieved through the use of revised exterior 
components (typically at a model refresh in mid-cycle) and add-on 
devices that currently being applied. The latter list would include 
revised front and rear fascias, modified front air dams and rear 
valances, addition of rear deck lips and underbody panels, and lower 
aerodynamic drag exterior mirrors.
(6) What Are the Projected Technology Effectiveness Values and Costs
    The assessment of the technology effectiveness and costs was 
determined from a combination of sources. First an assessment was 
performed by SwRI under contract with the agencies to determine the 
effectiveness and costs on several technologies that were generally not 
considered in the Phase 1 GHG rule time frame. Some of the technologies 
were common with the light-duty assessment but the effectiveness and 
costs of individual technologies were appropriately adjusted to match 
the expected effectiveness and costs when implemented in a heavy-duty 
application. Finally, the agencies performed extensive outreach to 
suppliers of engine, transmission and vehicle technologies applicable 
to heavy-duty applications to get industry input on cost and 
effectiveness of potential GHG and fuel consumption reducing 
technologies.
    To achieve the levels of the proposed standards for gasoline and 
diesel powered heavy-duty vehicles, a combination of the technologies 
previously discussed would be required respective to unique gasoline 
and diesel technologies and their challenges. Although some of the 
technologies may already be implemented in a portion of heavy-duty 
vehicles, none of the technologies discussed are considered ubiquitous 
in the heavy-duty fleet. Also, as would be expected, the available test 
data show that some vehicle models would not need the full complement 
of available technologies to achieve the proposed standards. 
Furthermore, many technologies can be further improved (e.g., 
aerodynamic improvements) from today's best levels, and so allow for 
compliance without needing to apply a technology that a manufacturer 
might deem less desirable.
    Technology costs for HD pickups and vans are shown in Table VI-4. 
These costs reflect direct and indirect costs to the vehicle 
manufacturer for the 2021 model year. See Chapter 2 of the Draft RIA 
for a more complete description of the basis of these costs.

Table VI-4--Technology Costs for HD Pickups & Vans Inclusive of Indirect
                     Cost Markups for MY2021 (2012$)
------------------------------------------------------------------------
                  Technology                      Gasoline      Diesel
------------------------------------------------------------------------
Engine changes to accommodate low friction               $6           $6
 lubes........................................
Engine friction reduction--level 1............          116          116
Engine friction reduction--level 2............          254          254
Dual cam phasing..............................          183          183
Cylinder deactivation.........................          196          N/A
Stoichiometric gasoline direct injection......          451          N/A
Turbo improvements............................          N/A           16
Cooled EGR....................................          373          373
Turbocharging & downsizing\a\.................          671          N/A
``Right-sized'' diesel from larger diesel.....          N/A            0
8s automatic transmission (increment to 6s              457          457
 automatic transmission)......................
Improved accessories--level 1.................           82           82
Improved accessories--level 2.................          132          132
Low rolling resistance tires--level 1.........           10           10
Passive aerodynamic improvements (aero 1).....           51           51
Passive plus Active aerodynamic improvements            230          230
 (aero2)......................................
Electric (or electro/hydraulic) power steering          151          151
Mass reduction (10% on a 6500 lb vehicle).....          318          318
Driveline friction reduction..................          139          139
Stop-start (no regenerative braking)..........          539          539
Mild HEV......................................        2,730        2,730
Strong HEV without inclusion of any engine            6,779        6,779
 changes......................................
------------------------------------------------------------------------
Note:
\a\ Cost to downsize from a V8 OHC to a V6 OHC engine with twin turbos.

    As noted above, the CAFE model works by adding technologies in an 
incremental fashion to each particular vehicle in a manufacturer's 
fleet until that fleet complies with the imposed standards. It does 
this by following a predefined set of decision trees whereby the 
particular vehicle is placed on the appropriate decision tree and it 
follows the predefined progression of technology available on that 
tree. At each step along the tree, a decision is made regarding the 
cost of a given technology relative to what already exists on the 
vehicle along with the fuel consumption improvement it provides 
relative to the fuel consumption at the current location on the tree, 
prior to deciding whether to take that next step on the tree or remain 
in the current location. Because the model works in this way, the input 
files must be structured to provide costs and effectiveness values for 
each technology

[[Page 40356]]

relative to whatever technologies have been added in earlier steps 
along the tree. Table VI-5 presents the cost and effectiveness values 
used in the CAFE model input files.

             Table VI-5--CAFE Model Input Values for Cost & Effectiveness for Given Technologies \a\
----------------------------------------------------------------------------------------------------------------
                                                                              Incremental cost (2012$) \a\ \b\
                       Technology                          FC savings (%) --------------------------------------
                                                                               2021         2025         2027
----------------------------------------------------------------------------------------------------------------
Improved Lubricants and Engine Friction Reduction.......             1.60           24           24           23
Coupled Cam Phasing (SOHC)..............................             3.82           48           43           39
Dual Variable Valve Lift (SOHC).........................             2.47           42           37           34
Cylinder Deactivation (SOHC)............................             3.70           34           30           27
Intake Cam Phasing (DOHC)...............................             0.00           48           43           39
Dual Cam Phasing (DOHC).................................             3.82           46           40           37
Dual Variable Valve Lift (DOHC).........................             2.47           42           37           34
Cylinder Deactivation (DOHC)............................             3.70           34           30           27
Stoichiometric Gasoline Direct Injection (OHC)..........             0.50           71           61           56
Cylinder Deactivation (OHV).............................             3.90          216          188          172
Variable Valve Actuation (OHV)..........................             6.10           54           47           43
Stoichiometric Gasoline Direct Injection (OHV)..........             0.50           71           61           56
Engine Turbocharging and Downsizing:
    Small Gasoline Engines..............................             8.00          518          441          407
    Medium Gasoline Engines.............................             8.00          -12          -62          -44
    Large Gasoline Engines..............................             8.00          623          522          456
Cooled Exhaust Gas Recirculation........................             3.04          382          332          303
Cylinder Deactivation on Turbo/downsized Eng............             1.70           33           29           26
Lean-Burn Gasoline Direct Injection.....................             4.30        1,758        1,485        1,282
Improved Diesel Engine Turbocharging....................             2.51           22           19           18
Engine Friction & Parasitic Reduction:
    Small Diesel Engines................................             3.50          269          253          213
    Medium Diesel Engines...............................             3.50          345          325          273
    Large Diesel Engines................................             3.50          421          397          334
Downsizing of Diesel Engines (V6 to I-4)................            11.10            0            0            0
8-Speed Automatic Transmission \c\......................             5.00          482          419          382
Electric Power Steering.................................             1.00          160          144          130
Improved Accessories (Level 1)..........................             0.93           93           83           75
Improved Accessories (Level 2)..........................             0.93           57           54           46
Stop-Start System.......................................             1.10          612          517          446
Integrated Starter-Generator............................             3.20        1,040          969          760
Strong Hybrid Electric Vehicle..........................            17.20        3,038        2,393        2,133
Mass Reduction (5%).....................................             1.50         0.28         0.24         0.21
Mass Reduction (additional 5%)..........................             1.50         0.87         0.75         0.66
Reduced Rolling Resistance Tires........................             1.10           10            9            9
Low-Drag Brakes.........................................             0.40          106          102          102
Driveline Friction Reduction............................             0.50          153          137          124
Aerodynamic Improvements (10%)..........................             0.70           58           52           47
Aerodynamic Improvements (add'l 10%)....................             0.70          193          182          153
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values for other model years available in CAFE model input files available at NHTSA Web site.
\b\ For mass reduction, cost reported on mass basis (per pound of curb weight reduction).
\c\ 8 speed automatic transmission costs include costs for high efficiency gearbox and aggressive shift logic
  whereas those costs were kept separate in prior analyses.

(7) Summary of Alternatives Analysis
    The major outputs of the CAFE model analysis are summarized in 
Table VI-6 and Table VI-7 below for the flat and dynamic baselines, 
respectively. For a more detailed analysis of the alternatives, please 
refer to Section D below as well as the draft RIA.

      Table VI-6--Summary of HD Pickup and Van Alternatives' Analysis--Method A Using the Flat Baseline \a\
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Standard Increase........................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase through MY..................            2025            2027            2025            2025
    Total Stringency Increase...................            9.6%           16.2%           16.3%           18.5%
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           19.05           20.58           20.58           21.14
Achieved........................................           19.12           20.58           20.83           21.32
----------------------------------------------------------------------------------------------------------------

[[Page 40357]]

 
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.25            4.86            4.86            4.73
Achieved........................................            5.23            4.86            4.80            4.69
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             495             458             458             446
Achieved........................................             493             458             453             442
----------------------------------------------------------------------------------------------------------------
                                   Incremental Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($/vehicle) \b\.........................             700           1,324           1,804           2,135
Payback period (m) \b\..........................              24              26              34              36
    Total ($m)..................................             529           1,001           1,363           1,614
----------------------------------------------------------------------------------------------------------------
                               Benefit-Cost Summary, MYs 2021-2030 ($billion) \c\
----------------------------------------------------------------------------------------------------------------
Fuel Savings (bil. gal.)........................             6.1            10.1            11.9            13.3
CO2 Reduction (mmt).............................              73             118             139             155
    Total Social Cost...........................             3.3             5.6             8.7            10.2
    Total Social Benefit........................            18.4            29.0            34.4            37.9
    Net Social Benefit..........................            15.1            23.4            25.7            27.7
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Values also used in Method B.
\c\ At a 3% discount rate.

    Table VI-7--Summary of HD Pickup and Van Alternatives' Analysis--Method A Using the Dynamic Baseline \a\
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Standard Increase........................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase through MY..................            2025            2027            2025            2025
    Total Stringency Increase...................            9.6%           16.2%           16.3%           18.5%
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           19.04           20.57           20.57           21.14
Achieved........................................           19.14           20.61           20.83           21.27
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.25            4.86            4.86            4.73
Achieved........................................            5.22            4.85            4.80            4.70
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             495             458             458             446
Achieved........................................             491             458             453             444
----------------------------------------------------------------------------------------------------------------
                                   Incremental Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($/vehicle) \b\.........................             578           1,348           1,655           2,080
Payback period (m) \b\..........................              25              31              34              38
    Total ($m)..................................             437           1,019           1,251           1,572
----------------------------------------------------------------------------------------------------------------
                               Benefit-Cost Summary, MYs 2021-2030 ($billion) \c\
----------------------------------------------------------------------------------------------------------------
Fuel Savings (bil. gal.)........................             5.0             8.9            10.5            11.9
CO2 Reduction (mmt).............................              59             104             122             139
    Total Social Cost...........................             3.3             6.8             9.5            13.0
    Total Social Benefit........................            14.3            23.6            28.2            32.8
    Net Social Benefit..........................            11.0            16.8            18.7            19.8
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Values also used in Method B.
\c\ At a 3% discount rate.

[[Page 40358]]

    In general, the proposed standards are projected to cause 
manufacturers to produce HD pickups and vans that are lighter, more 
aerodynamic, and more technologically complex across all the 
alternatives, while social benefits continue to increase across all 
alternatives. As shown, there is a major difference between the 
relatively small improvements in required fuel consumption and average 
incremental technology cost between the alternatives, suggesting that 
the challenge of improving fuel consumption and CO2 
emissions accelerates as stringency increases (i.e., that there may be 
a ``knee'' in the dependence of the challenge and on the stringency). 
Despite the fact that the required average fuel consumption level only 
changes by 3 percent between Alternative 4 and Alternative 5, average 
technology cost increases by more than 25 percent.
    Note further that the difference in estimated costs, effectiveness, 
degree of technology penetration required, and overall benefits do not 
vary significantly under either the flat or dynamic baseline 
assumptions. The agencies view these results as corroborative of the 
basic reasonableness of the approach proposed.
(8) Consistency of the Proposed Standards With the Agencies' Respective 
Legal Authorities
    Based on the information currently before the agencies, we believe 
that Alternative 3 would be maximum feasible and appropriate for this 
segment for the model years in question. EPA believes this reflects a 
reasonable consideration of the statutory factors of technology 
effectiveness, feasibility, cost, lead time, and safety for purposes of 
CAA sections 202 (a)(1) and (2). NHTSA believes this proposal is 
maximum feasible under EISA. The agencies have projected a compliance 
path for the proposed standards showing aggressive implementation of 
technologies that the agencies consider to be available in the time 
frame of these rules. Under this approach, manufacturers are expected 
to implement these technologies at aggressive adoption rates on 
essentially all vehicles across this sector by 2027 model year. In the 
case of several of these technologies, adoption rates are projected to 
approach 100 percent. This includes a combination of engine, 
transmission and vehicle technologies as described in this section 
across every vehicle. The proposal also is premised on less aggressive 
penetration of particular advanced technologies, including strong 
hybrid electric vehicles.
    We project the proposed standards to be achievable within known 
design cycles, and we believe these standards would allow different 
paths to compliance in addition to the one we outline and cost here. As 
discussed below and throughout this analysis, our proposal places a 
higher value on maintaining functionality and capability of vehicles 
designed for work (versus light-duty), and on the assurance of in use 
reliability and market acceptance of new technology, particularly in 
initial model years of the program. Nevertheless, it may be possible to 
have additional adoption rates of the technologies than we project so 
that further reductions could be available at reasonable cost and cost-
effectiveness.
    Alternative 4 is also discussed in detail below because the 
agencies believe it has the potential to be the maximum feasible 
alternative, and otherwise appropriate. The agencies could decide to 
adopt Alternative 4, in whole or in part, in the final rule. In 
particular, the agencies believe Alternative 4, which would achieve the 
same stringency as the proposed standards with two years less lead 
time, merits serious consideration. However, the agencies are uncertain 
whether the projected technologies and market penetration rates that 
could be necessary to meet the stringencies would be practicable within 
the lead time provided in Alternative 4. The proposed standards are 
generally designed to achieve the levels of fuel consumption and GHG 
stringency that Alternative 4 would achieve, but with several years of 
additional lead time, meaning that manufacturers could, in theory, 
apply new technology at a more gradual pace and with greater 
flexibility. The agencies seek comment on these alternatives, including 
their corresponding lead times.
    Alternative 4 is based on a year-over-year increase in stringency 
of 3.5 percent in MYs 2021-2025 whereas the proposed preferred 
Alternative 3 is based on a 2.5 percent year-over-year increase in 
stringency in MY 2021-2027. The agencies project that the higher rate 
of increase in stringency associated with Alternative 4 and the shorter 
lead time would necessitate the use of a different technology mix under 
Alternative 4 compared to Alternative 3. Alternative 3 would achieve 
the same final stringency increase as Alternative 4 at about 80 percent 
of the average per-vehicle cost increase, and without the expected 
deployment of more advanced technology at high penetration levels. In 
particular, under the agencies' primary analysis that includes the use 
of strong hybrids manufacturers are estimated to deploy strong hybrids 
in approximately 8 percent of new vehicles (in MY2027) under 
Alternative 3, compared to 12 percent under Alternative 4 (in MY 2025). 
Less aggressive electrification technologies also appear on 33 percent 
of new vehicles simulated to be produced in MY2027 under Alternative 4, 
but are not necessary under Alternative 3. Additionally, it is 
important to note that due to the shorter lead time of Alternative 4, 
there are fewer vehicle refreshes and redesigns during the phase-in 
period of MY 2021-2025. While the CAFE model's algorithm accounts for 
manufacturers' consideration of upcoming stringency changes and credit 
carry-forward, the steeper ramp-up of the standard in Alternative 4, 
coupled with the five-year credit life, results in a prediction that 
manufacturers would take less cost-effective means to comply with the 
standards compared with the proposed alternative 3 phase-in period of 
MY 2021-2027. For example, the model predicts that some manufacturers 
would not implement any amount of strong hybrids on their vans during 
the 2021-2025 timeframe and instead would implement less effective 
technologies such as mild hybrids at higher rates than what would 
otherwise have been required if they had implemented a small percentage 
of strong hybrids. Whereas for Alternative 3, the longer, shallower 
phase-in of the standards allows for more compliance flexibility and 
closer matching with the vehicle redesign cycles, which (as noted 
above) can be up to ten years for HD vans.
    There is also a high degree of sensitivity to the estimated 
effectiveness levels of individual technologies. At high penetration 
rates of all technologies on a vehicle, the result of a reduced 
effectiveness of even a single technology could be non-compliance with 
the standards. If the standards do not account for this uncertainty, 
there would be a real possibility that a manufacturer who followed the 
exact technology path we project would not meet their target because a 
technology performed slightly differently in their application. NHTSA 
has explored this uncertainty, among others, in the uncertainty 
analysis described in Section D below.
    As discussed above, the proposed Alternative 3 standards and the 
Alternative 4 standards are based on the application of the 
technologies described in this section. These technologies are 
projected to be available within the lead time provided under 
Alternative 3--i.e., by MY 2027,

[[Page 40359]]

as discussed in Draft RIA Chapter 2.6. The proposed standards and 
Alternative 4 would require a relatively aggressive implementation 
schedule of most of these technologies during the program phase-in. 
Heavy-duty pickups and vans would need to have a combination of many 
individual technologies to achieve the proposed standards. The proposed 
standards are projected to yield significant emission and fuel 
consumption reductions without requiring a large segment transition to 
strong hybrids, a technology that while successful in light-duty 
passenger cars, cross-over vehicles and SUVs, may impact vehicle work 
capabilities \355\ and have questionable customer acceptance in a large 
portion of this segment dedicated to towing.\356\
---------------------------------------------------------------------------

    \355\ Hybrid batteries, motors and electronics generally add 
weight to a vehicle and require more space which can result in 
conflicts with payload weight and volume objectives.
    \356\ Hybrid electric systems are not sized for situations when 
vehicles are required to do trailer towing where the combined weight 
of vehicle and trailer is 2 to 4 times that of the vehicle alone. 
During these conditions, the hybrid system will have reduced 
effectiveness. Sizing the system for trailer towing is prohibitive 
with respect to hybrid component required sizes and the availability 
of locations to place larger components like batteries.
---------------------------------------------------------------------------

    Table VI-8 below shows that the agencies' analysis estimates that 
the most cost-effective way to meet the requirements of Alternative 3 
would be to use strong hybrids in up to 9.9 percent of pickups and 5.5 
percent of vans on an industry-wide basis whereas Alternative 4 shows 
strong hybrids on up to 19 percent of pickups. The analysis shows that 
the two years of additional lead time provided by the proposed 
Alternative 3 would provide manufacturers with a better opportunity to 
maximize the use of more cost effective technologies over time thereby 
reducing the need for strong hybrids which may be particularly 
challenging for this market segment. The agencies seek comment on the 
potential use of technologies in response to Alternatives 3 and 4, as 
well as the corresponding lead times proposed in each alternative.

     Table VI-8--CAFE Model Technology Adoption Rates for Proposal and Alternative 4 Summary--Flat Baseline
----------------------------------------------------------------------------------------------------------------
                                           Proposal (2.5% per year) 2021 to   Alternative 4 (3.5% per year) 2021
                                                         2027                               to 2025
               Technology               ------------------------------------------------------------------------
                                           Pickup trucks                        Pickup trucks
                                                (%)            Vans  (%)             (%)            Vans  (%)
----------------------------------------------------------------------------------------------------------------
Low friction lubricants................               100               100                100               100
Engine friction reduction..............               100               100                100               100
Cylinder deactivation..................                22                19                 22                19
Variable valve timing..................                22                82                 22                82
Gasoline direct injection..............                 0                63                  0                80
Diesel engine improvements.............                60               3.6                 60               3.6
Turbo downsized engine.................                 0                63                  0                63
8 speed transmission...................                98                92                 98                92
Low rolling resistance tires...........               100                92                100                59
Aerodynamic drag reduction.............               100               100                100               100
Mass reduction and materials...........               100               100                100               100
Electric power steering................               100                49                100                46
Improved accessories...................               100                87                100                36
Low drag brakes........................               100                45                100                45
Stop/start engine systems..............                 0                 0                 15               1.5
Mild hybrid............................                 0                 0                 29                15
Strong hybrid..........................               9.9               5.5                 19                 0
----------------------------------------------------------------------------------------------------------------

    As discussed earlier, the agencies also conducted a sensitivity 
analysis to determine a compliance pathway where no strong hybrids 
would be selected. Although the agencies project that strong hybrids 
may be the most cost effective approach, manufacturers may select 
another compliance path. This no strong hybrid analysis included the 
use of downsized turbocharged engine in vans currently equipped with 
large V-8 engines. Turbo-downsized engines were not allowed on 6+ liter 
gasoline vans in the primary analysis because the agencies sought to 
preserve consumer choice with respect to vans that have large V-8s for 
towing. However, given the recent introduction of vans with 
considerable towing capacity and turbo-downsized engines, the agencies 
believe it would be feasible for vans in the time-frame of these 
proposed rules. Table VI-9 below reflects the difference in penetration 
rates of technologies for the proposal and Alternative 4 if strong 
hybridization is not chosen as a technology pathway. For simplicity, 
pickup trucks and vans are combined into a single industry wide 
penetration rate. While strong hybridization may provide the most cost 
effective path for a manufacturer to comply with the Proposal or 
Alternative 4, there are other means to comply with the requirements, 
mainly a 20 percent penetration rate of mild hybrids for the Proposal 
or a 66 percent penetration of mild hybrids for Alternative 4. The 
modeling of both alternatives predicts a 1 to 4 percent penetration of 
stop/start engine systems.
    The table also shows that when strong hybrids are used as a pathway 
to compliance, penetration rates of all hybrid technologies increase 
substantially between the proposal and Alternative 4. The analysis 
predicts an increase in strong hybrid penetration from 8 percent to 12 
percent, a 23 percent penetration of mild hybrids and a 10 percent 
penetration stop/start engine systems for Alternative 4 compared with 
the proposal. Also, by having the final standards apply in MY2027 
instead of MY2025, the proposal is not premised on use of any mild 
hybrids or stop/start engine systems to achieve the same level of 
stringency as Alternative 4.

[[Page 40360]]

    Table VI-9--CAFE Model Technology Adoption Rates for Proposal and Alternative 4 Combined Fleet and Fuels
                                             Summary--Flat Baseline
----------------------------------------------------------------------------------------------------------------
                                          Proposal (2.5% per year)  2021 to      Alternative 4 (3.5% per year)
                                                         2027                            2021 to 2025
               Technology               ------------------------------------------------------------------------
                                            With strong      Without strong      With strong     Without strong
                                            hybrids (%)       hybrids (%)        hybrids (%)      hybrids  (%)
----------------------------------------------------------------------------------------------------------------
Low friction lubricants................               100               100                100               100
Engine friction reduction..............               100               100                100               100
Cylinder deactivation..................                21                22                 21                14
Variable valve timing..................                46                46                 46                46
Gasoline direct injection..............                25                45                 31                45
Diesel engine improvements.............                38                38                 38                38
Turbo downsized engine \a\.............                25                31                 25                31
8 speed transmission...................                96                96                 96                96
Low rolling resistance tires...........                97                97                 84                84
Aerodynamic drag reduction.............               100               100                100               100
Mass reduction and materials...........               100               100                100               100
Electric power steering................                80                92                 79                79
Improved accessories...................                67                77                 75                75
Low drag brakes........................                78                93                 78                78
Stop/start engine systems..............                 0                 1                 10                 4
Mild hybrid............................                 0                20                 23                66
Strong hybrid..........................                 8                 0                 12                 0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ The 6+ liter V8 vans were allowed to convert to turbocharged and downsized engines in the ``without strong
  hybrid'' analysis for both the Proposal and the Alternative 4 to provide a compliance path.

    Table VI-10 and Table VI-11 below provide a further breakdown of 
projected technology adoption rates specifically for gasoline-fueled 
pickups and vans which shows potential adoption rates of strong hybrids 
for each vehicle type. Strong hybrids are not projected to be used in 
diesel applications. The Alternative 4 analysis shows the use of strong 
hybrids in up to 48 percent of gasoline pickups, depending on the mix 
of strong and mild hybrids, and stop/start engine systems in 20 percent 
of gasoline pickups (the largest gasoline HD segment). It is important 
to note that this analysis only shows one pathway to compliance, and 
the manufacturers may make other decisions, e.g., changing the mix of 
strong vs. mild hybrids, or applying electrification technologies to HD 
vans instead. The technology adoption rates projected for gasoline 
pickups and gasoline vans due to the proposed Alternative 3 and 
Alternative 4 are shown in Table VI-10 and Table VI-11, respectively.

Table VI-10--CAFE Model Technology Adoption Rates for Proposal and Alternative 4 on Gasoline Pickup Trucks--Flat
                                                    Baseline
----------------------------------------------------------------------------------------------------------------
                                  Proposal (2.5% per year)  2021 to 2027   Alternative 4 (3.5% per year) 2021 to
                                -----------------------------------------                  2025
           Technology                                                    ---------------------------------------
                                 With strong  hybrids    Without strong   With strong  hybrids   Without strong
                                          (%)             hybrids (%)              (%)            hybrids  (%)
----------------------------------------------------------------------------------------------------------------
Low friction lubricants........  100.................               100   100.................               100
Engine friction reduction......  100.................               100   100.................               100
Cylinder deactivation..........  56..................                56   56..................                56
Variable valve timing..........  56..................                56   56..................                56
Gasoline direct injection......  0...................                56   0...................                56
8 speed transmission...........  100.................               100   100.................               100
Low rolling resistance tires...  100.................               100   100.................               100
Aerodynamic drag reduction.....  100.................               100   100.................               100
Mass reduction and materials...  100.................               100   100.................               100
Electric power steering........  100.................               100   100.................               100
Improved accessories...........  100.................               100   100.................               100
Low drag brakes................  100.................               100   100.................               100
Driveline friction reduction...  44..................                68   68..................                68
Stop/start engine systems......  0...................                 0   20..................                 0
Mild hybrid....................  Up to 42 \a\........                0%   18-86 \a\...........                86
Strong hybrid..................  Up to 25............  .................  Up to 48............  ................
----------------------------------------------------------------------------------------------------------------
Note:
\a\ Depending on extent of strong hybrid adoption as hybrid technologies can replace each other, however they
  will have different effectiveness and costs.

[[Page 40361]]

Table VI-11--CAFE Model Technology Adoption Rates for Proposal and Alternative 4 on Gasoline Vans--Flat Baseline
----------------------------------------------------------------------------------------------------------------
                                     Proposal (2.5% per year) 2021 to 2027    Alternative 4 (3.5% per year) 2021
                                  -------------------------------------------               to 2025
            Technology                                                       -----------------------------------
                                   With strong hybrids (%)   Without strong      With strong     Without strong
                                                               hybrids (%)       hybrids (%)       hybrids (%)
----------------------------------------------------------------------------------------------------------------
Low friction lubricants..........  100....................               100               100               100
Engine friction reduction........  100....................               100               100               100
Cylinder deactivation............  23.....................                 3                23                 3
Variable valve timing............  100....................               100               100               100
Gasoline direct injection........  57.....................                97                97                97
Turbo downsized engine\ a\.......  77.....................                97                77                97
8 speed transmission.............  97.....................                97                97                97
Low rolling resistance tires.....  100....................               100                60                60
Aerodynamic drag reduction.......  100....................               100               100               100
Mass reduction and materials.....  100....................               100               100               100
Electric power steering..........  55.....................                85                53                53
Improved accessories.............  23.....................                38                43                43
Low drag brakes..................  53.....................                89                53               100
Stop/start engine systems........  0......................                 0                 2                 0
Mild hybrid......................  Up to 13 \b\...........                13                18                40
Strong hybrid....................  Up to 7................  ................                 0  ................
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ The 6+ liter V8 vans were allowed to convert to turbocharged and downsized engines in the ``without strong
  hybrid'' analysis for both the Proposal and the Alternative 4 to provide a compliance path.
\b\ Depending on extent of strong hybrid adoption as hybrid technologies can replace each other, however they
  will have different effectiveness and costs.

    The tables above show that many technologies would be at or 
potentially approach 100 percent adoption rates according to the 
analysis. If certain technologies turn out to be not well suited for 
certain vehicle models or less effective that projected, other 
technology pathways would be needed. The additional lead time provided 
by the proposed Alternative 3 reduces these concerns because 
manufacturers would have more flexibility to implement their compliance 
strategy and are more likely to contain a product redesign cycle 
necessary for many new technologies to be implemented.
    GM may have a particular challenge meeting new standards compared 
to other manufacturers because their production consists of a larger 
portion of gasoline-powered vehicles and because they continue to offer 
a traditional style HD van equipped only with a V-8 engine. Under the 
strong hybrid analysis for Alternative 3, GM is projected to apply 
strong hybrids to 46 percent of their HD gasoline pickups and 17 
percent their HD gasoline vans. Under Alternative 4, GM is projected to 
apply a combination of 53 percent strong and 43 percent mild hybrids to 
their HD gasoline pickups and 44 percent mild hybrids to their HD vans. 
The no strong hybrid analysis shows that GM could comply without strong 
hybrids based on the use of turbo downsizing on all of their HD 
gasoline vans to fully comply with either Alternative 3 or Alternative 
4. As modeled, Alternative 4 would also require GM to additionally 
utilize several other technologies such as higher penetration of mild 
hybridization. If GM were to choose to maintain a V-8 version of their 
current HD van and not fully utilize turbo downsizing, another 
compliance path such as some use of strong hybrids would be needed. 
This would also be the case if GM chose not to fully utilize some other 
technologies under Alterative 4 as well.
    In addition to the possibility of an increased level of 
hybridization, the agencies are also requesting comment on other 
possible outcomes associated especially with Alternative 4; in 
particular, the possibility of traditional van designs or other 
products being discontinued. Several manufacturers now offer or are 
moving to European style HD vans. Ford, for example, has discontinued 
its E-series body on frame HD van and has replaced it with the unibody 
Transit van for MY 2015. While other manufacturers have replaced their 
traditional style vans with new European style van designs, GM 
continues to offer the traditional full frame style van with eight 
cylinder gasoline engines for higher towing capability (up to 16,000 lb 
GCWR). Typically, the European style vans are equipped with smaller 
engines offering better fuel consumption and lower CO2 
emissions but with reduced towing capability, similar to light-duty 
trucks (though Ford offers a Transit van with a GCWR of 15,000 lb).
    The agencies request comment on the potential for Alternative 4 in 
particular to incentivize GM to discontinue its current traditional 
style van and replace it with an as yet to be designed European style 
van similar to its competitor's products. See Bluewater Network v. EPA, 
370 F. 3d 1, 22 (D.C. Cir. 2004) (standard implementing technology-
forcing provision of CAA remanded to EPA for an explanation of why the 
standard was not based on discontinuation of a particular model); 
International Harvester v. Ruckelshaus, 478 F. 2d 615, 640-41 (D.C. 
Cir. 1973) (``We are inclined to agree with the Administrator that as 
long as feasible technology permits the demand for new passenger 
automobiles to be generally met, the basic requirements of the Act 
would be satisfied, even though this might occasion fewer models and a 
more limited choice of engine types''). Such an outcome could limit 
consumer choice both on the style of van available in the marketplace 
and on the range of capabilities of the vehicles available. The 
agencies have not attempted to cost out this possible compliance path. 
The agencies request comments on the likelihood of this type of 
redesign as a possible outcome of Alternative 3 and Alternative 4, and 
whether it would be appropriate. We are especially interested in 
comments on the potential

[[Page 40362]]

impact on consumer choice and the costs associated with this type of 
wholesale vehicle model replacement.
    In addition, another potential outcome of Alternative 4 would be 
that manufacturers could change the product utility. For example, 
although GM's traditional van discussed above currently offers similar 
towing capacity as gasoline pickups, GM could choose to replace engines 
designed for those towing capacities with small gas or diesel engines. 
The agencies request comment on the potential for Alternative 4 to lead 
to this type of compliance approach.
    The agencies also request comment on the possibility that 
Alternative 4 could lead to increased dieselization of the HD pickup 
and van fleet. Dieselization is not a technology path the agencies 
included in the analysis for the Phase 1 rule or the Phase 2 proposal 
but it is something the agencies could consider as a technology path 
under Alternative 4. As discussed earlier, diesel engines are 
fundamentally more efficient than gasoline engines providing the same 
power (even gasoline engines with the technologies discussed above). 
Alternative 4 could result in manufacturers switching from gasoline 
engines to diesel engines in certain challenging segments. However, 
while technologically feasible, this pathway could cause a distortion 
in consumer choices and significantly increase the cost of those 
vehicles, particularly considering Alternative 4 is projected to 
require penetration of some form of hybridization. Also, if 
dieselization occurs by manufacturers equipping vehicles with larger 
diesel engines rather than ``right-sized'' engines, the towing 
capability of the vehicles could increase resulting in higher work 
factors for the vehicles, higher targets, and reduced program benefits. 
The issue of surplus towing capability is also discussed above in VI.B. 
(1).
    The technologies associated with meeting the proposed standards are 
estimated to add costs to heavy-duty pickups and vans as shown in Table 
VI-12 and Table VI-13 for the flat baseline and dynamic baseline, 
respectively. These costs are the average fleet-wide incremental 
vehicle costs relative to a vehicle meeting the MY2018 standard in each 
of the model years shown. Reductions associated with these costs and 
technologies are considerable, estimated at a 13.6 percent reduction of 
fuel consumption and CO2eq emissions from the MY 2018 
baseline for gasoline and diesel engine equipped vehicles.\357\ A 
detailed cost and cost effectiveness analysis for both the proposed 
preferred Alternative 3 are provided in Section IX and Chapter 7.1 of 
the draft RIA. As shown by the analysis, the long-term cost 
effectiveness of the proposal is similar to that of the Phase 1 HD 
pickup and van standards and also falls within the range of the cost 
effectiveness for Phase 2 standards proposed for the other HD 
sectors.\358\ The cost of controls would be fully recovered by the 
operator due to the associated fuel savings, with a payback period 
somewhere in the third year of ownership, as shown in Section IX.L of 
this preamble. Consistent with the agencies' respective statutory 
authorities under 42 U.S.C. 7521(a) and 49 U.S.C. 32902(k)(2), and 
based on the agencies' analysis, EPA and NHTSA are proposing 
Alternative 3. The agencies seek comment on Alternative 4, as we may 
seek to adopt it in whole or in part in the final rule.
---------------------------------------------------------------------------

    \357\ See Table VI-5.
    \358\ Analysis using the MOVES model indicates that the cost 
effectiveness of these standards is $95 per ton CO2 eq 
removed in MY 2030 (Draft RIA Table 7-31), almost identical to the 
$90 per ton CO2 eq removed (MY 2030) which the agencies 
found to be highly cost effective for these same vehicles in Phase 
1. See 76 FR 57228.
---------------------------------------------------------------------------

    We also show the costs for the potential Alternative 4 standards in 
Table VI-14 and Table VI-15. As shown, the costs under Alternative 4 
would be significantly higher compared to Alternative 3.

                    Table VI-12--HD Pickups and Vans Incremental Technology Costs per Vehicle Preferred Alternative vs. Flat Baseline
                                                                         [2012$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               2021            2022            2023            2024            2025            2026            2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
HD Pickups & Vans.......................           $516            $508            $791            $948          $1,161          $1,224          $1,342
--------------------------------------------------------------------------------------------------------------------------------------------------------

                  Table VI-13--HD Pickups and Vans Incremental Technology Costs per Vehicle Preferred Alternative vs. Dynamic Baseline
                                                                         [2012$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               2021            2022            2023            2024            2025            2026            2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
HD Pickups & Vans.......................           $493            $485            $766            $896          $1,149          $1,248          $1,366
--------------------------------------------------------------------------------------------------------------------------------------------------------

                        Table VI-14--HD Pickups and Vans Incremental Technology Costs per Vehicle Alternative 4 vs. Flat Baseline
                                                                         [2012$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               2021            2022            2023            2024            2025            2026            2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
HD Pickups & Vans.......................         $1,050          $1,033          $1,621          $1,734          $1,825          $1,808          $1,841
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40363]]

                      Table VI-15--HD Pickups and Vans Incremental Technology Costs per Vehicle Alternative 4 vs. Dynamic Baseline
                                                                         [2012$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               2021            2022            2023            2024            2025            2026            2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
HD Pickups & Vans.......................           $909            $894          $1,415          $1,532          $1,627          $1,649          $1,684
--------------------------------------------------------------------------------------------------------------------------------------------------------

D. DOT CAFE Model Analysis of the Regulatory Alternatives for HD 
Pickups and Vans

    Considering the establishment of potential HD pickup and van fuel 
consumption and GHG standards to follow those already in place through 
model year 2018, the agencies evaluated a range of potential regulatory 
alternatives. The agencies estimated the extent to which manufacturers 
might add fuel-saving and CO2-avoiding technologies under 
each regulatory alternative, including the no-action alternative 
described in Section X. of this proposal. For HD pickups and vans both 
agencies analyzed two no-action alternatives, where one no-action 
alternative could be described as a ``flat baseline'' and the other as 
a ``dynamic baseline''. Please refer to Section X. of this proposal for 
a complete discussion of the assumptions that underlie these baselines. 
The agencies then estimated the extent to which additional technology 
that would be implemented to meet each regulatory alternative would 
incrementally (compared to the no-action alternative) impact costs to 
manufacturers and vehicle buyers, physical outcomes such as highway 
travel, fuel consumption, and greenhouse gas emissions, and economic 
benefits and costs to vehicle owners and society. The remainder of this 
section and portions of Sections VII through X present the regulatory 
alternatives the agencies have considered, summarize the agencies' 
analyses, and explain the agencies' selection of the HD pickup and van 
preferred alternative defined by today's proposed standards.
    The agencies conducted coordinated and complementary analyses by 
employing both DOT's CAFE model and EPA's MOVES model and other 
analytical tools to project fuel consumption and GHG emissions impacts 
resulting from the proposed standards for HD pickups and vans, against 
both the flat and dynamic baselines. In addition to running the DOT 
CAFE model to provide per vehicle cost and technology values, NHTSA 
also used the model to estimate the full range of impacts for pickups 
and vans, including fuel consumption and GHG emissions, including 
downstream vehicular emissions as well as emissions from upstream 
processes related to fuel production, distribution, and delivery. The 
CAFE model applies fuel properties (density and carbon content) to 
estimated fuel consumption in order to calculate vehicular 
CO2 emissions, applies per-mile emission factors (in this 
analysis, from MOVES) to estimated VMT in order to calculate vehicular 
CH4 and N2O emissions (as well, as discussed 
below, of non-GHG pollutants), and applies per-gallon upstream emission 
factors (in this analysis, from GREET) in order to calculate upstream 
GHG (and non-GHG) emissions. EPA also ran its MOVES model for all HD 
categories, namely tractors and trailers, vocational vehicles and HD 
pickups and vans, to develop a consistent set of fuel consumption and 
CO2 reductions for all HD categories. The MOVES runs 
followed largely the procedures described above, with some differences. 
MOVES used the same technology application rates and costs that are 
part of the inputs, and used cost per vehicle outputs of the CAFE model 
to evaluate the proposed standards for HD pickup trucks and vans. The 
agencies note that these two independent analyses of aggregate costs 
and benefits both support the proposed standards.
    While both agencies fully analyzed the regulatory alternatives 
against both baselines, NHTSA considered its primary analysis to be 
based on the dynamic baseline, where certain cost-effective 
technologies are assumed to be applied by manufacturers to improve fuel 
efficiency beyond the Phase 1 requirements in the absence of new Phase 
2 standards. On the other hand, EPA considered both baselines and EPA's 
less dynamic or flat baseline analysis is presented in Sections VII 
through X of this proposal as well as the draft Regulatory Impact 
Analysis accompanying this proposal. In Section X both the flat and 
dynamic baseline analyses are presented for all of the regulatory 
alternatives.
    This section provides a discussion of the CAFE model, followed by 
the comprehensive results of the CAFE model against the dynamic 
baseline to show costs, benefits, and environmental impacts of the 
regulatory alternatives for HD pickups and vans. This presentation of 
regulatory analysis is consistent with NHTSA's presentation of similar 
analyses conducted in support of the agencies joint light-duty vehicle 
fuel economy and GHG regulations. The CAFE analysis against the flat 
baseline as well as EPA's complementary analysis of GHG impacts, non-
GHG impacts, and economic and other impacts using MOVES is presented in 
Sections VII through IX of this proposal, as well as in the draft 
Regulatory Impact Analysis accompanying this proposal. These are 
presented side-by-side with the agencies' joint analyses of the other 
heavy-duty sectors (i.e., tractors, trailers, vocational vehicles). The 
presentation of the EPA analyses of HD pickups and vans in these 
sections is consistent with the agencies' presentation of similar 
analyses conducted as part of the agencies' joint HD Phase 1 
regulations and with EPA's presentation of similar analyses conducted 
in support of the agencies' joint light-duty vehicle fuel economy and 
GHG regulations. The agencies' intention for presenting both of these 
complementary and coordinated analyses is to offer interested readers 
the opportunity to compare the regulatory alternatives considered for 
Phase 2 in both the context of our Phase 1 analytical approaches and 
our light-duty vehicle analytical approaches.
(1) Evaluation of Regulatory Alternatives
    As discussed in Section C above, the agencies used DOT's CAFE model 
to conduct an analysis of potential standards for HD pickups and vans. 
The basic operation of the CAFE model was described in section VI.C.2, 
so will not be repeated here. However, this section provides additional 
detail on the model operation, inputs, assumptions, and outputs.
    DOT developed the CAFE model in 2002 to support the 2003 issuance 
of CAFE standards for MYs 2005-2007 light trucks. DOT has since 
significantly expanded and refined the model, and has applied the model 
to support every ensuing CAFE rulemaking;

 2006: MYs 2008-2011 light trucks

[[Page 40364]]

 2008: MYs 2011-2015 passenger cars and light trucks (final 
rule prepared but withheld)
 2009: MY 2011 passenger cars and light trucks
 2010: MYs 2012-2016 passenger cars and light trucks (joint 
rulemaking with EPA)
 2012: MYs 2017-2021 passenger cars and light trucks (joint 
rulemaking with EPA)

    Past analyses conducted using the CAFE model have been subjected to 
extensive and detailed review and comment, much of which has informed 
the model's expansion and refinement. NHTSA's use of the model was 
considered and supported in Center for Biological Diversity v. National 
Highway Traffic Safety Admin., 538 F.3d 1172, 1194 (9th Cir. 2008). For 
further discussion see 76 FR 57198, and the model has been subjected to 
formal peer review and review by the General Accounting Office (GAO) 
and National Research Council (NRC). NHTSA makes public the model, 
source code, and--except insofar as doing so would compromise 
confidential business information (CBI) manufacturers have provided to 
NHTSA--all model inputs and outputs underlying published rulemaking 
analyses.
    This analysis reflects several changes made to the model since 
2012, when NHTSA used the model to estimate the effects, costs, and 
benefits of final CAFE standards for light-duty vehicles produced 
during MYs 2017-2021, and augural standards for MYs 2022-2025. Some of 
these changes specifically enable analysis of potential fuel 
consumption standards (and, hence, related CO2 emissions 
standards harmonized with fuel consumption standards) for heavy-duty 
pickups and vans; other changes implement more general improvements to 
the model. Key changes include the following:
     Expansion and restructuring of model inputs, compliance 
calculations, and reporting to accommodate standards for heavy-duty 
pickups and vans, including attribute-based standards involving targets 
that vary with ``work factor''.
     Explicit calculation of test weight, taking into account 
test weight ``bins'' and differences in the definition of test weight 
for light-duty vehicles (curb weight plus 300 pound) and heavy-duty 
pickups and vans (average of GVWR and curb weight).
     Procedures to estimate increases in payload when curb 
weight is reduced, increases in towing capacity if GVWR is reduced, and 
calculation procedures to correspondingly update calculated work 
factors.
     Expansion of model inputs, procedures, and outputs to 
accommodate technologies not included in prior analyses.
     Changes to the algorithm used to apply technologies, 
enabling more explicit accounting for shared vehicle platforms and 
adoption and ``inheritance'' of major engine changes.
     Expansion of the Monte Carlo simulation procedures used to 
perform probabilistic uncertainty analysis.
    These changes are reflected in updated model documentation 
available at NHTSA's Web site, the documentation also providing more 
information about the model's purpose, scope, structure, design, 
inputs, operation, and outputs. DOT invites comment on the updated 
model, and in particular, on the updated handling of shared vehicle 
platforms, engines, and transmissions, and on the new procedures to 
estimate changes to test weight, GVWR, and GCWR as vehicle curb weight 
is reduced.
(a) Product Cadence
    Past comments on the CAFE model have stressed the importance of 
product cadence--i.e., the development and periodic redesign and 
freshening of vehicles--in terms of involving technical, financial, and 
other practical constraints on applying new technologies, and DOT has 
steadily made changes to the model with a view toward accounting for 
these considerations. For example, early versions of the model added 
explicit ``carrying forward'' of applied technologies between model 
years, subsequent versions applied assumptions that most technologies 
would be applied when vehicles are freshened or redesigned, and more 
recent versions applied assumptions that manufacturers would sometimes 
apply technology earlier than ``necessary'' in order to facilitate 
compliance with standards in ensuing model years. Thus, for example, if 
a manufacturer is expected to redesign many of its products in model 
years 2018 and 2023, and the standard's stringency increases 
significantly in model year 2021, the CAFE model will estimate the 
potential that the manufacturer will add more technology than necessary 
for compliance in MY 2018, in order to carry those product changes 
forward through the next redesign and contribute to compliance with the 
MY 2021 standard.
    The model also accommodates estimates of overall limits (expressed 
as ``phase-in caps'' in model inputs) on the rates at which 
manufacturers' may practicably add technology to their respective 
fleets. So, for example, even if a manufacturer is expected to redesign 
half of its production in MY 2016, if the manufacturer is not already 
producing any strong hybrid electric vehicles (SHEVs), a phase-in cap 
can be specified in order to assume that manufacturer will stop 
applying SHEVs in MY 2016 once it has done so to at least 3 percent of 
its production in that model year.
    After the light-duty rulemaking analysis accompanying the 2012 
final rule regarding post-2016 CAFE standards and related GHG emissions 
standards, DOT staff began work on CAFE model changes expected to 
better reflect additional considerations involved with product planning 
and cadence. These changes, summarized below, interact with preexisting 
model characteristics discussed above.
(b) Platforms and Technology
    The term ``platform'' is used loosely in industry, but generally 
refers to a common structure shared by a group of vehicle variants. The 
degree of commonality varies, with some platform variants exhibiting 
traditional ``badge engineering'' where two products are differentiated 
by little more than insignias, while other platforms be used to produce 
a broad suite of vehicles that bear little outer resemblance to one 
another.
    Given the degree of commonality between variants of a single 
platform, manufacturers do not have complete freedom to apply 
technology to a vehicle: while some technologies (e.g. low rolling 
resistance tires) are very nearly ``bolt-on'' technologies, others 
involve substantial changes to the structure and design of the vehicle, 
and therefore necessarily are constant between vehicles that share a 
common platform. DOT staff has, therefore, modified the CAFE model such 
that all mass reduction and aero technologies are forced to be constant 
between variants of a platform. The agencies request comment on the 
suitability of this viewpoint, and which technologies can deviate from 
one platform variant to another.
    Within the analysis fleet, each vehicle is associated with a 
specific platform. As the CAFE model applies technology, it first 
defines a platform ``leader'' as the vehicle variant of a platform with 
the highest technology utilization vehicle of mass reduction and 
aerodynamic technologies. As the vehicle applies technologies, it 
effectively harmonizes to the highest common denominator of the 
platform. If there is a tie, the CAFE model begins applying aerodynamic 
and mass reduction technology to the vehicle with the lowest average 
sales

[[Page 40365]]

across all available model years. If there remains a tie, the model 
begins by choosing the vehicle with the highest average MSRP across all 
available model years. The model follows this formulation due to 
previous market trends suggesting that many technologies begin 
deployment at the high-end, low-volume end of the market as 
manufacturers build their confidence and capability in a technology, 
and later expand the technology across more mainstream product lines.
    In the HD pickup and van market, there is a relatively small amount 
of diversity in platforms produced by manufacturers: typically 1-2 
truck platforms and 1-2 van platforms. However, accounting for 
platforms will take on greater significance in future analyses 
involving the light-duty fleet, and the agency requests comments on the 
general use of platforms within CAFE rulemaking.
(c) Engine and Transmission Inheritance
    In practice, manufacturers are limited in the number of engines and 
transmissions that they produce. Typically a manufacturer produces a 
number of engines--perhaps six or eight engines for a large 
manufacturer--and tunes them for slight variants in output for a 
variety of car and truck applications. Manufacturers limit complexity 
in their engine portfolio for much the same reason as they limit 
complexity in vehicle variants: They face engineering manpower 
limitations, and supplier, production and service costs that scale with 
the number of parts produced.
    In previous usage of the CAFE model, engines and transmissions in 
individual models were allowed relative freedom in technology 
application, potentially leading to solutions that would, if followed, 
involve unaccounted-for costs associated with increased complexity in 
the product portfolio. The lack of a constraint in this area allowed 
the model to apply different levels of technology to the engine in each 
vehicle at the time of redesign or refresh, independent of what was 
done to other vehicles using a previously identical engine.
    In the current version of the CAFE model, engines and transmissions 
that are shared between vehicles must apply the same levels of 
technology in all technologies dictated by engine or transmission 
inheritance. This forced adoption is referred to as ``engine 
inheritance'' in the model documentation.
    As with platform-shared technologies, the model first chooses an 
``engine leader'' among vehicles sharing the same engine. The leader is 
selected first by the vehicle with the lowest average sales across all 
available model years. If there is a tie, the vehicle with the highest 
average MSRP across model years is chosen. The model applies the same 
logic with respect to the application of transmission changes. As with 
platforms, this is driven by the concept that vehicle manufacturers 
typically deploy new technologies in small numbers prior to deploying 
widely across their product lines.
(d) Interactions Between Regulatory Classes
    Like earlier versions, the current CAFE model provides for 
integrated analysis spanning different regulatory classes, accounting 
both for standards that apply separately to different classes and for 
interactions between regulatory classes. Light vehicle CAFE standards 
are specified separately for passenger cars and light trucks. However, 
there is considerable sharing between these two regulatory classes. 
Some specific engines and transmissions are used in both passenger cars 
and light trucks, and some vehicle platforms span these regulatory 
classes. For example, some sport-utility vehicles are offered in 2WD 
versions classified as passenger cars and 4WD versions classified as 
light trucks. Integrated analysis of manufacturers' passenger car and 
light truck fleets provides the ability to account for such sharing and 
reduce the likelihood of finding solutions that could involve 
impractical levels of complexity in manufacturers' product lines. In 
addition, integrated analysis provides the ability to simulate the 
potential that manufactures could earn CAFE credits by over complying 
with one standard and use those credits toward compliance with the 
other standard (i.e., to simulate credit transfers between regulatory 
classes).
    HD pickups and vans are regulated separately from light-duty 
vehicles. While manufacturers cannot transfer credits between light-
duty and MDHD classes, there is some sharing of engineering and 
technology between light-duty vehicles and HD pickups and vans. For 
example, some passenger vans with GVWR over 8,500 lbs are classified as 
medium-duty passenger vehicles (MDPVs) and thus included in 
manufacturers' light-duty truck fleets, while cargo vans sharing the 
same nameplate are classified as HD vans.
    While today's analysis examines the HD pickup and van fleet in 
isolation, as a basis for analysis supporting the planned final rule, 
the agencies intend to develop an overall analysis fleet spanning both 
the light-duty and HD pickup and van fleets. Doing so could show some 
technology ``spilling over'' to HD pickups and vans due, for example, 
to the application of technology in response to current light-duty 
standards. More generally, modeling the two fleets together should tend 
to more realistically limit the scope and complexity of estimated 
compliance pathways.
    The agencies anticipate that the impact of modeling a combined 
fleet will primarily arise from engine-transmission inheritance. While 
platform sharing between the light-duty and MD pickup and van fleets is 
relatively small (MDPVs aside), there are a number of instances of 
engine and transmission sharing across the two fleets. When the fleets 
are modeled together, the agencies anticipate that engine inheritance 
will be implemented across the combined fleet, and therefore only one 
engine-transmission leader can be defined across the combined fleet. As 
with the fleets separately, all vehicles using a shared engine/
transmission would automatically adopt technologies adopted by the 
engine-transmission leader.
    The agencies request comment on plans to analyze the light-duty and 
MD pickup and van fleets jointly in support of planning for the final 
rule.
(e) Phase-In Caps
    The CAFE model retains the ability to use phase-in caps (specified 
in model inputs) as proxies for a variety of practical restrictions on 
technology application. Unlike vehicle-specific restrictions related to 
redesign, refreshes or platforms/engines, phase-in caps constrain 
technology application at the vehicle manufacturer level. They are 
intended to reflect a manufacturer's overall resource capacity 
available for implementing new technologies (such as engineering and 
development personnel and financial resources), thereby ensuring that 
resource capacity is accounted for in the modeling process.
    In previous CAFE rulemakings, redesign/refresh schedules and phase-
in caps were the primary mechanisms to reflect an OEM's limited pool of 
available resources during the rulemaking time frame and the years 
leading up to the rulemaking time frame, especially in years where many 
models may be scheduled for refresh or redesign. The newly-introduced 
representation platform-, engine-, and transmission-related 
considerations discussed above augment the model's preexisting 
representation of redesign cycles and accommodation of phase-in caps. 
Considering these new constraints,

[[Page 40366]]

inputs for today's analysis de-emphasize reliance on phase-in caps.
    In this application of the CAFE model, phase-in caps are used only 
for the most advanced technologies included in the analysis, i.e., 
SHEVs and lean-burn GDI engines, considering that these technologies 
are most likely to involve implementation costs and risks not otherwise 
accounted for in corresponding input estimates of technology cost. For 
these two technologies, the agencies have applied caps that begin at 3 
percent (i.e., 3 percent of the manufacturer's production) in MY 2017, 
increase at 3 percent annually during the ensuing nine years (reaching 
30 percent in the MY 2026), and subsequently increasing at 5 percent 
annually for four years (reaching 50 percent in MY 2030). Note that the 
agencies did not feel that lean-burn engines were feasible in the 
timeframe of this rulemaking, so decided to reject any model runs where 
they were selected. Due to the cost ineffectiveness of this technology, 
it was never chosen. The agencies request comment on the 
appropriateness of these phase-in caps as proxies for constraints that, 
though not monetized by the agencies, nonetheless limit rates at which 
these two technologies can practicably be deployed, and on the 
appropriateness of setting inputs to stop applying phase-in caps to 
other technologies in this analysis. Comments on this issue should 
provide information supporting any alternative recommended inputs.
(f) Impact of Vehicle Technology Application Requirements
    Compared to prior analyses of light-duty standards, these model 
changes, along with characteristics of the HD pickup and van fleet 
result in some changes in the broad characteristics of the model's 
application of technology to manufacturers' fleets. First, since the 
number of HD pickup and van platforms in a portfolio is typically 
small, compliance with standards may appear especially ``lumpy'' 
(compared to previous applications of the CAFE model to the more highly 
segmented light-duty fleet), with significant over compliance when 
widespread redesigns precede stringency increases, and/or significant 
application of carried-forward (aka ``banked'') credits.
    Second, since the use of phase-in caps has been de-emphasized and 
manufacturer technology deployment remains tied strongly to estimated 
product redesign and freshening schedules, technology penetration rates 
may jump more quickly as manufacturers apply technology to high-volume 
products in their portfolio.
    By design, restrictions that enforce commonality of mass reduction 
and aerodynamic technologies on variants of a platform, and those that 
enforce engine inheritance, will result in fewer vehicle-technology 
combinations in a manufacturer's future modeled fleet. These 
restrictions are expected to more accurately capture the true costs 
associated with producing and maintaining a product portfolio.
(g) Accounting for Test Weight, Payload, and Towing Capacity
    As mentioned above, NHTSA has also revised the CAFE model to 
explicitly account for the regulatory ``binning'' of test weights used 
to certify light-duty fuel economy and HD pickup and van fuel 
consumption for purposes of evaluating fleet-level compliance with fuel 
economy and fuel consumption standards. For HD pickups and vans, test 
weight (TW) is based on adjusted loaded vehicle weight (ALVW), which is 
defined as the average of gross vehicle weight rating (GVWR) and curb 
weight (CW). TW values are then rounded, resulting in TW ``bins'':

ALVW <= 4,000 lb.: TW rounded to nearest 125 lb.
4,000 lb. < ALVW <= 5,500 lb.: TW rounded to nearest 250 lb.
ALVW > 5,500 lb.: TW rounded to nearest 500 lb.

    This ``binning'' of TW is relevant to calculation of fuel 
consumption reductions accompanying mass reduction. Model inputs for 
mass reduction (as an applied technology) are expressed in terms of a 
percentage reduction of curb weight and an accompanying estimate of the 
percentage reduction in fuel consumption, setting aside rounding of 
test weight. Therefore, to account for rounding of test weight, NHTSA 
has modified these calculations as follows:

[GRAPHIC] [TIFF OMITTED] TP13JY15.011

Where:

[Delta]CW = % change in curb weight (from model input),
[Delta]FCunrounded_TW = % change in fuel consumption 
(from model input), without TW rounding,
[Delta]TW = % change in test weight (calculated), and
[Delta]FCrounded_TW = % change in fuel consumption 
(calculated), with TW rounding.

    As a result, some applications of vehicle mass reduction will 
produce no compliance benefit at all, in cases where the changes in 
ALVW are too small to change test weight when rounding is taken into 
account. On the other hand, some other applications of vehicle mass 
reduction will produce significantly more compliance benefit than when 
rounding is not taken into account, in cases where even small changes 
in ALVW are sufficient to cause vehicles' test weights to increase by, 
e.g., 500 lbs when rounding is accounted for. Model outputs now include 
initial and final TW, GVWR, and GCWR (and, as before, CW) for each 
vehicle model in each model year, and the agencies invite comment on 
the extent to which these changes to account explicitly for changes in 
TW are likely to produce more realistic estimates of the compliance 
impacts of reductions in vehicle mass.
    In addition, considering that the regulatory alternatives in the 
agencies' analysis all involve attribute-based standards in which 
underlying fuel consumption targets vary with ``work factor'' (defined 
by the agencies as the sum of three quarters of payload, one quarter of 
towing capacity, and 500 lb. for vehicles with 4WD), NHTSA has modified 
the CAFE model to apply inputs defining shares of curb weight reduction 
to be ``returned'' to payload and shares of GVWR reduction to be 
returned to towing capacity. The standards' dependence on work factor 
provides some incentive to increase payload and towing capacity, both 
of which are buyer-facing measures of vehicle utility. In the agencies' 
judgment, this provides reason to assume that if vehicle mass is 
reduced, manufacturers are likely to ``return'' some of the change to 
payload and/or towing capacity. For this analysis, the agencies have 
applied the following assumptions:
     GVWR will be reduced by half the amount by which curb 
weight is reduced. In other words, 50 percent of the curb weight 
reduction will be returned to payload.

[[Page 40367]]

     GCWR will not be reduced. In other words, 100 percent of 
any GVWR reduction will be returned to towing capacity.
     GVWR/CW and GCWR/GVWR will not increase beyond levels 
observed among the majority of similar vehicles (or, for outlier 
vehicles, initial values):

   Table VI-16--Ratios for Modifying GVW and GCW as a Function of Mass
                                Reduction
------------------------------------------------------------------------
               Group                  Maximum ratios assumed enabled by
-----------------------------------            mass reduction
                                   -------------------------------------
                                         GVWR/CW           GCWR/GVWR
------------------------------------------------------------------------
Unibody...........................               1.75               1.50
Gasoline pickups >13k GVWR........               2.00               1.50
Other gasoline pickups............               1.75               2.25
Diesel SRW pickups................               1.75               2.50
All other.........................               1.75               2.25
------------------------------------------------------------------------

    The first of two of these inputs are specified along with standards 
for each regulatory alternative, and the GVWR/CW and GCWR/GVWR ``caps'' 
are specified separately for each vehicle model in the analysis fleet.
    In addition, DOT has changed the model to prevent HD pickup and van 
GVWR from falling below 8,500 lbs when mass reduction is applied 
(because doing so would cause vehicles to be reclassified as light-duty 
vehicles), and to treat any additional mass for hybrid electric 
vehicles as reducing payload by the same amount (e.g., if adding a 
strong HEV package to a vehicle involves a 350 pound penalty, GVWR is 
assumed to remain unchanged, such that payload is also reduced by 350 
lbs).
    The agencies invite comment on these methods for estimating how 
changes in vehicle mass may impact fuel consumption, GVWR, and GCWR, 
and on corresponding inputs to today's analysis.
(2) Development of the Analysis Fleet
    As discussed above, both agencies used DOT's CAFE modeling system 
to estimate technology costs and application rates under each 
regulatory alternative, including the no action alternative (which 
reflects continuation of previously-promulgated standards). Impacts 
under each of the ``action'' alternatives are calculated on an 
incremental basis relative to impacts under the no action alternative. 
The modeling system relies on many inputs, including an analysis fleet. 
In order to estimate the impacts of potential standards, it is 
necessary to estimate the composition of the future vehicle fleet. 
Doing so enables estimation of the extent to which each manufacturer 
may need to add technology in response to a given series of attribute-
based standards, accounting for the mix and fuel consumption of 
vehicles in each manufacturer's regulated fleet. The agencies create an 
analysis fleet in order to track the volumes and types of fuel economy-
improving and CO2-reducing technologies that are already 
present in the existing vehicle fleet. This aspect of the analysis 
fleet helps to keep the CAFE model from adding technologies to vehicles 
that already have these technologies, which would result in ``double 
counting'' of technologies' costs and benefits. An additional step 
involved projecting the fleet sales into MYs 2019-2030. This represents 
the fleet volumes that the agencies believe would exist in MYs 2019-
2030. The following presents an overview of the information and methods 
applied to develop the analysis fleet, and some basic characteristics 
of that fleet.
    The resultant analysis fleet is provided in detail at NHTSA's Web 
site, along with all other inputs to and outputs from today's analysis. 
The agencies invite comment on this analysis fleet and, in particular, 
on any other information that should be reflected in an analysis fleet 
used to update the agencies' analysis for the final rule. Also, the 
agencies also invites comment on the potential expansion of this 
analysis fleet such that the impacts of new HD pickup and van standards 
can be estimated within the context of an integrated analysis of light-
duty vehicles and HD pickups and vans, accounting for interactions 
between the fleets.
(a) Data Sources
    Most of the information about the vehicles that make up the 2014 
analysis fleet was gathered from the 2014 Pre-Model Year Reports 
submitted to EPA by the manufacturers under Phase 1 of Fuel Efficiency 
and GHG Emission Program for Medium- and Heavy-Duty Trucks, MYs 2014-
2018.
    The major manufacturers of class 2b and class 3 trucks (Chrysler, 
Ford and GM) were asked to voluntarily submit updates to their Pre-
Model Year Reports. Updated data were provided by Chrysler and GM. 
These updated data were used in constructing the analysis fleet for 
these manufacturers.
    The agencies agreed to treat this information as Confidential 
Business Information (CBI) until the publication of the proposed rule. 
This information can be made public at this time because by now all 
MY2014 vehicle models have been produced, which makes data about them 
essentially public information.
    These data (by individual vehicle configuration produced in MY2014) 
include: Projected Production Volume/MY2014 Sales, Drive Type, Axle 
Ratio, Work Factor, Curb Weight, Test Weight,\359\ GVWR, GCWR, Fuel 
Consumption (gal/100 mile), engine type (gasoline or diesel), engine 
displacement, transmission type and number of gears.
---------------------------------------------------------------------------

    \359\ Chrysler and GM did not provide test weights in their 
submittals. Test weights were calculated as the average of GVWR and 
curb weight rounded up to the nearest 100 lb.
---------------------------------------------------------------------------

    The column ``Engine'' of the Pre-Model Year report for each OEM was 
copied to the column ``Engine Code'' of the vehicle sheet of the CAFE 
model market data input file. Values of ``Engine'' were changed to 
Engine Codes for use in the CAFE model. The codes indicated on the 
vehicle sheet map the detailed engine data on the engine sheet to the 
appropriate vehicle on the vehicle sheet of the CAFE model input file.
    The column ``Trans Class'' of the Pre-Model Year report for each 
OEM was copied to the column ``Transmission Code'' of the vehicle sheet 
of the market data input file. Values of ``Trans Class'' were changed 
to Transmission Codes for use in the CAFE model. The codes indicated on 
the vehicle sheet map the detailed transmission data on the 
transmission sheet to the appropriate vehicle on the vehicle sheet of 
the CAFE model input file.
    In addition to information about each vehicle, the agencies need 
additional

[[Page 40368]]

information about the fuel economy-improving/CO2-reducing 
technologies already on those vehicles in order to assess how much and 
which technologies to apply to determine a path toward future 
compliance. Thus, the agencies augmented this information with 
publicly-available data that includes more complete technology 
descriptions. Specific engines and transmissions associated with each 
manufacturer's trucks were identified using their respective internet 
sites. Detailed technical data on individual engines and transmissions 
indicated on the engine sheet and transmission sheet of the CAFE model 
input file were then obtained from manufacturer internet sites, spec 
sheets and product literature, Ward's Automotive Group and other 
commercial internet sites such as cars.com, edmunds.com, and 
motortrend.com. Specific additional information included:
     ``Fuel Economy on Secondary Fuel'' was calculated as E85 = 
.74 gasoline fuel economy, or B20 = .98 diesel fuel economy. These 
values were duplicated in the columns ``Fuel Economy (Ethanol-85)'' and 
``Fuel Economy (Biodiesel-20)'' of the CAFE market data input file.
     Values in the columns ``Fuel Share (Gasoline)'', ``Fuel 
Share (Ethanol-85)'', ``Fuel Share (Diesel),'' and ``Fuel Share 
(Biodiesel-20)'' are Volpe assumptions.
     The CAFE model also requires that values of Origin, 
Regulatory Class, Technology Class, Safety Class, and Seating (Max) be 
present in the file in order for the model to run. Placeholder values 
were added in these columns.
     In addition to the data taken from the OEM Pre Model Year 
submittals, NHTSA added additional data for use by the CAFE model. 
These included Platform, Refresh Years, Redesign Years, MSRP, Style, 
Structure and Fuel Capacity.
     MSRP was obtained from web2carz.com and the OEM Web sites.
     Fuel capacity was obtained from OEM spec sheets and 
product literature.
     The Structure values (Ladder, Unibody) used by the CAFE 
model were added. These were determined from OEM product literature and 
the automotive press. It should be noted that the new vans such as the 
Transit in fact utilize a ladder/unibody structure. Ford product 
literature uses the term ``Uniladder'' to describe the structure. Vans 
based on this structure are noted in the Vehicle Notes column of the 
NHTSA input file.
     Style values used by the CAFE model were also added: 
Chassis Cab, Cutaway, Pickup and Van.
(b) Vehicle Redesign Schedules and Platforms
    Product cadence in the Class 2b and 3 pickup market has 
historically ranged from 7-9 years between major redesigns. However, 
due to increasing competitive pressures and consumer demands the agency 
anticipates that manufacturers will generally shift to shorter design 
cycles resembling those of the light duty market. Pickup truck 
manufacturers in the Class 2b and 3 segments are shown to adopt 
redesign cycles of six years, allowing two redesigns prior to the end 
of the regulatory period in 2025. The agencies request comment on the 
anticipated future use of redesign cycles in this product segment.
    The Class 2b and 3 van market has changed markedly from five years 
ago. Ford, Nissan, Ram and Daimler have adopted vans of ``Euro Van'' 
appearance, and in many cases now use smaller turbocharged gasoline or 
diesel engines in the place of larger, naturally-aspirated V8s. The 
2014 Model Year used in this analysis represents a period where most 
manufacturers, with the exception of General Motors, have recently 
introduced a completely redesigned product after many years. The van 
segment has historically been one of the slowest to be redesigned of 
any product segment, with some products going two decades or more 
between redesigns.
    Due to new entrants in the field and increased competition, the 
agencies anticipate that most manufacturers will increase the pace of 
product redesigns in the van segment, but that they will continue to 
trail other segments. The cycle time used in this analysis is 
approximately ten years between major redesigns, allowing manufacturers 
only one major redesign during the regulatory period. The agencies 
request comment on this anticipated product design cycle.
    Additional detail on product cadence assumptions for specific 
manufacturers is located in Chapter 10 of the draft RIA.
(c) Sales Volume Forecast
    Since each manufacturer's required average fuel consumption and GHG 
levels are sales-weighted averages of the fuel economy/GHG targets 
across all model offerings, sales volumes play a critical role in 
estimating that burden. The CAFE model requires a forecast of sales 
volumes, at the vehicle model-variant level, in order to simulate the 
technology application necessary for a manufacturer to achieve 
compliance in each model year for which outcomes are simulated.
    For today's analysis, the agencies relied on the MY 2014 pre-model-
year compliance submissions from manufacturers to provide sales volumes 
at the model level based on the level of disaggregation in which the 
models appear in the compliance data. However, the agencies only use 
these reported volumes without adjustment for MY 2014. For all future 
model years, we combine the manufacturer submissions with sales 
projections from the 2014 Annual Energy Outlook Reference Case and IHS 
Automotive to determine model variant level sales volumes in future 
years.\360\ The projected sales volumes by class that appear in the 
2014 Annual Energy Outlook as a result of a collection of assumptions 
about economic conditions, demand for commercial miles traveled, and 
technology migration from light-duty pickup trucks in response to the 
concurrent light-duty CAFE/GHG standards. These are shown in Chapter 2 
of the draft RIA.
---------------------------------------------------------------------------

    \360\ Tables from AEO's forecast are available at http://www.eia.gov/oiaf/aeo/tablebrowser/. The agencies also made use of 
the IHS Automotive Light Vehicle Production Forecast (August 2014).
---------------------------------------------------------------------------

    For this analysis, the agencies have limited this analysis fleet to 
class 2b and 3 HD pickups and vans. However, especially considering 
interactions between the light-duty and HD pickup and van fleets (e.g., 
MDPVs being included in the light-duty fleet), the agencies are 
evaluating the potential to analyze the fleets in an integrated fashion 
for the final rule, and invite comment on the extent to which doing so 
could provide more realistic estimates of the incremental impacts of 
new standards applicable HD pickups and vans.
    The projection of total sales volumes for the Class 2b and 3 market 
segment was based on the total volumes in the 2014 AEO Reference Case. 
For the purposes of this analysis, the AEO2014 calendar year volumes 
have been used to represent the corresponding model-year volumes. While 
AEO2014 provides enough resolution in its projections to separate the 
volumes for the Class 2b and 3 segments, the agencies deferred to the 
vehicle manufacturers and chose to rely on the relative shares present 
in the pre-model-year compliance data.
    The relative sales share by vehicle type (van or pickup truck, in 
this case) was derived from a sales forecast that the agencies 
purchased from IHS Automotive, and applied to the total volumes in the 
AEO2014 projection. Table VI-17 shows the implied shares of the total 
new 2b/3 vehicle market broken down by manufacturer and vehicle type.

[[Page 40369]]

                                                               Table VI-17--IHS Automotive Market Share Forecast for 2b/3 Vehicles
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Model year market share
                 Manufacturer                                 Style              ---------------------------------------------------------------------------------------------------------------
                                                                                     2015  (%)       2016  (%)       2017  (%)       2018  (%)       2019  (%)       2020  (%)       2021  (%)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Daimler.......................................  Van.............................               3               3               3               3               3               3               3
Fiat..........................................  Van.............................               2               2               2               2               2               2               3
Ford..........................................  Van.............................              16              17              17              17              18              18              18
General Motors................................  Van.............................              12              12              11              12              13              13              13
Nissan........................................  Van.............................               2               2               2               2               2               2               2
Daimler.......................................  Pickup..........................               0               0               0               0               0               0               0
Fiat..........................................  Pickup..........................              14              14              14              14              11              12              12
Ford..........................................  Pickup..........................              28              27              30              30              30              27              26
General Motors................................  Pickup..........................              23              23              21              21              21              22              23
Nissan........................................  Pickup..........................               0               0               0               0               0               0               0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40370]]

    Within those broadly defined market shares, volumes at the 
manufacturer/model-variant level were constructed by applying the 
model-variant's share of manufacturer sales in the pre-model-year 
compliance data for the relevant vehicle style, and multiplied by the 
total volume estimated for that manufacturer and that style.
    After building out a set of initial future sales volumes based on 
the sources described above, the agencies attempted to incorporate new 
information about changes in sales mix that would not be captured by 
either the existing sales forecasts or the simulated technology changes 
in vehicle platforms. In particular, Ford has announced intentions to 
phase out their existing Econoline vans, gradually shifting volumes to 
the new Transit platform for some model variants (notably chassis cabs 
and cutaways variants) and eliminating offerings outright for complete 
Econoline vans as early as model year 2015. In the case of complete 
Econoline vans, the volumes for those vehicles were allocated to MY2015 
Transit vehicles based on assumptions about likely production splits 
for the powertrains of the new Transit platform. The volumes for 
complete Econoline vans were shifted at ratios of 50 percent, 35 
percent, and 15 percent for 3.7 L, 3.5 L Eco-boost, and 3.2 L diesel, 
respectively. Within each powertrain, sales were allocated based on the 
percentage shares present in the pre-model-year compliance data. The 
chassis cab and cutaway variants of the Econolines were phased out 
linearly between MY2015 and MY2020, at which time the Econolines cease 
to exist in any form and all corresponding volume resides with the 
Transits.
(3) Additional Technology Cost and Effectiveness Inputs
    In addition to the base technology cost and effectiveness inputs 
described in VI. of this preamble, the CAFE model has some additional 
cost and effectiveness inputs, described as follows.
    The CAFE model accommodates inputs to adjust accumulated 
effectiveness under circumstances when combining multiple technologies 
could result in underestimation or overestimation of total incremental 
effectiveness relative to an ``unevolved'' baseline vehicle. These so-
called synergy factors may be positive, where the combination of the 
technologies results in greater improvement than the additive 
improvement of each technology, or negative, where the combination of 
the technologies is lower than the additive improvement of each 
technology. The synergy factors used in this analysis are described in 
VI-18.

               Table VI-18--Technology Pair Effectiveness Synergy Factors for HD Pickups and Vans
----------------------------------------------------------------------------------------------------------------
                                                Adjustment
               Technology pair                      (%)               Technology pair           Adjustment  (%)
----------------------------------------------------------------------------------------------------------------
8SPD/CCPS...................................           -4.60  IATC/CCPS......................              -1.30
8SPD/DEACO..................................           -4.60  IATC/DEACO.....................              -1.30
8SPD/ICP....................................           -4.60  IATC/ICP.......................              -1.30
8SPD/TRBDS1.................................            4.60  IATC/TRBDS1....................               1.30
AERO2/SHEV1.................................            1.40  MR1/CCPS.......................               0.40
CCPS/IACC1..................................           -0.40  MR1/DCP........................               0.40
CCPS/IACC2..................................           -0.60  MR1/VVA........................               0.40
DCP/IACC1...................................           -0.40  MR2/ROLL1......................              -0.10
DCP/IACC2...................................           -0.60  MR2/SHEV1......................              -0.40
DEACD/IATC..................................           -0.10  NAUTO/CCPS.....................              -1.70
DEACO/IACC2.................................           -0.80  NAUTO/DEACO....................              -1.70
DEACO/MHEV..................................           -0.70  NAUTO/ICP......................              -1.70
DEACS/IATC..................................           -0.10  NAUTO/SAX......................              -0.40
DTURB/IATC..................................            1.00  NAUTO/TRBDS1...................               1.70
DTURB/MHEV..................................           -0.60  ROLL1/AERO1....................               0.10
DTURB/SHEV1.................................           -1.00  ROLL1/SHEV1....................               1.10
DVVLD/8SPD..................................           -0.60  ROLL2/AERO2....................               0.20
DVVLD/IACC2.................................           -0.80  SHFTOPT/MHEV...................              -0.30
DVVLD/IATC..................................           -0.60  TRBDS1/MHEV....................               0.80
DVVLD/MHEV..................................           -0.70  TRBDS1/SHEV1...................              -3.30
DVVLS/8SPD..................................           -0.60  TRBDS1/VVA.....................              -8.00
DVVLS/IACC2.................................           -0.80  TRBDS2/EPS.....................              -0.30
DVVLS/IATC..................................           -0.50  TRBDS2/IACC2...................              -0.30
DVVLS/MHEV..................................           -0.70  TRBDS2/NAUTO...................              -0.50
                                              ..............  VVA/IACC1......................              -0.40
                                              ..............  VVA/IACC2......................              -0.60
                                              ..............  VVA/IATC.......................              -0.60
----------------------------------------------------------------------------------------------------------------

    The CAFE model also accommodates inputs to adjust accumulated 
incremental costs under circumstances when the application sequence 
could result in underestimation or overestimation of total incremental 
costs relative to an ``unevolved'' baseline vehicle. For today's 
analysis, the agencies have applied one such adjustment, increasing the 
cost of medium-sized gasoline engines by $513 in cases where 
turbocharging and engine downsizing is applied with variable valve 
actuation.
    The analysis performed using Method A also applied cost inputs to 
address some costs encompassed neither by the agencies' estimates of 
the direct cost to apply these technologies, nor by the agencies' 
methods for ``marking up'' these costs to arrive at increases in the 
new vehicle purchase costs. To account for the additional costs that 
could be incurred if a technology is applied and then quickly replaced, 
the CAFE model accommodates inputs specifying a ``stranded capital 
cost'' specific to each technology. For this analysis, the model was 
run with inputs to apply about $78 of additional cost (per engine) if 
gasoline engine turbocharging and downsizing (separately for each 
``level'' considered) is applied and then

[[Page 40371]]

immediately replaced, declining steadily to zero by the tenth model 
year following initial application of the technology. The model also 
accommodates inputs specifying any additional changes owners might 
incur in maintenance and post-warranty repair costs. For this analysis, 
the model was run with inputs indicating that vehicles equipped with 
less rolling-resistant tires could incur additional tire replacement 
costs equivalent to $21-$23 (depending on model year) in additional 
costs to purchase the new vehicle. The agencies did not, however, 
include inputs specifying any potential changes repair costs that might 
accompany application of any of the above technologies. A sensitivity 
analysis using Method A, discussed below, includes a case in which 
repair costs are estimated using factors consistent with those 
underlying the indirect cost multipliers used to mark up direct costs 
for the agencies' central analysis.
    The agencies invite comment on all efficacy and cost inputs 
involved in today's analysis and request that commenters provide any 
additional data or forward-looking estimates that could be used to 
support alternative inputs, including those related to costs beyond 
those reflected in the cost to purchase new vehicles.
(4) Other Analysis Inputs
    In addition to the inputs summarized above, the analysis of 
potential standards for HD pickups and vans makes use of a range of 
other estimates and assumptions specified as inputs to the CAFE 
modeling system. Some significant inputs (e.g., estimates of future 
fuel prices) also applicable to other MDHD segments are discussed below 
in Section IX. Others more specific to the analysis of HD pickups and 
vans are as follows:
(a) Vehicle Survival and Mileage Accumulation:
    Today's analysis estimates the travel, fuel consumption, and 
emissions over the useful lives of vehicles produced during model years 
2014-2030. Doing so requires initial estimates of these vehicles' 
survival rates (i.e., shares expected to remain in service) and mileage 
accumulation rates (i.e., anticipated annual travel by vehicles 
remaining in service), both as a function of vehicle vintage (i.e., 
age). These estimates are based on an empirical analysis of changes in 
the fleet of registered vehicles over time, in the case of survival 
rates, and usage data collected as part of the last Vehicle In Use 
Survey (the 2002 VIUS), in the case of mileage accumulation.
(b) Rebound Effect
    Expressed as an elasticity of mileage accumulation with respect to 
the fuel cost per mile of operation, the agencies have applied a 
rebound effect of 10 percent for today's analysis.
(c) On-Road ``Gap''
    The model was run with a 20 percent adjustment to reflect 
differences between on-road and laboratory performance.
(d) Fleet Population Profile
    Though not reported here, cumulative fuel consumption and 
CO2 emissions are presented in the accompanying draft EIS, 
and these calculations utilize estimates of the numbers of vehicles 
produced in each model year remaining in service in calendar year 2014. 
The initial age distribution of the registered vehicle population in 
2014 is based on vehicle registration data acquired by NHTSA from R.L. 
Polk Company.
(e) Past Fuel Consumption Levels
    Though not reported here, cumulative fuel consumption and 
CO2 emissions are presented in the accompanying draft EIS, 
and these calculations require estimates of the performance of vehicles 
produced prior to model year 2014. Consistent with AEO 2014, the model 
was run with the assumption that gasoline and diesel HD pickups and 
vans averaged 14.9 mpg and 18.6 mpg, respectively, with gasoline 
versions averaging about 48 percent of production.
(f) Long-Term Fuel Consumption Levels
    Though not reported here, longer-term estimates of fuel consumption 
and emissions are presented in the accompanying draft EIS. These 
estimates include calculations involving vehicle produced after MY 2030 
and, consistent with AEO 2014, the model was run with the assumption 
that fuel consumption and CO2 emission levels will continue 
to decline at 0.05 percent annually (compounded) after MY 2030.
(g) Payback Period
    To estimate in what sequence and to what degree manufacturers might 
add fuel-saving technologies to their respective fleets, the CAFE model 
iteratively ranks remaining opportunities (i.e., applications of 
specific technologies to specific vehicles) in terms of effective cost, 
primary components of which are the technology cost and the avoided 
fuel outlays, attempting to minimize effective costs incurred.\361\ 
Depending on inputs, the model also assumes manufacturers may improve 
fuel consumption beyond requirements insofar as doing so will involve 
applications of technology at negative effective cost--i.e., technology 
application for which buyers' up-front costs are quickly paid back 
through avoided fuel outlays. This calculation includes only fuel 
outlays occurring within a specified payback period. For this analysis, 
a payback period of 6 months was applied for the dynamic baseline case, 
or Alternative 1b. Thus, for example, a manufacturer already in 
compliance with standards is projected to apply a fuel consumption 
improvement projected to cost $250 (i.e., as a cost that could be 
charged to the buyer at normal profit to the manufacturer) and reduce 
fuel costs by $500 in the first year of vehicle operation. The agencies 
have conducted the same analysis applying a payback period of 0 months 
for the flat baseline case, or Alternative 1a.
---------------------------------------------------------------------------

    \361\ Volpe CAFE Model, available at http://www.nhtsa.gov/fuel-economy.
---------------------------------------------------------------------------

(h) Civil Penalties
    EPCA and EISA require that a manufacturer pay civil penalties if it 
does not have enough credits to cover a shortfall with one or both of 
the light-duty CAFE standards in a model year. While these provisions 
do not apply to HD pickups and vans, at this time, the CAFE model will 
show civil penalties owed in cases where available technologies and 
credits are estimated to be insufficient for a manufacturer to achieve 
compliance with a standard. These model-reported estimates have been 
excluded from this analysis.
(i) Coefficients for Fatality Calculations
    Today's analysis considered the potential effects on crash safety 
of the technologies manufacturers may apply to their vehicles to meet 
each of the regulatory alternatives. NHTSA research has shown that 
vehicle mass reduction affects overall societal fatalities associated 
with crashes \362\ and, most relevant to this proposal, mass reduction 
in heavier light- and medium-duty vehicles has an overall beneficial 
effect on societal fatalities. Reducing the mass of a heavier vehicle 
involved in a crash with another vehicle(s) makes it less likely there 
will be fatalities among the occupants of the other vehicles. In 
addition to the effects of mass reduction, the analysis anticipates 
that

[[Page 40372]]

the proposed standards, by reducing the cost of driving HD pickups and 
vans, would lead to increased travel by these vehicles and, therefore, 
more crashes involving these vehicles. The Method A analysis considers 
overall impacts considering both of these factors, using a methodology 
similar to NHTSA's analyses for the MYs 2017--2025 CAFE and GHG 
emission standards.
---------------------------------------------------------------------------

    \362\ U.S. DOT/NHTSA, Relationships Between Fatality Risk Mass 
and Footprint in MY 2000-2007 PC and LTVs, ID: NHTSA-2010-0131-0336, 
Posted August 21, 2012.
---------------------------------------------------------------------------

    The Method A analysis includes estimates of the extent to which HD 
pickups and vans produced during MYs 2014-2030 may be involved in fatal 
crashes, considering the mass, survival, and mileage accumulation of 
these vehicles, taking into account changes in mass and mileage 
accumulation under each regulatory alternative. These calculations make 
use of the same coefficients applied to light trucks in the MYs 2017-
2025 CAFE rulemaking analysis. Baseline rates of involvement in fatal 
crashes are 13.03 and 13.24 fatalities per billion miles for vehicles 
with initial curb weights above and below 4,594 lbs, respectively. 
Considering that the data underlying the corresponding statistical 
analysis included observations through calendar year 2010, these rates 
are reduced by 9.6 percent to account for subsequent impacts of recent 
Federal Motor Vehicle Safety Standards (FMVSS) and anticipated 
behavioral changes (e.g., continued increases in seat belt use). For 
vehicles above 4,594 lbs--i.e., the majority of the HD pickup and van 
fleet--mass reduction is estimated to reduce the net incidence of 
highway fatalities by 0.34 percent per 100 lbs of removed curb weight. 
For the few HD pickups and vans below 4,594 lbs, mass reduction is 
estimated to increase the net incidence of highway fatalities by 0.52 
percent per 100 lbs. Consistent with DOT guidance, the social cost of 
highway fatalities is estimated using a value of statistical life (VSL) 
of $9.36m in 2014, increasing thereafter at 1.18 percent annually.
(j) Compliance Credit Provisions
    Today's analysis accounts for the potential to over comply with 
standards and thereby earn compliance credits, applying these credits 
to ensuring compliance requirements. In doing so, the agencies treat 
any unused carried-forward credits as expiring after five model years, 
consistent with current and proposed standards. For today's analysis, 
the agencies are not estimating the potential to ``borrow''--i.e., to 
carry credits back to past model years.
(k) Emission Factors
    While CAFE model calculates vehicular CO2 emissions 
directly on a per-gallon basis using fuel consumption and fuel 
properties (density and carbon content), the model calculates emissions 
of other pollutants (methane, nitrogen oxides, ozone precursors, carbon 
monoxide, sulfur dioxide, particulate matter, and air toxics) on a per-
mile basis. In doing so, the Method A analysis used corresponding 
emission factors estimated using EPA's MOVES model.\363\ To estimate 
emissions (including CO2) from upstream processes involved 
in producing, distributing, and delivering fuel, NHTSA has applied 
emission factors--all specified on a gram per gallon basis--derived 
from Argonne National Laboratory's GREET model.\364\
---------------------------------------------------------------------------

    \363\ EPA MOVES model available at http://www.epa.gov/otaq/models/moves/index.htm (last accessed Feb 23, 2015).
    \364\ GREET (Greenhouse Gases, Regulated Emissions, and Energy 
Use in Transportation) Model, Argonne National Laboratory, https://greet.es.anl.gov/.
---------------------------------------------------------------------------

(l) Refueling Time Benefits
    To estimate the value of time savings associated with vehicle 
refueling, the Method A analysis used estimates that an average 
refueling event involves refilling 60 percent of the tank's capacity 
over the course of 3.5 minutes, at an hourly cost of $27.22.
(m) External Costs of Travel
    Changes in vehicle travel will entail economic externalities. To 
estimate these costs, the Method A analysis used estimates that 
congestion-, accident-, and noise-related externalities will total 5.1 
[cent]/mi., 2.8 [cent]/mi., and 0.1 [cent]/mi., respectively.
(n) Ownership and Operating Costs
    Method A results predict that the total cost of vehicle ownership 
and operation will change not just due to changes in vehicle price and 
fuel outlays, but also due to some other costs likely to vary with 
vehicle price. To estimate these costs, NHTSA has applied factors of 
5.5 percent (of price) for taxes and fees, 15.3 percent for financing, 
19.2 percent for insurance, 1.9 percent for relative value loss. The 
Method A analysis also estimates that average vehicle resale value will 
increase by 25 percent of any increase in new vehicle price.
(5) DOT CAFE Model Analysis of Impacts of Regulatory Alternatives for 
HD Pickups and Vans
(a) Industry Impacts
    The agencies' analysis fleet provides a starting point for 
estimating the extent to which manufacturers might add fuel-saving 
(and, therefore, CO2-avoiding) technologies under various 
regulatory alternatives, including the no-action alternative that 
defines a baseline against which to measure estimated impacts of new 
standards. The analysis fleet is a forward-looking projection of 
production of new HD pickups and vans, holding vehicle characteristics 
(e.g., technology content and fuel consumption levels) constant at 
model year 2014 levels, and adjusting production volumes based on 
recent DOE and commercially-available forecasts. This analysis fleet 
includes some significant changes relative to the market 
characterization that was used to develop the Phase 1 standards 
applicable starting in model year 2014; in particular, the analysis 
fleet includes some new HD vans (e.g., Ford's Transit and Fiat/
Chrysler's Promaster) that are considerably more fuel-efficient than HD 
vans these manufacturers have previously produced for the U.S. market.
    While the proposed standards are scheduled to begin in model year 
2021, the requirements they define are likely to influence 
manufacturers' planning decisions several years in advance. This is 
true in light-duty planning, but accentuated by the comparatively long 
redesign cycles and small number of models and platforms offered for 
sale in the 2b/3 market segment. Additionally, manufacturers will 
respond to the cost and efficacy of available fuel consumption 
improvements, the price of fuel, and the requirements of the Phase 1 
standards that specify maximum allowable average fuel consumption and 
GHG levels for MY2014-MY2018 HD pickups and vans (the final standard 
for MY2018 is held constant for model years 2019 and 2020). The 
forward-looking nature of product plans that determine which vehicle 
models will be offered in the model years affected by the proposed 
standards lead to additional technology application to vehicles in the 
analysis fleet that occurs in the years prior to the start of the 
proposed standards. From the industry perspective, this means that 
manufacturers will incur costs to comply with the proposed standards in 
the baseline and that the total cost of the proposed regulations will 
include some costs that occur prior to their start, and represent 
incremental changes over a world in which manufacturers will have 
already modified their vehicle offerings compared to today.

[[Page 40373]]

   Table VI-19--MY2021 Baseline Costs for Manufacturers in 2b/3 Market
           Segment in the Dynamic Baseline, or Alternative 1b
------------------------------------------------------------------------
                                                  Average     Total cost
                 Manufacturer                    technology    increase
                                                  cost ($)       ($m)
------------------------------------------------------------------------
Chrysler/Fiat.................................          275           27
Daimler.......................................           18            0
Ford..........................................          258           78
General Motors................................          782          191
Nissan........................................          282            3
Industry......................................          442          300
------------------------------------------------------------------------

    As Table VI-19 shows, the industry as a whole is expected to add 
about $440 of new technology to each new vehicle model by 2021 under 
the no-action alternative defined by the Phase 1 standards. Reflecting 
differences in projected product offerings in the analysis fleet, some 
manufacturers (notably Daimler) are significantly less constrained by 
the Phase 1 standards than others and face lower cost increases as a 
result. General Motors (GM) shows the largest increase in average 
vehicle cost, but results for GM's closest competitors (Ford and 
Chrysler/Fiat) do not include the costs of their recent van redesigns, 
which are already present in the analysis fleet (discussed in greater 
detail below).
    The above results reflect the assumption that manufacturers having 
achieved compliance with standards might act as if buyers are willing 
to pay for further fuel consumption improvements that ``pay back'' 
within 6 months (i.e., those improvements whose incremental costs are 
exceeded by savings on fuel within the first six months of ownership). 
It is also possible that manufacturers will choose not to migrate cost-
effective technologies to the 2b/3 market segment from similar vehicles 
in the light-duty market. To examine this possibility, all regulatory 
alternatives were also analyzed using the DOT CAFE model (Method A) 
with a 0-month payback period in lieu of the 6-month payback period 
discussed above. (A sensitivity analysis using Method A, discussed 
below, also explores longer payback periods, as well as the combined 
effect of payback period and fuel price on vehicle design decisions). 
Resultant technology costs in model year 2021 results for the no-action 
alternative, summarized in Table VI-20 below, are quite similar to 
those shown above for the 6-month payback period. Due to the similarity 
between the two baseline characterizations, results in the following 
discussion represent differences relative to only the 6-month payback 
baseline.

 Table VI-20--MY2021 Baseline Costs for HD Pickups and Vans in the Flat
                       Baseline, or Alternative 1a
------------------------------------------------------------------------
                                                  Average     Total cost
                 Manufacturer                    technology    increase
                                                  cost ($)       ($m)
------------------------------------------------------------------------
Chrysler/Fiat.................................          268           27
Daimler.......................................            0            0
Ford..........................................          248           75
General Motors................................          767          188
Nissan........................................          257            3
Industry......................................          431          292
------------------------------------------------------------------------

    The results below represent the impacts of several regulatory 
alternatives, including those defined by the proposed standards, as 
incremental changes over the baseline, where the baseline is defined as 
the state of the world in the absence of the proposed regulatory 
action. Large-scale, macroeconomic conditions like fuel prices are 
constant across all alternatives, including the baseline, as are the 
fuel economy improvements under the no-action alternative defined by 
the Phase 1 MDHD rulemaking that covers model years 2014-2018 and is 
constant from model year 2018 through 2020. In the baseline scenario, 
the Phase 1 standards are assumed to remain in place and at 2018 levels 
throughout the analysis (i.e. MY 2030). The only difference between the 
definitions of the alternatives is the stringency of the proposed 
standards starting in MY 2021 and continuing through either MY 2025 or 
MY 2027, and all of the differences in outcomes across alternatives are 
attributable to differences in the standards.
    The standards vary in stringency across regulatory alternatives (1-
5), but as discussed above, all of the standards are based on the curve 
developed in the Phase 1 standards that relate fuel economy and GHG 
emissions to a vehicle's work factor. The alternatives considered here 
represent different rates of annual increase in the curve defined for 
model year 2018, growing from a 0 percent annual increase (Alternative 
1, the baseline or ``no-action'' alternative) up to a 4 percent annual 
increase (Alternative 5). Table VI-21 shows a summary \365\ of outcomes 
by alternative incremental to the baseline (Alternative 1b) for Model 
Year 2030 \366\, with the exception of technology penetration rates, 
which are absolute.
---------------------------------------------------------------------------

    \365\ NHTSA generated hundreds of outputs related to economic 
and environmental impacts, each available technology, and the costs 
associated with the rule. A more comprehensive treatment of these 
outputs appears in Chapter 10 of the draft RIA.
    \366\ The DOT CAFE model estimates that redesign schedules will 
``straddle'' model year 2027, the latest year for which the agencies 
are proposing increases in the stringency of fuel consumption and 
GHG standards. Considering also that today's analysis estimates some 
earning and application of ``carried forward'' compliance credits, 
the model was run extending the analysis through model year 2030.
---------------------------------------------------------------------------

    The technologies applied by the CAFE model have been grouped (in 
most cases) to give readers a general sense of which types of 
technology are applied more frequently than others, and are more likely 
to be offered in new class 2b/3 vehicles once manufacturers are fully 
compliant with the standards in the alternative. Model year 2030 was 
chosen to account for technology application that occurs once the 
standards have stabilized, but manufacturers are still redesigning 
products to achieve compliance--generating technology costs and 
benefits in those model years. The summaries of technology penetration 
are also intended to reflect the relationship between technology 
application and cost increases across the alternatives. The table rows 
present the degree to which specific technologies will be present in 
new class 2b and class 3 vehicles in 2030, and correspond to: Variable 
valve timing (VVT) and/or variable valve lift (VVL), cylinder 
deactivation, direct injection, engine turbocharging, 8-speed automatic 
transmissions, electric power-steering and accessory improvements, 
micro-hybridization (which reduces engine idle, but does not assist 
propulsion), full hybridization (integrated starter generator or strong 
hybrid that assists propulsion and recaptures braking energy), and 
aerodynamic improvements to the vehicle shape. In addition to the 
technologies in the following tables, there are some lower-complexity 
technologies that have high market penetration across all the 
alternatives and manufacturers; low rolling-resistance tires, low 
friction lubricants, and reduced engine friction, for example.

[[Page 40374]]

    Table VI-21--Summary of HD Pickups and Vans Alternatives' Impact on Industry Versus the Dynamic Baseline,
                                                 Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
Total Stringency Increase.......................            9.6%           16.2%           16.3%           18.5%
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           19.04           20.57           20.57           21.14
Achieved........................................           19.14           20.61           20.83           21.27
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.25            4.86            4.86            4.73
Achieved........................................            5.22            4.85            4.80            4.70
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             495             458             458             446
Achieved........................................             491             458             453             444
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................              46              46              46              46
Cylinder Deac...................................              29              21              21              21
Direct Injection................................              17              25              31              32
Turbocharging...................................              55              63              63              63
8-Speed AT......................................              67              96              96              97
EPS, Accessories................................              54              80              79              79
Stop Start......................................               0               0              10              13
Hybridization \a\...............................               0               8              35              51
Aero. Improvements..............................              36              78              78              78
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................             239             243             325             313
CW (%)..........................................             3.7             3.7             5.0             4.8
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \b\.................................             578           1,348           1,655           2,080
Total ($m) \c\..................................             437           1,019           1,251           1,572
Payback period (m) \c\..........................              25              31              34              38
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Includes mild hybrids (ISG) and strong HEVs.
\b\ Values used in Methods A & B.
\c\ Values used in Method A, calculated using a 3% discount rate.

    In general, the model projects that the standards would cause 
manufacturers to produce HD pickups and vans that are lighter, more 
aerodynamic, and more technologically complex across all the 
alternatives. As Table VI-21 shows, there is a difference between the 
relatively small increases in required fuel economy and average 
incremental technology cost between the alternatives, suggesting that 
the challenge of improving fuel consumption and CO2 
emissions accelerates as stringency increases (i.e., that there may be 
a ``knee'' in the relationship between technology cost and reductions 
in fuel consumption/GHG emissions). Despite the fact that the required 
average fuel consumption level changes by about 3 percent between 
Alternative 4 and Alternative 5, average technology cost increases by 
more than 25 percent. These differences help illustrate the clustered 
character of this market segment, where relatively small increases in 
fuel economy can lead to much larger cost increases if entire platforms 
must be changed in response to the standards.
    The contrast between alternatives 3 and 4 is even more prominent, 
with an identical required fuel economy improvement leading to price 
increases greater than 20 percent based on the more rapid rate of 
increase and shorter time span of Alternative 4, which achieves all of 
its increases by MY 2025 while Alternative 3 continues to increase at a 
slower rate until MY 2027. Despite these differences, the increase in 
average payback period when moving from Alternative 3 to Alternative 4 
to Alternative 5 is fairly constant at around an additional three 
months for each jump in stringency.
    Manufacturers offer few models, typically only a pickup truck and/
or a cargo van, and while there are a large number of variants of each 
model, the degree of component sharing across the variants can make 
diversified technology application either economically impractical or 
impossible. This forces manufacturers to apply some technologies more 
broadly in order to achieve compliance than they might do in other 
market segments (passenger cars, for example). This difference between 
broad and narrow application--where some technologies must be applied 
to entire platforms, while some can be applied to individual model 
variants--also explains why

[[Page 40375]]

certain technology penetration rates decrease between alternatives of 
increasing stringency (cylinder deactivation or mass reductions in 
Table VI-21, for example). For those cases, narrowly applying a more 
advanced (and costly) technology can be a more cost effective path to 
compliance and lead to reductions in the amount of lower-complexity 
technology that is applied.
    One driver of the change in technology cost between Alternative 3 
and Alternative 4 is the amount of hybridization projected to result 
from the implementation of the standards. While only about 5 percent 
full hybridization (defined as either integrated starter-generator or 
strong hybrid) is expected to be needed to comply with Alternative 3, 
the higher rate of increase and compressed schedule moving from 
Alternative 3 to Alternative 4 is enough to increase the percentage of 
the fleet adopting full hybridization by a factor of two. To the extent 
that manufacturers are concerned about introducing hybrid vehicles in 
the 2b and 3 market, it is worth noting that new vehicles subject to 
Alternative 3 achieve the same fuel economy as new vehicle subject to 
Alternative 4 by 2030, with less hybridization required to achieve the 
improvement.
    The alternatives also lead to important differences in outcomes at 
the manufacturer level, both from the industry average and from each 
other. General Motors, Ford, and Chrysler (Fiat), are expected to have 
approximately 95 percent of the 2b/3 new vehicle market during the 
years that the proposed standards are being phased in. Due to their 
importance to this market and the similarities between their model 
offerings, these three manufacturers are discussed together and a 
summary of the way each is impacted by the standards appears below in 
Table VI-22, Table VI-23, and Table VI-24 for General Motors, Ford, and 
Chrysler/Fiat, respectively.

  Table VI-22--Summary of Impacts on General Motors by 2030 in the HD Pickup and Van Market Versus the Dynamic
                                            Baseline, Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           18.38           19.96              20           20.53
Achieved........................................           18.43           19.95           20.24           20.51
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.44            5.01               5            4.87
Achieved........................................            5.42            5.01            4.94            4.87
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             507             467             467             455
Achieved........................................             505             468             461             455
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................              64              64              64              64
Cylinder Deac...................................              47              47              47              47
Direct Injection................................              18              18              36              36
Turbocharging...................................              53              53              53              53
8-Speed AT......................................              36             100             100             100
EPS, Accessories................................             100             100             100             100
Stop Start......................................               0               0               2               0
Hybridization...................................               0              19              79             100
Aero. Improvements..............................             100             100             100             100
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................             325             161             158             164
CW (%)..........................................             5.3             2.6             2.6             2.7
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................             785           1,706           2,244           2,736
Total ($m, undiscounted) \b\....................             214             465             611             746
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

  Table VI-23--Summary of Impacts on Ford by 2030 in the HD Pickup and Van Market Versus the Dynamic Baseline,
                                                 Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y

[[Page 40376]]

 
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           19.42           20.96           20.92           21.51
Achieved........................................            19.5           21.04           21.28            21.8
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.15            4.77            4.78            4.65
Achieved........................................            5.13            4.75            4.70            4.59
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             485             449             450             438
Achieved........................................             482             447             443             433
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................              34              34              34              34
Cylinder Deac...................................              18               0               0               0
Direct Injection................................              16              34              34              34
Turbocharging...................................              51              69              69              69
8-Speed AT......................................             100             100             100             100
EPS, Accessories................................              41              62              59              59
Stop Start......................................               0               0              20              29
Hybridization...................................               0               2              14              30
Aero. Improvements..............................               0              59              59              59
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................             210             202             379             356
CW (%)..........................................             3.2               3             5.7             5.3
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................             506           1,110           1,353           1,801
Total ($m, undiscounted) \b\....................             170             372             454             604
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

   Table VI-24--Summary of Impacts on Fiat/Chrysler by 2030 in the HD Pickup and Van Market Versus the Dynamic
                                            Baseline, Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           18.73           20.08           20.12           20.70
Achieved........................................           18.83           20.06           20.10           20.70
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.34            4.98            4.97            4.83
Achieved........................................            5.31            4.99            4.97            4.83
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             515             480             479             466
Achieved........................................             512             481             480             467
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................              40              40              40              40
Cylinder Deac...................................              23              23              23              23
Direct Injection................................              17              17              17              17
Turbocharging...................................              74              74              74              74

[[Page 40377]]

 
8-Speed AT......................................              65              88              88              88
EPS, Accessories................................               0             100             100             100
Stop-Start......................................               0               0               0               0
Hybridization...................................               0               3               3              10
Aero. Improvements..............................               0             100             100             100
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................             196             649             648             617
CW (%)..........................................             2.8             9.1             9.1             8.7
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................             434           1,469           1,486           1,700
Total ($m, undiscounted) \b\....................              48             163             164             188
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

    The fuel consumption and GHG standards require manufacturers to 
achieve an average level of compliance, represented by a sales-weighted 
average across the specific targets of all vehicles offered for sale in 
a given model year, such that each manufacturer will have a unique 
required consumption/emissions level determined by the composition of 
its fleet, as illustrated above. However, there are more interesting 
differences than the small differences in required fuel economy levels 
among manufacturers. In particular, the average incremental technology 
cost increases with the stringency of the alternative for each 
manufacturer, but the size of the cost increase from one alternative to 
the next varies among them, with General Motors showing considerably 
larger increases in cost moving from Alternative 3 to Alternative 4, 
than from either Alternative 2 to Alternative 3 or Alternative 4 to 
Alternative 5. Ford is estimated to have more uniform cost increases 
from each alternative to the next, in increasing stringency, though 
still benefits from the reduced pace and longer period of increase 
associated with Alternative 3 compared to Alternative 4.
    The simulation results show all three manufacturers facing cost 
increases when the stringency of the standards move from 2.5 percent 
annual increases over the period from MY 2021-2027 to 3.5 percent 
annual increases from MY 2021-2025, but General Motors has the largest 
at 75 percent more than the industry average price increase for 
Alternative 4. GM also faces higher cost increases in Alternative 2 
about 50 percent more than either Ford or Fiat/Chrysler. And for the 
most stringent alternative considered, the agencies estimate that 
General Motors would face average cost increases of more than $2,700, 
in addition to the more than $700 increase in the baseline--approaching 
nearly $3,500 per vehicle over today's prices.
    Technology choices also differ by manufacturer, and some of those 
decisions are directly responsible for the largest cost discrepancies. 
For example, GM is estimated to engage in the least amount of mass 
reduction among the Big 3 after Phase 1, and much less than Chrysler/
Fiat, but reduces average vehicle mass by over 300 lbs in the 
baseline--suggesting that some of GM's easiest Phase 1 compliance 
opportunities can be found in lightweighting technologies. Similarly, 
Chrysler/Fiat is projected to apply less hybridization than the others, 
and much less than General Motors, which is simulated to have full 
hybrids (either integrated starter generator or complete hybrid system) 
on all of its fleet by 2030, nearly 20 percent of which will be strong 
hybrids, in Alternative 4 and the strong hybrid share decreases to 
about 18 percent in Alternative 5, as some lower level technologies are 
applied more broadly. Because the analysis applies the same technology 
inputs and the same logic for selecting among available opportunities 
to apply technology, the unique situation of each manufacturer 
determined which technology path is projected as the most cost-
effective.
    In order to understand the differences in incremental technology 
costs and fuel economy achievement across manufacturers in this market 
segment, it is important to understand the differences in their 
starting position relative to the proposed standards. One important 
factor, made more obvious in the following figures, is the difference 
between the fuel economy and performance of the recently redesigned 
vans offered by Fiat/Chrysler and Ford (the Promaster and Transit, 
respectively), and the more traditionally-styled vans that continue to 
be offered by General Motors (the Express/Savannah). In MY 2014, Ford 
began the phase-out of the Econoline van platform, moving those volumes 
to the Euro-style Transit vans (discussed in more detail in Section VI. 
D.2). The Transit platform represents a significant improvement over 
the existing Econoline platform from the perspective of fuel economy, 
and for the purpose of complying with the standards, the relationship 
between the Transit's work factor and fuel economy is a more favorable 
one than the Econoline vans it replaces. Since the redesign of van 
offerings from both Chrysler/Fiat and Ford occur in (or prior to) the 
2014 model year, the costs, fuel consumption improvements, and 
reductions of vehicle mass associated with those redesigns are included 
in the analysis fleet, meaning they are not carried as part of the 
compliance modeling exercise. By contrast, General Motors is simulated 
to redesign their van offerings after 2014, such that there is a 
greater potential for these vehicles to incur additional costs 
attributable to new standards, unlike the costs associated with the 
recent redesigns of their competitors. The inclusion of these new Ford 
and Chrysler/Fiat products in the analysis fleet is the primary driver 
of the cost discrepancy between GM and its competitors in both the 
baseline and Alternative 2, when Ford and Chrysler/

[[Page 40378]]

Fiat have to apply considerably less technology to achieve compliance.
    The remaining 5 percent of the 2b/3 market is attributed to two 
manufacturers, Daimler and Nissan, which, unlike the other 
manufacturers in this market segment, only produce vans. The vans 
offered by both manufacturers currently utilize two engines and two 
transmissions, although both Nissan engines are gasoline engines and 
both Daimler engines are diesels. Despite the logical grouping, these 
two manufacturers are impacted much differently by the proposed 
standards. For the least stringent alternative considered, Daimler adds 
no technology and incurs no incremental cost in order to comply with 
the standards. At stringency increases greater than or equal to 3.5 
percent per year, Daimler only really improves some of their 
transmissions and improves the electrical accessories of its Sprinter 
vans. By contrast, Nissan's starting position is much weaker and their 
compliance costs closer to the industry average in Table VI-21. This 
difference could increase if the analysis fleet supporting the final 
rule includes forthcoming Nissan HD pickups.

 Table VI-25--Summary of Impacts on Daimler by 2030 in the HD Pickup and Van Market Versus the Dynamic Baseline,
                                                 Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           23.36           25.19           25.25           25.91
Achieved........................................           25.23           25.79           25.79           26.53
----------------------------------------------------------------------------------------------------------------
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            4.28            3.97            3.96            3.86
Achieved........................................            3.96            3.88            3.88            3.77
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             436             404             404             393
Achieved........................................             404             395             395             384
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................               0               0               0               0
Cylinder Deac...................................               0               0               0               0
Direct Injection................................               0               0               0               0
Turbocharging...................................              44              44              44              44
8-Speed AT......................................               0              44              44             100
EPS, Accessories................................               0               0               0               0
Stop-Start......................................               0               0               0               0
Hybridization...................................               0               0               0               0
Aero. Improvements..............................               0               0               0               0
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................               0               0               0               0
CW (%)..........................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................               0             165             165             374
Total ($m, undiscounted) \b\....................               0               4               4               9
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

 Table VI-26--Summary of Impacts on Nissan by 2030 in the HD Pickup and Van Market Versus the Dynamic Baseline,
                                                 Alternative 1b
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                     Average Fuel Economy (miles per gallon)
----------------------------------------------------------------------------------------------------------------
Required........................................           19.64           21.19           20.92           21.46
Achieved........................................           19.84           21.17           21.19           21.51
----------------------------------------------------------------------------------------------------------------

[[Page 40379]]

 
                                   Average Fuel Consumption (gallons/100 mi.)
----------------------------------------------------------------------------------------------------------------
Required........................................            5.09           44.72            4.78            4.66
Achieved........................................            5.04            4.72            4.72            4.65
----------------------------------------------------------------------------------------------------------------
                                     Average Greenhouse Gas Emissions (g/mi)
----------------------------------------------------------------------------------------------------------------
Required........................................             452             419             425             414
Achieved........................................             448             419             419             413
----------------------------------------------------------------------------------------------------------------
                                           Technology Penetration (%)
----------------------------------------------------------------------------------------------------------------
VVT and/or VVL..................................             100             100             100             100
Cylinder Deac...................................              49              49              49              49
Direct Injection................................              51              51              51             100
Turbocharging...................................              51              51              51              50
8-Speed AT......................................               0              51              51              51
EPS, Accessories................................               0             100             100             100
Stop-Start......................................               0               0               0               0
Hybridization...................................               0               0               0              28
Aero. Improvements..............................               0             100             100             100
----------------------------------------------------------------------------------------------------------------
                                         Mass Reduction (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
CW (lb.)........................................               0               0             307             303
CW (%)..........................................               0               0               5             4.9
----------------------------------------------------------------------------------------------------------------
                                         Technology Cost (vs. No-Action)
----------------------------------------------------------------------------------------------------------------
Average ($) \a\.................................             378           1,150           1,347           1,935
Total ($m, undiscounted) \b\....................               5            15.1            17.7            25.4
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Values used in Methods A & B.
\b\ Values used in Method A, calculated at a 3% discount rate.

    As Table VI-25 and Table VI-26 show, Nissan applies more technology 
than Daimler in the less stringent alternatives and significantly more 
technology with increasing stringency. The Euro-style Sprinter vans 
that comprise all of Daimler's model offerings in this segment put 
Daimler in a favorable position. However, those vans are already 
advanced--containing downsized diesel engines and advanced aerodynamic 
profiles. Much like the Ford Transit vans, the recent improvements to 
the Sprinter vans occurred outside the scope of the compliance modeling 
so the costs of the improvements are not captured in the analysis.
    Although Daimler's required fuel economy level is much higher than 
Nissan's (in miles per gallon), Nissan starts from a much weaker 
position than Daimler and must incorporate additional engine, 
transmission, platform-level technologies (e.g. mass reduction and 
aerodynamic improvements) in order to achieve compliance. In fact, more 
than 25 percent of Nissan's van offerings are projected to contain 
integrated starter generators by 2030 in Alternative 5.
    While the agencies do not allow sales volumes for any manufacturer 
(or model) to vary across regulatory alternatives in the analysis, it 
is conceivable that under the most stringent alternatives individual 
manufacturers could lose market share to their competitors if the 
prices of their new vehicles rise more than the industry average 
without compensating fuel savings and/or changes to other features.
(b) Estimated Owner/Operator Impacts With Respect to HD Pickups and 
Vans Using Method A
    The owner/operator impacts of the proposed rules are more 
straightforward. Table VI-27 shows the impact on the average owner/
operator who buys a new class 2b or 3 vehicle in model year 2030 using 
the worst case assumption that manufacturers pass through the entire 
cost of technology to the purchaser. (All dollar values are discounted 
at a rate of 7 percent per year from the time of purchase, except the 
average price increase, which occurs at the time of purchase). The 
additional costs associated with increases in taxes, registration fees, 
and financing costs are also captured in the table.

  Table VI-27--Summary of Individual Owner/Operator Impacts in MY 2030 in the HD Pickup and Van Market Segment
                      Using Method A and Versus the Dynamic Baseline, Alternative 1\b\ \a\
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase Increases............          2.0%/y          2.5%/y          3.5%/y          4.0%/y
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------

[[Page 40380]]

 
                            Value of Lifetime Fuel Savings (discounted 2012 dollars)
----------------------------------------------------------------------------------------------------------------
Pretax..........................................           2,068           3,924           4,180           4,676
Tax.............................................             210             409             438             491
Total...........................................           2,278           4,334           4,618           5,168
----------------------------------------------------------------------------------------------------------------
                                   Economic Benefits (discounted 2012 dollars)
----------------------------------------------------------------------------------------------------------------
Mobility Benefit................................             244             437             472             525
Avoided Refueling Time..........................              86             164             172             193
----------------------------------------------------------------------------------------------------------------
                                New Vehicle Purchase (vs. No-Action Alternative)
----------------------------------------------------------------------------------------------------------------
Avg. Price Increase ($).........................             578           1,348           1,655           2,080
Avg. Payback (years)............................             2.5               3             3.4             3.9
Additional costs ($)............................             120             280             344             432
----------------------------------------------------------------------------------------------------------------
                               Net Lifetime Owner/Operator Benefits (discounted $)
----------------------------------------------------------------------------------------------------------------
Total Net Benefits..............................           1,910           3,307           3,263           3,374
----------------------------------------------------------------------------------------------------------------
Notes:
* All dollar values are discounted at a rate of 7 percent per year from the time of purchase, except the average
  price increase, which occurs at the time of purchase).
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    As expected, an owner/operator's lifetime fuel savings increase 
monotonically across the alternatives. The mobility benefit in Table 
VI-27 refers to the value of additional miles that an individual owner/
operator travels as a result of reduced per-mile travel costs. The 
additional miles result in additional fuel consumption and represent 
foregone fuel savings, but are valued by owner/operators at the cost of 
the additional fuel plus the owner/operator surplus (a measure of the 
increase in welfare that owner/operators achieve by having more 
mobility). The refueling benefit measures the value of time saved 
through reduced refueling events, the result of improved fuel economy 
and range in vehicles that have been modified in response to the 
standards.
    There are some limitations to using payback period as a measure, as 
it accounts for fuel expenditures and incremental costs associated with 
taxes, registration fees and financing, and increased maintenance 
costs, but not the cost of potential repairs or replacements, which may 
or may not be more expensive with more advanced technology.
    Overall, the average owner/operator is likely to see discounted 
lifetime benefits that are multiples of the price increases faced when 
purchasing the new vehicle in MY 2030 (or the few model years preceding 
2030). In particular, the net present value of future benefits at the 
time of purchase are estimated to be 3.5, 3.0, 2.2, and 1.8 times the 
price increase of the average new MY2030 vehicle for Alternatives 2-5, 
respectively. As Table VI-27 illustrates, the preferred alternative has 
the highest ratio of discounted future owner/operator benefits to 
owner/operator costs.
(c) Estimated Social and Environmental Impacts for HD Pickups and Vans
    Social benefits increase with the increasing stringency of the 
alternatives. As in the owner/operator analysis, the net benefits 
continue to increase with increasing stringency--suggesting that 
benefits are still increasing faster than costs for even the most 
stringent alternative.

 Table VI-28--Summary of Total Social Costs and Benefits Through MY 2029 in the HD Pickup and Van Market Segment
                      Using Method A and Versus the Dynamic Baseline, Alternative 1\b\ \a\
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................            2.0%            2.5%            3.5%            4.0%
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                                            Fuel Purchases ($billion)
----------------------------------------------------------------------------------------------------------------
Pretax Savings..................................             9.6            15.9            19.1            22.2
----------------------------------------------------------------------------------------------------------------
                                          Fuel Externalities ($billion)
----------------------------------------------------------------------------------------------------------------
Energy Security.................................             0.5             0.9             1.1             1.3
CO2 emissions \b\...............................             1.9             3.2             3.8             4.4
----------------------------------------------------------------------------------------------------------------
                                      VMT-Related Externalities ($billion)
----------------------------------------------------------------------------------------------------------------
Driving Surplus.................................             1.1             1.8             2.1             2.4
Refueling Surplus...............................             0.4             0.7             0.8             0.9

[[Page 40381]]

 
Congestion......................................            -0.2            -0.4            -0.4            -0.5
Accidents.......................................            -0.1            -0.2            -0.2            -0.3
Noise...........................................               0               0               0               0
Fatalities......................................             0.1            -0.2            -0.2            -0.5
Criteria Emissions..............................             0.6             1.1             1.3             1.6
----------------------------------------------------------------------------------------------------------------
                                    Technology Costs vs. No-Action ($billion)
----------------------------------------------------------------------------------------------------------------
Incremental Cost................................             2.5             5.0             7.2             9.7
Additional Costs................................             0.5             1.0             1.5             2.0
----------------------------------------------------------------------------------------------------------------
                                         Benefit Cost Summary ($billion)
----------------------------------------------------------------------------------------------------------------
Total Social Cost...............................             3.3             6.8             9.5            13.0
Total Social Benefit............................            13.9            22.7            27.4            31.7
Net Social Benefit..............................            10.6            15.9            17.9            18.7
----------------------------------------------------------------------------------------------------------------
Notes:
* All dollar values are discounted at a rate of 3 percent per year from the time of purchase.
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Using the 3% average social cost of CO2 value. There are four distinct social cost of CO2 values presented
  in the Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis under Executive Order
  12866 (2010 and 2013). The CO2 emissions presented here would be valued lower with one of those other three
  values and higher at the other two values.

    Table VI-28 provides a summary of benefits and costs, cumulative 
from MY2015-MY2029 (although the early years of the series typically 
have no incremental costs and benefits over the baseline), for each 
alternative. In the social perspective, fuel savings are considered net 
of fuel taxes, which are a transfer from purchasers of fuel to society 
at large. The energy security component represents the risk premium 
associated with exposure to oil price spikes and the economic 
consequences of adapting to them. This externality is monetized on a 
per-gallon basis, just as the social cost of carbon is used in this 
analysis. Just as the previous two externalities are caused by fuel 
consumption, others are caused by travel itself. The additional VMT 
resulting from the increase in travel demand that occurs when the price 
of driving decreases (i.e. the rebound effect), not only leads to 
increased mobility (which is a benefit to drivers), but also to 
increases in congestion, noise, accidents, and per-mile emissions of 
criteria pollutants like carbon monoxide and diesel particulates. 
Although increases in VMT lead to increases in tailpipe emissions of 
criteria pollutants, the proposed regulations decrease overall 
consumption enough that the emissions reductions associated with the 
remainder of the fuel cycle (extraction, refining, transportation and 
distribution) are large enough to create a net reduction in the 
emissions of criteria pollutants (shown below in Table VI-29 and VI-
30).\367\ A full presentation of the costs and benefits, and the 
considerations that have gone into each cost and benefit category--such 
as how energy security premiums were developed, how the social costs of 
carbon and co-pollutant benefits were developed, etc.--is presented in 
Section IX of this preamble and in Chapters 7 and 8 of the draft RIA 
for each regulated segment (engines, HD pickups and vans, vocational 
vehicles, tractors and trailers).
---------------------------------------------------------------------------

    \367\ For a more detailed discussion of the results from the 
CAFE Model on the proposed heavy duty pickups and vans regulation's 
impact on emissions of CO2 and criteria pollutants, see 
NHTSA's accompanying Draft Environmental Impact Statement.
---------------------------------------------------------------------------

    Another side effect of increased VMT is the likely increase in 
crashes, which is a function of the total vehicle travel in each year. 
Although additional crashes could involve additional fatalities, we 
estimate that this potential could be partially offset by the 
application of mass reduction to HD pickup trucks and vans, which could 
make fatalities less likely in some crashes involving these vehicles. 
As Table VI-28 illustrates, the social cost associated with traffic 
fatalities is the result of an additional -10 (Alternative 2 leads to a 
reduction in fatalities over the baseline, due to the application of 
mass reduction technologies), 35, 36, and 66 fatalities for 
Alternatives 2-5, respectively. The baseline contains nearly 25,000 
fatalities involving 2b/3 vehicles over the same period. The 
incremental fatalities associated with Alternative 2-5 are -0.4, 0.1, 
0.1, and 0.3 percent relative to the MYs 2015-2029 baseline, 
respectively.
    The CAFE model was used to estimate the emissions impacts of the 
various alternatives that are the result of lower fuel consumption, but 
increased vehicle miles traveled for vehicle produced in model years 
subject to the standards in the alternatives. Criteria pollutants are 
largely the result of vehicle use, and accrue on a per-mile-of-travel 
basis, but the alternatives still generally lead to emissions 
reductions. Although vehicle use increases under each of the 
alternatives, upstream emissions associated with fuel refining, 
transportation and distribution are reduced for each gallon of fuel 
saved and that savings is larger than the incremental increase in 
emissions associated with increased travel. The net of the two factors 
is a savings of criteria (and other) pollutant emissions.

[[Page 40382]]

   Table VI-29--Summary of Environmental Impacts Through MY2029 in the HD Pickup and Van Market Segment, Using
                           Method A and Versus the Dynamic Baseline, Alternative 1b a
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................            2.0%            2.5%            3.5%            4.0%
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                               Greenhouse Gas Emissions vs. No-Action Alternative
----------------------------------------------------------------------------------------------------------------
CO2 (MMT).......................................              54              91             110             127
CH4 and N2O (tons)..............................          65,600         111,400         133,700         155,300
----------------------------------------------------------------------------------------------------------------
                                Other Emissions vs. No-Action Alternative (tons)
----------------------------------------------------------------------------------------------------------------
CO..............................................          10,400          20,700          25,800          30,400
VOC and NOX.....................................          23,800          43,600          53,500          62,200
PM..............................................           1,470           2,550           3,090           3,590
SO2.............................................          11,400          19,900          24,100          28,000
Air Toxics......................................              44              47              49              55
Diesel PM10.....................................           2,470           4,350           5,300           6,160
----------------------------------------------------------------------------------------------------------------
                             Other Emissions vs. No-Action Alternative (% reduction)
----------------------------------------------------------------------------------------------------------------
CO..............................................             0.1             0.3             0.4             0.4
VOC and NOX.....................................             1.1             2.1             2.6             3.0
PM..............................................             1.7             3.0             3.6             4.2
SO2.............................................             2.9             5.1             6.2             7.2
Air Toxics......................................             0.1             0.1             0.1             0.2
Diesel PM10.....................................             2.7             4.8             5.9             6.8
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    In addition to comparing environmental impacts of the alternatives 
against a dynamic baseline that shows some improvement over time, 
compared to today's fleet, even in the absence of the alternatives, the 
environmental impacts from the Method A analysis were compared against 
a flat baseline. This other comparison is summarized below, but both 
comparisons are discussed in greater detail in the Draft EIS.

   Table VI-30--Summary of Environmental Impacts Through MY2029 in the HD Pickup and Van Market Segment, Using
                             Method A and Versus the Flat Baseline, Alternative 1\a\
----------------------------------------------------------------------------------------------------------------
                   Alternative                           2               3               4               5
----------------------------------------------------------------------------------------------------------------
Annual Stringency Increase......................            2.0%            2.5%            3.5%            4.0%
Stringency Increase Through MY..................            2025            2027            2025            2025
----------------------------------------------------------------------------------------------------------------
                               Greenhouse Gas Emissions vs. No-Action Alternative
----------------------------------------------------------------------------------------------------------------
CO2 (MMT).......................................              66             105             127             142
CH4 and N2O (tons)..............................          79,700         127,400         154,800         172,800
----------------------------------------------------------------------------------------------------------------
                                Other Emissions vs. No-Action Alternative (tons)
----------------------------------------------------------------------------------------------------------------
CO..............................................          11,630          22,160          28,030          32,370
VOC and NOX.....................................          28,280          48,770          60,180          68,050
PM..............................................           1,780           2,900           3,550           3,980
SO2.............................................          13,780          22,580          27,660          31,020
Air Toxics......................................              60              65              72              73
Diesel PM10.....................................           2,980           4,930           6,060           6,810
----------------------------------------------------------------------------------------------------------------
                             Other Emissions vs. No-Action Alternative (% reduction)
----------------------------------------------------------------------------------------------------------------
CO..............................................             0.2             0.3             0.4             0.4
VOC and NOX.....................................             1.4             2.3             2.9             3.3
PM..............................................             2.1             3.4             4.2             4.7
SO2.............................................             3.5             5.7             7.0             7.9
Air Toxics......................................             0.2             0.2             0.2             0.2
Diesel PM10.....................................             3.3             5.4             6.7             7.5
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

[[Page 40383]]

(6) Sensitivity Analysis Evaluating Different Inputs to the DOT CAFE 
Model
    This section describes some of the principal sensitivity results, 
obtained by running the various scenarios describing the policy 
alternatives with alternative inputs. OMB Circular A-4 indicates that 
``it is usually necessary to provide a sensitivity analysis to reveal 
whether, and to what extent, the results of the analysis are sensitive 
to plausible changes in the main assumptions and numeric inputs.'' 
\368\ Considering this guidance, a number of sensitivity analyses were 
performed using analysis Method A to examine important assumptions and 
inputs, including the following, all of which are discussed in greater 
detail in the accompanying RIA:
---------------------------------------------------------------------------

    \368\ Available at http://www.whitehouse.gov/omb/circulars_a004_a-4/.
---------------------------------------------------------------------------

    1. Payback Period: In addition to the 0 and 6 month payback periods 
discussed above, also evaluated cases involving payback periods of 12, 
18, and 24 months.
    2. Fuel Prices: Evaluated cases involving fuel prices from the AEO 
2014 low and high oil price scenarios. (See AEO-Low and AEO-High in the 
tables.)
    3. Fuel Prices and Payback Period: Evaluated one side case 
involving a 0 month payback period combined with fuel prices from the 
AEO 2014 low oil price scenario, and one side case with a 24 month 
payback period combined with fuel prices from the AEO 2014 high oil 
price scenario.
    4. Benefits to Vehicle Buyers: The main Method A analysis assumes 
there is no loss in value to owner/operators resulting from vehicles 
that have an increase in price and higher fuel economy. NHTSA performed 
this sensitivity analysis assuming that there is a 25, or 50 percent 
loss in value to owner/operators--equivalent to the assumption that 
owner/operators will only value the calculated benefits they will 
achieve at 75, or 50 percent, respectively, of the main analysis 
estimates. (These are labeled as 75pctOwner/operatorBenefit and 
50pctOwner/operatorBenefit.)
    5. Value of Avoided GHG Emissions: Evaluated side cases involving 
lower and higher valuation of avoided CO2 emissions, 
expressed as the social cost of carbon (SCC).
    6. Rebound Effect: Evaluated side cases involving rebound effect 
values of 5 percent, 15 percent, and 20 percent. (These are labeled as 
05PctReboundEffect, 15PctReboundEffect and 20PctReboundEffect).
    7. RPE-based Markup: Evaluated a side case using a retail price 
equivalent (RPE) markup factor of 1.5 for non-electrification 
technologies, which is consistent with the NAS estimation for 
technologies manufactured by suppliers, and a RPE markup factor of 1.33 
for electrification technologies (mild and strong HEV).
    8. ICM-based Post-Warranty Repair Costs: NHTSA evaluated a side 
case that scaled the frequency of repair by vehicle survival rates, 
assumes that per-vehicle repair costs during the post-warranty period 
are the same as in the in-warranty period, and that repair costs are 
proportional to incremental direct costs (therefore vehicles with 
additional components will have increased repair costs).
    9. Mass-Safety Effect: Evaluated side cases with the mass-safety 
impact coefficient at the values defining the 5th and 95th percent 
points of the confidence interval estimated in the underlying 
statistical analysis. (These are labeled MassFatalityCoeff05pct and 
MassFatalityCoeff95pct.)
    10. Strong HEVs: Evaluated a side case in which strong HEVs were 
excluded from the set of technology estimated to be available for HD 
pickups and vans through model year 2030. As in Section VI.C. (8), this 
``no SHEV'' case allowed turbocharging and downsizing on all GM vans to 
provide a lower-cost path for compliance.
    11. Diesel Downsizing: Evaluated a side case in which downsizing of 
diesel engines was estimated to be more widely available to HD pickups 
and vans.
    12. Technology Effectiveness: Evaluated side cases involving inputs 
reflecting lower and higher impacts of technologies on fuel 
consumption.
    13. Technology Direct Costs: Evaluated side cases involving inputs 
reflecting lower and higher direct incremental costs for fuel-saving 
technologies.
    14. Fleet Mix: Evaluated a side case in which the shares of 
individual vehicle models and configurations were kept constant at 
estimated current levels.
    Table VI-31 below, summarizes key metrics for each of the cases 
included in the sensitivity analysis using Method A for the proposed 
alternative. The table reflects the percent change in the metrics 
(columns) relative to the main analysis, due to the particular 
sensitivity case (rows) for the proposed alternative 3. For each 
sensitivity run, the change in the metric can we described as the 
difference between the baseline and the preferred alternative for the 
sensitivity case, minus the difference between the preferred 
alternative and the baseline in the main analysis, divided by the 
difference between the preferred alternative and the baseline in the 
main analysis. Or,
[GRAPHIC] [TIFF OMITTED] TP13JY15.012

    Each metric represents the sum of the impacts of the preferred 
alternative over the model years 2018-2029, and the percent changes in 
the table represent percent changes to those sums. More detailed 
results for all alternatives are available in the accompanying RIA 
Chapter 10.

    Table VI-31--Sensitivity Analysis Results From CAFE Model in the HD Pickup and Van Market Segment Using Method A and Versus the Dynamic Baseline,
                                 Alternative 1b (2.5% Growth in Stringency: Cells Are Percent Change From Base Case) \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Fuel savings     CO2 savings    Fuel savings    Social costs       Social        Social net
                    Sensitivity case                       (gallons) (%)     (MMT) (%)        ($) (%)           (%)        benefits (%)    benefits (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0 Month Payback.........................................            14.0            14.5            15.1             5.6            15.1            18.2

[[Page 40384]]

 
12 Month Payback........................................            -4.8            -4.7            -4.5            -2.5            -4.7            -5.4
18 Month Payback........................................           -29.2           -28.1           -26.5           -14.1           -26.8           -31.1
24 Month Payback........................................           -42.9           -42.4           -41.9           -23.2           -42.1           -48.4
AEO-Low.................................................             3.3             3.5           -27.9           -10.8           -22.2           -26.1
AEO-High................................................            -7.0            -7.2            23.3             1.4            19.5            25.6
AEO-Low, 0 Month Payback................................            18.6            19.3           -16.5            -3.4           -10.1           -12.3
AEO-High, 24 Month Payback..............................           -63.8           -64.6           -54.4           -49.9           -55.7           -57.7
50pct Owner/operator Benefit............................             0.0             0.0           -50.0             0.0           -34.6           -46.2
75pct Owner/operator Benefit............................             0.0             0.0           -25.0             0.0           -17.3           -23.1
Low SCC.................................................             0.0             0.0             0.0             0.0           -10.6           -14.1
Low SCC, 0 Month Payback................................            14.0            14.5            15.1             5.6             2.9             2.0
High SCC................................................             0.0             0.0             0.0             0.0             7.8            10.4
High SCC, 0 Month Payback...............................            14.0            14.5            15.1             5.6            24.0            30.1
Very High SCC...........................................             0.0             0.0             0.0             0.0            28.7            38.4
Very High SCC, 0 Month Payback..........................            14.0            14.5            15.1             5.6            48.0            62.2
05 Pct Rebound Effect...................................             4.6             4.6             4.6           -12.9             0.4             4.8
15 Pct Rebound Effect...................................            -4.6            -4.6            -4.6            12.9            -0.4            -4.8
20 Pct Rebound Effect...................................            -9.1            -9.2            -9.2            25.7            -0.8            -9.7
RPE-Based Markup........................................            -3.2            -1.5             0.3            31.4            -0.1           -10.6
Mass Fatality Coeff 05pct...............................             0.0             0.0             0.0           -23.6             0.0             7.9
Mass Fatality Coeff 95pct...............................             0.0             0.0             0.0            23.9             0.0            -8.0
NoSHEVs.................................................            -6.7            -5.8            -5.0             2.3            -5.1            -7.6
NoSHEVs, 0 Month Payback................................             8.2             9.8            11.5            -1.2            11.3            15.4
Lower Effectiveness.....................................            -7.8            -7.8            -8.1            39.5            -8.0           -23.9
Higher Effectiveness....................................           -10.6           -10.3           -10.0           -23.3           -10.2            -5.8
Lower Direct Costs......................................             0.9             2.7             4.8            18.4             4.3            -0.4
Higher Direct Costs.....................................            -4.1            -3.8            -3.5            75.3            -3.8           -30.3
Wider Diesel Downsizing.................................            -1.5            -1.0            -0.6           -10.3            -0.8             2.4
07 Pct Discount Rate....................................             0.0             0.0          -100.0           -41.7          -100.0          -119.5
07 Pct DR, 0 Month Payback..............................            14.0            14.5           -37.9           -30.7           -30.7           -30.7
Allow Gas To Diesel.....................................            15.5             5.3          -100.0            16.8          -100.0          -139.1
Allow Gas To Diesel, 0 Month Payback....................            32.1            22.6            14.5            46.8            17.0             7.0
flat mix after 2016.....................................             1.1             0.9             0.7             2.6             0.8             0.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

    For some of the cases for which results are presented above, the 
sensitivity of results to changes in inputs is simple, direct, and 
easily observed. For example, changes to valuation of avoided GHG 
emissions impact only this portion of the estimated economic benefits; 
manufacturers' responses and corresponding costs are not impacted. 
Similarly, a higher discount rate does not affect physical quantities 
saved (gallons of fuel and metric tons of CO2 in the table), 
but reduces the value of the costs and benefits attributable to the 
proposed standards in an intuitive way. Some other cases warrant closer 
consideration:
    First, cases involving alternatives to the reference six-month 
payback period involve different degrees of fuel consumption 
improvement, and these differences are greatest in the no-action 
alternative defining the baseline. Because all estimated impacts of the 
proposed standards are shown as incremental values relative to this 
baseline, longer payback periods correspond to smaller estimates of 
incremental impacts, as fuel economy increasingly improves in the 
absence of the rule and manufacturers are compelled to add less 
technology in order to comply with the standards.
    Second, cases involving different fuel prices similarly involve 
different degrees of fuel economy improvement in the absence of the 
standard, as more, or less, improvement occurs as a result of more, or 
fewer, technologies appearing cost effective to owner/operators. Lower 
fuel prices correspond to increases in fuel savings on a volumetric 
basis, as the standard is responsible for a greater amount of the fuel 
economy improvement, but the value of fuel savings decreases because 
each gallon saved is worth less when fuel prices are low. Higher fuel 
prices correspond to reductions in the volumetric fuel savings 
attributable to the proposed standards, but lead to increases in the 
value of fuel saved because each gallon saved is worth more when fuel 
prices are high.
    Third, because the payback period and fuel price inputs work in 
opposing directions, the relative magnitude of each is important to 
consider for the combined sensitivity cases. While the low price and 0-
month payback case leads to significant volumetric savings compared to 
the main analysis, the low fuel price is still sufficient to produce a 
negative change in net benefits. Similarly, the high price and 24-month 
payback case results in large reductions to volumetric savings that can 
be attributed to the proposed standards, but the presence of high fuel 
prices is not sufficient to lead to increases in either the dollar 
value of fuel savings or net social benefits.
    Fourth, the cases involving different inputs defining the 
availability of some technologies do not impact equally the estimated 
impacts across all manufacturers. Section C.8 above

[[Page 40385]]

provides a discussion of a sensitivity analysis that excludes strong 
hybrids and includes the use of downsized turbocharged engines in vans 
currently equipped with large V-8 engines. The modeling results for 
this analysis are provided in Section C.8 and in the table above. The 
no strong hybrid analysis shows that GM could comply with the proposed 
preferred Alternative 3 without strong hybrids based on the use of 
turbo downsizing on all of their HD gasoline vans. Alternatively, when 
the analysis is modified to allow for wider application of diesel 
engines, strong HEV application for GM drops slightly (from 19 percent 
to 17 percent) in MY2030, average per-vehicle costs drop slightly (by 
about $50), but MY2030 additional penetration rates of diesel engines 
increase by about 10 percent. Manufacturer-specific model results 
accompanying today's rules show the extent to which individual 
manufacturers' potential responses to the standards vary with these 
alternative assumptions regarding the availability and applicability of 
fuel-saving technologies. However, across all of these sensitivity 
cases, the model projects that social costs increase (as a result of 
increases in technology costs) when manufacturers choose to comply with 
the proposed regulations without the use of strong hybrids.
    Fifth, the cases that vary the effectiveness and direct cost of 
available technologies produce nuanced results in the context of even 
the 0-month payback case. In the case of effectiveness changes, both 
sensitivity cases result in reductions to the volumetric fuel savings 
attributable to the proposal; lower effectiveness because the 
technologies applied in response to the standards save less fuel, and 
higher effectiveness because more of the increase in fuel economy 
occurs in the baseline. However, for both cases, social costs (a strong 
proxy for technology costs) move in the intuitive direction.
    The cases that vary direct costs show volumetric fuel savings 
increasing under lower direct technology costs despite additional fuel 
economy improvements in the baseline, as more aggressive technology 
becomes cost effective. Higher direct costs lead to decreases in 
volumetric fuel savings, as more of the fuel economy improvement can be 
attributed to the rule. In both cases, social costs (as a result of 
technology costs) move in the intuitive direction.
    If, instead of using the values in the main analysis, each 
sensitivity case were itself the main analysis, the costs and benefits 
attributable to the proposed rule would be as they appear in Table VI-
32, below.

                       Table VI-32--Costs and Benefits of Proposed Standards for HD Pickups and Vans Under Alternative Assumptions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Fuel savings                                                       Social        Net social
                    Sensitivity case                         (billion      CO2 reduction   Fuel savings    Social costs      benefits        benefits
                                                             gallons)          (MMT)        ($billion)      ($billion)      ($billion)      ($billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
6 Month Payback (main)..................................             7.8            94.1            15.9             5.5            23.5            18.0
0 Month Payback.........................................             8.9           107.7            18.3             5.8            27.0            21.3
12 Month Payback........................................             7.4            87.2            15.2             5.6            21.9            16.3
18 Month Payback........................................             5.5            65.8            11.7             4.9            16.8            11.9
24 Month Payback........................................             4.5            52.7             9.2             4.4            13.3             8.9
AEO-Low.................................................             8.1            94.7            11.5             5.1            17.8            12.7
AEO-High................................................             7.3            84.9            19.6             5.8            27.4            21.6
AEO-Low, 0 Month Payback................................             9.3           109.1            13.3             5.6            20.6            15.1
AEO-High, 24 Month Payback..............................             2.8            32.4             7.2             2.9            10.2             7.3
50pct Owner/operator Benefit............................             7.8            91.5             8.0             5.8            15.0             9.2
75pct Owner/operator Benefit............................             7.8            91.5            11.9             5.8            19.0            13.2
Low SCC.................................................             7.8            91.5            15.9             5.8            20.5            14.8
Low SCC, 0 Month Payback................................             8.9           104.7            18.3             6.1            23.6            17.5
High SCC................................................             7.8            91.5            15.9             5.8            24.7            19.0
High SCC, 0 Month Payback...............................             8.9           104.7            18.3             6.1            28.5            22.4
Very High SCC...........................................             7.8            91.5            15.9             5.8            29.5            23.8
Very High SCC, 0 Month Payback..........................             8.9           104.7            18.3             6.1            34.0            27.9
05 Pct Rebound Effect...................................             8.2            95.7            16.6             5.0            23.0            18.0
15 Pct Rebound Effect...................................             7.5            87.2            15.2             6.5            22.9            16.4
20 Pct Rebound Effect...................................             7.1            83.0            14.4             7.2            22.8            15.5
RPE-Based Markup........................................             7.6            90.1            16.0             7.6            22.9            15.4
Mass Fatality Coeff 05pct...............................             7.8            91.5            15.9             4.4            23.0            18.5
Mass Fatality Coeff 95pct...............................             7.8            91.5            15.9             7.1            23.0            15.8
NoSHEVs.................................................             7.2            84.3            14.6             8.0            21.1            13.1
NoSHEVs, 0 Month Payback................................             7.0            82.0            14.3             4.4            20.6            16.2
Lower Effectiveness.....................................             7.9            94.0            16.7             6.8            23.9            17.1
Higher Effectiveness....................................             7.5            88.0            15.3            10.1            22.1            12.0
Lower Direct Costs......................................             7.7            90.5            15.8             5.2            22.8            17.6
Higher Direct Costs.....................................             7.8            91.5             8.5             3.8            13.8            10.0
Wider Diesel Downsizing.................................             8.9           104.7             9.9             4.0            15.9            11.9
07 Pct Discount Rate....................................             9.0            96.3            15.3             7.2            22.7            15.5
07 Pct DR, 0 Month Payback..............................            10.3           112.2            18.2             8.5            26.9            18.4
Allow Gas To Diesel.....................................             7.9            92.3            16.0             5.9            23.1            17.2
Allow Gas To Diesel, 0 Month Payback....................             7.3            85.8            15.1             6.9            21.7            14.8
Flat mix after 2016.....................................             8.4            99.8            17.6             7.4            25.4            17.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

(7) Uncertainty Analysis
    As in previous rules, NHTSA has conducted an uncertainty analysis 
to determine the extent to which uncertainty about input assumptions 
could impact the costs and benefits attributable to the proposed rule. 
Unlike the preceding sensitivity analysis, which is useful for 
understanding how

[[Page 40386]]

alternative values of a single input assumption may influence the 
estimated impacts of the proposed standards, the uncertainty analysis 
considers multiple states of the world, characterized by a distribution 
of specific values of all relevant inputs, based on their relative 
probability of occurrence. A sensitivity analysis varies a single 
parameter of interest, holding all others constant at whatever nominal 
values are used to generate the single point estimate in the main 
analysis, and measures the resulting deviation. However, the 
uncertainty analysis allows all of those parameters to vary 
simultaneously--relaxing the assumption that ``all else is equal''.
    Each trial, of which there are 14,000 in this analysis, represents 
a different state of the world in which the standards are implemented. 
To gauge the robustness of the estimates of impacts in the proposal, 
NHTSA varied technology costs and effectiveness, fuel prices, market 
demand for fuel economy improvements in the absence of the rule, the 
amount of additional driving associated with fuel economy improvements 
(the rebound effect), and the on-road gaps between realized fuel 
economy and laboratory test values for gasoline and diesel vehicles. 
The shapes and types of the probability distributions used in the 
analysis vary by uncertainty parameter, though the costs and 
effectiveness values for technologies are sampled as groups to minimize 
issues associated with interdependence. The most important input to the 
uncertainty analysis, fuel prices (which drive the majority of benefits 
from the proposed standards), are drawn from a range of fuel prices 
characterized by permutations of the Low, Reference, and High fuel 
price cases in the Annual Energy Outlook 2014.
[GRAPHIC] [TIFF OMITTED] TP13JY15.013

    Figure VI-7 displays the distribution of net benefits estimated by 
the ensemble of simulation runs. As Figure VI-7 indicates, the analysis 
produces a wide distribution of possible outcomes that are much broader 
than the range of estimates characterized by only the difference 
between the more and less dynamic baselines. While the expected value, 
the probability-weighted average outcome, is only about 70 percent of 
the net benefits estimated in the main analysis, almost all of the 
trials produce positive net benefits. In fact, the distribution 
suggests there is only a one percent chance of the proposal producing 
negative net benefits for HD pickups and vans. So while the estimated 
net benefits in the main analysis may be higher than the expected value 
when uncertainty is considered, net benefits at least as high as those 
estimated in the main analysis are still 20 times as likely as an 
outcome that results in net costs.
    Figure VI-8 shows the distribution of payback periods (in years) 
for Model Year 2029 trucks across 14,000 simulation runs. The ``payback 
period'' typically refers to the number of years of vehicle use that 
occur before the savings on fuel expenditures offset the additional 
technology cost associated with improved fuel economy. As Figure VI-8 
illustrates, the expected incremental technology cost of both Phase 1 
and Phase 2 is eclipsed by the value of fuel savings by year three of 
ownership in most cases

[[Page 40387]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.014

    This is an important metric for owner/operator acceptability and, 
though Figure VI-8 illustrates the long right tail of the payback 
distribution (where payback periods are likely to be unacceptably 
long), fewer than ten percent of the trials result in payback periods 
longer than four years. This suggests that, even in the face of 
uncertainty about future fuel prices and fuel economy in real-world 
driving conditions, buyers of the vehicles that are modified to comply 
with the requirements of the proposal will still see fuel savings 
greater than their additional vehicle cost in a relatively short period 
of time. As one would expect, the technologies used in Phase 1 of the 
MDHD program are likely to be more cost effective and serve to lower 
the expected payback period, even compared to the main analysis of 
Phase 2.

E. Compliance and Flexibility for HD Pickup and Van Standards

(1) Averaging, Banking, and Trading
    The Phase 1 program established substantial flexibility in how 
manufacturers can choose to implement EPA and NHTSA standards while 
preserving the benefits for the environment and for energy consumption 
and security. Primary among these flexibilities are the gradual phase-
in schedule, and the corporate fleet average approach which encompasses 
averaging, banking and trading described below. See Section IV.A. of 
the Phase 1 preamble (76 FR 57238) for additional discussion of the 
Phase 1 averaging, banking, and trading and Section IV.A (3) of the 
Phase 1 preamble (76 FR 57243) for a discussion of the credit 
calculation methodology.
    Manufacturers in this category typically offer gasoline and diesel 
versions of HD pickup and van vehicle models. The agencies established 
chassis-based Phase 1 standards that are equivalent in terms of 
stringency for gasoline and diesel vehicles and are proposing the same 
approach to stringency for Phase 2. In Phase 1, the agencies 
established that HD pickups and vans are treated as one large averaging 
set that includes both gasoline and diesel vehicles \369\ and the 
agencies are proposing to maintain this averaging set approach for 
Phase 2.
---------------------------------------------------------------------------

    \369\ See 40 CFR 1037.104(d) and the proposed 40 CFR 86.1819-
14(d). Credits may not be transferred or traded between this vehicle 
averaging set and loose engines or other heavy-duty categories, as 
discussed in Section I.
---------------------------------------------------------------------------

    As explained in Section II.C(3) of the Phase 1 preamble (76 FR 
57167), and in Section VI.B (3) above, the program is structured so 
that final compliance is determined at the end of each model year, when 
production for the model year is complete. At that point, each 
manufacturer calculates production-weighted fleet average 
CO2 emission and fuel consumption rates along with its 
production-weighted fleet average standard. Under this approach, a 
manufacturer's HD pickup and van fleet that achieves a fleet average 
CO2 or fuel consumption level better than its standard would 
be allowed to generate credits. Conversely, if the fleet average 
CO2 or fuel consumption level does not meet its standard, 
the fleet would incur debits (also referred to as a shortfall).
    A manufacturer whose fleet generates credits in a given model year 
will have several options for using those credits to offset emissions 
from other HD pickups and vans. These options include credit carry-
back, credit carry-forward, and credit trading within the HD pickup and 
van averaging set. These types of credit provisions also exist in the 
light-duty 2012-2016 and 2017-2025 MY vehicle

[[Page 40388]]

rules, as well as many other mobile source standards issued by EPA 
under the CAA. The manufacturer will be able to carry back credits to 
offset a deficit that had accrued in a prior model year and was 
subsequently carried over to the current model year, with a limitation 
on the carry-back of credits to three model years. After satisfying any 
need to offset pre-existing deficits, a manufacturer may bank remaining 
credits for use in future years, with a limitation on the carry-forward 
of credits to five model years. Averaging vehicle credits with engine 
credits or between vehicle weight classes is not allowed, as discussed 
in Section I. The agencies are not proposing changes to any of these 
provisions for the Phase 2 program.
    While the agencies are proposing to retain 5 year carry-forward of 
credits for all HD sectors, the agencies request comment on the merits 
of a temporary credit carry-forward period of longer than 5 years for 
HD pickups and vans, allowing Phase 1 credits generated in MYs 2014-
2019 to be used through MY 2027. EPA included a similar provision in 
the MY 2017-2025 light-duty vehicle rule, which allows a one-time 
credit carry-forward of MY 2010-2015 credits to be carried forward 
through MY 2021.\370\ Such a credit carry-forward extension for HD 
pickups and vans may provide manufacturers with additional flexibility 
during the transition to the proposed Phase 2 standards. A temporary 
credit carry-forward period of longer than five years for Phase 1 
credits may help manufacturers resolve lead-time issues they might face 
as the proposed more stringent Phase 2 standards phase-in and help 
avoid negative impacts to their product redesign cycles which tend to 
be longer than those for light-duty vehicles.
---------------------------------------------------------------------------

    \370\ 77 FR 62788, October 15, 2012.
---------------------------------------------------------------------------

    As discussed in Section VI.B.4., EPA and NHTSA are proposing to 
change the HD pickup and van useful life for GHG emissions and fuel 
consumption from the current 11 years/120,000 miles to 15 years/150,000 
miles to make the useful life for GHG emissions consistent with the 
useful life of criteria pollutants recently updated in the Tier 3 rule. 
As shown in the Equation VI-1 credits calculation formula below, 
established by the Phase 1 rule, useful life in miles is a 
multiplicative factor included in the calculation of CO2 and 
fuel consumption credits. In order to ensure banked credits maintain 
their value in the transition from Phase 1 to Phase 2, NHTSA and EPA 
propose an adjustment factor of 1.25 (i.e, 150,000/120,000) for credits 
that are carried forward from Phase 1 to the MY 2021 and later Phase 2 
standards. Without this adjustment factor the proposed change in useful 
life would effectively result in a discount of banked credits that are 
carried forward from Phase 1 to Phase 2, which is not the intent of the 
change in the useful life. Consider, for example, a vehicle 
configuration with annual sales of 1,000 vehicles that was 10 g/mile 
below the standard. Under Phase 1, those vehicles would generate 1,200 
Mg of credit (10x1,000x120,000/1,000,000). Under Phase 2, the same 
vehicles would generate 1,500 Mg of credit (10x1,000x150,000/
1,000,000). The agencies do not believe that this proposed adjustment 
results in a loss of program benefits because there is little or no 
deterioration anticipated for CO2 emissions and fuel 
consumption over the life of the vehicles. Also, as described in the 
standards and feasibility sections above, the carry-forward of credits 
is an integral part of the program, helping to smoothing the transition 
to the new Phase 2 standards. The agencies believe that effectively 
discounting carry-forward credits from Phase 1 to Phase 2 would be 
unnecessary and could negatively impact the feasibility of the proposed 
Phase 2 standards. EPA and NHTSA request comment on all aspects of the 
averaging, banking, and trading program.
[GRAPHIC] [TIFF OMITTED] TP13JY15.096

Where:
CO2 Std = Fleet average CO2 standard (g/mi)
FC Std = Fleet average fuel consumption standard (gal/100 mile)
CO2 Act = Fleet average actual CO2 value (g/
mi)
FC Act = Fleet average actual fuel consumption value (gal/100 mile)
Volume = the total production of vehicles in the regulatory category
UL = the useful life for the regulatory category (miles)
(2) Advanced Technology Credits
    The Phase 1 program included on an interim basis advanced 
technology credits for MYs 2014 and later in the form of a multiplier 
of 1.5 for the following technologies:

 Hybrid powertrain designs that include energy storage systems
 Waste heat recovery
 All-electric vehicles
 Fuel cell vehicles
    The advanced technology credit program is intended to encourage 
early development of technologies that are not yet commercially 
available. This multiplier approach means that each advanced technology 
vehicle would count as 1.5 vehicles in a manufacturer's compliance 
calculation. A manufacturer also has the option to subtract these 
vehicles out of its fleet and determine their performance as a separate 
fleet calculating advanced technology credits that can be used for all 
other HD vehicle categories, but these credits would, of course, not 
then be reflected in the manufacturer's conventional pickup and van 
category credit balance. The credits are thus `special' in that they 
can be applied across the entire heavy-duty sector, unlike the ABT and 
early credits discussed above and the proposed off-cycle technology 
credits discussed in the following subsection. The agencies also capped 
the amount of advanced credits that can be transferred into any 
averaging set into any model year at 60,000 Mg to prevent market 
distortions.
    The advanced technology multipliers were included on an interim 
basis in the Phase 1 program and the agencies are proposing to end the 
incentive multipliers beginning in MY 2021, when the more stringent 
Phase 2 standards are proposed to begin phase-in. The agencies are 
proposing a similar approach for the other HD sectors as

[[Page 40389]]

discussed in Section I.C. (1). The advanced technology incentives are 
intended to promote the commercialization of technologies that have the 
potential to provide substantially better GHG emissions and fuel 
consumption if they were able to overcome major near-term market 
barriers. However, the incentives are not intended to be a permanent 
part of the program as they result in a decrease in overall GHG 
emissions and fuel consumption benefits associated with the program 
when used. More importantly, as explained in Section I. above, the 
agencies are already predicating the stringency of the proposed 
standards on development and deployment of two of these Phase 1 
advanced technologies (waste heat recovery and strong hybrid 
technology), so that it would be inappropriate (and essentially a 
windfall) to include credits for use of these technologies in Phase 
2.\371\
---------------------------------------------------------------------------

    \371\ EPA and NHTSA similarly included temporary advanced 
technology multipliers in the light-duty 2017-2025 program, 
believing it was worthwhile to forego modest additional emissions 
reductions and fuel consumption improvements in the near-term in 
order to lay the foundation for the potential for much larger 
``game-changing'' GHG and oil consumption reductions in the longer 
term. The incentives in the light-duty vehicle program are available 
through the 2021 model year. See 77 FR 62811, October 15, 2012.
---------------------------------------------------------------------------

    As discussed in Section I, the agencies request comment on the 
proposed approach for the advanced technology multipliers for HD 
pickups and vans as well as the other HD sectors, including comments on 
whether or not the credits should be extended to later model years for 
more advanced technologies such as EVs and fuel cell vehicles. These 
technologies are not projected to be part of the technology path used 
by manufacturer to meet the proposed Phase 2 standards for HD pickups 
and vans. Waste heat recovery is also not projected to be used for HD 
pickups and vans in the time frame of the proposed rules. EV and fuel 
cell technologies would presumably need to overcome the highest hurdles 
to commercialization for HD pickups and vans in the time frame of the 
proposed rules, and also have the potential to provide the highest 
level of benefit. We welcome comments on the need for such incentives, 
including information on why an incentive for specific technologies in 
this time frame may be warranted, recognizing that the incentive would 
result in reduced benefits in terms of CO2 emissions and 
fuel use due to the Phase 2 program.
    NHTSA and EPA established that for Phase 1, EVs and other zero 
tailpipe emission vehicles be factored into the fleet average GHG and 
fuel consumption calculations based on the diesel standards targets for 
their model year and work factor. The agencies also established for 
electric and zero emission vehicles that in the credits equation the 
actual emissions and fuel consumption performance be set to zero (i.e. 
that emissions be considered on a tailpipe basis exclusively) rather 
than including upstream emissions or energy consumption associated with 
electricity generation. As we look to the future, we are not projecting 
the adoption of electric HD pickups and vans into the market; 
therefore, we believe that this provision is still appropriate. Unlike 
the MY2012-2016 light-duty rule, which adopted a cap whereby upstream 
emissions would be counted after a certain volume of sales (see 75 FR 
25434-25436), we believe there is no need to propose a cap for HD 
pickups and vans because of the infrequent projected use of EV 
technologies in the Phase 2 timeframe. In Phase 2, we propose to 
continue to deem electric vehicles as having zero CO2, 
CH4, and N2O emissions as well as zero fuel 
consumption. We welcome comments on this approach. See also Section I 
for a discussion of the treatment of lifecycle emissions for 
alternative fuel vehicles and Section XI for the treatment of lifecycle 
emissions for natural gas specifically.
(3) Off-Cycle Technology Credits
    The Phase 1 program established an opportunity for manufacturers to 
generate credits by applying innovative technologies whose 
CO2 and fuel consumption benefits are not captured on the 2-
cycle test procedure (i.e., off-cycle).\372\ As discussed in Sections 
III.F. and V.E.3., the agencies are proposing approaches for Phase 2 
off-cycle technology credits for tractors and vocational vehicles with 
proposed provisions tailored for those sectors. For HD pickups and 
vans, the approach for off-cycle technologies established in Phase 1 is 
similar to that established for light-duty vehicles due to the use of 
the same basic chassis test procedures. The agencies are proposing to 
retain this approach for Phase 2. To generate credits, manufacturers 
are required to submit data and a methodology for determining the level 
of credits for the off-cycle technology subject to EPA and NHTSA review 
and approval. The application for off-cycle technology credits is also 
subject to a public evaluation process and comment period. EPA and 
NHTSA would approve the methodology and credits only if certain 
criteria were met. Baseline emissions and fuel consumption \373\ and 
control emissions and fuel consumption need to be clearly demonstrated 
over a wide range of real world driving conditions and over a 
sufficient number of vehicles to address issues of uncertainty with the 
data. Data must be on a vehicle model-specific basis unless a 
manufacturer demonstrated model-specific data were not necessary. Once 
a complete application is submitted by the manufacturer, the 
regulations require that the agencies publish a notice of availability 
in the Federal Register notifying the public of a manufacturer's 
proposed off-cycle credit calculation methodology and provide 
opportunity for comment.
---------------------------------------------------------------------------

    \372\ See 76 FR 57251, September 15, 2011, 40 CFR 
1037.104(d)(13), and the proposed 40 CFR 86.1819-14(d)(13).
    \373\ Fuel consumption is derived from measured CO2 
emissions using conversion factors of 8,887 g CO2/gallon 
for gasoline and 10,180 g CO2/gallon for diesel fuel.
---------------------------------------------------------------------------

    As noted above, the approach finalized for HD pickups and vans 
paralleled provisions for off-cycle credits in the MY 2012-2016 light-
duty vehicle GHG program.\374\ In the MY 2017-2025 light-duty vehicle 
program, EPA revised the off-cycle credits program for light-duty 
vehicles to streamline the credits process. In addition to the process 
established in the MY 2012-2016 rule, EPA added a list or ``menu'' of 
pre-approved off-cycle technologies and associated credit levels.\375\ 
Manufacturers may use the pre-defined off-cycle technology menu to 
generate light-duty vehicle credits by demonstrating at time of 
certification that the vehicles are equipped with the technology 
without providing additional test data. Different levels of credits are 
provided for cars and light trucks in the light-duty program. NHTSA 
also included these credits in the CAFE program (in gallons/mile 
equivalent) starting with MY 2017. The list of pre-approved off-cycle 
technologies for light-duty vehicles is shown below.
---------------------------------------------------------------------------

    \374\ See 75 FR 25440, May 7, 2010 and 40 CFR 86.1869-12(d).
    \375\ 77 FR 62832-62839, October 15, 2012.

[[Page 40390]]

Table VI-33--Pre-Approved Off-Cycle Technologies for Light-Duty Vehicles
------------------------------------------------------------------------
                        Pre-approved technologies
-------------------------------------------------------------------------
High Efficiency Exterior Lighting (at 100W)
Waste Heat Recovery (at 100W; scalable)
Solar Roof Panels (for 75 W, battery charging only)
Solar Roof Panels (for 75 W, active cabin ventilation plus battery
 charging)
Active Aerodynamic Improvements (scalable)
Engine Idle Start-Stop w/heater circulation system
Engine Idle Start-Stop without/heater circulation system
Active Transmission Warm-Up
Active Engine Warm-Up
Solar/Thermal Control
------------------------------------------------------------------------

    The agencies initially note that where vehicles are not chassis-
certified, but rather evaluate compliance using the GEM simulation 
tool, with the proposed modifications to GEM, many more technologies 
(especially those related to engine and transmission improvements) will 
now be `on-cycle'--evaluated directly by the GEM compliance tool. 
However, with respect to the proposed standards which would be chassis-
certified--namely, the standards for heavy duty pickups and vans, the 
effectiveness of some technologies will be only partially captured (or 
not captured at all). EPA and NHTSA are requesting comment on 
establishing a pre-defined technology menu list for HD pickups and 
vans. The list for HD pickups and vans could include some or all of the 
technologies listed in Table VI-33. As with the light-duty program, the 
pre-defined list may simplify the process for generating off-cycle 
credits and may further encourage the introduction of these 
technologies. However, the appropriate default level of credits for the 
heavier vehicles would need to be established. The agencies request 
comments with supporting HD pickup and van specific data and analysis 
that would provide a substantive basis for appropriate adjustments to 
the credits levels for the HD pickup and van category. The data and 
analysis would need to demonstrate that the pre-defined credit level 
represents real-world emissions reductions and fuel consumption 
improvements not captured by the 2-cycle test procedures.
    As with the light-duty vehicle program, the agencies would also 
consider including a cap on credits generated from a pre-defined list 
established for HD pickups and vans. The cap for the light-duty vehicle 
program is 10 g/mile (and gallons/mi equivalent) applied on a 
manufacturer fleet-wide basis.\376\ The 10 g/mile cap limits the total 
off-cycle credits allowed based on the pre-defined list across the 
manufacturer's light-duty vehicle fleet. The agencies adopted the cap 
on credits to address issues of uncertainty regarding the level of 
credits automatically assigned to each technology. Manufacturers able 
to demonstrate that a technology provides improvements beyond the menu 
credit level would be able to apply for additional credits through the 
individual demonstration process noted above. Credits based on the 
individual manufacturer demonstration would not count against the 
credit cap. If a menu list of credits is developed to be included in 
the HD pickup and van program, a cap may also be appropriate depending 
on the technology list and credit levels. The agencies request comments 
on all aspects of the off-cycle credits program for HD trucks and vans.
---------------------------------------------------------------------------

    \376\ See 40 CFR 86.1869-12(b).
---------------------------------------------------------------------------

(4) Demonstrating Compliance for Heavy-Duty Pickup Trucks and Vans
    The Phase 1 rule established a comprehensive compliance program for 
HD pickups and vans that NHTSA and EPA are generally retaining for 
Phase 2. The compliance provisions cover details regarding the 
implementation of the fleet average standards including vehicle 
certification, demonstrating compliance at the end of the model year, 
in-use standards and testing, carryover of certification test data, and 
reporting requirements. Please see Section V.B (1) of the Phase 1 rule 
preamble (76 FR 57256-57263) for a detailed discussion of these 
provisions.
    The Phase 1 rule contains special provisions regarding loose 
engines and optional chassis certification of certain vocational 
vehicles over 14,000 lbs. GVWR. The agencies are proposing to extend 
the optional chassis certification provisions to Phase 2 and are not 
proposing to extend the loose engine provisions. See the vocational 
vehicle Section V.E. and XIV.A.2 for a detailed discussion of the 
proposal for optional chassis certification and II.D. for the 
discussion of loose engines.

VII. Aggregate GHG, Fuel Consumption, and Climate Impacts

    Given that the purpose of setting these Phase 2 standards is to 
reduce fuel consumption and greenhouse gas (GHG) emissions from heavy-
duty vehicles, it is necessary for the agencies to analyze the extent 
to which the proposed standards would accomplish that purpose. This 
section describes the agencies' methodologies for projecting the 
reductions in greenhouse gas (GHG) emissions and fuel consumption, and 
the methodologies the agencies used to quantify the impacts associated 
with the proposed standards, as well as the impacts of Alternative 4. 
In addition, EPA's analyses of the projected change in atmospheric 
carbon dioxide (CO2) concentration and consequent climate 
change impacts are discussed. Because of NHTSA's obligations under 
EPCA/EISA and NEPA, NHTSA further analyzes, for each regulatory 
alternative, the projected environmental impacts related to fuel 
consumption, GHG emissions, and climate change. Detailed documentation 
of this analysis is provided in Chapters 3 and 5 of NHTSA's DEIS 
accompanying today's notice.

A. What methodologies did the agencies use to project GHG emissions and 
fuel consumption impacts?

    Different tools exist for estimating potential fuel consumption and 
GHG emissions impacts associated with fuel efficiency and GHG emission 
standards. One such tool is EPA's official mobile source emissions 
inventory model named Motor Vehicle Emissions Simulator (MOVES).\377\ 
The agencies used the most current version of the model, MOVES2014, to 
quantify the impacts of the proposed standards for vocational vehicles 
and combination tractor-trailers on GHG emissions and fuel consumption 
for each regulatory alternative. MOVES was run with user

[[Page 40391]]

input databases, described in more detail below, that reflected the 
projected technological improvements resulting from the proposed rules, 
such as the improvements in engine and vehicle efficiency, aerodynamic 
drag, and tire rolling resistance.
---------------------------------------------------------------------------

    \377\ MOVES homepage: http://www.epa.gov/otaq/models/moves/index.htm (last accessed Feb 23, 2015).
---------------------------------------------------------------------------

    Another such tool is DOT's CAFE model, which estimates how 
manufacturers could potentially apply technology improvements in 
response to new standards, and then calculates, among other things, 
resultant changes in national fuel consumption and GHG emissions. For 
today's analysis of potential new standards for HD pickups and vans, 
the model was reconfigured to use the work-based attribute metric of 
``work factor'' established in the Phase 1 rule for heavy-duty pickups 
and vans instead of the light-duty ``footprint'' attribute metric. The 
CAFE model takes user-specified inputs on, among other things, vehicles 
that will be produced in a given model year, technologies available to 
improve fuel efficiency on those vehicles, potential regulatory 
standards that would drive improvements in fuel efficiency, and 
economic assumptions. The CAFE model takes every vehicle in each 
manufacturer's fleet and decides what technologies to add to those 
vehicles in order to allow each manufacturer to comply with the 
standards in the most cost-effective way. Based on the resulting 
improved vehicle fleet, the CAFE model then calculates total fuel 
consumption and GHG emissions impacts based on those inputs, along with 
economic costs and benefits. The DOT's CAFE model is further described 
in detail in Section VI.C of the preamble and Chapter 2 of the draft 
RIA.
    For these rules, the agencies conducted coordinated and 
complementary analyses by using two analytical methods for the heavy-
duty pickup and van segment employing both DOT's CAFE model and EPA's 
MOVES model. The agencies used EPA's MOVES model to estimate fuel 
consumption and emissions impacts for tractor-trailers (including the 
engine that powers the tractor), and vocational vehicles (including the 
engine that powers the vehicle).
    For heavy-duty pickups and vans, the agencies performed 
complementary analyses, which we refer to as ``Method A'' and ``Method 
B''. In Method A, the CAFE model was used to project a pathway the 
industry could use to comply with each regulatory alternative and the 
estimated effects on fuel consumption, emissions, benefits and costs. 
In Method B, the MOVES model was used to estimate fuel consumption and 
emissions from these vehicles. NHTSA considered Method A as its central 
analysis. EPA considered the results of both methods. The agencies 
concluded that both methods led the agencies to the same conclusions 
and the same selection of the proposed standards. See Chapter 5 of the 
draft RIA for additional discussions of these two methods.
    For both methods, the agencies analyzed the impact of the proposed 
rules and Alternative 4, relative to two different reference cases--
less dynamic and more dynamic. The less dynamic baseline projects very 
little improvement in new vehicles in the absence of new Phase 2 
standards. In contrast, the more dynamic baseline projects more 
improvements in vehicle fuel efficiency. The agencies considered both 
reference cases (for additional details, see Chapter 11 of the draft 
RIA). The results for all of the regulatory alternatives relative to 
both reference cases, derived via the same methodologies discussed in 
this section, are presented in Section X of the preamble.
    For brevity, a subset of these analyses are presented in this 
section, and the reader is referred to both the RIA Chapter 11 and 
NHTSA's DEIS Chapters 3 and 5 for complete sets of these analyses. In 
this section, Method A is presented for both the proposed standards 
(i.e., Alternative 3--the agencies' preferred alternative) and for the 
standards the agencies considered in Alternative 4, relative to both 
the more dynamic baseline (Alternative 1b) and the less dynamic 
baseline (Alternative 1a). Method B is presented also for the proposed 
standards and Alternative 4, but relative only to the less dynamic 
baseline. The agencies' intention for presenting both of these 
complementary and coordinated analyses is to offer interested readers 
the opportunity to compare the regulatory alternatives considered for 
Phase 2 in both the context of our HD Phase 1 analytical approaches and 
our light-duty vehicle analytical approaches. The agencies view these 
analyses as corroborative and reinforcing: Both support agencies' 
conclusion that the proposed standards are appropriate and at the 
maximum feasible levels.
    Because reducing fuel consumption also affects emissions that occur 
as a result of fuel production and distribution (including renewable 
fuels), the agencies also calculated those ``upstream'' changes using 
the ``downstream'' fuel consumption reductions predicted by the CAFE 
model and the MOVES model. As described in Section VI, Method A uses 
the CAFE model to estimate vehicular fuel consumption and emissions 
impacts for HD pickups and vans and to calculate upstream impacts. For 
vocational vehicles and combination tractor-trailers, both Method A and 
Method B use the same upstream tools originally created for the 
Renewable Fuel Standard 2 (RFS2) rulemaking analysis,\378\ used in the 
LD GHG rulemakings,\379\ HD GHG Phase 1,\380\ and updated for the 
current analysis. The estimate of emissions associated with production 
and distribution of gasoline and diesel from crude oil is based on 
emission factors in the ``Greenhouse Gases, Regulated Emissions, and 
Energy Use in Transportation'' model (GREET) developed by DOE's Argonne 
National Lab. In some cases, the GREET values were modified or updated 
by the agencies to be consistent with the National Emission Inventory 
(NEI) and emission factors from MOVES. Method B uses the same tool 
described above to estimate the upstream impacts for HD pickups and 
vans. For additional details, see Chapter 5 of the draft RIA. The 
upstream tool used for the Method B can be found in the docket.\381\ As 
noted in Section VI above, these analyses corroborate each other's 
results.
---------------------------------------------------------------------------

    \378\ U.S. EPA. Draft Regulatory Impact Analysis: Changes to 
Renewable Fuel Standard Program. Chapters 2 and 3. May 26, 2009. 
Docket ID: EPA-HQ-OAR-2009-0472-0119
    \379\ 2017 and Later Model Year Light-Duty Vehicle Greenhouse 
Gas Emissions and Corporate Average Fuel Economy Standards (77 FR 
62623, October 15, 2012).
    \380\ Greenhouse Gas Emission Standards and Fuel Efficiency 
Standards for Medium- and Heavy-Duty Engines and Vehicles (76 FR 
57106, September 15, 2011).
    \381\ Memorandum to the Docket ``Upstream Emissions Modeling 
Files for HDGHG Phase 2 NPRM'' Docket No. EPA-HQ-OAR-2014-0827.
---------------------------------------------------------------------------

    The agencies analyzed the anticipated emissions impacts of the 
proposed rules and Alternative 4 on carbon dioxide (CO2), 
methane (CH4), nitrous oxide (N2O), and 
hydrofluorocarbons (HFCs) for a number of calendar years (for purposes 
of the discussion in these proposed rules, only 2025, 2035 and 2050 
will be shown) by comparing to both reference cases.\382\ Additional 
runs were performed for just the three of the greenhouse gases 
(CO2, CH4, and N2O) and for fuel 
consumption for every calendar year from 2014 to 2050, inclusive, which 
fed the economy-wide modeling, monetized greenhouse gas benefits 
estimation, and climate impacts

[[Page 40392]]

analyses, discussed in sections below.\383\
---------------------------------------------------------------------------

    \382\ The emissions impacts of the proposed rules on non-GHGs, 
including air toxics, were also estimated using MOVES. See Section 
VIII of the preamble for more information.
    \383\ The CAFE model estimates, among other things, 
manufacturers' potential multiyear planning decisions within the 
context of an estimated year-by-year product cadence (i.e., schedule 
for redesigning and freshening vehicles). The agencies included 
earlier model years in the analysis in order to account for the 
potential that manufacturers might take anticipatory actions in 
model years preceding those covered by today's proposal.
---------------------------------------------------------------------------

B. Analysis of Fuel Consumption and GHG Emissions Impacts Resulting 
From Proposed Standards and Alternative 4

    The following sections describe the model inputs and assumptions 
for both the less dynamic and more dynamic reference cases and the 
control case representing the agencies' proposed fuel efficiency and 
GHG standards. The agencies request comment on the model inputs, 
projected reductions in energy rates and fuel consumption rates 
presented in this section, as well as in Chapter 5 of the draft RIA. 
The details of all the MOVES runs, and input data tables, as well as 
the MOVES code and database, can be found in the docket.\384\ See 
Section VI.C for the discussion of the model inputs and assumptions for 
the analysis of the HD pickups and vans using DOT's CAFE Model.
---------------------------------------------------------------------------

    \384\ Memorandum to the Docket ``Runspecs, Model Inputs, MOVES 
Code and Database for HD GHG Phase 2 NPRM Emissions Modeling'' 
Docket No. EPA-HQ-OAR-2014-0827
---------------------------------------------------------------------------

(1) Model Inputs and Assumptions for the Less Dynamic Reference Case
    The less dynamic reference case (identified as Alternative 1a in 
Section X), includes the impact of Phase 1, but generally assumes that 
fuel efficiency and GHG emission standards are not improved beyond the 
required 2018 model year levels. Alternative 1a functions as one of the 
baselines against which the impacts of the proposed standards can be 
evaluated. This case projects some improvements in the efficiency of 
the box trailers pulled by combination tractors due to increased 
penetration of aerodynamic technologies and low rolling resistance 
tires attributed to both EPA's SmartWay Transport Partnership and 
California Air Resources Board's Tractor-Trailer Greenhouse Gas 
regulation, as described in Section IV of the preamble. For other HD 
vehicle sectors, no market-driven improvement in fuel efficiency was 
assumed. For HD pickups and vans, the CAFE model was applied in a 
manner that assumes manufacturers would only add fuel-saving technology 
as needed to continue complying with Phase 1 standards. MOVES2014 
defaults were used for all other parameters to estimate the emissions 
inventories for this case. The less dynamic reference case assumed the 
MOVES2014 default vehicle population and miles traveled estimates. The 
growth in vehicle populations and miles traveled in MOVES2014 is based 
on the relative annual VMT growth from AEO2014 Early Release for model 
years 2012 and later.\385\
---------------------------------------------------------------------------

    \385\ MOVES2014 assumes the population and VMT growth based on 
the early release version of AEO2014 because it was the only version 
that was available at the time of MOVES2014 development. Annual 
Energy Outlook 2014. http://www.eia.gov/forecasts/aeo/er/ (last 
accessed Feb 23, 2015).
    \386\ Vocational vehicles modeled in MOVES include heavy heavy-
duty, medium heavy-duty, and light heavy-duty vehicles. However, for 
light heavy-duty vocational vehicles, class 2b and 3 vehicles are 
not included in the inventories for the vocational sector. Instead, 
all vocational vehicles with GVWR of less than 14,000 lbs were 
modeled using the energy rate reductions described below for HD 
pickup trucks and vans. In practice, many manufacturers of these 
vehicles choose to average the lightest vocational vehicles into 
chassis-certified families (i.e., heavy-duty pickups and vans).
---------------------------------------------------------------------------

(2) Model Inputs and Assumptions for the More Dynamic Reference Case
    The more dynamic reference case (identified as Alternative 1b in 
Section X), also includes the impact of Phase 1 and generally assumes 
that fuel efficiency and GHG emission standards are not improved beyond 
the required 2018 model year levels. However, for this case, the 
agencies assume market forces would lead to additional fuel efficiency 
improvements for HD pickups and vans and tractor-trailers. These 
additional assumed improvements are described in Section X of the 
preamble. No additional fuel efficiency improvements due to market 
forces were assumed for vocational vehicles. For HD pickups and vans, 
the agencies applied the CAFE model using the input assumption that 
manufacturers having achieved compliance with Phase 1 standards would 
continue to apply technologies for which increased purchase costs would 
be ``paid back'' through corresponding fuel savings within the first 
six months of vehicle operation. The agencies conducted the MOVES 
analysis of this case in the same manner as for the less dynamic 
reference case.
(3) Model Inputs and Assumptions for ``Control'' Case
(a) Vocational Vehicles and Tractor-Trailers
    The ``control'' case represents the agencies' proposed fuel 
efficiency and GHG standards. The agencies developed additional user 
input data for MOVES runs to estimate the control case inventories. The 
inputs to MOVES for the control case account for improvements of engine 
and vehicle efficiency in vocational vehicles and combination tractor-
trailers. The agencies used the percent reduction in aerodynamic drag 
and tire rolling resistance coefficients and absolute changes in 
average total running weight (gross combined weight) expected from the 
proposed rules to develop the road load inputs for the control case, 
based on the GEM analysis. The agencies also used the percent reduction 
in CO2 emissions expected from the powertrain and other 
vehicle technologies not accounted for in the aerodynamic drag and tire 
rolling resistance in the proposed rules to develop energy inputs for 
the control case runs.
    Table VII-1 and Table VII-2 describe the proposed improvements in 
engine and vehicle efficiency from the proposed rules for vocational 
vehicles and combination tractor-trailers that were input into MOVES 
for estimating the control case emissions inventories. Additional 
details regarding the MOVES inputs are included in the Chapter 5 of the 
draft RIA.

                  Table VII-1--Estimated Reductions in Energy Rates for the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                                                                                  Reduction from
                 Vehicle type                                 Fuel                  Model years   reference case
                                                                                                     (percent)
----------------------------------------------------------------------------------------------------------------
Long-haul Tractor-Trailers and HHD Vocational.  Diesel..........................       2018-2020             1.3
                                                                                       2021-2023             5.2
                                                                                       2024-2026             9.7
                                                                                           2027+            10.4
Short-haul Tractor-Trailers and HHD Vocational  Diesel..........................       2018-2020             0.9

[[Page 40393]]

 
                                                                                       2021-2023             5.0
                                                                                       2024-2026             9.5
                                                                                           2027+            10.4
Single-Frame Vocational \386\.................  Diesel and CNG..................       2021-2023             5.3
                                                                                       2024-2026             8.9
                                                                                           2027+            13.3
                                                Gasoline........................       2021-2023             3.3
                                                                                       2024-2026             5.4
                                                                                           2027+            10.3
----------------------------------------------------------------------------------------------------------------

                Table VII-2--Estimated Reductions in Road Load Factors for the Proposed Standards
----------------------------------------------------------------------------------------------------------------
                                                                 Reduction in     Reduction in
                                                                 tire rolling     aerodynamic         Weight
                 Vehicle type                    Model years      resistance          drag        reduction (LB)
                                                                 coefficient      coefficient          \a\
                                                                  (percent)        (percent)
----------------------------------------------------------------------------------------------------------------
Combination Long-haul Tractor-Trailers.......       2018-2020              5.5              5.1           -131
                                                    2021-2023              9.8             15.3           -199
                                                    2024-2026             15.7             20.5           -246
                                                        2027+             17.9             26.9           -304
Combination Short-haul Tractor-Trailers \387\       2018-2020              4.0              1.6            -41
                                                    2021-2023             10.5              9.3            -79
                                                    2024-2026             13.9             12.3           -100
                                                        2027+             17.6             15.9           -127
Intercity Buses..............................       2021-2023              6.5              0                0
                                                    2024-2026              9.2              0                0
                                                        2027+             16.5              0                0
Transit Buses................................       2021-2023              0                0                0
                                                    2024-2026              2.9              0                0
                                                        2027+              3.0              0                0
School Buses.................................       2021-2023              0                0                0
                                                    2024-2026              2.9              0                0
                                                        2027+              4.0              0                0
Refuse Trucks................................       2021-2023              0                0               20
                                                    2024-2026              2.9              0               20
                                                        2027+              3.0              0               25
Single Unit Short-haul Trucks................       2021-2023              4.8              0                5.8
                                                    2024-2026              8.3              0                5.8
                                                        2027+             13.0              0                7
Single Unit Long-haul Trucks.................       2021-2023              6.5              0               20
                                                    2024-2026              9.2              0               20
                                                        2027+             16.5              0               25
Motor Homes..................................       2021-2023              3.0              0                0
                                                    2024-2026              6.2              0                0
                                                        2027+              7.4              0                0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ Negative weight reductions reflect an expected weight increase as a byproduct of other vehicle and engine
  improvements, as described in Chapter 5 of the draft RIA.

    In addition, the proposed CO2 standard for tractors 
reflecting the use of auxiliary power units (APU) during extended 
idling, as discussed in Section III.D of the preamble, was included in 
the modeling for the long-haul combination tractor-trailers, as shown 
below in Table VII-3.
---------------------------------------------------------------------------

    \387\ Vocational tractors are included in the short-haul tractor 
segment.

Table VII-3--Assumed APU Use During Extended Idling for Combination Long-
                          Haul Tractor-Trailers
------------------------------------------------------------------------
                                                                APU
              Vehicle type                  Model year      penetration
                                                           \a\ (percent)
------------------------------------------------------------------------
Combination Long-Haul Trucks............       2010-2020              30
                                               2021-2023              80

[[Page 40394]]

 
                                                   2024+              90
------------------------------------------------------------------------
Note:
\a\ The assumed APU penetration remains constant for model years 2024
  and later.

    To account for the potential increase in vehicle use expected to 
result from improvements in fuel efficiency for vocational vehicles and 
combination tractor-trailers due to the proposed rules (also known as 
the ``rebound effect'' and described in more detail in Chapter 5 of the 
draft RIA), the control case assumed an increase in VMT from the 
reference levels by 1.83 percent for the vocational vehicles and 0.79 
percent for the combination tractor-trailers.
(b) Heavy-Duty Pickups and Vans
    As explained above and as also discussed in the draft RIA, the 
agencies used both DOT's CAFE model and EPA's MOVES model, for Method A 
and B, respectively, to project fuel consumption and GHG emissions 
impacts resulting from the proposed standards for HD pickups and vans, 
including downstream vehicular emissions as well as emissions from 
upstream processes related to fuel production, distribution, and 
delivery.
(i) Method A for HD Pickups and Vans
    For Method A, the agencies used the CAFE model which applies fuel 
properties (density and carbon content) to estimated fuel consumption 
in order to calculate vehicular CO2 emissions, applies per-
mile emission factors from MOVES to estimated VMT (for each regulatory 
alternative, adjusted to account for the rebound effect) in order to 
calculate vehicular CH4 and N2O emissions (as 
well, as discussed below, of non-GHG pollutants), and applies per-
gallon upstream emission factors from GREET in order to calculate 
upstream GHG (and non-GHG) emissions.
    As discussed above in Section VI, the proposed standards for HD 
pickups and vans--that is, the functions defining fuel consumption and 
GHG targets that each depend work factor--increase in stringency by 2.5 
percent annually during model years 2021-2027. The standards define 
targets specific to each vehicle model, but no vehicle is required to 
meet its target; instead, the production-weighted averages of the 
vehicle-specific targets define average fuel consumption and 
CO2 emission rates that a given manufacturer's overall fleet 
of produced vehicles is required to achieve. The standards are 
specified separately for gasoline and diesel vehicles, and vary with 
work factor. Work factors could change, and today's analysis assumes 
that some applications of mass reduction could enable increased work 
factor in cases where manufacturers could increase a vehicle's rated 
payload and/or towing capacity. Therefore, average required levels will 
depend on the mix of vehicles and work factors of the vehicles produced 
for sale in the U.S., and since these can only be estimated at this 
time, average required and achieved fuel consumption and CO2 
emission rates are subject to uncertainty. Between today's notice and 
issuance of the ensuing final rule, the agencies intend to update the 
market forecast (and other inputs) used to analyze HD pickup and van 
standards, and expect that doing so will lead to different estimates of 
required and achieved fuel consumption and CO2 emission 
rates (as well as different estimates of impacts, costs, and benefits).
    The following four tables present stringency increases and 
estimated required and achieved fuel consumption and CO2 
emission rates for the two No Action Alternatives (Alternative 1a and 
1b) and the proposed standards defining the Preferred Alternative. 
Stringency increases are shown relative to standards applicable in 
model year 2018 (and through model year 2020). As mathematical 
functions, the standards themselves are not subject to uncertainty. By 
2027, they are 16.2 percent more stringent (i.e., lower) than those 
applicable during 2018-2020. NHTSA estimates that, by model 2027, the 
proposed standards could reduce average required fuel consumption and 
CO2 emission rates to about 4.86 gallons/100 miles and about 
458 grams/mile, respectively. NHTSA further estimates that average 
achieved fuel consumption and CO2 emission rates could 
correspondingly be reduced to about the same levels. If, as represented 
by Alternative 1b, manufacturers would, even absent today's proposed 
standards, voluntarily make improvements that pay back within six 
months, these model year 2027 levels are about 13.5 percent lower than 
the agencies estimate could be achieved under the Phase 1 standards 
defining the No Action Alternative. If, as represented by Alternative 
1a, manufacturers would, absent today's proposed standards, only apply 
technology as required to achieve compliance, these model year 2027 
levels are about 15 percent lower than the agencies estimate could be 
achieved under the Phase 1 standards. As indicated below, the agencies 
estimate that these improvements in fuel consumption and CO2 
emission rates would build from model year to model year, beginning as 
soon as model year 2017 (insofar as manufacturers may make anticipatory 
improvements if warranted given planned produce cadence).

[[Page 40395]]

    Table VII-4--Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved Fuel Consumption Rates for Method A, Relative to
                                                                   Alternative 1b \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Ave. required fuel cons. (gal./100 mi.)         Ave. achieved fuel cons. (gal./100 mi.)
            Model year                 Stringency (vs.   -----------------------------------------------------------------------------------------------
                                          2018) (%)          No action       Proposed      Reduction (%)     No action       Proposed      Reduction (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014..............................  MYs 2014-2020                   6.41            6.41             0.0            6.21            6.21             0.0
2015..............................   Subject to Phase 1             6.41            6.41             0.0            6.12            6.12             0.0
2016..............................   Standards.                     6.27            6.27             0.0            6.15            6.15             0.0
2017..............................                                  6.11            6.11             0.0            5.89            5.88             0.2
2018..............................                                  5.80            5.80             0.0            5.75            5.70             0.8
2019..............................                                  5.78            5.78             0.0            5.72            5.68             0.7
2020..............................                                  5.78            5.78             0.0            5.69            5.64             0.8
2021..............................  2.5.................            5.77            5.64             2.2            5.63            5.42             3.8
2022..............................  4.9.................            5.77            5.50             4.7            5.63            5.42             3.8
2023..............................  7.3.................            5.77            5.38             6.8            5.63            5.28             6.3
2024..............................  9.6.................            5.77            5.25             9.0            5.63            5.23             7.1
2025..............................  11.9................            5.77            5.12            11.4            5.63            4.99            11.5
2026..............................  14.1................            5.77            4.98            13.7            5.63            4.93            12.5
2027..............................  16.2................            5.77            4.86            15.8            5.62            4.86            13.7
2028*.............................  16.2................            5.77            4.86            15.8            5.62            4.86            13.7
2029*.............................  16.2................            5.77            4.86            15.8            5.62            4.85            13.7
2030*.............................  16.2................            5.77            4.86            15.8            5.62            4.85            13.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
*Absent further action, standards assumed to continue unchanged after model year 2027.

Table VII-5--Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved CO2 Emission Rates for Method A, Relative to Alternative
                                                                         1b \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Ave. required CO2 Rate (g./                   Ave. achieved CO2 Rate (g./mi.)
                                       Stringency (vs.                 mi.)              ---------------------------------------------------------------
            Model year                    2018) (%)      --------------------------------
                                                             No action       Proposed        Reduction       No Action       Proposed      Reduction (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014..............................  MYs 2014-2020                    602             602             0.0             581             581             0.0
2015..............................   Subject to Phase 1              608             608             0.0             578             578             0.0
2016..............................   Standards.                      593             593             0.0             580             580             0.0
2017..............................                                   578             578             0.0             556             554             0.2
2018..............................                                   548             548             0.0             543             538             0.8
2019..............................                                   545             545             0.0             539             535             0.7
2020..............................                                   545             545             0.0             536             532             0.8
2021..............................  2.5.................             544             532             2.2             530             510             3.8
2022..............................  4.9.................             544             519             4.7             530             510             3.8
2023..............................  7.3.................             544             507             6.8             530             496             6.4
2024..............................  9.6.................             544             495             9.1             530             492             7.2
2025..............................  11.9................             544             482            11.3             530             470            11.3
2026..............................  14.1................             544             470            13.6             530             465            12.3
2027..............................  16.2................             544             458            15.8             529             458            13.4
2028*.............................  16.2................             544             458            15.8             529             458            13.4
2029*.............................  16.2................             544             458            15.8             529             458            13.5
2030*.............................  16.2................             544             458            15.8             529             458            13.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
*Absent further action, standards assumed to continue unchanged after model year 2027.

    Table VII-6--Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved Fuel Consumption Rates for Method A, Relative to
                                                                   Alternative 1a \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Ave. required fuel cons. (gal./100 mi.)         Ave. achieved fuel cons. (gal./100 mi.)
            Model year                 Stringency (vs.   -----------------------------------------------------------------------------------------------
                                          2018)(%)           No action       Proposed      Reduction (%)     No Action       Proposed      Reduction (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014..............................  MYs 2014-2020                   6.41            6.41             0.0            6.21            6.21             0.0
2015..............................   Subject to Phase 1             6.41            6.41             0.0            6.12            6.12             0.0
2016..............................   Standards.                     6.27            6.27             0.0            6.15            6.15             0.0
2017..............................                                  6.11            6.11             0.0            5.89            5.87             0.3
2018..............................                                  5.80            5.80    **[caret]0.0            5.75            5.70             0.9
2019..............................                                  5.78            5.78             0.0            5.73            5.68             0.8
2020..............................                                  5.78            5.78             0.0            5.73            5.68             0.8
2021..............................  2.5.................            5.77            5.64             2.3            5.72            5.44             4.8
2022..............................  4.9.................            5.77            5.50             4.7            5.72            5.44             4.8
2023..............................  7.3.................            5.77            5.38             6.8            5.72            5.29             7.6

[[Page 40396]]

 
2024..............................  9.6.................            5.77            5.25             9.1            5.72            5.23             8.5
2025..............................  11.9................            5.77            5.12            11.4            5.72            4.98            12.9
2026..............................  14.1................            5.77            4.98            13.7            5.72            4.94            13.6
2027..............................  16.2................            5.77            4.86            15.8            5.72            4.87            14.9
2028*.............................  16.2................            5.77            4.86            15.8            5.72            4.87            14.9
2029*.............................  16.2................            5.77            4.86            15.8            5.72            4.86            15.0
2030*.............................  16.2................            5.77            4.86            15.8            5.72            4.86            15.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
*Absent further action, standards assumed to continue unchanged after model year 2027.
**Increased work factor for some vehicles produces a slight increase in average required fuel consumption.

Table VII-7--Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved CO2 Emission Rates for Method A, Relative to Alternative
                                                                         1a \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Ave. required CO2 Rate (g./mi.)                 Ave. achieved CO2 Rate (g./mi.)
            Model year                 Stringency (vs.   -----------------------------------------------------------------------------------------------
                                          2018) (%)          No action       Proposed      Reduction (%)     No action       Proposed      Reduction (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014..............................  MYs 2014-2020                   6.02             602             0.0             581             581             0.0
2015..............................   Subject to Phase 1             6.08             608             0.0             578             578             0.0
2016..............................   Standards.                      593             593             0.0             580             580             0.0
2017..............................                                   578             578             0.0             556             554             0.3
2018..............................                                   548             548          **-0.0             543             538             0.9
2019..............................                                   545             546          **-0.1             539             535             0.8
2020..............................                                   545             545          **-0.1             539             535             0.8
2021..............................  2.5.................             544             532             2.2             538             512             4.9
2022..............................  4.9.................             544             519             4.7             538             512             4.9
2023..............................  7.3.................             544             507             6.8             538             497             7.7
2024..............................  9.6.................             544             495             9.1             538             492             8.6
2025..............................  11.9................             544             482            11.4             538             470            12.7
2026..............................  14.1................             544             470            13.6             538             466            13.4
2027..............................  16.2................             544             458            15.8             538             459            14.7
2028*.............................  16.2................             544             458            15.8             538             459            14.7
2029*.............................  16.2................             544             458            15.8             538             459            14.8
2030*.............................  16.2................             544             458            15.8             538             459            14.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
*Absent further action, standards assumed to continue unchanged after model year 2027.
**Increased work factor for some vehicles produces a slight increase in the average required CO2 emission rate.

    While the above tables show the agencies' estimates of average fuel 
consumption and CO2 emission rates manufacturers might 
achieve under today's proposed standards, total U.S. fuel consumption 
and GHG emissions from HD pickups and vans will also depend on how many 
of these vehicles are produced, and how they are operated over their 
useful lives. Relevant to estimating these outcomes, the CAFE model 
applies vintage-specific estimates of vehicle survival and mileage 
accumulation, and adjusts the latter to account for the rebound effect. 
This impact of the rebound effect is specific to each model year (and, 
underlying, to each vehicle model in each model year), varying with 
changes in achieved fuel consumption rates.
(ii) Method B for HD Pickups and Vans
    For Method B, the MOVES model was used to estimate fuel consumption 
and GHG emissions for HD pickups and vans. MOVES evaluated the proposed 
standards for HD pickup trucks and vans in terms of grams of 
CO2 per mile or gallons of fuel per 100 miles. Since nearly 
all HD pickup trucks and vans are certified on a chassis dynamometer, 
the CO2 reductions for these vehicles were not represented 
as engine and road load reduction components, but rather as total 
vehicle CO2 reductions. The control case for HD pickups and 
vans assumed an increase in VMT from the reference levels by 1.18 
percent for HD pickups and vans.

[[Page 40397]]

  Table VII-8--Estimated Total Vehicle CO2 Reductions for the Proposed
Standards and In-Use Emissions for HD Pickup Trucks and Vans in Method B
                                   \a\
------------------------------------------------------------------------
                                                                 CO2
                                                              reduction
         Vehicle type                Fuel        Model year      from
                                                              reference
                                                               case (%)
------------------------------------------------------------------------
HD pickup trucks and vans....  Gasoline and            2021         2.50
                                Diesel.
                                                       2022         4.94
                                                       2023         7.31
                                                       2024         9.63
                                                       2025        11.89
                                                       2026        14.09
                                                      2027+        16.24
------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

C. What are the projected reductions in fuel consumption and GHG 
emissions?

    NHTSA and EPA expect significant reductions in GHG emissions and 
fuel consumption from the proposed rules--fuel consumption reductions 
from more efficient vehicles, emission reductions from both downstream 
(tailpipe) and upstream (fuel production and distribution) sources, and 
HFC emissions from the proposed air conditioning leakage standards. The 
following subsections summarize two slightly different analyses of the 
annual GHG emissions and fuel consumption reductions expected from 
these proposed rules, as well as the reductions in GHG emissions and 
fuel consumption expected over the lifetime of each heavy-duty vehicle 
categories. In addition, because the agencies are carefully considering 
Alternative 4 along with Alternative 3, the preferred alternative, the 
results from both are presented here for the reader's reference. 
Section VII. C. (1) shows the impacts of the proposed rules and 
Alternative 4 on fuel consumption and GHG emissions using the MOVES 
model for tractor-trailers and vocational vehicles, and the DOT's CAFE 
model for HD pickups and vans (Method A), relative to two different 
reference cases--less dynamic and more dynamic. Section VII. C. (2) 
shows the impacts of the proposed standards and Alternative 4, relative 
to the less dynamic reference case only, using the MOVES model for all 
heavy-duty vehicle categories. NHTSA also analyzes these impacts 
resulting from the proposed rules and reasonable alternatives in 
Chapters 3 and 5 of its DEIS.
(1) Impacts of the Proposed Rules and Alternative 4 Using Analysis 
Method A
(a) Calendar Year Analysis
(i) Downstream (Tailpipe) Emissions Projections
    As described in Section VII. A, for the analysis using Method A, 
the agencies used MOVES to estimate downstream GHG inventories from the 
proposed rules for vocational vehicles and tractor-trailers. For HD 
pickups and vans, DOT's CAFE model was used.
    The following two tables summarize the agencies' estimates of HD 
pickup and van fuel consumption and GHG emissions under the current and 
proposed standards defining the No-Action and Preferred alternatives, 
respectively, using Method A. Table VII-9 shows results assuming 
manufacturers would voluntarily make improvements that pay back within 
six months (i.e., Alternative 1b). Table VII-10 shows results assuming 
manufacturers would only make improvements as needed to achieve 
compliance with standards (i.e., Alternative 1a). While underlying 
calculations are all performed for each calendar year during each 
vehicle's useful life, presentation of outcomes on a model year basis 
aligns more clearly with consideration of cost impacts in each model 
year, and with consideration of standards specified on a model year 
basis. In addition, Method A analyzes manufacturers' potential 
responses to HD pickup and van standards on a model year basis through 
2030, and any longer-term costs presented in today's notice represent 
extrapolation of these results absent any underlying analysis of 
longer-term technology prospects and manufacturers' longer-term product 
offerings.

  Table VII-9--Estimated Fuel Consumption and GHG Emissions Over Useful Life of HD Pickups and Vans Produced in
                          Each Model Year for Method A, Relative to Alternative 1b \a\
----------------------------------------------------------------------------------------------------------------
                                       Fuel consumption (b. gal.) over         GHG emissions (MMT CO2eq) over
                                             fleet's useful life                    fleet's useful life
            Model year             -----------------------------------------------------------------------------
                                                               Reduction                              Reduction
                                     No action     Proposed       (%)       No action     Proposed       (%)
----------------------------------------------------------------------------------------------------------------
2014..............................         9.41         9.41          0.0          115          115          0.0
2015..............................         9.53         9.53          0.0          117          117          0.0
2016..............................         9.72         9.72          0.0          119          119          0.0
2017..............................         9.49         9.47          0.2          116          116          0.2
2018..............................         9.26         9.19          0.7          113          113          0.7
2019..............................         9.20         9.14          0.7          113          112          0.7
2020..............................         9.19         9.12          0.7          112          112          0.7
2021..............................         9.10         8.79          3.4          111          107          3.4
2022..............................         9.13         8.82          3.4          112          108          3.4
2023..............................         9.11         8.59          5.7          111          105          5.7
2024..............................         9.32         8.72          6.4          114          107          6.4

[[Page 40398]]

 
2025..............................         9.49         8.49         10.5          116          104         10.4
2026..............................         9.67         8.56         11.5          118          105         11.3
2027..............................         9.78         8.55         12.6          120          105         12.3
2028..............................         9.90         8.66         12.6          121          106         12.3
2029..............................        10.02         8.75         12.6          122          107         12.4
2030..............................        10.03         8.76         12.6          123          107         12.4
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VII-10--Estimated Fuel Consumption and GHG Emissions over Useful Life of HD Pickups and Vans Produced in
                          Each Model Year for Method A, Relative to Alternative 1a \a\
----------------------------------------------------------------------------------------------------------------
                                       Fuel consumption (b. gal.) over         GHG Emissions (MMT CO2eq) over
                                             fleet's useful life                    fleet's useful life
            Model year             -----------------------------------------------------------------------------
                                                               Reduction                              Reduction
                                     No action     Proposed       (%)       No action     Proposed       (%)
----------------------------------------------------------------------------------------------------------------
2014..............................         9.41         9.41          0.0          115          115          0.0
2015..............................         9.53         9.53          0.0          117          117          0.0
2016..............................         9.72         9.72          0.0          119          119          0.0
2017..............................         9.49         9.46          0.3          116          116          0.3
2018..............................         9.27         9.19          0.8          114          113          0.8
2019..............................         9.20         9.14          0.7          113          112          0.7
2020..............................         9.25         9.18          0.7          113          112          0.8
2021..............................         9.23         8.82          4.4          113          108          4.4
2022..............................         9.26         8.85          4.4          113          108          4.4
2023..............................         9.23         8.60          6.9          113          105          6.9
2024..............................         9.45         8.72          7.7          116          107          7.7
2025..............................         9.62         8.48         11.8          118          104         11.7
2026..............................         9.81         8.58         12.5          120          105         12.3
2027..............................         9.93         8.57         13.7          121          105         13.5
2028..............................        10.05         8.68         13.7          123          106         13.5
2029..............................        10.17         8.77         13.7          124          108         13.5
2030..............................        10.18         8.78         13.7          124          108         13.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    To more clearly communicate these trends visually, the following 
two charts present the above results graphically for Method A, relative 
to Alternative 1b. As shown, fuel consumption and GHG emissions follow 
parallel though not precisely identical paths. Though not presented, 
the charts for Alternative 1a would appear sufficiently similar that 
differences between Alternative 1a and Alternative 1b remain best 
communicated by comparing values in the above tables.

[[Page 40399]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.015

[[Page 40400]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.016

      Table VII-11 Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred
                               Alternative vs. Alt 1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                        Total
                             CY                                CO2 (MMT)     CH4 (MMT     N2O (MMT    downstream
                                                                              CO2eq)     CO2eq)\9\   (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025........................................................        -26.9         -0.4            0        -27.2
2035........................................................        -86.0         -1.0            0        -86.9
2050........................................................       -121.6         -1.4            0       -123.0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-12--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
      Preferred Alternative vs. Alt 1b Using Analysis Method A \a\
------------------------------------------------------------------------
                                                             Gasoline
                                          Diesel savings      savings
                   CY                        (billion        (billion
                                             gallons)        gallons)
------------------------------------------------------------------------
2025....................................             2.5             0.2
2035....................................             7.6             0.9
2050....................................            10.8             1.2
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

[[Page 40401]]

     Table VII-13--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred
                               Alternative vs. Alt 1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                       Total
                       CY                            CO2 (MMT)       CH4 (MMT        N2O (MMT       downstream
                                                                      CO2eq)         CO2eq)\9\      (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -27.7            -0.4               0           -28.1
2035............................................           -93.6            -1.0               0           -94.6
2050............................................          -133.5            -1.4               0          -134.9
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-14--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
      Preferred Alternative vs. Alt 1a Using Analysis Method A \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          2.5          0.2
2035..........................................          8.3          1.0
2050..........................................         11.9          1.3
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

 Table VII-15--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs.
                                       Alt 1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                       Total
                       CY                            CO2 (MMT)       CH4 (MMT        N2O (MMT       downstream
                                                                      CO2eq)         CO2eq)\9\      (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -33.2            -0.4               0           -33.5
2035............................................           -89.9            -1.0               0           -90.9
2050............................................          -122.6            -1.4               0          -124.0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-16--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
          Alternative 4 vs. Alt 1b Using Analysis Method A \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          3.0          0.3
2035..........................................          7.9          1.0
2050..........................................         10.8          1.3
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

 Table VII-17--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs.
                                       Alt 1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                       Total
                       CY                            CO2 (MMT)       CH4 (MMT        N2O (MMT       downstream
                                                                      CO2eq)        CO2eq) \9\      (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -34.3            -0.4               0           -34.6
2035............................................           -97.7            -1.0               0           -98.7
2050............................................          -134.6            -1.4               0          -136.0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

[[Page 40402]]

Table VII-18--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
          Alternative 4 vs. Alt 1a Using Analysis Method A \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          3.1          0.3
2035..........................................          8.6          1.1
2050..........................................         12.0          1.3
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(ii) Upstream (Fuel Production and Distribution) Emissions Projections

Table VII-19--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred Alternative
                                     vs. Alt 1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                     CH4 (MMT        N2O (MMT     Total upstream
                       CY                            CO2 (MMT)        CO2eq)          CO2eq)        (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................            -8.4            -0.9            -0.1            -9.3
2035............................................           -26.6            -2.8            -0.2           -29.7
2050............................................           -37.7            -4.0            -0.3           -42.0
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-20--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred Alternative
                                     vs. Alt 1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                     CH4 (MMT        N2O (MMT     Total upstream
                       CY                            CO2 (MMT)        CO2eq)          CO2eq)        (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................            -8.6            -0.9            -0.1            -9.6
2035............................................           -29.0            -3.1            -0.2           -32.3
2050............................................           -41.4            -4.4            -0.3           -46.1
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-21--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs. Alt
                                         1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                     CH4 (MMT        N2O (MMT     Total upstream
                       CY                            CO2 (MMT)        CO2eq)          CO2eq)        (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -10.3            -1.1            -0.1           -11.5
2035............................................           -27.8            -3.0            -0.2           -31.0
2050............................................           -38.0            -4.0            -0.3           -42.3
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-22--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs. Alt
                                         1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                                                     CH4 (MMT        N2O (MMT     Total upstream
                       CY                            CO2 (MMT)        CO2eq)          CO2eq)        (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025............................................           -10.6            -1.1            -0.1           -11.8
2035............................................           -30.2            -3.2            -0.2           -33.7
2050............................................           -41.7            -4.4            -0.3           -46.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(iii) HFC Emissions Projections
    The projected HFC emission reductions due to the proposed AC 
leakage standards are 93,272 metric tons of CO2eq in 2025, 
253,118 metric tons of CO2eq in 2035, and 299,590 metric 
tons CO2eq in 2050.
    (iv) Total (Downstream + Upstream + HFC) Emissions Projections

[[Page 40403]]

Table VII-23--Annual Total GHG Emissions Impacts in Calendar Years 2025,
 2035 and 2050--Preferred Alternative vs. Alt 1b Using Analysis Method A
                                   \a\
------------------------------------------------------------------------
                                  2025 (MMT      2035 (MMT    2050 (MMT
              CY                    CO2eq)         CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream...................  -27.2..........        -86.9       -123.0
Upstream.....................  -9.3...........        -29.7        -42.0
HFC..........................  -0.09..........        -0.25         -0.3
    Total....................  -36.4..........       -116.4       -164.7
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table VII-24--Annual Total GHG Emissions Impacts in Calendar Years 2025,
   2035 and 2050 2050--Preferred Alternative vs. Alt 1a Using Analysis
                              Method A \a\
------------------------------------------------------------------------
                                  2025 (MMT      2035 (MMT    2050 (MMT
              CY                    CO2eq)         CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream...................  -28.1..........        -94.6       -134.9
Upstream.....................  -9.6...........        -32.3        -46.1
HFC..........................  -0.09..........        -0.25         -0.3
    Total....................  -37.6..........       -126.4       -180.7
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table VII-25--Annual Total GHG Emissions Impacts in Calendar Years 2025,
   2035 and 2050--Alternative 4 vs. Alt 1b Using Analysis Method A \a\
------------------------------------------------------------------------
                                  2025 (MMT      2035 (MMT    2050 (MMT
              CY                    CO2eq)         CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream...................  -33.5..........        -90.9       -124.0
Upstream.....................  -11.5..........        -31.0        -42.3
HFC..........................  -0.09..........        -0.25         -0.3
    Total....................  -44.9..........       -121.7       -166.0
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table VII-26--Annual Total GHG Emissions Impacts in Calendar Years 2025,
2035 and 2050 2050--Alternative 4 vs. Alt 1a Using Analysis Method A \a\
------------------------------------------------------------------------
                                  2025 (MMT      2035 (MMT    2050 (MMT
              CY                    CO2eq)         CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream...................  -34.6..........        -98.7       -136.0
Upstream.....................  -11.8..........        -33.7        -46.5
HFC..........................  -0.09..........        -0.25         -0.3
    Total....................  -46.3..........       -132.2       -182.2
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(b) Model Year Lifetime Analysis

  Table VII-27--Lifetime GHG Reductions and Fuel Savings Using Analysis Method A--Summary for Model Years 2018-
                                                    2029 \a\
----------------------------------------------------------------------------------------------------------------
                                                              Alternative 3 (proposed)        Alternative 4
----------------------------------------------------------------------------------------------------------------
                                                                1b (More     1a (Less     1b (More     1a (Less
              No-Action Alternative (Baseline)                  Dynamic)     Dynamic)     Dynamic)     Dynamic)
----------------------------------------------------------------------------------------------------------------
Fuel Savings (Billion Gallons)..............................         72.2         76.7         81.9         86.7
    Total GHG Reductions (MMT CO2eq)........................          974        1,034        1,102        1,166
        Downstream (MMT CO2eq)..............................        726.1        771.3        821.9        870.3
        Upstream (MMT CO2eq)................................        247.7        262.9        279.9        296.1
----------------------------------------------------------------------------------------------------------------
Note:

[[Page 40404]]

 
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(2) Impacts of the Proposed Rules and Alternative 4 using Analysis 
Method B
(a) Calendar Year Analysis
(i) Downstream (Tailpipe) Emissions Projections
    As described in Section VII. A., the Method B used MOVES to 
estimate downstream GHG inventories from the proposed rules and 
Alternative 4 relative to Alternative 1a for all heavy-duty vehicle 
categories (including the engines associated with tractor-trailer 
combinations and vocational vehicles). The agencies expect reductions 
in CO2 emissions from all heavy-duty vehicle categories due 
to engine and vehicle improvements. We expect N2O emissions 
to increase very slightly because of a rebound in vehicle miles 
traveled (VMT). However, since N2O is produced as a 
byproduct of fuel combustion, the increase in N2O emissions 
is expected to be more than offset by the improvements in fuel 
efficiency from the proposed rules.\388\ We expect methane emissions to 
decrease primarily due to reduced refueling from improved fuel 
efficiency and the differences in hydrocarbon emission characteristics 
between on-road diesel engines and APUs. The amount of methane emitted 
as a fraction of total hydrocarbons is expected to be significantly 
less for APUs than for on-road diesel engines during extended idling. 
Overall, the downstream GHG emissions would be reduced significantly 
and are described in the following subsections.
---------------------------------------------------------------------------

    \388\ MOVES is not capable of modeling the changes in exhaust 
N2O emissions from the improvements in fuel efficiency. 
Due to this limitation, a conservative approach was taken to only 
model the VMT rebound in estimating the emissions impact on 
N2O from the proposed rules, resulting in a slight 
increase in downstream N2O inventory.
---------------------------------------------------------------------------

    Since fuel consumption is not directly modeled in MOVES, the total 
energy consumption was run as a surrogate in MOVES. Then, the total 
energy consumption was converted to fuel consumption based on the fuel 
heating values assumed in the Renewable Fuels Standard rulemaking \389\ 
and used in the development of MOVES emission and energy rates.\390\
---------------------------------------------------------------------------

    \389\ Renewable Fuels Standards assumptions of 115,000 BTU/
gallon gasoline (E0) and 76,330 BTU/gallon ethanol (E100) were 
weighted 90% and 10%, respectively, for E10 and 85% and 15%, 
respectively, for E15 and converted to kJ at 1.055 kJ/BTU. The 
conversion factors are 117,245 kJ/gallon for gasoline blended with 
ten percent ethanol (E10) and 115,205 kJ/gallon for gasoline blended 
with fifteen percent ethanol (E15).
    \390\ The conversion factor for diesel is 138,451 kJ/gallon. See 
MOVES2004 Energy and Emission Inputs. EPA420-P-05-003, March 2005. 
http://www.epa.gov/otaq/models/ngm/420p05003.pdf (last accessed Feb 
23, 2015).
---------------------------------------------------------------------------

    Table VII-28 and Table VII-29 show the impacts on downstream GHG 
emissions and fuel savings in 2025, 2035 and 2050, relative to 
Alternative 1a, for the preferred alternative and Alternative 4, 
respectively.
    Table VII-30 and Table VII-31 show the estimated fuel savings from 
the preferred alternative and Alternative 4 in 2025, 2035, and 2050, 
relative to Alternative 1a. For both GHG emissions and fuel savings, 
the annual impacts are greater for Alternative 4 than the preferred 
alternative in earlier years, but the differences become 
indistinguishable by 2050. The results from the comparable analyses 
relative to Alternative 1b are presented in Section VII. C. (1).

     Table VII-28--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred
                               Alternative vs. Alt 1a Using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                        Total
                             CY                                CO2 (MMT)     CH4 (MMT     N2O (MMT    downstream
                                                                              CO2eq)       CO2eq)    (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025........................................................        -27.0         -0.4        0.002        -27.4
2035........................................................        -93.7         -1.0        0.004        -94.7
2050........................................................       -135.1         -1.4        0.005       -136.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VII-29--Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs.
                                       Alt 1a using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                        Total
                             CY                                CO2 (MMT)     CH4 (MMT     N2O (MMT    downstream
                                                                              CO2eq)       CO2eq)    (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025........................................................        -33.3         -0.4        0.002        -33.7
2035........................................................        -97.3         -1.0        0.004        -98.3
2050........................................................       -135.5         -1.4        0.005       -136.9
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

[[Page 40405]]

Table VII-30--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
      Preferred Alternative vs. Alt 1a using Analysis Method B \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          2.5          0.2
2035..........................................          8.5          0.8
2050..........................................         12.3          1.1
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table VII-31--Annual Fuel Savings in Calendar Years 2025, 2035 and 2050--
          Alternative 4 vs. Alt 1a using Analysis Method B \a\
------------------------------------------------------------------------
                                                   Diesel      Gasoline
                                                  savings      savings
                      CY                          (billion     (billion
                                                  gallons)     gallons)
------------------------------------------------------------------------
2025..........................................          3.1          0.3
2035..........................................          8.8          0.9
2050..........................................         12.3          1.1
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(ii) Upstream (Fuel Production and Distribution) Emissions Projections
    The upstream GHG emission reductions associated with the production 
and distribution of gasoline and diesel from crude oil were based on 
emission factors from DOE's ``Greenhouse Gases, Regulated Emissions, 
and Energy Use in Transportation'' (GREET) model. In some cases, the 
GREET values were modified or updated by the agencies to be consistent 
with EPA's National Emissions Inventory (NEI), and emission factors 
from MOVES. More information regarding these modifications can be found 
in Chapter 5 of the draft RIA. These estimates show the impacts for 
domestic emission reductions only. Additionally, since this rulemaking 
is not expected to impact biofuel volumes mandated by the Annual 
Renewable Fuel Standards (RFS) regulations \391\, the impacts on 
upstream emissions from changes in biofuel feedstock (i.e., 
agricultural sources such as fertilizer, fugitive dust, and livestock) 
are not shown. GHG emission reductions from upstream sources can be 
found in Table VII-32 and Table VII-33 for preferred alternative and 
Alternative 4, respectively.
---------------------------------------------------------------------------

    \391\ U.S. EPA. 2014 Standards for the Renewable Fuel Standard 
Program. 40 CFR part 80. EPA-HQ-OAR-2013-0479; FRL-9900-90-OAR, RIN 
2060-AR76.

Table VII-32--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Preferred Alternative
                                     vs. Alt 1a using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                        Total
                             CY                                CO2 (MMT)     CH4 (MMT     N2O (MMT     uptream
                                                                              CO2eq)       CO2eq)    (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025........................................................         -8.4         -0.9        -0.04         -9.3
2035........................................................        -29.1         -3.0        -0.14        -32.2
2050........................................................        -41.9         -4.4        -0.20        -46.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

Table VII-33--Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050--Alternative 4 vs. Alt
                                         1a using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                        Total
                             CY                                CO2 (MMT)     CH4 (MMT     N2O (MMT     uptream
                                                                              CO2eq)       CO2eq)    (MMT CO2eq)
----------------------------------------------------------------------------------------------------------------
2025........................................................        -10.4         -1.0         -0.1        -11.5
2035........................................................        -30.1         -3.2         -0.1        -33.4
2050........................................................        -42.0         -4.4         -0.2        -46.6
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(iii) HFC Emissions Projections
    Based on projected HFC emission reductions due to the proposed AC 
leakage standards, EPA estimates the HFC reductions to be 93,272 metric 
tons of CO2eq in 2025, 253,118 metric tons of 
CO2eq in 2035, and 299,590 metric tons CO2eq in 
2050, as detailed in Chapters 5.3.4 of the draft RIA. EPA welcomes 
comments on the methodology used to quantify the HFC emissions 
benefits, as detailed in Chapter 5 of the draft RIA.
(iv) Total (Downstream + Upstream + HFC) Emissions Projections
    Table VII-34 combines the impacts of the preferred alternative from 
downstream (Table VII-28), upstream (Table VII-32), and HFC to 
summarize the total GHG reductions in calendar years 2025, 2035 and 
2050, relative to Alternative 1a. The combined impact of Alternative 4 
on total GHG emissions are shown in Table VII-35.
    Because of the differences in lead time, as expected, Alternative 4 
shows greater annual GHG reductions in earlier years (i.e., calendar 
year 2025), but by

[[Page 40406]]

2050, the preferred alternative and Alternative 4 show the same 
magnitude of reductions in annual GHG emissions.

Table VII-34--Annual Total GHG Emissions Impacts in Calendar Years 2025,
 2035 and 2050--Preferred Alternative vs. Alt 1a using Analysis Method B
                                   \a\
------------------------------------------------------------------------
                                    2025 (MMT    2035 (MMT    2050 (MMT
                CY                    CO2eq)       CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream.......................        -27.4        -94.7       -136.5
Upstream.........................         -9.3        -32.2        -46.5
HFC..............................         -0.1        -0.25         -0.3
    Total........................        -36.8       -127.2       -183.3
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table VII-35--Annual Total GHG Emissions Impacts in Calendar Years 2025,
   2035 and 2050--Alternative 4 vs. Alt 1a using Analysis Method B \a\
------------------------------------------------------------------------
                                    2025 (MMT    2035 (MMT    2050 (MMT
                CY                    CO2eq)       CO2eq)       CO2eq)
------------------------------------------------------------------------
Downstream.......................        -33.7        -98.3       -136.9
Upstream.........................        -11.5        -33.4        -46.6
HFC..............................         -0.1        -0.25         -0.3
    Total........................        -45.3       -132.0       -183.8
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(b) Model Year Lifetime Analysis
    In addition to the annual GHG emissions and fuel consumption 
reductions expected from the proposed rules and Alternative 4, the 
combined (downstream and upstream) GHG and fuel consumption impacts for 
the lifetime of the impacted vehicles were estimated. Table VII-36 
shows the fleet-wide GHG reductions and fuel savings from the preferred 
alternative and Alternative 4, relative to Alternative 1a, through the 
lifetime \392\ of heavy-duty vehicles. Compared to the preferred 
alternative, Alternative 4 shows greater lifetime GHG reductions and 
fuels savings by 12 percent and 13 percent, respectively. For the 
lifetime GHG reductions and fuel savings by vehicle categories, see 
Chapter 5 of the draft RIA.
---------------------------------------------------------------------------

    \392\ A lifetime of 30 years is assumed in MOVES.

  Table VII-36--Lifetime GHG Reductions and Fuel Savings using Analysis
             Method B--Summary for Model Years 2018-2029 \a\
------------------------------------------------------------------------
                  Model years                   Alternative  Alternative
-----------------------------------------------      3            4
                                                 (proposed) ------------
                                               -------------
       No-action alternative (baseline)           1a (less     1a (less
                                                  dynamic)     dynamic)
------------------------------------------------------------------------
Fuel Savings (Billion Gallons)................         75.8         85.4
    Total GHG Reductions (MMT CO2eq)..........      1,036.4      1,163.1
        Downstream (MMT CO2eq)................        772.6        867.3
        Upstream (MMT CO2eq)..................        263.8        295.8
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

D. Climate Impacts and Indicators
(1) Climate Change Impacts From GHG Emissions
    The impact of GHG emissions on the climate has been reviewed in the 
2009 Endangerment and Cause or Contribute Findings for Greenhouse Gases 
under Section 202(a) of the Clean Air Act, the 2012-2016 light-duty 
vehicle rulemaking, the 2014-2018 heavy-duty vehicle GHG and Fuel 
Efficiency rulemaking, and the 2017-2025 light-duty vehicle rulemaking, 
and the proposed standards for new electricity utility generating 
units. See 74 FR 66496; 75 FR 25491; 76 FR 57294; 77 FR 62894; 79 FR 
1456-1459 (January 8, 2014). This section briefly discusses again some 
of the climate impact of EPA's proposed actions in context of 
transportation emissions. NHTSA has analyzed the climate impacts of its 
specific proposed actions (i.e., excluding EPA's HFC regulatory 
provisions) as well as reasonable alternative in its DEIS that 
accompanies

[[Page 40407]]

this proposed rule. DOT has considered the potential climate impacts 
documented in the DEIS as part of the rulemaking process.
    Once emitted, GHGs that are the subject of this proposed regulation 
can remain in the atmosphere for decades to millennia, meaning that (1) 
their concentrations become well-mixed throughout the global atmosphere 
regardless of emission origin, and (2) their effects on climate are 
long lasting. GHG emissions come mainly from the combustion of fossil 
fuels (coal, oil, and gas), with additional contributions from the 
clearing of forests, agricultural activities, cement production, and 
some industrial activities. Transportation activities, in aggregate, 
were the second largest contributor to total U.S. GHG emissions in 2010 
(27 percent of total emissions).\393\
---------------------------------------------------------------------------

    \393\ U.S. EPA (2012) Inventory of U.S. Greenhouse Gas Emissions 
and Sinks: 1990-2010. EPA 430-R-12-001. Available at http://epa.gov/climatechange/emissions/downloads12/US-GHG-Inventory-2012-Main-Text.pdf.
---------------------------------------------------------------------------

    The EPA Administrator relied on thorough and peer-reviewed 
assessments of climate change science prepared by the Intergovernmental 
Panel on Climate Change (``IPCC''), the United States Global Change 
Research Program (``USGCRP''), and the National Research Council of the 
National Academies (``NRC'') \394\ as the primary scientific and 
technical basis for the Endangerment and Cause or Contribute Findings 
for Greenhouse Gases Under Section 202(a) of the Clean Air Act (74 FR 
66496, December 15, 2009). These assessments comprehensively address 
the scientific issues the EPA Administrator had to examine, providing 
her data and information on a wide range of issues pertinent to the 
Endangerment Finding. These assessments have been rigorously reviewed 
by the expert community, and also by United States government agencies 
and scientists, including by EPA itself.
---------------------------------------------------------------------------

    \394\ For a complete list of core references from IPCC, USGCRP/
CCSP, NRC and others relied upon for development of the TSD for 
EPA's Endangerment and Cause or Contribute Findings see section 
1(b), specifically, Table 1.1 of the TSD. (Docket EPA-HQ-OAR-2010-
0799)
---------------------------------------------------------------------------

    Based on these assessments, the EPA Administrator determined that 
the emissions from new motor vehicles and engines contributes to 
elevated concentrations of greenhouse gases, that these greenhouse 
gases cause warming; that the recent warming has been attributed to the 
increase in greenhouse gases; and that warming of the climate endangers 
the public health and welfare of current and future generations. See 
Coalition for Responsible Regulation v. EPA, 684 F. 3d 102, 121 (D.C. 
Cir. 2012) (upholding all of EPA's findings and stating ``EPA had 
before it substantial record evidence that anthropogenic emissions of 
greenhouse gases `very likely' caused warming of the climate over the 
last several decades. EPA further had evidence of current and future 
effects of this warming on public health and welfare. Relying again 
upon substantial scientific evidence, EPA determined that 
anthropogenically induced climate change threatens both public health 
and public welfare. It found that extreme weather events, changes in 
air quality, increases in food- and water-borne pathogens, and 
increases in temperatures are likely to have adverse health effects. 
The record also supports EPA's conclusion that climate change endangers 
human welfare by creating risk to food production and agriculture, 
forestry, energy, infrastructure, ecosystems, and wildlife. Substantial 
evidence further supported EPA's conclusion that the warming resulting 
from the greenhouse gas emissions could be expected to create risks to 
water resources and in general to coastal areas as a result of expected 
increase in sea level.'')
    A number of major peer-reviewed scientific assessments have been 
released since the administrative record concerning the Endangerment 
Finding closed following EPA's 2010 Reconsideration Denial.\395\ These 
assessments include the ``Special Report on Managing the Risks of 
Extreme Events and Disasters to Advance Climate Change Adaptation'' 
\396\, the 2013-14 Fifth Assessment Report (AR5),\397\ the 2014 
National Climate Assessment report,\398\ the ``Ocean Acidification: A 
National Strategy to Meet the Challenges of a Changing Ocean,'' \399\ 
``Report on Climate Stabilization Targets: Emissions, Concentrations, 
and Impacts over Decades to Millennia,'' \400\ ``National Security 
Implications for U.S. Naval Forces'' (National Security 
Implications),\401\ ``Understanding Earth's Deep Past: Lessons for Our 
Climate Future,'' \402\ ``Sea Level Rise for the Coasts of California, 
Oregon, and Washington: Past, Present, and Future,'' \403\ ``Climate 
and Social Stress: Implications for Security Analysis,'' \404\ and 
``Abrupt Impacts of Climate Change'' (Abrupt Impacts) assessments.\405\
---------------------------------------------------------------------------

    \395\ ``EPA's Denial of the Petitions to Reconsider the 
Endangerment and Cause or Contribute Findings for Greenhouse Gases 
under Section 202(a) of the Clean Air Act'', 75 FR 49,556 (Aug. 13, 
2010) (``Reconsideration Denial'').
    \396\ Intergovernmental Panel on Climate Change (IPCC). 2012: 
Managing the Risks of Extreme Events and Disasters to Advance 
Climate Change Adaption. A Special Report of Working Groups I and II 
of the Intergovernmental Panel on Climate Change. Cambridge 
University Press, Cambridge, UK, and New York, NY, USA.
    \397\ Intergovernmental Panel on Climate Change (IPCC). 2013. 
Climate Change 2013: The Physical Science Basis. Contribution of 
Working Group I to the Fifth Assessment Report of the 
Intergovernmental Panel on Climate Change. Cambridge University 
Press, Cambridge, United Kingdom and New York, NY, USA, 
Intergovernmental Panel on Climate Change (IPCC). 2014. Climate 
Change 2014: Impacts, Adaptation, and Vulnerability. Contribution of 
Working Group II to the Fifth Assessment Report of the 
Intergovernmental Panel on Climate Change. Cambridge University 
Press, Cambridge, United Kingdom and New York, NY, USA, 
Intergovernmental Panel on Climate Change (IPCC). 2014. Climate 
Change 2014: Mitigation of Climate Change. Contribution of Working 
Group III to the Fifth Assessment Report of the Intergovernmental 
Panel on Climate Change. Cambridge University Press, Cambridge, 
United Kingdom and New York, NY, USA.
    \398\ Melillo, Jerry M., Terese (T.C.) Richmond, and Gary W. 
Yohe, Eds. 2014. Climate Change Impacts in the United States: The 
Third National Climate Assessment. U.S. Global Change Research 
Program. Available at http://nca2014.globalchange.gov.
    \399\ National Research Council (NRC). 2010. Ocean 
Acidification: A National Strategy to Meet the Challenges of a 
Changing Ocean. National Academies Press. Washington, DC.
    \400\ National Research Council (NRC). 2011. Climate 
Stabilization Targets: Emissions, Concentrations, and Impacts over 
Decades to Millennia. National Academies Press, Washington, DC.
    \401\ National Research Council (NRC) 2011. National Security 
Implications of Climate Change for U.S. Naval Forces. National 
Academies Press. Washington, DC.
    \402\ National Research Council (NRC). 2012. Sea-Level Rise for 
the Coasts of California, Oregon, and Washington: Past, Present, and 
Future. National Academies Press. Washington, DC.
    \403\ National Research Council (NRC). 2012. Sea-Level Rise for 
the Coasts of California, Oregon, and Washington: Past, Present, and 
Future. National Academies Press. Washington, DC.
    \404\ National Research Council (NRC). 2013. Climate and Social 
Stress: Implications for Security Analysis. National Academies 
Press. Washington, DC.
    \405\ National Research Council (NRC). 2013. Abrupt Impacts of 
Climate Change: Anticipating Surprises. National Academies Press. 
Washington, DC.
---------------------------------------------------------------------------

    EPA has reviewed these assessments and finds that in general, the 
improved understanding of the climate system they present are 
consistent with the assessments underlying the 2009 Endangerment 
Finding.
    The most recent assessments released were the IPCC AR5 assessments 
between September 2013 and April 2014, the NRC Abrupt Impacts 
assessment in December of 2013, and the U.S. National Climate 
Assessment in May of 2014. The NRC Abrupt Impacts report examines the 
potential for tipping points, thresholds beyond which major and rapid 
changes occur in the Earth's climate system or other systems impacted 
by the climate. The Abrupt

[[Page 40408]]

Impacts report did find less cause for concern than some previous 
assessments regarding some abrupt events within the next century such 
as disruption of the Atlantic Meridional Overturning Circulation (AMOC) 
and sudden releases of high-latitude methane from hydrates and 
permafrost, but found that the potential for abrupt changes in 
ecosystems, weather and climate extremes, and groundwater supplies 
critical for agriculture now seem more likely, severe, and imminent. 
The assessment found that some abrupt changes were already underway 
(Arctic sea ice retreat and increases in extinction risk due to the 
speed of climate change), but cautioned that even abrupt changes such 
as the AMOC disruption that are not expected in this century can have 
severe impacts when they happen.
    The IPCC AR5 assessments are also generally consistent with the 
underlying science supporting the 2009 Endangerment Finding. For 
example, confidence in attributing recent warming to human causes has 
increased: The IPCC stated that it is extremely likely (>95 percent 
confidence) that human influences have been the dominant cause of 
recent warming. Moreover, the IPCC found that the last 30 years were 
likely (>66 percent confidence) the warmest 30 year period in the 
Northern Hemisphere of the past 1400 years, that the rate of ice loss 
of worldwide glaciers and the Greenland and Antarctic ice sheets has 
likely increased, that there is medium confidence that the recent 
summer sea ice retreat in the Arctic is larger than it has been in 1450 
years, and that concentrations of carbon dioxide and several other of 
the major greenhouse gases are higher than they have been in at least 
800,000 years. Climate-change induced impacts have been observed in 
changing precipitation patterns, melting snow and ice, species 
migration, negative impacts on crops, increased heat and decreased cold 
mortality, and altered ranges for water-borne illnesses and disease 
vectors. Additional risks from future changes include death, injury, 
and disrupted livelihoods in coastal zones and regions vulnerable to 
inland flooding, food insecurity linked to warming, drought, and 
flooding, especially for poor populations, reduced access to drinking 
and irrigation water for those with minimal capital in semi-arid 
regions, and decreased biodiversity in marine ecosystems, especially in 
the Arctic and tropics, with implications for coastal livelihoods. The 
IPCC determined that ``[c]ontinued emissions of greenhouse gases will 
cause further warming and changes in all components of the climate 
system. Limiting climate change will require substantial and sustained 
reductions of greenhouse gases emissions.''
    Finally, the recently released National Climate Assessment stated, 
``Climate change is already affecting the American people in far 
reaching ways. Certain types of extreme weather events with links to 
climate change have become more frequent and/or intense, including 
prolonged periods of heat, heavy downpours, and, in some regions, 
floods and droughts. In addition, warming is causing sea level to rise 
and glaciers and Arctic sea ice to melt, and oceans are becoming more 
acidic as they absorb carbon dioxide. These and other aspects of 
climate change are disrupting people's lives and damaging some sectors 
of our economy.''
    Assessments from these bodies represent the current state of 
knowledge, comprehensively cover and synthesize thousands of individual 
studies to obtain the majority conclusions from the body of scientific 
literature and undergo a rigorous and exacting standard of review by 
the peer expert community and U.S. government.
    Based on modeling analysis performed by the agencies, reductions in 
CO2 and other GHG emissions associated with these proposed 
rules will affect future climate change. Since GHGs are well-mixed in 
the atmosphere and have long atmospheric lifetimes, changes in GHG 
emissions will affect atmospheric concentrations of greenhouse gases 
and future climate for decades to millennia, depending on the gas. This 
section provides estimates of the projected change in atmospheric 
CO2 concentrations based on the emission reductions 
estimated for these proposed rules, compared to the reference case. In 
addition, this section analyzes the response to the changes in GHG 
concentrations of the following climate-related variables: Global mean 
temperature, sea level rise, and ocean pH.
(2) Projected Change in Atmospheric CO2 Concentrations, 
Global Mean Surface Temperature and Sea Level Rise
    To assess the impact of the emissions reductions from the proposed 
rules, EPA estimated changes in projected atmospheric CO2 
concentrations, global mean surface temperature and sea-level rise to 
2100 using the GCAM (Global Change Assessment Model, formerly MiniCAM), 
integrated assessment model \406\ coupled with the MAGICC (Model for 
the Assessment of Greenhouse-gas Induced Climate Change) simple climate 
model.\407\ GCAM was used to create the globally and temporally 
consistent set of climate relevant emissions required for running 
MAGICC. MAGICC was then used to estimate the projected change in 
relevant climate variables over time. Given the magnitude of the 
estimated emissions reductions associated with these rules, a simple 
climate model such as MAGICC is appropriate for estimating the 
atmospheric and climate response.
---------------------------------------------------------------------------

    \406\ GCAM is a long-term, global integrated assessment model of 
energy, economy, agriculture and land use that considers the sources 
of emissions of a suite of greenhouse gases (GHG's), emitted in 14 
globally disaggregated regions, the fate of emissions to the 
atmosphere, and the consequences of changing concentrations of 
greenhouse related gases for climate change. GCAM begins with a 
representation of demographic and economic developments in each 
region and combines these with assumptions about technology 
development to describe an internally consistent representation of 
energy, agriculture, land-use, and economic developments that in 
turn shape global emissions.
    \407\ MAGICC consists of a suite of coupled gas-cycle, climate 
and ice-melt models integrated into a single framework. The 
framework allows the user to determine changes in greenhouse-gas 
concentrations, global-mean surface air temperature and sea-level 
resulting from anthropogenic emissions of carbon dioxide 
(CO2), methane (CH4), nitrous oxide (N2O), reactive gases 
(CO, NOX, VOCs), the halocarbons (e.g. HCFCs, HFCs, PFCs) 
and sulfur dioxide (SO2). MAGICC emulates the global-mean 
temperature responses of more sophisticated coupled Atmosphere/Ocean 
General Circulation Models (AOGCMs) with high accuracy.
---------------------------------------------------------------------------

    The analysis projects that the proposed rules would reduce 
atmospheric concentrations of CO2, global climate warming, 
ocean acidification, and sea level rise relative to the reference case. 
Although the projected reductions and improvements are small in 
comparison to the total projected climate change, they are 
quantifiable, directionally consistent, and will contribute to reducing 
the risks associated with climate change. Climate change is a global 
phenomenon and EPA recognizes that this one national action alone will 
not prevent it; EPA notes this would be true for any given GHG 
mitigation action when taken alone or when considered in isolation. EPA 
also notes that a substantial portion of CO2 emitted into 
the atmosphere is not removed by natural processes for millennia, and 
therefore each unit of CO2 not emitted into the atmosphere 
due to this rules avoids essentially permanent climate change on 
centennial time scales.
    EPA determines that the projected reductions in atmospheric 
CO2, global mean temperature, sea level rise, and ocean pH 
are meaningful in the context of this action. The results of the 
analysis, summarized in Table VII-37, demonstrate that relative to the

[[Page 40409]]

reference case, by 2100 projected atmospheric CO2 
concentrations are estimated to be reduced by 1.1 to 1.2 part per 
million by volume (ppmv), global mean temperature is estimated to be 
reduced by 0.0026 to 0.0065 [deg]C, and sea-level rise is projected to 
be reduced by approximately 0.023 to 0.057 cm, based on a range of 
climate sensitivities (described below). Details about this modeling 
analysis can be found in the draft RIA Chapter 6.3.

Table VII-37--Impact of GHG Emissions Reductions on Projected Changes in Global Climate Associated With Proposed
                                       Phase 2 Standards for MY 2018-2024
                          [Based on a range of climate sensitivities from 1.5-6 [deg]C]
----------------------------------------------------------------------------------------------------------------
              Variable                         Units                Year                Projected change
----------------------------------------------------------------------------------------------------------------
Atmospheric CO2 CONCENTRATION.......  ppmv...................            2100  -1.1 to -1.2
Global Mean Surface Temperature.....  [deg]C.................            2100  -0.0026 to -0.0065
Sea Level Rise......................  cm.....................            2100  -0.023 to -0.057
Ocean pH............................  pH units...............            2100  +0.0006 \a\
----------------------------------------------------------------------------------------------------------------
Note:
\a\ The value for projected change in ocean pH is based on a climate sensitivity of 3.0.

    The projected reductions are small relative to the change in 
temperature (1.8-4.8 [deg]C), CO2 concentration (404 to 470 
ppm), sea level rise (23-56 cm), and ocean acidity (-0.30 pH units) 
from 1990 to 2100 from the MAGICC simulations for the GCAM reference 
case. However, this is to be expected given the magnitude of emissions 
reductions expected from the program in the context of global 
emissions. Moreover, these effects are occurring everywhere around the 
globe, so benefits that appear to be marginal for any one location, 
such as a reduction in seal level rise of half a millimeter, can be 
sizable when the effects are summed along thousands of miles of 
coastline. This uncertainty range does not include the effects of 
uncertainty in future emissions. It should also be noted that the 
calculations in MAGICC do not include the possible effects of 
accelerated ice flow in Greenland and/or Antarctica: Estimates of sea 
level rise from the recent NRC, IPCC, and NCA assessments range from 26 
cm to 2 meters depending on the emissions scenario, the processes 
included, and the likelihood range assessed; inclusion of these effects 
would lead to correspondingly larger benefits of mitigation. Further 
discussion of EPA's modeling analysis is found in the RIA, Chapter 6.3.
    Based on the projected atmospheric CO2 concentration 
reductions resulting from these proposed rules, EPA calculates an 
increase in ocean pH of 0.0006 pH units in 2100 relative to the 
baseline case (this is a reduction in the expected acidification of the 
ocean of a decrease of 0.3 pH units from 1990 to 2100 in the baseline 
case). Thus, this analysis indicates the projected decrease in 
atmospheric CO2 concentrations from the proposed Phase 2 
standards would result in an increase in ocean pH (i.e., a reduction in 
the expected acidification of the ocean in the reference case). A more 
detailed discussion of the modeling analysis associated with ocean pH 
is provided in the draft RIA, Chapter 6.3.
    The 2011 NRC assessment on ``Climate Stabilization Targets: 
Emissions, Concentrations, and Impacts over Decades to Millennia'' 
determined how a number of climate impacts--such as heaviest daily 
rainfalls, crop yields, and Arctic sea ice extent--would change with a 
temperature change of 1 degree Celsius (C) of warming. These 
relationships of impacts with temperature change could be combined with 
the calculated reductions in warming in Table VII-37 to estimate 
changes in these impacts associated with this proposed rulemaking.
    As a substantial portion of CO2 emitted into the 
atmosphere is not removed by natural processes for millennia, each unit 
of CO2 not emitted into the atmosphere avoids some degree of 
effectively permanent climate change. Therefore, reductions in 
emissions in the near-term are important in determining climate impacts 
experienced not just over the next decades but over thousands of 
years.\408\ Though the magnitude of the avoided climate change 
projected here in isolation is small in comparison to the total 
projected changes, these reductions represent a reduction in the 
adverse risks associated with climate change (though these risks were 
not formally estimated for this action) across a range of equilibrium 
climate sensitivities.
---------------------------------------------------------------------------

    \408\ National Research Council (NRC) (2011). Climate 
Stabilization Targets: Emissions, Concentrations, and Impacts over 
Decades to Millennia. National Academy Press. Washington, DC. 
(Docket EPA-HQ-OAR-2010-0799)
---------------------------------------------------------------------------

    EPA's analysis of this proposed rule's impact on global climate 
conditions is intended to quantify these potential reductions using the 
best available science. EPA's modeling results show consistent 
reductions relative to the baseline case in changes of CO2 
concentration, temperature, sea-level rise, and ocean pH over the next 
century.

VIII. How will this proposed action impact non-GHG emissions and their 
associated effects?

    The proposed heavy-duty vehicle standards are expected to influence 
the emissions of criteria air pollutants and several air toxics. This 
section describes the projected impacts of the proposed rules and 
Alternative 4 on non-GHG emissions and air quality, and the health and 
environmental effects associated with these pollutants. NHTSA further 
analyzes these projected health and environmental effects resulting 
from its proposed rules and reasonable alternatives in Chapter 4 of its 
DEIS.

A. Emissions Inventory Impacts

    As described in Section VII, the agencies conducted coordinated and 
complementary analyses for these rules by employing both DOT's CAFE 
model and EPA's MOVES model, relative to different reference cases 
(i.e., different baselines). The agencies used EPA's MOVES model to 
estimate the non-GHG impacts for tractor-trailers (including the engine 
that powers the vehicle), and vocational vehicles (including the engine 
that powers the vehicle). For heavy-duty pickups and vans, the agencies 
performed complementary analyses using the CAFE model (``Method A'') 
and the MOVES model (``Method B'') to estimate non-GHG emissions from 
these vehicles. For both methods, the agencies analyzed the impact of 
the proposed rules, relative to two different reference cases--less 
dynamic and more dynamic. The less dynamic baseline projects very 
little improvement in new vehicles in the absence of new Phase 2 
standards. In contrast, the more dynamic baseline

[[Page 40410]]

projects more improvements in vehicle fuel efficiency. The agencies 
considered both reference cases. The results for all of the regulatory 
alternatives relative to both reference cases, derived via the same 
methodologies discussed in Section VII of the Preamble, are presented 
in Section X of the Preamble.
    For brevity, a subset of these analyses are presented in this 
section and the reader is referred to both the RIA Chapter 11 and 
NHTSA's DEIS Chapters 3 and 5 for complete sets of these analyses. In 
this section, Method A is presented for both the proposed standards 
(i.e., Alternative 3--the agencies' preferred alternative) and for the 
standards the agencies considered in Alternative 4, relative to both 
the more dynamic baseline (Alternative 1b) and the less dynamic 
baseline (Alternative 1a). Method B is presented also for the proposed 
standards and Alternative 4, but relative only to the less dynamic 
baseline. The agencies' intention for presenting both of these 
complementary and coordinated analyses is to offer interested readers 
the opportunity to compare the regulatory alternatives considered for 
Phase 2 in both the context of our HD Phase 1 analytical approaches and 
our light-duty vehicle analytical approaches. The agencies view these 
analyses as corroborative and reinforcing: Both support agencies' 
conclusion that the proposed standards are appropriate and at the 
maximum feasible levels.
    The following subsections summarize two slightly different analyses 
of the annual non-GHG emissions reductions expected from the proposed 
standards and Alternative 4. Section VIII. A. (1) presents the impacts 
of the proposed rules and Alternative 4 on non-GHG emissions using the 
analytical Method A, relative to two different reference cases--less 
dynamic and more dynamic. Section VIII. A. (2) presents the impacts of 
the proposed standards and Alternative 4, relative to the less dynamic 
reference case only, using the MOVES model for all heavy-duty vehicle 
categories.
(1) Impacts of the Proposed Rules and Alternative 4 Using Analysis 
Method A
(a) Calendar Year Analysis
(i) Upstream Impacts of the Proposed Program and Alternative 4
    Increasing efficiency in heavy-duty vehicles would result in 
reduced fuel demand, and therefore, reductions in the emissions 
associated with all processes involved in getting petroleum to the 
pump. Both Method A and Method B project these impacts for fuel 
consumed by vocational vehicles and combination tractor-trailers, using 
the same methods. See Section VIII.A.(2) (a)(i) for the description of 
this methodology. To project these impacts for fuel consumed by HD 
pickups and vans, Method A used similar calculations and inputs 
applicable to the CAFE model, as discussed above in Section VI. More 
information on the development of the emission factors used in this 
analysis can be found in Chapter 5 of the draft RIA.
    The following four tables summarize the projected upstream emission 
impacts of the preferred alternative and Alternative 4 on both criteria 
pollutants and air toxics from the heavy-duty sector, relative to 
Alternative 1b (more dynamic baseline conditions under the No-Action 
Alternative) and Alternative 1a (less dynamic baseline conditions under 
the No-Action Alternative).

 Table VIII-1--Annual Upstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
             Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1b using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -1           -5           -3          -14           -5          -17
Acetaldehyde......................           -3           -3          -10          -11          -15          -13
Acrolein..........................            0           -4           -1          -12           -2          -15
Benzene...........................          -21           -4          -74          -13         -104          -15
CO................................       -3,798           -5      -12,087          -14      -17,120          -17
Formaldehyde......................          -19           -5          -59          -14          -84          -17
NOX...............................       -9,472           -5      -30,333          -14      -42,839          -17
PM2.5.............................       -1,019           -5       -3,257          -14       -4,609          -17
SOX...............................       -5,983           -5      -19,190          -14      -27,074          -17
VOC...............................       -3,066           -4      -11,029          -13      -15,386          -15
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VIII-2--Annual Upstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
                 Years 2025, 2035 and 2050--Alternative 4 vs. Alt 1b using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -1           -6           -3          -15           -5          -17
Acetaldehyde......................           -4           -5          -11          -12          -15          -14
Acrolein..........................           -1           -5           -1          -13           -2          -15
Benzene...........................          -28           -5          -78          -13         -105          -16
CO................................       -4,679           -6      -12,640          -15      -17,263          -17
Formaldehyde......................          -23           -6          -62          -15          -85          -17
NOX...............................      -11,708           -6      -31,769          -15      -43,263          -17
PM2.5.............................       -1,259           -6       -3,408          -15       -4,649          -17
SOX...............................       -7,402           -6      -20,107          -15      -27,356          -17

[[Page 40411]]

 
VOC...............................       -4,081           -5      -11,717          -13      -15,645          -15
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VIII-3--Annual Upstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
             Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1a using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -1           -5           -4          -15           -5          -18
Acetaldehyde......................           -3           -3          -11          -12          -16          -14
Acrolein..........................            0           -4           -1          -13           -2          -15
Benzene...........................          -22           -4          -80          -14         -113          -16
CO................................       -3,911           -5      -13,153          -15      -18,794          -18
Formaldehyde......................          -19           -5          -65          -15          -92          -18
NOX...............................       -9,787           -5      -33,021          -15      -47,028          -18
PM2.5.............................       -1,051           -5       -3,545          -15       -5,058          -18
SOX...............................       -6,189           -5      -20,896          -15      -29,726          -18
VOC...............................       -3,193           -4      -11,848          -13      -16,625          -16
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VIII-4--Annual Upstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
                 Years 2025, 2035 and 2050--Alternative 4 vs. Alt 1a using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -1           -6           -4          -16           -5          -18
Acetaldehyde......................           -4           -5          -12          -12          -16          -14
Acrolein..........................           -1           -5           -1          -13           -2          -16
Benzene...........................          -29           -5          -84          -14         -114          -17
CO................................       -4,816           -6      -13,720          -16      -18,945          -18
Formaldehyde......................          -24           -6          -67          -16          -93          -18
NOX...............................      -12,098           -6      -34,501          -16      -47,477          -18
PM2.5.............................       -1,298           -6       -3,700          -16       -5,101          -18
SOX...............................       -7,658           -6      -21,843          -16      -30,024          -18
VOC...............................       -4,251           -5      -12,541          -14      -16,870          -16
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(ii) Downstream Impacts of the Proposed Program and Alternative 4
    For vocational vehicles and tractor-trailers, the agencies used the 
MOVES model to determine non-GHG emissions inventories. The 
improvements in engine efficiency and road load, the increased use of 
APUs, and VMT rebound were included in the MOVES analysis. For the 
analysis presented in this section, the DOT CAFE model was used for HD 
pickups and vans. Further information about DOT's CAFE model is 
available in Section VI.C and Chapter 10 of the draft RIA. The 
following four tables summarize the projected downstream emission 
impacts of the preferred alternative and Alternative 4 on both criteria 
pollutants and air toxics from the heavy-duty sector, relative to 
Alternative 1b and Alternative 1a.

[[Page 40412]]

Table VIII-5--Annual Downstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
             Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1b using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -8           -3          -21          -12          -30          -16
Acetaldehyde......................         -669          -10       -1,882          -31       -2,667          -36
Acrolein..........................          -97          -10         -272          -31         -385          -37
Benzene...........................         -123           -6         -347          -19         -490          -24
CO................................      -26,485           -3      -75,199           -8     -106,756           -9
Formaldehyde......................       -2,100          -12       -5,910          -32       -8,376          -37
NOX...............................      -92,444           -7     -260,949          -28     -370,663          -34
PM2.5 \b\.........................          643            2        1,722            8        2,410           10
SOX...............................         -229           -4         -715          -13       -1,026          -15
VOC...............................      -13,161           -6      -38,051          -21      -54,139          -26
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and
  brake wear are included.

Table VIII-6--Annual Downstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
                 Years 2025, 2035 and 2050--Alternative 4 vs. Alt 1b using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -8           -2          -21          -12          -30          -16
Acetaldehyde......................         -669          -10       -1,882          -31       -2,667          -36
Acrolein..........................          -97          -10         -271          -31         -385          -37
Benzene...........................         -124           -6         -347          -19         -490          -24
CO................................      -26,705           -3      -75,407           -8     -106,874           -9
Formaldehyde......................       -2,100          -12       -5,908          -32       -8,375          -37
NOX...............................      -93,984           -8     -262,150          -28     -370,704          -34
PM2.5 \b\.........................          619            2        1,705            8        2,412           10
SOX...............................         -280           -5         -742          -13       -1,029          -15
VOC...............................      -13,925           -7      -38,472          -22      -54,150          -26
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and
  brake wear are included.

Table VIII-7--Annual Downstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
             Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1a using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -8           -3          -21          -12          -30          -16
Acetaldehyde......................         -669          -10       -1,880          -31       -2,664          -36
Acrolein..........................          -97          -10         -271          -31         -384          -37
Benzene...........................         -123           -6         -346          -19         -490          -24
CO................................      -26,576           -3      -75,571           -8     -107,287           -9
Formaldehyde......................       -2,100          -12       -5,904          -32       -8,369          -37
NOX...............................      -93,197           -8     -266,890          -29     -380,303          -35
PM2.5 \b\.........................          632            2        1,635            8        2,267            9
SOX...............................         -232           -4         -776          -14       -1,125          -16
VOC...............................      -13,210           -6      -38,964          -22      -55,628          -26
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and
  brake wear are included.

[[Page 40413]]

Table VIII-8--Annual Downstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar
                 Years 2025, 2035 and 2050--Alternative 4 vs. Alt 1a using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -8           -2          -21          -12          -29          -16
Acetaldehyde......................         -668          -10       -1,880          -31       -2,664          -36
Acrolein..........................          -97          -10         -271          -31         -384          -37
Benzene...........................         -124           -6         -346          -19         -489          -24
CO................................      -26,821           -3      -75,795           -8     -107,414           -9
Formaldehyde......................       -2,099          -12       -5,902          -32       -8,367          -37
NOX...............................      -94,724           -8     -268,075          -29     -380,328          -35
PM2.5 \b\.........................          609            2        1,618            8        2,269            9
SOX...............................         -282           -5         -803          -14       -1,127          -16
VOC...............................      -13,971           -7      -39,383          -22      -55,638          -26
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and
  brake wear are included.

(iii) Total Impacts of the Proposed Program and Alternative 4
    The following four tables summarize the projected upstream emission 
impacts of the preferred alternative and Alternative 4 on both criteria 
pollutants and air toxics from the heavy-duty sector, relative to 
Alternative 1b and Alternative 1a.

 Table VIII-9--Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics From Heavy-
 Duty Sector in Calendar Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % reduction      tons     % reduction      tons     % reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -9           -3          -25          -13          -34          -16
Acetaldehyde......................         -672          -10       -1,893          -30       -2,682          -36
Acrolein..........................          -97          -10         -273          -31         -387          -37
Benzene...........................         -145           -5         -421          -18         -595          -22
CO................................      -30,282           -3      -87,286           -8     -123,876          -10
Formaldehyde......................       -2,119          -11       -5,969          -32       -8,460          -37
NOX...............................     -101,916           -7     -291,282          -26     -413,501          -31
PM2.5.............................         -376           -1       -1,535           -3       -2,199           -4
SOX...............................       -6,213           -5      -19,905          -14      -28,101          -17
VOC...............................      -16,227           -6      -49,080          -18      -69,525          -22
 
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VIII-10--Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics From Heavy-
     Duty Sector in Calendar Years 2025, 2035 and 2050--Alternative 4 vs. Alt 1b Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % reduction      tons     % reduction      tons     % reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -9           -3          -25          -13          -34          -16
Acetaldehyde......................         -673          -10       -1,893          -30       -2,682          -36
Acrolein..........................          -97          -10         -273          -31         -387          -37
Benzene...........................         -152           -6         -426          -18         -595          -22
CO................................      -31,383           -3      -88,047           -8     -124,137          -10
Formaldehyde......................       -2,123          -11       -5,970          -32       -8,460          -37
NOX...............................     -105,693           -7     -293,918          -26     -413,967          -31
PM2.5.............................         -639           -1       -1,703           -4       -2,237           -4
SOX...............................       -7,682           -6      -20,849          -15      -28,385          -17

[[Page 40414]]

 
VOC...............................      -18,006           -6      -50,189          -19      -69,796          -22
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VIII-11--Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics From Heavy-
 Duty Sector in Calendar Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % reduction      tons     % reduction      tons     % reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -9           -3          -25          -13          -35          -16
Acetaldehyde......................         -672          -10       -1,891          -30       -2,680          -36
Acrolein..........................          -97          -10         -273          -31         -386          -37
Benzene...........................         -145           -5         -425          -18         -603          -22
CO................................      -30,487           -3      -88,724           -8     -126,081          -10
Formaldehyde......................       -2,119          -11       -5,969          -32       -8,461          -37
NOX...............................     -102,983           -7     -299,911          -26     -427,332          -32
PM2.5.............................         -419           -1       -1,910           -4       -2,791           -5
SOX...............................       -6,421           -5      -21,672          -15      -30,850          -18
VOC...............................      -16,403           -6      -50,812          -19      -72,253          -23
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VIII-12--Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics From Heavy-
     Duty Sector in Calendar Years 2025, 2035 and 2050--Alternative 4 vs. Alt 1a Using Analysis Method A \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % reduction      tons     % reduction      tons     % reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -9           -3          -25          -13          -35          -16
Acetaldehyde......................         -672          -10       -1,891          -30       -2,679          -36
Acrolein..........................          -97          -10         -273          -31         -386          -37
Benzene...........................         -153           -6         -430          -18         -603          -22
CO................................      -31,637           -3      -89,514           -8     -126,360          -10
Formaldehyde......................       -2,123          -11       -5,969          -32       -8,460          -37
NOX...............................     -106,822           -7     -302,575          -26     -427,805          -32
PM2.5.............................         -689           -1       -2,082           -5       -2,833           -5
SOX...............................       -7,941           -6      -22,646          -16      -31,151          -18
VOC...............................      -18,222           -6      -51,924          -19      -72,509          -23
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(b) Model Year Lifetime Analysis

 Table VIII-13--Lifetime Non-GHG Reductions Using Analysis Method A--Summary for Model Years 2018-2029 (US Short
                                                    Tons) \a\
----------------------------------------------------------------------------------------------------------------
                                               Alternative 3 (proposed)                  Alternative 4
                                         -----------------------------------------------------------------------
    No-action alternative (baseline)          1b (more          1a (less          1b (more          1a (less
                                              dynamic)          dynamic)          dynamic)          dynamic)
----------------------------------------------------------------------------------------------------------------
NOX.....................................         2,359,548         2,409,738         2,420,931         2,472,021
    Downstream..........................         2,103,163         2,137,232         2,130,659         2,164,458

[[Page 40415]]

 
    Upstream............................           256,385           272,506           290,272           307,563
PM2.5...................................            13,496            15,706            17,524            19,839
    Downstream \b\......................           -14,051           -13,546           -13,649           -13,153
    Upstream............................            27,547            29,252            31,173            32,992
SOX.....................................           167,415           177,948           189,670           200,992
    Downstream..........................             5,326             5,562             6,079             6,311
    Upstream............................           162,089           172,386           183,591           194,681
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Negative number means emissions would increase from reference to control case. PM2.5 from tire wear and
  brake wear are included.

(2) Impacts of the Proposed Rules and Alternative 4 using Analysis 
Method B
(a) Calendar Year Analysis
(i) Upstream Impacts of the Proposed Program and Alternative 4
    Increasing efficiency in heavy-duty vehicles would result in 
reduced fuel demand, and therefore, reductions in the emissions 
associated with all processes involved in getting petroleum to the 
pump. To project these impacts, Method B estimated the impact of 
reduced petroleum volumes on the extraction and transportation of crude 
oil as well as the production and distribution of finished gasoline and 
diesel. For the purpose of assessing domestic-only emission reductions, 
it was necessary to estimate the fraction of fuel savings attributable 
to domestic finished gasoline and diesel, and of this fuel, what 
fraction is produced from domestic crude. Method B estimated the 
emissions associated with production and distribution of gasoline and 
diesel from crude oil based on emission factors in the ``Greenhouse 
Gases, Regulated Emissions, and Energy used in Transportation'' model 
(GREET) developed by DOE's Argonne National Laboratory. In some cases, 
the GREET values were modified or updated by the agencies to be 
consistent with the National Emission Inventory (NEI) and emission 
factors from MOVES. Method B estimated the projected corresponding 
changes in upstream emissions using the same tools originally created 
for the Renewable Fuel Standard 2 (RFS2) rulemaking analysis,\409\ used 
in the LD GHG rulemakings,\410\ HD GHG Phase 1,\411\ and updated for 
the current analysis. More information on the development of the 
emission factors used in this analysis can be found in Chapter 5 of the 
draft RIA.
---------------------------------------------------------------------------

    \409\ U.S. EPA. Draft Regulatory Impact Analysis: Changes to 
Renewable Fuel Standard Program. Chapters 2 and 3. May 26, 2009. 
Docket ID: EPA-HQ-OAR-2009-0472-0119.
    \410\ 2017 and Later Model Year Light-Duty Vehicle Greenhouse 
Gas Emissions and Corporate Average Fuel Economy Standards (77 FR 
62623, October 15, 2012).
    \411\ Greenhouse Gas Emission Standards and Fuel Efficiency 
Standards for Medium- and Heavy-Duty Engines and Vehicles (76 FR 
57106, September 15, 2011).
---------------------------------------------------------------------------

    Table VIII-14 and Table VIII-15 summarizes the projected upstream 
emission impacts of the Preferred Alternative and Alternative 4 on both 
criteria pollutants and air toxics from the heavy-duty sector, relative 
to Alternative 1a. The comparable estimates relative to Alternative 1b 
are presented in Section VIII. A. (1).

 Table VIII-14--Annual Upstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
             Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1a Using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -1         -5.0           -4        -15.3           -5        -18.4
Acetaldehyde......................           -4         -3.0          -18        -11.9          -26        -14.6
Acrolein..........................         -0.5         -3.4           -2        -12.7           -3        -15.5
Benzene...........................          -24         -3.8          -92        -13.4         -132        -16.3
CO................................       -3,798         -4.9      -13,001        -15.3      -18,772        -18.4
Formaldehyde......................          -19         -4.7          -67        -14.9          -98        -18.0
NOX...............................       -9,282         -4.9      -31,782        -15.3      -45,888        -18.4
PM2.5.............................       -1,020         -4.9       -3,514        -15.2       -5,072        -18.2
SOX...............................       -5,817         -4.9      -19,902        -15.3      -28,736        -18.4
VOC...............................       -3,283         -3.7      -12,724        -13.2      -18,214        -16.1
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

[[Page 40416]]

 Table VIII-15--Annual Upstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar
                 Years 2025, 2035 and 2050--Alternative 4 vs. Alt 1a Using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -1         -6.1           -4        -15.9           -5        -18.4
Acetaldehyde......................           -6         -4.3          -20        -12.6          -26        -14.7
Acrolein..........................           -1         -4.7           -2        -13.3           -3        -15.5
Benzene...........................          -32         -5.0          -97        -14.0         -133        -16.3
CO................................       -4,661         -6.1      -13,485        -15.9      -18,812        -18.4
Formaldehyde......................          -24         -5.9          -70        -15.5          -97        -18.0
NOX...............................      -11,393         -6.1      -32,965        -15.9      -45,986        -18.4
PM2.5.............................       -1,256         -6.0       -3,647        -15.7       -5,083        -18.3
SOX...............................       -7,137         -6.1      -20,641        -15.9      -28,797        -18.4
VOC...............................       -4,342         -4.9      -13,326        -13.8      -18,273        -16.1
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(ii) Downstream Impacts of the Proposed Program and Alternative 4
    Both the proposed program and Alternative 4 would impact the 
downstream emissions of non-GHG pollutants. These pollutants include 
oxides of nitrogen (NOX), oxides of sulfur (SOX), 
volatile organic compounds (VOC), carbon monoxide (CO), fine 
particulate matter (PM2.5), and air toxics. The agencies are 
expecting reductions in downstream emissions of NOX, VOC, 
SOX, CO, and air toxics. Much of these estimated net 
reductions are a result of the agencies' anticipation of increased use 
of auxiliary power units (APUs) in combination tractors during extended 
idling; APUs emit these pollutants at a lower rate than on-road engines 
during extended idle operation, with the exception of PM2.5. 
Additional reductions in tailpipe emissions of NOX and CO 
and refueling emissions of VOC would be achieved through improvements 
in engine efficiency and reduced road load (improved aerodynamics and 
tire rolling resistance), which reduces the amount of work required to 
travel a given distance and increases fuel economy. For vehicle types 
not affected by road load improvements, such as HD pickups and 
vans,\412\ non-GHG emissions would increase very slightly due to VMT 
rebound. In addition, brake wear and tire wear emissions of 
PM2.5 would also increase very slightly due to VMT rebound. 
The agencies estimate that downstream emissions of SOX would 
be reduced, because they are roughly proportional to fuel consumption. 
Alternative 4 would have directionally similar effects as the preferred 
alternative.
---------------------------------------------------------------------------

    \412\ HD pickups and vans are subject to gram per mile 
(distance) emission standards, as opposed to larger heavy-duty 
vehicles which are certified to a gram per brake horsepower (work) 
standard.
---------------------------------------------------------------------------

    For vocational vehicles and tractor-trailers, agencies used MOVES 
to determine non-GHG emissions impacts of the proposed rules and 
Alternative 4, relative to the less dynamic baseline (Alternative 1a). 
The improvements in engine efficiency and road load, the increased use 
of APUs, and VMT rebound were included in the MOVES analysis. For this 
analysis, Method B also used the MOVES model for HD pickups and vans. 
(Note that for the comparable analysis as described in Section VIII. A. 
(1), Method A used DOT's CAFE model). Further information about the 
modeling using DOT's CAFE and MOVES model is available in Section VII 
and Chapter 5 of the draft RIA.
    The downstream criteria pollutant and air toxics impacts of the 
Preferred Alternative and Alternative 4, relative to Alternative 1a, 
are presented in Table VIII-16 and Table VIII-17, respectively.

    Table VIII-16--Annual Downstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in
        Calendar Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1a Using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -8         -2.6          -22        -15.1          -31        -19.6
Acetaldehyde......................         -670        -10.3       -1,884        -31.0       -2,671        -36.5
Acrolein..........................          -97         -9.9         -272        -31.6         -385        -37.3
Benzene...........................         -125         -5.9         -353        -21.0         -501        -25.7
CO................................      -25,824         -1.7      -72,960         -6.0     -103,887         -7.6
Formaldehyde......................       -2,102        -11.5       -5,911        -32.1       -8,379        -37.5
NOX...............................      -93,220         -7.5     -267,125        -29.1     -380,721        -35.2
PM2.5 \b\.........................          634          1.6        1,631          7.6        2,257          9.1
SOX...............................         -254         -4.8         -876        -15.0       -1,264        -18.1
VOC...............................      -13,440         -6.4      -40,148        -21.7      -57,308        -26.1
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and
  brake wear are included.

[[Page 40417]]

    Table VIII-17--Annual Downstream Impacts on Criteria Pollutants and Air Toxics From Heavy-Duty Sector in
             Calendar Years 2025, 2035 and 2050--Alternative 4 vs. Alt 1aUsing Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                US short                  US short                  US short
                                        tons     % Reduction      tons     % Reduction      tons     % Reduction
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -8         -2.6          -22        -15.1          -31        -19.6
Acetaldehyde......................         -670        -10.3       -1,884        -31.0       -2,671        -36.5
Acrolein..........................          -97         -9.9         -272        -31.6         -385        -37.3
Benzene...........................         -126         -5.9         -354        -21.0         -501        -25.7
CO................................      -25,919         -1.7      -73,041         -6.0     -103,891         -7.6
Formaldehyde......................       -2,101        -11.5       -5,910        -32.1       -8,378        -37.5
NOX...............................      -94,787         -7.6     -268,373        -29.2     -380,810        -35.2
PM2.5 \b\.........................          610          1.5        1,611          7.5        2,256          9.1
SOX...............................         -313         -5.9         -909        -15.6       -1,267        -18.1
VOC...............................      -14,310         -6.8      -40,640        -22.0      -57,348        -26.1
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and
  brake wear are included.

    As shown in Table VIII-16, a net increase in downstream 
PM2.5 emissions is expected. Although the improvements in 
engine efficiency and road load are expected to reduce tailpipe 
emissions of PM2.5, the projected increased use \413\ of 
APUs would lead to higher PM2.5 emissions that more than 
offset the reductions from the tailpipe, since engines powering APUs 
are currently required to meet less stringent PM standards than on-road 
engines. Therefore, EPA conducted an evaluation of a program that would 
reduce the unintended consequence of increase in PM2.5 
emissions from increased APU use by fitting the APU with a diesel 
particulate filter or having the APU exhaust plumbed into the vehicle's 
exhaust system upstream of the particulate matter aftertreatment 
device. Such program requiring additional PM2.5 controls on 
APU could significantly reduce PM2.5 emissions, as shown in 
Table VIII-18 below. For additional details, see Section III.C.3 of the 
preamble.
---------------------------------------------------------------------------

    \413\ The projected use of APU during extended idling is 
presented in Table VII-3 of the preamble.

 Table VIII-18--Projected Impact on PM2.5 Emissions of Further PM2.5 Control on APUs--Preferred Alternative vs.
                               Alt 1a Using Analysis Method B (US Short Tons) \a\
----------------------------------------------------------------------------------------------------------------
                                                                     Proposed
                                                                      program        Proposed
                                                                     inventory        program      Net impact of
                               CY                                     without     inventory with   further PM2.5
                                                                   further PM2.5   further PM2.5    control on
                                                                    control on      control on         APUs
                                                                       APUs            APUs
----------------------------------------------------------------------------------------------------------------
2035............................................................          23,083          19,999          -3,084
2050............................................................          26,932          22,588          -4,344
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    It is worth noting that the emission reductions shown in Table 
VIII-16 are not incremental to the emissions reductions projected in 
the Phase 1 rulemaking. This is because, as described in Sections 
III.D.2.a of the preamble, the agencies have revised their assumptions 
about the adoption rate of APUs. This proposal assumes that without the 
proposed Phase 2 program (i.e., in the Phase 2 reference case), the APU 
adoption rate will be 30 percent for model years 2010 and later, which 
is the value used in the Phase 1 reference case. EPA conducted an 
analysis to estimate the combined emissions impacts of the Phase 1 and 
the proposed Phase 2 programs for NOX, VOC, SOX 
and PM2.5 in calendar year 2050 using MOVES2014. The results 
are shown in Table VIII-19. For NOX and PM2.5 
only, we estimated the combined Phase 1 and Phase 2 downstream and 
upstream emissions impacts for calendar year 2025, and project that the 
two rules combined would reduce NOX by up to 120,000 tons 
and PM2.5 by up to 2,000 tons in that year. For additional 
details, see Chapter 5 of the draft RIA.

[[Page 40418]]

  Table VIII-19--Combined Phase 1 and Phase 2 Annual Downstream Impacts on Criteria Pollutants From Heavy-Duty
             Sector in Calendar Year 2050--Preferred Alternative vs. Alt 1a Using Analysis Method B
                                               [US short tons] \a\
----------------------------------------------------------------------------------------------------------------
                     CY                             NOX              VOC              SOX             PM2.5b
----------------------------------------------------------------------------------------------------------------
2050........................................        -403,915          -69,415           -2,111            1,890
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Positive number reflects an increase in emissions.

(iii) Total Impacts of the Proposed Program and Alternative 4
    As shown in Table VIII-20 and Table VIII-21, agencies estimate that 
both the proposed program and Alternative 4 would result in overall net 
reductions of NOX, VOC, SOX, CO, 
PM2.5, and air toxics emissions. The downstream increase in 
PM2.5 due to APU use is expected to be more than offset by 
reductions in PM2.5 from upstream.\414\ The results are 
shown both in changes in absolute tons and in percent reductions from 
the less dynamic reference to the alternatives for the heavy-duty 
sector. By 2050, the total impacts of the proposed program and 
Alternative 4 on criteria pollutants and air toxics are 
indistinguishable.
---------------------------------------------------------------------------

    \414\ Although net reduction in PM2.5 is expected at 
the national level, it is unlikely that the geographic location of 
increases in downstream PM2.5 emissions will coincide 
with the location of decreases in upstream PM2.5 
emissions. For further details, see Section VIII.D of this preamble 
and in Chapter 8 of the draft RIA.

 Table VIII-20--Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics From Heavy-
 Duty Sector in Calendar Years 2025, 2035 and 2050--Preferred Alternative vs. Alt 1a Using Analysis Method B \a\
----------------------------------------------------------------------------------------------------------------
                                             CY2025                    CY2035                    CY2050
                                   -----------------------------------------------------------------------------
             Pollutant                             US short                  US short                  US short
                                    % Reduction      tons     % Reduction      tons     % Reduction      tons
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene.....................           -9         -2.7          -25        -15.1          -36        -19.4
Acetaldehyde......................         -674        -10.1       -1,902        -30.5       -2,697        -36.0
Acrolein..........................          -97         -9.8         -274        -31.3         -388        -36.9
Benzene...........................         -149         -5.4         -445        -18.8         -633        -22.9
CO................................      -29,622         -1.9      -85,961         -6.6     -122,659         -8.4
Formaldehyde......................       -2,121        -11.4       -5,978        -31.7       -8,475        -37.0
NOX...............................     -102,502         -7.2     -298,907        -26.6     -426,610        -32.1
PM2.5.............................         -386         -0.6       -1,883         -4.2       -2,815         -5.4
SOX...............................       -6,070         -4.9      -20,777        -15.3      -30,000        -18.4
VOC...............................      -16,724         -5.6      -52,872        -18.8      -75,521        -22.7
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table VIII-21--Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics From Heavy-Duty Sector in Calendar Years 2025, 2035
                                             and 2050--Alternative 4 vs. Alt 1a Using Analysis Method B \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      CY2025                          CY2035                          CY2050
                        Pollutant                        -----------------------------------------------------------------------------------------------
                                                           US short tons    % Reduction    US short tons    % Reduction    US short tons    % Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
1,3-Butadiene...........................................              -9            -2.8             -26           -15.2             -36           -19.4
Acetaldehyde............................................            -676           -10.1          -1,903           -30.6          -2,697           -36.0
Acrolein................................................             -97            -9.8            -274           -31.3            -388           -36.9
Benzene.................................................            -157            -5.7            -450           -18.9            -634           -22.9
CO......................................................         -30,580            -1.9         -86,526            -6.6        -122,703            -8.4
Formaldehyde............................................          -2,125           -11.4          -5,980           -31.7          -8,476           -37.0
NOX.....................................................        -106,180            -7.4        -301,339           -26.8        -426,796           -32.1
PM2.5...................................................            -646            -1.1          -2,036            -4.6          -2,827            -5.4
SOX.....................................................          -7,450            -6.1         -21,550           -15.9         -30,064           -18.4
VOC.....................................................         -18,652            -6.2         -53,966           -19.2         -75,621           -22.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

[[Page 40419]]

(b) Model Year Lifetime Analysis
    In addition to the annual non-GHG emissions reductions expected 
from the proposed rules and Alternative 4, the combined (downstream and 
upstream) non-GHG impacts for the lifetime of the impacted vehicles 
were estimated. Table VIII-22 shows the fleet-wide reductions of 
NOX, PM2.5 and SOX from the preferred 
alternative and Alternative 4, relative to Alternative 1a, through the 
lifetime \415\ of heavy-duty vehicles. For the lifetime non-GHG 
reductions by vehicle categories, see Chapter 5 of the draft RIA.
---------------------------------------------------------------------------

    \415\ A lifetime of 30 years is assumed in MOVES.

  Table VIII-22--Lifetime Non-GHG Reductions Using Analysis Method B--
                    Summary for Model Years 2018-2029
                           [US short tons] \a\
------------------------------------------------------------------------
                                      Alternative 3      Alternative 4
                                        (proposed)    ------------------
 No-action alternative (baseline)  -------------------
                                        1a  (Less          1a  (Less
                                         dynamic)           dynamic)
------------------------------------------------------------------------
NOX...............................          2,399,990          2,459,497
    Downstream....................          2,139,331          2,167,512
    Upstream......................            260,659            291,986
PM2.5.............................             15,206             19,151
    Downstream \b\................            -13,528            -13,089
    Upstream......................             28,733             32,240
SOX...............................            169,436            189,904
    Downstream....................              6,158              7,035
    Upstream......................            163,278            182,869
------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.
\b\ Negative number means emissions would increase from reference to
  control case. PM2.5 from tire wear and brake wear are included.

B. Health Effects of Non-GHG Pollutants

    In this section, we discuss health effects associated with exposure 
to some of the criteria and air toxic pollutants impacted by the 
proposed and alternative heavy-duty vehicle standards.
(1) Particulate Matter
(a) Background
    Particulate matter is a highly complex mixture of solid particles 
and liquid droplets distributed among numerous atmospheric gases which 
interact with solid and liquid phases. Particles range in size from 
those smaller than 1 nanometer (10-9 meter) to over 100 
micrometer ([micro]m, or 10-6 meter) in diameter (for 
reference, a typical strand of human hair is 70 [micro]m in diameter 
and a grain of salt is about 100 [micro]m). Atmospheric particles can 
be grouped into several classes according to their aerodynamic and 
physical sizes. Generally, the three broad classes of particles 
considered by EPA include ultrafine particles (UFP, aerodynamic 
diameter <0.1 [micro]m), ``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).\416\ 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 less than or equal to 10 [micro]m and greater than 
2.5 [micro]m). EPA currently has standards that regulate 
PM2.5 and PM10.\417\
---------------------------------------------------------------------------

    \416\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F. Figure 3-1.
    \417\ 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 national ambient air quality standards (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).
---------------------------------------------------------------------------

    Particles span many sizes and shapes and may consist of hundreds of 
different chemicals. Particles are emitted directly from sources and 
are also formed through atmospheric chemical reactions; the former are 
often referred to as ``primary'' particles, and the latter as 
``secondary'' particles. Particle concentration and composition varies 
by time of year and location, and in addition to differences in source 
emissions, is affected by several weather-related factors, such as 
temperature, clouds, humidity, and wind. A further layer of complexity 
comes from particles' ability to shift between solid/liquid and gaseous 
phases, which is influenced by concentration and meteorology, 
especially temperature.
    Fine particles are produced primarily by combustion processes and 
by transformations of gaseous emissions (e.g., sulfur oxides 
(SOX), oxides of nitrogen, and volatile organic compounds 
(VOC)) in the atmosphere. The chemical and physical properties of 
PM2.5 may vary greatly with time, region, meteorology, and 
source category. Thus, PM2.5 may include a complex mixture 
of different components including sulfates, nitrates, organic 
compounds, elemental carbon and metal compounds. These particles can 
remain in the atmosphere for days to weeks and travel hundreds to 
thousands of kilometers.
(b) Health Effects of PM
    Scientific studies show ambient PM is associated with a broad range 
of health effects. These health effects are discussed in detail in the 
December 2009 Integrated Science Assessment for Particulate Matter (PM 
ISA).\418\ The PM ISA summarizes health effects evidence associated 
with both short- and long-term exposures to PM2.5, 
PM10-2.5, and ultrafine particles. The PM ISA concludes that 
human exposures to ambient PM2.5 concentrations are 
associated with a number of adverse health effects and characterizes 
the weight of evidence for these health

[[Page 40420]]

outcomes.\419\ The discussion below highlights the PM ISA's conclusions 
pertaining to health effects associated with both short- and long-term 
PM exposures. Further discussion of health effects associated with 
PM2.5 can also be found in the rulemaking documents for the 
most recent review of the PM NAAQS completed in 2012.420 421
---------------------------------------------------------------------------

    \418\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F.
    \419\ The causal framework draws upon the assessment and 
integration of evidence from across epidemiological, controlled 
human exposure, and toxicological studies, and the related 
uncertainties that ultimately influence our understanding of the 
evidence. This framework employs a five-level hierarchy that 
classifies the overall weight of evidence and causality using the 
following categorizations: causal relationship, likely to be causal 
relationship, suggestive of a causal relationship, inadequate to 
infer a causal relationship, and not likely to be a causal 
relationship (U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F, Table 1-3).
    \420\ 78 FR 3103-3104, January 15, 2013.
    \421\ 77 FR 38906-38911, June 29, 2012.
---------------------------------------------------------------------------

    EPA has concluded that a causal relationship exists between both 
long- and short-term exposures to PM2.5 and premature 
mortality and cardiovascular effects and a likely causal relationship 
exists between long- and short-term PM2.5 exposures and 
respiratory effects. Further, there is evidence suggestive of a causal 
relationship between long-term PM2.5 exposures and other 
health effects, including developmental and reproductive effects (e.g., 
low birth weight, infant mortality) and carcinogenic, mutagenic, and 
genotoxic effects (e.g., lung cancer mortality).\422\
---------------------------------------------------------------------------

    \422\ These causal inferences are based not only on the more 
expansive epidemiological evidence available in this review but also 
reflect consideration of important progress that has been made to 
advance our understanding of a number of potential biologic modes of 
action or pathways for PM-related cardiovascular and respiratory 
effects (U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F, Chapter 5).
---------------------------------------------------------------------------

    As summarized in the Final PM NAAQS rule, and discussed extensively 
in the 2009 p.m. ISA, the available scientific evidence significantly 
strengthens the link between long- and short-term exposure to 
PM2.5 and premature mortality, while providing indications 
that the magnitude of the PM2.5- mortality association with 
long-term exposures may be larger than previously estimated. 
423 424 The strongest evidence comes from recent studies 
investigating long-term exposure to PM2.5 and 
cardiovascular-related mortality. The evidence supporting a causal 
relationship between long-term PM2.5 exposure and mortality 
also includes consideration of new studies that demonstrated an 
improvement in community health following reductions in ambient fine 
particles.
---------------------------------------------------------------------------

    \423\ 78 FR 3103-3104, January 15, 2013.
    \424\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F, Chapter 6 (Section 6.5) 
and Chapter 7 (Section 7.6).
---------------------------------------------------------------------------

    Several studies evaluated in the 2009 p.m. ISA have examined the 
association between cardiovascular effects and long-term 
PM2.5 exposures in multi-city epidemiological studies 
conducted in the U.S. and Europe. These studies have provided new 
evidence linking long-term exposure to PM2.5 with an array 
of cardiovascular effects such as heart attacks, congestive heart 
failure, stroke, and mortality. This evidence is coherent with studies 
of effects associated with short-term exposure to PM2.5 that 
have observed associations with a continuum of effects ranging from 
subtle changes in indicators of cardiovascular health to serious 
clinical events, such as increased hospitalizations and emergency 
department visits due to cardiovascular disease and cardiovascular 
mortality.\425\
---------------------------------------------------------------------------

    \425\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F, Chapter 2 (Section 2.3.1 
and 2.3.2) and Chapter 6.
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    As detailed in the 2009 p.m. ISA, extended analyses of seminal 
epidemiological studies, as well as more recent epidemiological studies 
conducted in the U.S. and abroad, provide strong evidence of 
respiratory-related morbidity effects associated with long-term 
PM2.5 exposure. The strongest evidence for respiratory-
related effects is from studies that evaluated decrements in lung 
function growth (in children), increased respiratory symptoms, and 
asthma development. The strongest evidence from short-term 
PM2.5 exposure studies has been observed for increased 
respiratory-related emergency department visits and hospital admissions 
for chronic obstructive pulmonary disease (COPD) and respiratory 
infections.\426\
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    \426\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F, Chapter 2 (Section 2.3.1 
and 2.3.2) and Chapter 6.
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    The body of scientific evidence detailed in the 2009 p.m. ISA is 
still limited with respect to associations between long-term 
PM2.5 exposures and developmental and reproductive effects 
as well as cancer, mutagenic, and genotoxic effects. The strongest 
evidence for an association between PM2.5 and developmental 
and reproductive effects comes from epidemiological studies of low 
birth weight and infant mortality, especially due to respiratory causes 
during the post-neonatal period (i.e., 1 month to 12 months of 
age).\427\ With regard to cancer effects, ``[m]ultiple epidemiologic 
studies have shown a consistent positive association between 
PM2.5 and lung cancer mortality, but studies have generally 
not reported associations between PM2.5 and lung cancer 
incidence.'' \428\
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    \427\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F, Chapter 2 (Section 2.3.1 
and 2.3.2) and Chapter 7.
    \428\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F. pg 2-13
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    Specific groups within the general population are at increased risk 
for experiencing adverse health effects related to PM 
exposures.429 430 431 432 The evidence detailed in the 2009 
p.m. ISA expands our understanding of previously identified at-risk 
populations and lifestages (i.e., children, older adults, and 
individuals with pre-existing heart and lung disease) and supports the 
identification of additional at-risk populations (e.g., persons with 
lower socioeconomic status, genetic differences). Additionally, there 
is emerging, though still limited, evidence for additional potentially 
at-risk populations and lifestages, such as those with diabetes, people 
who are obese, pregnant women, and the developing fetus.\433\
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    \429\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F. Chapter 8 and Chapter 2.
    \430\ 77 FR 38890, June 29, 2012.
    \431\ 78 FR 3104, January 15, 2013.
    \432\ U.S. EPA. (2011). Policy Assessment for the Review of the 
PM NAAQS. U.S. Environmental Protection Agency, Washington, DC, EPA/
452/R-11-003. Section 2.2.1.
    \433\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F. Chapter 8 and Chapter 2 
(Section 2.4.1).
---------------------------------------------------------------------------

    For PM10-2.5, the 2009 p.m. ISA concluded that available 
evidence was suggestive of a causal relationship between short-term 
exposures to PM10-2.5 and cardiovascular effects (e.g., 
hospital admissions and ED visits, changes in cardiovascular function), 
respiratory effects (e.g., ED visits and hospital admissions, increase 
in markers of pulmonary inflammation), and premature mortality. Data 
were inadequate to draw conclusions regarding the relationships between 
long-term exposure to PM10-2.5 and various health 
effects.434 435 436
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    \434\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F. Section 2.3.4 and Table 
2-6.
    \435\ 78 FR 3167-3168, January 15, 2013.
    \436\ 77 FR 38947-38951, June 29, 2012.

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[[Page 40421]]

    For ultrafine particles, the 2009 p.m. ISA concluded that the 
evidence was suggestive of a causal relationship between short-term 
exposures and cardiovascular effects, including changes in heart rhythm 
and vasomotor function (the ability of blood vessels to expand and 
contract). It also concluded that there was evidence suggestive of a 
causal relationship between short-term exposure to ultrafine particles 
and respiratory effects, including lung function and pulmonary 
inflammation, with limited and inconsistent evidence for increases in 
ED visits and hospital admissions. Data were inadequate to draw 
conclusions regarding the relationship between short-term exposure to 
ultrafine particle and additional health effects including premature 
mortality as well as long-term exposure to ultrafine particles and all 
health outcomes evaluated.437 438
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    \437\ U.S. EPA. (2009). Integrated Science Assessment for 
Particulate Matter (Final Report). U.S. Environmental Protection 
Agency, Washington, DC, EPA/600/R-08/139F. Section 2.3.5 and Table 
2-6.
    \438\ 78 FR 3121, January 15, 2013.
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(2) Ozone
(a) Background
    Ground-level ozone pollution is typically formed through reactions 
involving VOC and NOX in the lower atmosphere in the 
presence of sunlight. These pollutants, often referred to as ozone 
precursors, are emitted by many types of pollution sources, such as 
highway and nonroad motor vehicles and engines, power plants, chemical 
plants, refineries, makers of consumer and commercial products, 
industrial facilities, and smaller area sources.
    The science of ozone formation, transport, and accumulation is 
complex. Ground-level ozone is produced and destroyed in a cyclical set 
of chemical reactions, many of which are sensitive to temperature and 
sunlight. When ambient temperatures and sunlight levels remain high for 
several days and the air is relatively stagnant, ozone and its 
precursors can build up and result in more ozone than typically occurs 
on a single high-temperature day. Ozone and its precursors can be 
transported hundreds of miles downwind from precursor emissions, 
resulting in elevated ozone levels even in areas with low local VOC or 
NOX emissions.
(b) Health Effects of Ozone
    This section provides a summary of the health effects associated 
with exposure to ambient concentrations of ozone.\439\ The information 
in this section is based on the information and conclusions in the 
February 2013 Integrated Science Assessment for Ozone (Ozone ISA).\440\ 
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.\441\ The 
discussion below 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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    \439\ Human exposure to ozone varies over time due to changes in 
ambient ozone concentration and because people move between 
locations which have notable different ozone concentrations. Also, 
the amount of ozone delivered to the lung is not only influenced by 
the ambient concentrations but also by the individuals breathing 
route and rate.
    \440\ U.S. EPA. Integrated Science Assessment of Ozone and 
Related Photochemical Oxidants (Final Report). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-10/076F, 2013. The ISA 
is available at http://cfpub.epa.gov/ncea/isa/recordisplay.cfm?deid=247492#Download.
    \441\ 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.
---------------------------------------------------------------------------

    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 cardiovascular effects, including decreased 
cardiac function and increased vascular disease, and total mortality 
are likely to be causally associated with short-term exposure to ozone 
and that evidence is suggestive of a causal relationship between 
central nervous system effects 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, 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 lung 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. 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. 
Additional children's vulnerability and susceptibility factors are 
listed in Section XIV.
(3) Nitrogen Oxides
(a) Background
    Nitrogen dioxide (NO2) is a member of the NOX 
family of gases. Most NO2 is formed in the air through the 
oxidation of nitric oxide (NO) emitted when fuel is burned at a high 
temperature. NO2 and its gas phase oxidation products can 
dissolve in water droplets and further oxidize to form nitric acid 
which reacts with ammonia to form nitrates, which are important 
components of ambient PM. The health effects of ambient PM are 
discussed in Section VIII.B.1.b of this preamble. NOX and 
VOC are the two major precursors of ozone. The health effects of ozone 
are covered in Section VIII.B.2.b.
(b) Health Effects of Nitrogen Oxides
    The most recent review of the health effects of oxides of nitrogen 
completed by EPA can be found in the 2008 Integrated Science Assessment 
for Oxides of Nitrogen--Health Criteria (Oxides of Nitrogen ISA).\442\ 
EPA concluded that the findings of epidemiological, controlled human 
exposure, and animal toxicological

[[Page 40422]]

studies provided evidence that was sufficient to infer a likely causal 
relationship between respiratory effects and short-term NO2 
exposure. The 2008 ISA for Oxides of Nitrogen concluded that the 
strongest evidence for such a relationship comes from epidemiological 
studies of respiratory effects including increased respiratory 
symptoms, emergency department visits, and hospital admissions. Based 
on both short- and long-term exposure studies, the 2008 ISA for Oxides 
of Nitrogen concluded that individuals with preexisting pulmonary 
conditions (e.g., asthma or COPD), children, and older adults are 
potentially at greater risk of NO2-related respiratory 
effects. Based on findings from controlled human exposure studies, the 
2008 ISA for Oxides of Nitrogen also drew two broad conclusions 
regarding airway responsiveness following NO2 exposure. 
First, the ISA concluded that NO2 exposure may enhance the 
sensitivity to allergen-induced decrements in lung function and 
increase the allergen-induced airway inflammatory response following 
30-minute exposures of asthmatic adults to NO2 
concentrations as low as 260 ppb.\443\ Second, exposure to 
NO2 was found to enhance the inherent responsiveness of the 
airway to subsequent nonspecific challenges in controlled human 
exposure studies of healthy and asthmatic adults. Statistically 
significant increases in nonspecific airway responsiveness were 
reported for asthmatic adults following 30-minute exposures to 200-300 
ppb NO2 and following 1-hour exposures to 100 ppb 
NO2.\444\ Enhanced airway responsiveness could have 
important clinical implications for asthmatics since transient 
increases in airway responsiveness following NO2 exposure 
have the potential to increase symptoms and worsen asthma control. 
Together, the epidemiological and experimental data sets formed a 
plausible, consistent, and coherent description of a relationship 
between NO2 exposures and an array of adverse health effects 
that range from the onset of respiratory symptoms to hospital 
admissions and emergency department visits for respiratory causes, 
especially asthma.\445\
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    \442\ U.S. EPA (2008). Integrated Science Assessment for Oxides 
of Nitrogen--Health Criteria (Final Report). EPA/600/R-08/071. 
Washington, DC: U.S. EPA.
    \443\ U.S. EPA (2008). Integrated Science Assessment for Oxides 
of Nitrogen--Health Criteria (Final Report). EPA/600/R-08/071. 
Washington, DC: U.S. EPA, Section 3.1.3.1.
    \444\ U.S. EPA (2008). Integrated Science Assessment for Oxides 
of Nitrogen--Health Criteria (Final Report). EPA/600/R-08/071. 
Washington, DC: U.S.EPA, Section 3.1.3.2.
    \445\ U.S. EPA (2008). Integrated Science Assessment for Oxides 
of Nitrogen--Health Criteria (Final Report). EPA/600/R-08/071. 
Washington, DC: U.S. EPA, Section 3.1.7.
---------------------------------------------------------------------------

    In evaluating a broader range of health effects, the 2008 ISA for 
Oxides of Nitrogen concluded evidence was ``suggestive but not 
sufficient to infer a causal relationship'' between short-term 
NO2 exposure and premature mortality and between long-term 
NO2 exposure and respiratory effects. The latter was based 
largely on associations observed between long-term NO2 
exposure and decreases in lung function growth in children. 
Furthermore, the 2008 ISA for Oxides of Nitrogen concluded that 
evidence was ``inadequate to infer the presence or absence of a causal 
relationship'' between short-term NO2 exposure and 
cardiovascular effects as well as between long-term NO2 
exposure and cardiovascular effects, reproductive and developmental 
effects, premature mortality, and cancer.\446\ The conclusions for 
these health effect categories were informed by uncertainties in the 
evidence base such as the independent effects of NO2 
exposure within the broader mixture of traffic-related pollutants, 
limited evidence from experimental studies, and/or an overall limited 
literature base.

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

    \446\ U.S. EPA (2008). Integrated Science Assessment for Oxides 
of Nitrogen--Health Criteria (Final Report). EPA/600/R-08/071. 
Washington, DC: U.S. EPA.
---------------------------------------------------------------------------

(4) Sulfur Oxides
(a) Background
    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 derived), 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. The health effects of ambient 
PM are discussed in Section VIII.B.1.b of this preamble.
(b) Health Effects of SO2
    Information on the health effects of SO2 can be found in 
the 2008 Integrated Science Assessment for Sulfur Oxides--Health 
Criteria (SOX ISA).\447\ Short-term peaks of SO2 
have long been known to cause adverse respiratory health effects, 
particularly among individuals with asthma. In addition to those with 
asthma (both children and adults), potentially sensitive groups include 
all children and the elderly. During periods of elevated ventilation, 
asthmatics may experience symptomatic bronchoconstriction within 
minutes of exposure. Following an extensive evaluation of health 
evidence from epidemiologic and laboratory studies, EPA concluded that 
there is a causal relationship between respiratory health effects and 
short-term exposure to SO2. Separately, based on an 
evaluation of the epidemiologic evidence of associations between short-
term exposure to SO2 and mortality, EPA concluded that the 
overall evidence is suggestive of a causal relationship between short-
term exposure to SO2 and mortality. Additional information 
on the health effects of SO2 is available in Chapter 
6.1.1.4.2 of the RIA.

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

    \447\ U.S. EPA. (2008). Integrated Science Assessment (ISA) for 
Sulfur Oxides--Health Criteria (Final Report). EPA/600/R-08/047F. 
Washington, DC: U.S. Environmental Protection Agency.
---------------------------------------------------------------------------

(5) Carbon Monoxide
(a) Background
    Carbon monoxide (CO) is a colorless, odorless gas emitted from 
combustion processes. Nationally and, particularly in urban areas, the 
majority of CO emissions to ambient air come from mobile sources.
(b) Health Effects of Carbon Monoxide
    Information on the health effects of CO can be found in the January 
2010 Integrated Science Assessment for Carbon Monoxide (CO ISA).\448\ 
The CO ISA concludes that ambient concentrations of CO are associated 
with a number of adverse health effects.\449\ This section provides a 
summary of the health effects associated with exposure to ambient 
concentrations of CO.\450\
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    \448\ 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. Available at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=218686.
    \449\ 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.
    \450\ Personal exposure includes contributions from many 
sources, and in many different environments. Total personal exposure 
to CO includes both ambient and nonambient 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 show associations between short-term CO 
exposure and

[[Page 40423]]

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 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. The epidemiologic studies provide limited 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 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 
ambient 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 studies provide evidence of an 
association 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 copollutant 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.
(6) Diesel Exhaust
(a) Background
    Diesel exhaust consists of a complex mixture composed of 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 (< 2.5 [micro]m), of which a 
significant fraction is ultrafine particles (< 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, accelerate, decelerate), 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 lifetime for some of the 
compounds present in diesel exhaust ranges from hours to days.
(b) Health Effects of 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.451 452 A number of 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) had 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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    \451\ 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.
    \452\ 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.
---------------------------------------------------------------------------

    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.
    Non-cancer 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 [mu]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

[[Page 40424]]

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. EPA 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 noted 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 [mu]g/m\3\. In 2012, EPA revised 
the annual PM2.5 NAAQS to 12 [mu]g/m\3\. 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.
    Since 2002, several new studies have been published which continue 
to report increased lung cancer risk with occupational exposure to 
diesel exhaust from older engines. Of particular note since 2011 are 
three new epidemiology studies which have examined lung cancer in 
occupational populations, for example, truck drivers, underground 
nonmetal miners and other diesel motor related occupations. These 
studies reported increased risk of lung cancer with exposure to diesel 
exhaust with evidence of positive exposure-response relationships to 
varying degrees.453 454 455 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 reinforces 
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 since the newer engines have large 
reductions in the emission constituents compared to older technology 
diesel engines.
---------------------------------------------------------------------------

    \453\ 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.
    \454\ 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.
    \455\ 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.
---------------------------------------------------------------------------

    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.'' \456\ This designation was an update from its 1988 evaluation 
that considered the evidence to be indicative of a ``probable human 
carcinogen.''
---------------------------------------------------------------------------

    \456\ 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].
---------------------------------------------------------------------------

(7) Air Toxics
(a) Background
    Heavy-duty vehicle emissions contribute to ambient levels of air 
toxics known or suspected as human or animal carcinogens, or that have 
noncancer health effects. The population experiences an elevated risk 
of cancer and other noncancer health effects from exposure to the class 
of pollutants known collectively as ``air toxics.'' \457\ These 
compounds include, but are not limited to, benzene, 1,3-butadiene, 
formaldehyde, acetaldehyde, acrolein, polycyclic organic matter, and 
naphthalene. These compounds were identified as national or regional 
risk drivers or contributors in the 2005 National-scale Air Toxics 
Assessment and have significant inventory contributions from mobile 
sources.\458\
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    \457\ U.S. EPA. (2011) Summary of Results for the 2005 National-
Scale Assessment. www.epa.gov/ttn/atw/nata2005/05pdf/sum_results.pdf.
    \458\ U.S. EPA (2011) 2005 National-Scale Air Toxics Assessment. 
http://www.epa.gov/ttn/atw/nata2005.
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(b) 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.459 460 461 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 as the unit risk 
estimate (URE) for benzene.462 463 The International Agency 
for Research on Carcinogens (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.464 465
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    \459\ U.S. EPA. (2000). Integrated Risk Information System File 
for Benzene. This material is available electronically at: http://www.epa.gov/iris/subst/0276.htm.
    \460\ International Agency for Research on Cancer, 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.
    \461\ 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.
    \462\ A unit risk estimate is defined as the increase in the 
lifetime risk of an individual who is exposed for a lifetime to 1 
[mu]g/m3 benzene in air.
    \463\ U.S. EPA. (2000). Integrated Risk Information System File 
for Benzene. This material is available electronically at: http://www.epa.gov/iris/subst/0276.htm.
    \464\ International Agency for Research on Cancer (IARC). 
(1987). Monographs on the evaluation of carcinogenic risk of 
chemicals to humans, Volume 29, Supplement 7, Some industrial 
chemicals and dyestuffs, World Health Organization, Lyon, France.
    \465\ NTP. (2014). 13th Report on Carcinogens. Research Triangle 
Park, NC: U.S. Department of Health and Human Services, Public 
Health Service, National Toxicology Program.
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    A number of adverse noncancer health effects including blood 
disorders, such as pre leukemia and aplastic anemia, have also been 
associated with long-term exposure to benzene.466 467

[[Page 40425]]

The most sensitive noncancer effect observed in humans, based on 
current data, is the depression of the absolute lymphocyte count in 
blood.468 469 EPA's inhalation reference concentration (RfC) 
for benzene is 30 [mu]g/m\3\. The RfC is based on suppressed absolute 
lymphocyte counts seen in humans under occupational exposure 
conditions. In addition, recent work, including studies sponsored by 
the Health Effects Institute, provides evidence that biochemical 
responses are occurring at lower levels of benzene exposure than 
previously known.470 471 472 473 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 
exposure to benzene is 29 [mu]g/m\3\ for 1-14 days 
exposure.474 475
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    \466\ Aksoy, M. (1989). Hematotoxicity and carcinogenicity of 
benzene. Environ. Health Perspect. 82: 193-197.
    \467\ Goldstein, B.D. (1988). Benzene toxicity. Occupational 
medicine. State of the Art Reviews. 3: 541-554.
    \468\ 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.
    \469\ 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 http://www.epa.gov/iris/subst/0276.htm.
    \470\ 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.
    \471\ 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.
    \472\ Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et al. 
(2004). Hematotoxically in Workers Exposed to Low Levels of Benzene. 
Science 306: 1774-1776.
    \473\ 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.
    \474\ 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.
    \475\ 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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(c) 1,3-Butadiene
    EPA has characterized 1,3-butadiene as carcinogenic to humans by 
inhalation.476 477 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.478 479 480 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 
[mu]g/m\3\.\481\ 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.\482\ Based on this critical effect 
and the benchmark concentration methodology, an RfC for chronic health 
effects was calculated at 0.9 ppb (approximately 2 [mu]g/m\3\).
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    \476\ 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 
http://www.epa.gov/iris/supdocs/buta-sup.pdf.
    \477\ 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 http://www.epa.gov/iris/subst/0139.htm.
    \478\ 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 and Volume 97 (in 
preparation), World Health Organization, Lyon, France.
    \479\ 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.
    \480\ NTP. (2014). 13th Report on Carcinogens. Research Triangle 
Park, NC: U.S. Department of Health and Human Services, Public 
Health Service, National Toxicology Program.
    \481\ 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 http://www.epa.gov/iris/subst/0139.htm.
    \482\ 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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(d) Formaldehyde
    In 1991, EPA concluded that formaldehyde is a carcinogen based on 
nasal tumors in animal bioassays.\483\ An Inhalation URE for cancer and 
a Reference Dose for oral noncancer effects were developed by the 
agency and posted on the IRIS database. Since that time, the National 
Toxicology Program (NTP) and International Agency for Research on 
Cancer (IARC) have concluded that formaldehyde is a known human 
carcinogen.484 485
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    \483\ EPA. Integrated Risk Information System. Formaldehyde 
(CASRN 50-00-0) http://www.epa.gov/iris/subst/0419/htm.
    \484\ NTP. (2014). 13th Report on Carcinogens. Research Triangle 
Park, NC: U.S. Department of Health and Human Services, Public 
Health Service, National Toxicology Program.
    \485\ 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 lymph hematopoietic malignancies 
among workers exposed to formaldehyde.486 487 488 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.\489\ Extended follow-up of a cohort of British 
chemical workers did not report evidence of an increase in 
nasopharyngeal or lymph hematopoietic cancers, but a continuing 
statistically significant excess in lung cancers was reported.\490\ 
Finally, a study of embalmers reported formaldehyde exposures to be 
associated with an increased risk of myeloid leukemia but not brain 
cancer.\491\
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    \486\ 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.
    \487\ 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.
    \488\ Beane Freeman, L.E.; Blair, A.; Lubin, J.H.; Stewart, 
P.A.; Hayes, R.B.; Hoover, R.N.; Hauptmann, M. 2009. Mortality from 
lymph hematopoietic malignancies among workers in formaldehyde 
industries: The National Cancer Institute cohort. J. National Cancer 
Inst. 101: 751-761.
    \489\ Pinkerton, L.E. 2004. Mortality among a cohort of garment 
workers exposed to formaldehyde: An update. Occup. Environ. Med. 61: 
193-200.
    \490\ Coggon, D., E.C. Harris, J. Poole, K.T. Palmer. 2003. 
Extended follow-up of a cohort of British chemical workers exposed 
to formaldehyde. J National Cancer Inst. 95:1608-1615.
    \491\ 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 lymph hematopoietic malignancies 
and brain cancer among embalmers exposed to formaldehyde. Journal of 
the National Cancer Institute 101:1696-1708.

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[[Page 40426]]

    Health effects of formaldehyde in addition to cancer were reviewed 
by the Agency for Toxics Substances and Disease Registry in 1999 \492\ 
and supplemented in 2010,\493\ and by the World Health 
Organization.\494\ 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, 
pulmonary function, nasal histopathology, and immune system effects. In 
addition, research on reproductive and developmental effects and 
neurological effects were discussed along with several studies that 
suggest that formaldehyde may increase the risk of asthma--particularly 
in the young.
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    \492\ ATSDR. 1999. Toxicological Profile for Formaldehyde, U.S. 
Department of Health and Human Services (HHS), July 1999.
    \493\ ATSDR. 2010. Addendum to the Toxicological Profile for 
Formaldehyde. U.S. Department of Health and Human Services (HHS), 
October 2010.
    \494\ IPCS. 2002. Concise International Chemical Assessment 
Document 40. Formaldehyde. World Health Organization.
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    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 in June 2010.\495\ 
The 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.\496\ EPA is currently developing a 
new draft assessment in response to this review.
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    \495\ 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/irs_drats/recordisplay.cfm?deid=223614.
    \496\ 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.
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(e) 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.\497\ The URE in 
IRIS for acetaldehyde is 2.2 x 10-6 per [mu]g/m\3\.\498\ 
Acetaldehyde is reasonably anticipated to be a human carcinogen by the 
U.S. DHHS in the 13th Report on Carcinogens and is classified as 
possibly carcinogenic to humans (Group 2B) by the 
IARC.499 500 EPA is currently conducting a reassessment of 
cancer risk from inhalation exposure to acetaldehyde.
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    \497\ 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 http://www.epa.gov/iris/subst/0290.htm.
    \498\ U.S. EPA (1991). Integrated Risk Information System File 
of Acetaldehyde. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm.
    \499\ NTP. (2014). 13th Report on Carcinogens. Research Triangle 
Park, NC: U.S. Department of Health and Human Services, Public 
Health Service, National Toxicology Program.
    \500\ 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.\501\ In 
short-term (4 week) rat studies, degeneration of olfactory epithelium 
was observed at various concentration levels of acetaldehyde 
exposure.502 503 Data from these studies were used by EPA to 
develop an inhalation reference concentration of 9 [mu]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.\504\ The agency is 
currently conducting a reassessment of the health hazards from 
inhalation exposure to acetaldehyde.
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    \501\ U.S. EPA (1991). Integrated Risk Information System File 
of Acetaldehyde. This material is available electronically at http://www.epa.gov/iris/subst/0290.htm.
    \502\ 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 http://www.epa.gov/iris/subst/0364.htm.
    \503\ 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.
    \504\ 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.
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(f) 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.\505\ The IARC determined in 
1995 that acrolein was not classifiable as to its carcinogenicity in 
humans.\506\
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    \505\ 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 http://www.epa.gov/iris/subst/0364.htm.
    \506\ International Agency for Research on Cancer (IARC). 
(1995). Monographs on the evaluation of carcinogenic risk of 
chemicals to humans, Volume 63. Dry cleaning, some chlorinated 
solvents and other industrial chemicals, 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.\507\ The agency has developed an RfC for acrolein of 0.02 
[mu]g/m\3\ and an RfD of 0.5 [mu]g/kg-day.\508\ EPA is considering 
updating the acrolein assessment with data that have become available 
since the 2003 assessment was completed.
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    \507\ 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.
    \508\ 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.
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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.\509\ 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.\510\ Studies in humans indicate that levels as low as 0.09 
ppm (0.21 mg/m\3\) 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

[[Page 40427]]

hyper-responsiveness. Based on animal data (more pronounced respiratory 
irritancy in mice with allergic airway disease in comparison to non-
diseased mice \511\) 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 [mu]g/m\3\ 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 [mu]g/m\3\ and 0.7 [mu]g/m\3\, 
respectively.\512\
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    \509\ 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: http://www.epa.gov/ncea/iris/toxreviews/0364tr.pdf.
    \510\ 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: http://www.epa.gov/ncea/iris/toxreviews/0364tr.pdf.
    \511\ Morris J.B., Symanowicz P.T., Olsen J.E., 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.
    \512\ 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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(g) Polycyclic Organic Matter
    The term polycyclic organic matter (POM) defines a broad class of 
compounds that includes the polycyclic aromatic hydrocarbon compounds 
(PAHs). One of these compounds, naphthalene, is discussed separately 
below. POM compounds are formed primarily from combustion and are 
present in the atmosphere in gas and particulate form. Cancer is the 
major concern from exposure to POM. Epidemiologic studies have reported 
an increase in lung cancer in humans exposed to diesel exhaust, coke 
oven emissions, roofing tar emissions, and cigarette smoke; all of 
these mixtures contain POM compounds.513 514 Animal studies 
have reported respiratory tract tumors from inhalation exposure to 
benzo[a]pyrene and alimentary tract and liver tumors from oral exposure 
to benzo[a]pyrene.\515\ In 1997 EPA classified seven PAHs 
(benzo[a]pyrene, benz[a]anthracene, chrysene, benzo[b]fluoranthene, 
benzo[k]fluoranthene, dibenz[a,h]anthracene, and indeno[1,2,3-
cd]pyrene) as Group B2, probable human carcinogens.\516\ Since that 
time, studies have found that maternal exposures to PAHs in a 
population of pregnant women were associated with several adverse birth 
outcomes, including low birth weight and reduced length at birth, as 
well as impaired cognitive development in preschool children (3 years 
of age).517 518 These and similar studies are being 
evaluated as a part of the ongoing IRIS assessment of health effects 
associated with exposure to benzo[a]pyrene.
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    \513\ Agency for Toxic Substances and Disease Registry (ATSDR). 
(1995). Toxicological profile for Polycyclic Aromatic Hydrocarbons 
(PAHs). Atlanta, GA: U.S. Department of Health and Human Services, 
Public Health Service. Available electronically at http://www.atsdr.cdc.gov/ToxProfiles/TP.asp?id=122&tid=25.
    \514\ U.S. EPA (2002). Health Assessment Document for Diesel 
Engine Exhaust. EPA/600/8-90/057F Office of Research and 
Development, Washington, DC. http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=29060.
    \515\ International Agency for Research on Cancer (IARC). 
(2012). Monographs on the Evaluation of the Carcinogenic Risk of 
Chemicals for Humans, Chemical Agents and Related Occupations. Vol. 
100F. Lyon, France.
    \516\ U.S. EPA (1997). Integrated Risk Information System File 
of indeno (1,2,3-cd) pyrene. Research and Development, National 
Center for Environmental Assessment, Washington, DC. This material 
is available electronically at http://www.epa.gov/ncea/iris/subst/0457.htm.
    \517\ Perera, F.P.; Rauh, V.; Tsai, W-Y.; et al. (2002). Effect 
of transplacental exposure to environmental pollutants on birth 
outcomes in a multiethnic population. Environ Health Perspect. 111: 
201-205.
    \518\ Perera, F.P.; Rauh, V.; Whyatt, R.M.; Tsai, W.Y.; Tang, 
D.; Diaz, D.; Hoepner, L.; Barr, D.; Tu, Y.H.; Camann, D.; Kinney, 
P. (2006). Effect of prenatal exposure to airborne polycyclic 
aromatic hydrocarbons on neurodevelopment in the first 3 years of 
life among inner-city children. Environ Health Perspect 114: 1287-
1292.
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(h) 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.\519\ Chronic 
(long term) exposure of workers and rodents to naphthalene has been 
reported to cause cataracts and retinal damage.\520\ EPA released an 
external review draft of a reassessment of the inhalation 
carcinogenicity of naphthalene based on a number of recent animal 
carcinogenicity studies.\521\ The draft reassessment completed external 
peer review.\522\ Based on external peer review comments received, a 
revised draft assessment that considers all routes of exposure, as well 
as cancer and noncancer effects, is under development. 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 National Toxicology Program 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.\523\ 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.\524\
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    \519\ 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 http://www.epa.gov/iris/subst/0436.htm.
    \520\ 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 http://www.epa.gov/iris/subst/0436.htm.
    \521\ 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 http://www.epa.gov/iris/subst/0436.htm.
    \522\ 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.
    \523\ NTP. (2014). 13th Report on Carcinogens. U.S. Department 
of Health and Human Services, Public Health Service, National 
Toxicology Program.
    \524\ 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 chronic non-cancer effects in 
animals, including abnormal cell changes and growth in respiratory and 
nasal tissues.\525\ 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 [mu]g/m\3\.\526\ The

[[Page 40428]]

ATSDR MRL for acute exposure to naphthalene is 0.6 mg/kg/day.
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    \525\ 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 http://www.epa.gov/iris/subst/0436.htm.
    \526\ 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 http://www.epa.gov/iris/subst/0436.htm.
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(i) Other Air Toxics
    In addition to the compounds described above, other compounds in 
gaseous hydrocarbon and PM emissions from motor vehicles will be 
affected by this action. Mobile source air toxic compounds that will 
potentially be impacted include ethylbenzene, propionaldehyde, toluene, 
and xylene. Information regarding the health effects of these compounds 
can be found in EPA's IRIS database.\527\
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    \527\ U.S. EPA Integrated Risk Information System (IRIS) 
database is available at: www.epa.gov/iris.
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(8) 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 such studies have been published in peer-reviewed 
journals, concluding that concentrations of CO, 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. 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 recent large-scale review of air quality measurements in 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.\528\ 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 the review article, results varied based on the 
method of statistical analysis used to determine the trend.
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    \528\ 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.
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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 aldehydes have high background 
concentrations as a result of photochemical breakdown of precursors 
from many different organic compounds. This can make detection of 
gradients around roadways and other primary emission sources difficult. 
However, several studies have measured aldehydes in multiple weather 
conditions, and found higher concentrations of many carbonyls downwind 
of roadways.529 530 These findings suggest a substantial 
roadway source of these carbonyls.
---------------------------------------------------------------------------

    \529\ Liu, W.; Zhang, J.; Kwon, J.l; et l. (2006). 
Concentrations and source characteristics of airborne carbonyl 
comlbs measured outside urban residences. J Air Waste Manage Assoc 
56: 1196-1204.
    \530\ 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 http://dx.doi.org.
---------------------------------------------------------------------------

    In the past 15 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.\531\ In 
addition, numerous studies have found adverse health effects associated 
with spending time in traffic, such as commuting or walking along high-
traffic roadways.532 533 534 535 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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    \531\ In the widely-used PubMed database of health publications, 
between January 1, 1990 and August 18, 2011, 605 publications 
contained the keywords ``traffic, pollution, epidemiology,'' with 
approximately half the studies published after 2007.
    \532\ 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.
    \533\ 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.
    \534\ 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.
    \535\ Dubowsky 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 as well. In 2010, an expert panel of the Health Effects 
Institute (HEI) published a review of hundreds of exposure, 
epidemiology, and toxicology studies.\536\ The panel rated how the 
evidence for each type of health outcome supported a conclusion of a 
causal association with traffic-associated air pollution as either 
``sufficient,'' ``suggestive but not sufficient,'' or ``inadequate and 
insufficient.'' The panel categorized evidence of a causal association 
for exacerbation of childhood asthma as ``sufficient.'' The panel 
categorized evidence of a causal association for new onset asthma as 
between ``sufficient'' and as ``suggestive but not sufficient.'' 
``Suggestive of a causal association'' was how the panel categorized 
evidence linking traffic-associated air pollutants with exacerbation of 
adult respiratory symptoms and lung function decrement. It categorized 
as ``inadequate and insufficient'' evidence of a causal relationship 
between traffic-related air pollution and health care utilization for 
respiratory problems, new onset adult asthma, chronic obstructive 
pulmonary disease (COPD), nonasthmatic respiratory allergy, and cancer 
in adults and children. Other literature reviews have been published 
with conclusions generally similar to the HEI 
panel's.537 538 539 540 However, researchers from the U.S. 
Centers for Disease Control and Prevention (CDC) recently 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.\541\
---------------------------------------------------------------------------

    \536\ Health Effects Institute Panel on the Health Effects of 
Traffic-Related Air Pollution. (2010). Traffic-related air 
pollution: A critical review of the literature on emissions, 
exposure, and health effects. HEI Special Report 17. Available at 
http://www.healtheffects.org.
    \537\ 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.
    \538\ 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.
    \539\ 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.
    \540\ Raaschou-Nielsen, O.; Reynolds, P. (2006). Air pollution 
and childhood cancer: A review of the epidemiological literature. 
Int J Cancer 118: 2920-9.
    \541\ Boothe, V.L.; 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.
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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).542 543 544 545
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    \542\ 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.
    \543\ 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. doi: 10.1093/aje/
kwm308. [Online at http://dx.doi.org].
    \544\ Power, M.C.; Weisskopf, M.G.; Alexeef, S.E.; et al. 
(2011). Traffic-related air pollution and cognitive function in a 
cohort of older men. Environ Health Perspect 2011: 682-687.
    \545\ Wu, J.; Wilhelm, M.; Chung, J.; et al. (2011). Comparing 
exposure assessment methods for traffic-related air pollution in an 
adverse pregnancy outcome study. Environ Res 111: 685-6692.

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[[Page 40429]]

    In addition to health outcomes, particularly cardiopulmonary 
effects, conclusions of numerous studies suggest mechanisms by which 
traffic-related air pollution affects health. Numerous studies indicate 
that near-roadway exposures may increase systemic inflammation, 
affecting organ systems, including blood vessels and 
lungs.546 547 548 549 Long-term exposures in near-road 
environments have been associated with inflammation-associated 
conditions, such as atherosclerosis and asthma.550 551 552
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    \546\ Riediker, M. (2007). Cardiovascular effects of fine 
particulate matter components in highway patrol officers. Inhal 
Toxicol 19: 99-105. doi: 10.1080/08958370701495238. Available at 
http://dx.doi.org.
    \547\ Alexeef, S.E.; 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. Available at http://dx.doi.org.
    \548\ Eckel. S.P.; Berhane, K.; Salam, M.T.; et al. (2011). 
Traffic-related pollution exposure and exhaled nitric oxide in the 
Children's Health Study. Environ Health Perspect (IN PRESS). 
doi:10.1289/ehp.1103516. Available at http://dx.doi.org.
    \549\ 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].
    \550\ Adar, S.D.; Klein, R.; Klein, E.K.; et al. (2010). Air 
pollution and the microvasculatory: A cross-sectional assessment of 
in vivo retinal images in the population-based Multi-Ethnic Study of 
Atherosclerosis. PLoS Med 7(11): E1000372. doi:10.1371/
journal.pmed.1000372. Available at http://dx.doi.org.
    \551\ Kan, H.; Heiss, G.; Rose, K.M.; et al. (2008). Proxpective 
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. doi:10.1289/ehp.11290. 
Available at http://dx.doi.org.
    \552\ 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.553 554 555
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    \553\ 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 (In press).
    \554\ 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.
    \555\ 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. According to the 2009 American 
Housing Survey, over 22 million homes (17.0 percent of all U.S. housing 
units) were located within 300 feet of an airport, railroad, or highway 
with four or more lanes. This corresponds to a population of more than 
50 million U.S. residents in close proximity to high-traffic roadways 
or other transportation sources. Based on 2010 Census data, a 2013 
publication estimated that 19 percent of the U.S. population (over 59 
million people) lived within 500 meters of roads with at least 25,000 
annual average daily traffic (AADT), while about 3.2 percent of the 
population lived within 100 meters (about 300 feet) of such roads.\556\ 
Another 2013 study estimated that 3.7 percent of the U.S. population 
(about 11.3 million people) lived within 150 meters (about 500 feet) of 
interstate highways, or other freeways and expressways.\557\ As 
discussed in Section VIII. B. (9), on average, populations near major 
roads have higher fractions of minority residents and lower 
socioeconomic status. Furthermore, 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.
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    \556\ Rowangould, G.M. (2013) A census of the U.S. near-roadway 
population: Public health and environmental justice considerations. 
Transportation Research Part D 25: 59-67.
    \557\ Boehmer, T.K.; Foster, S.L.; Henry, J.R.; Woghiren-
Akinnifesi, E.L.; Yip, F.Y. (2013) Residential proximity to major 
highways--United States, 2010. Morbidity and Mortality Weekly Report 
62(3); 46-50.
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    In light of these concerns, EPA has required and is working with 
states to ensure that air quality monitors be placed near high-traffic 
roadways for determining NAAQS compliance for CO, NO2, and 
PM2.5 (in addition to those existing monitors located in 
neighborhoods and other locations farther away from pollution sources). 
Near-roadway monitors for NO2 begin operation between 2014 
and 2017 in Core Based Statistical Areas (CBSAs) with population of at 
least 500,000. Monitors for CO and PM2.5 begin operation 
between 2015 and 2017. These monitors will further our understanding of 
exposure in these locations.
    EPA and DOT continue to research near-road air quality, including 
the types of pollutants found in high concentrations near major roads 
and health problems associated with the mixture of pollutants near 
roads.
(9) Environmental Justice
    Environmental justice (EJ) is a principle asserting that all people 
deserve fair treatment and meaningful involvement with respect to 
environmental laws, regulations, and policies. EPA seeks to provide the 
same degree of protection from environmental health hazards for all 
people. DOT shares this goal and is informed about the potential 
environmental impacts of its rulemakings through its NEPA process (see 
NHTSA's DEIS). As referenced below, numerous studies have found that 
some environmental hazards are more prevalent in areas where racial/
ethnic minorities and people with low socioeconomic status (SES), 
represent a higher fraction of the population compared with the general 
population.
    As discussed in Section VIII. B. (8) of this document and NHTSA's 
DEIS, concentrations of many air pollutants are elevated near high-
traffic roadways. If minority populations and low-income populations 
disproportionately live near such roads, then an issue of EJ may be 
present. We reviewed existing scholarly literature examining the 
potential for disproportionate exposure among minorities and people 
with low SES and we conducted our own evaluation of two national 
datasets: The U.S. Census Bureau's American Housing Survey for calendar 
year 2009 and the U.S. Department of Education's database of school 
locations.
    Publications that address EJ issues generally report that 
populations living near major roadways (and other types of 
transportation infrastructure) tend to be composed of larger fractions 
of nonwhite residents. People living in neighborhoods near such sources 
of air pollution also tend to be lower in income than people living 
elsewhere. Numerous studies evaluating the demographics and 
socioeconomic status of populations or schools near roadways have found 
that they include a greater percentage of minority residents, as well 
as lower SES (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

[[Page 40430]]

State of California 558 559 560 561 562 563 Such disparities 
may be due to multiple factors.\564\
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    \558\ Marshall, J.D. (2008) Environmental inequality: Air 
pollution exposures in California's South Coast Air Basin.
    \559\ 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 [Online at http://dx.doi.org].
    \560\ 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 [Online at http://dx.doi.org].
    \561\ Green, R.S.; Smorodinsky, S.; Kim, J.J.; McLaughlin, R.; 
Ostro, B. (2003) Proximity of California public schools to busy 
roads. Environ Health Perspect 112: 61-66. doi:10.1289/ehp.6566 
[http://dx.doi.org].
    \562\ 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 [Online at http://dx.doi.org].
    \563\ 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.
    \564\ Depro, B.; Timmins, C. (2008) Mobility and environmental 
equity: Do housing choices determine exposure to air pollution? 
North Caroline State University Center for Environmental and 
Resource Economic Policy.
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    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.565 566 567 568 Household-level stressors such as 
parental smoking and relationship stress also may increase 
susceptibility to the adverse effects of air 
pollution.569 570
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    \565\ 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 [Online at http://dx.doi.org].
    \566\ 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 [Online at http://dx.doi.org].
    \567\ 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.
    \568\ 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 [Online at http://dx.doi.org].
    \569\ Lewis, A.S.; Sax, S.N.; Wason, S.C.; Campleman, S.L (2011) 
Non-chemical stressors and cumulative risk assessment: an overview 
of current initiatives and potential air pollutant interactions. Int 
J Environ Res Public Health 8: 2020-2073. Doi:10.3390/ijerph8062020 
[Online at http://dx.doi.org].
    \570\ Rosa, M.J.; Jung, K.H.; Perzanowski, M.S.; Kelvin, E.A.; 
Darling, K.W.; Camann, D.E.; Chillrud, S.N.; Whyatt, R.M.; Kinney, 
P.L.; Perera, F.P.; Miller, R.L (2010) Prenatal exposure to 
polycyclic aromatic hydrocarbons, environmental tobacco smoke and 
asthma. Respir Med (In press). doi:10.1016/j.rmed.2010.11.022 
[Online at http://dx.doi.org].
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    More recently, three publications report nationwide analyses that 
compare the demographic patterns of people who do or do not live near 
major roadways.571 572 573 All three of these studies found 
that people living near major roadways are more likely to be minorities 
or low in SES. They also found that the outcomes of their analyses 
varied between regions within the U.S. 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. In general, it found that higher density 
areas have higher proportions of low income and minority residents.
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    \571\ 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.
    \572\ 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.
    \573\ Boehmer, T.K.; Foster, S.L.; Henry, J.R.; Woghiren-
Akinnifesi, E.L.; Yip, F.Y. (2013) Residential proximity to major 
highways--United States, 2010. Morbidity and Mortality Weekly Report 
62(3): 46-50.
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    We analyzed two 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. The 
American Housing Survey (AHS) includes descriptive statistics of over 
70,000 housing units across the nation. The study survey is conducted 
every two years by the U.S. Census Bureau. The second database we 
analyzed was the U.S. Department of Education's Common Core of Data, 
which includes enrollment and location information for schools across 
the U.S.
    In analyzing the 2009 AHS, we focused on whether or not a housing 
unit was located within 300 feet of ``4-or-more lane highway, railroad, 
or airport.'' \574\ We analyzed whether there were differences between 
households in such locations compared with those in locations farther 
from these transportation facilities.\575\ We included other variables, 
such as land use category, region of country, and housing type. We 
found that homes with a nonwhite 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, 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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    \574\ 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 or 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.
    \575\ Bailey, C. (2011) Demographic and Social Patterns in 
Housing Units Near Large Highways and other Transportation Sources. 
Memorandum to docket.
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    In examining schools near major roadways, we examined 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.\576\ 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.\577\ We found that minority students were overrepresented at 
schools within 200 meters of the largest roadways, and that schools 
within 200 meters of the largest roadways also had higher than expected 
numbers of students eligible for free or reduced-price lunches. For 
example, Black students represent 22 percent of students at schools 
located within 200 meters of a primary road, whereas Black students 
represent 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, whereas Hispanic students represent 22 percent of 
students in all U.S. schools.
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    \576\ http://nces.ed.gov/ccd/.
    \577\ Pedde, M.; Bailey, C. (2011) Identification of Schools 
within 200 Meters of U.S. Primary and Secondary Roads. Memorandum to 
the docket.
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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 minority 
race, Hispanic

[[Page 40431]]

ethnicity, and/or low SES. The emission reductions from these proposed 
rules would likely result in widespread air quality improvements, but 
the impact on pollution levels in close proximity to roadways would be 
most direct. Thus, these proposed rules would likely help in mitigating 
the disparity in racial, ethnic, and economically-based exposures.

C. Environmental Effects of Non-GHG Pollutants

(1) Visibility
    Visibility can be defined as the degree to which the atmosphere is 
transparent to visible light.\578\ Visibility impairment is caused by 
light scattering and absorption by suspended particles and gases. 
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 2009 p.m. ISA.\579\
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    \578\ 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 Web site at http://www.nap.edu/books/0309048443/html/.
    \579\ 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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    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 (CAAA) provisions have resulted in 
substantial improvements in visibility, and will continue to do so in 
the future. Because trends in haze are closely associated with trends 
in particulate sulfate and nitrate due to the simple 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.\580\
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    \580\ U.S. Environmental Protection Agency (U.S. EPA). 2009. 
Integrated Science Assessment for Particulate Matter (Final Report). 
EPA-600-R-08-139F. National Center for Environmental Assessment--RTP 
Division. December. Available on the Internet at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546>.
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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.\581\ In 1999, EPA finalized the regional 
haze program to protect the visibility in Mandatory Class I Federal 
areas.\582\ There are 156 national parks, forests and wilderness areas 
categorized as Mandatory Class I Federal areas.\583\ 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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    \581\ See Section 169(a) of the Clean Air Act.
    \582\ 64 FR 35714, July 1, 1999.
    \583\ 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 protected by the Regional 
Haze Rule, 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). EPA revised 
the PM2.5 standards in December 2012 and established a 
target level of protection that is expected to be met through 
attainment of the existing secondary standards for PM2.5.
(2) Plant and Ecosystem Effects of Ozone
    The welfare effects of ozone 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 along a continuum to larger and larger spatial scales. 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 
species depending on the concentration level and the duration of the 
exposure.\584\ In those sensitive species,\585\ effects from repeated 
exposure to ozone throughout the growing season of the plant tend to 
accumulate, so that even low concentrations experienced for a longer 
duration have the potential to create chronic stress on 
vegetation.\586\ Ozone damage to sensitive 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.\587\ 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,\588\ 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.\589\
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    \584\ 73 FR 16486, March 27, 2008.
    \585\ 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.
    \586\ 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. Chapter 9, 
Section 9.3.4 of U.S. EPA, 2013 Integrated Science Assessment for 
Ozone and Related Photochemical Oxidants. Office of Research and 
Development/National Center for Environmental Assessment. U.S. 
Environmental Protection Agency. EPA 600/R-10/076F.
    \587\ 73 FR 16492, March 27, 2008.
    \588\ 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.
    \589\ 73 FR 16490-16497, March 27, 2008.
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    The Integrated Science Assessment (ISA) for Ozone presents more 
detailed information on how ozone effects vegetation and 
ecosystems.\590\ The ISA concludes that ambient concentrations of ozone 
are associated with a number of adverse welfare effects and 
characterizes the weight of evidence for different effects associated 
with ozone.\591\ The ISA concludes that visible foliar injury effects 
on vegetation,

[[Page 40432]]

reduced vegetation growth, reduced productivity in terrestrial 
ecosystems, reduced yield and quality of agricultural crops, and 
alteration of below-ground biogeochemical cycles are causally 
associated with exposure to ozone. It also concludes that reduced 
carbon sequestration in terrestrial ecosystems, alteration of 
terrestrial ecosystem water cycling, and alteration of terrestrial 
community composition are likely to be causally associated with 
exposure to ozone.
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    \590\ U.S. EPA. Integrated Science Assessment of Ozone and 
Related Photochemical Oxidants (Final Report). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-10/076F, 2013. The ISA 
is available at http://cfpub.epa.gov/ncea/isa/recordisplay.cfm?deid=247492#Download.
    \591\ 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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(3) Atmospheric Deposition
    Wet and dry deposition of ambient particulate matter delivers a 
complex mixture of metals (e.g., mercury, zinc, lead, nickel, aluminum, 
and cadmium), organic compounds (e.g., polycyclic organic matter, 
dioxins, and furans) and inorganic compounds (e.g., nitrate, sulfate) 
to terrestrial and aquatic ecosystems. The chemical form of the 
compounds deposited depends on a variety of factors including ambient 
conditions (e.g., temperature, humidity, oxidant levels) and the 
sources of the material. Chemical and physical transformations of the 
compounds occur in the atmosphere as well as the media onto which they 
deposit. These transformations in turn influence the fate, 
bioavailability and potential toxicity of these compounds.
    Adverse impacts to human health and the environment can occur when 
particulate matter is deposited to soils, water, and biota.\592\ 
Deposition of heavy metals or other toxics may lead to the human 
ingestion of contaminated fish, impairment of drinking water, damage to 
terrestrial, freshwater and marine ecosystem components, and limits to 
recreational uses. Atmospheric deposition has been identified as a key 
component of the environmental and human health hazard posed by several 
pollutants including mercury, dioxin and PCBs.\593\
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    \592\ U.S. EPA. Integrated Science Assessment for Particulate 
Matter (Final Report). U.S. Environmental Protection Agency, 
Washington, DC, EPA/600/R-08/139F, 2009.
    \593\ U.S. EPA. (2000). Deposition of Air Pollutants to the 
Great Waters: Third Report to Congress. Office of Air Quality 
Planning and Standards. EPA-453/R-00-0005.
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    The ecological effects of acidifying deposition and nutrient 
enrichment are detailed in the Integrated Science Assessment for Oxides 
of Nitrogen and Sulfur-Ecological Criteria.\594\ Atmospheric deposition 
of nitrogen and sulfur contributes to acidification, altering 
biogeochemistry and affecting animal and plant life in terrestrial and 
aquatic ecosystems across the United States. 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). In addition to the role nitrogen deposition plays in 
acidification, nitrogen deposition also leads to nutrient enrichment 
and altered biogeochemical cycling. 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. For a broader explanation of the topics treated here, refer to 
the description in Chapter 8.1.2.3 of the RIA.
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    \594\ NOX and SOX secondary ISA\594\ U.S. 
EPA. Integrated Science Assessment (ISA) for Oxides of Nitrogen and 
Sulfur Ecological Criteria (Final Report). U.S. Environmental 
Protection Agency, Washington, DC, EPA/600/R-08/082F, 2008.
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    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 stone, concrete and 
marble.\595\ 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).\596\ 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.
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    \595\ U.S. Environmental Protection Agency (U.S. EPA). 2009. 
Integrated Science Assessment for Particulate Matter (Final Report). 
EPA-600-R-08-139F. National Center for Environmental Assessment--RTP 
Division. December. Available on the Internet at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546>.
    \596\ 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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(4) Environmental Effects of Air Toxics
    Emissions from producing, transporting and combusting fuel 
contribute to ambient levels of pollutants that contribute to adverse 
effects on vegetation. Volatile organic compounds, some of which are 
considered air toxics, have long been suspected to play a role in 
vegetation damage.\597\ In laboratory experiments, a wide range of 
tolerance to VOCs has been observed.\598\ 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.\599\
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    \597\ U.S. EPA. (1991). Effects of organic chemicals in the 
atmosphere on terrestrial plants. EPA/600/3-91/001.
    \598\ 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.
    \599\ 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 nitrogen oxides.600 601 602
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    \600\ Viskari E-L. (2000). Epicuticular wax of Norway spruce 
needles as indicator of traffic pollutant deposition. Water, Air, 
and Soil Pollut. 121:327-337.
    \601\ Ugrekhelidze D, F Korte, G Kvesitadze. (1997). Uptake and 
transformation of benzene and toluene by plant leaves. Ecotox. 
Environ. Safety 37:24-29.
    \602\ 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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[[Page 40433]]

D. Air Quality Impacts of Non-GHG Pollutants

(1) Current Concentrations of Non-GHG Pollutants
    Nationally, levels of PM2.5, ozone, NOX, 
SOX, CO and air toxics are declining.\603\ However, as of 
July 2, 2014 approximately 147 million people lived in counties 
designated nonattainment for one or more of the NAAQS, and this figure 
does not include the people living in areas with a risk of exceeding 
the NAAQS in the future.\604\ The most recent available data indicate 
that the majority of Americans continue to be exposed to ambient 
concentrations of air toxics at levels which have the potential to 
cause adverse health effects.\605\ In addition, populations who live, 
work, or attend school near major roads experience elevated exposure 
concentrations to a wide range of air pollutants.\606\
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    \603\ U.S. EPA, 2011. Our Nation's Air: Status and Trends 
through 2010. EPA-454/R-12-001. February 2012. Available at: http://www.epa.gov/airtrends/2011/.
    \604\ Data come from Summary Nonattainment Area Population 
Exposure Report, current as of July 2, 2014 at: http://www.epa.gov/oar/oaqps/greenbk/popexp.html and contained in Docket EPA-HQ-OAR-
2014-0827.
    \605\ U.S. EPA. (2011) Summary of Results for the 2005 National-
Scale Assessment. www.epa.gov/ttn/atw/nata2005/05pdf/sum_results.pdf.
    \606\ Health Effects Institute Panel on the Health Effects of 
Traffic-Related Air Pollution. (2010) Traffic-related air pollution: 
a critical review of the literature on emissions, exposure, and 
health effects. HEI Special Report 17. Available at http://www.healtheffects.org].
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    EPA recognizes that states and local areas are particularly 
concerned about the challenges of reducing NOX and attaining 
as well as maintaining the ozone NAAQS. States and local areas are 
required to adopt emission control measures to attain the NAAQS. States 
may then choose to seek redesignation to attainment and if they do so 
they must demonstrate that control measures are in place sufficient to 
maintain the NAAQS for ten years (and eight years later, a similar 
demonstration is required for another ten-year period). The most recent 
revision to the ozone standards was in 2008; the previous 8-hour ozone 
standards were set in 1997. Attaining and maintaining the NAAQS has 
been challenging for some areas in the past, and EPA has recently 
issued a proposal that would strengthen the ozone NAAQS (79 Fed. Reg 
75,234, Dec. 17, 2014).
(2) Impacts of Proposed Standards on Future Ambient Concentrations of 
Non-GHG Pollutants
    Full-scale photochemical air quality modeling is necessary to 
accurately project levels of criteria pollutants and air toxics. For 
the final rulemaking, national-scale air quality modeling analyses will 
be performed to analyze the impacts of the standards on 
PM2.5, ozone, NO2, and selected air toxics (i.e., 
benzene, formaldehyde, acetaldehyde, naphthalene, acrolein and 1,3-
butadiene). The length of time needed to prepare the necessary 
emissions inventories, in addition to the processing time associated 
with the modeling itself, has precluded us from performing air quality 
modeling for this proposal.
    Section VIII.A of the preamble presents projections of the changes 
in criteria pollutant and air toxics emissions due to the proposed 
vehicle standards; the basis for those estimates is set out in Chapter 
5 of the draft RIA. NHTSA also provides its projections in Chapter 4 of 
its DEIS. The atmospheric chemistry related to ambient concentrations 
of PM2.5, ozone and air toxics is very complex, and making 
predictions based solely on emissions changes is extremely difficult. 
However, based on the magnitude of the emissions changes predicted to 
result from the proposed standards, the agencies expect that there will 
be improvements in ambient air quality, pending more comprehensive 
analyses for the final rulemaking.
    For the final rulemaking national-scale air quality modeling 
analyses will be performed to estimate future year ambient ozone, 
NO2, and PM2.5 concentrations, air toxics 
concentrations, visibility levels and nitrogen and sulfur deposition 
levels for 2040. The agencies intend to use a 2011-based Community 
Multi-scale Air Quality (CMAQ) modeling platform as the tool for the 
air quality modeling. The CMAQ modeling system is a comprehensive 
three-dimensional grid-based Eulerian air quality model designed to 
estimate the formation and fate of oxidant precursors, primary and 
secondary PM concentrations and deposition, and air toxics, over 
regional and urban spatial scales (e.g., over the contiguous United 
States).607 608 609 610 The CMAQ model is a well-known and 
well-established tool and is commonly used by EPA for regulatory 
analyses, by States in developing attainment demonstrations for their 
State Implementation Plans, and in numerous other national and 
international applications.611 612 613 614 The CMAQ model 
version 5.0 was most recently peer-reviewed in September of 2011 for 
the U.S. EPA.\615\ CMAQ includes numerous science modules that simulate 
the emission, production, decay, deposition and transport of organic 
and inorganic gas-phase and particle-phase pollutants in the 
atmosphere. This 2011 multi-pollutant modeling platform used the most 
recent multi-pollutant CMAQ code available at the time of air quality 
modeling (CMAQ version 5.0.2; multipollutant version).\616\ CMAQ v5.0.2 
reflects updates to version 5.0 to improve the underlying science 
algorithms as well as include new diagnostic/scientific

[[Page 40434]]

modules which are detailed at http://www.cmascenter.org.617 618 619
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    \607\ U.S. Environmental Protection Agency, Byun, D.W., and 
Ching, J.K.S., Eds, 1999. Science algorithms of EPA Models-3 
Community Multiscale Air Quality (CMAQ modeling system, EPA/600/R-
99/030, Office of Research and Development). Docket EPA-HQ-OAR-2010-
0162
    \608\ Byun, D.W., and Schere, K.L., 2006. Review of the 
Governing Equations, Computational Algorithms, and Other Components 
of the Models-3 Community Multiscale Air Quality (CMAQ) Modeling 
System, J. Applied Mechanics Reviews, 59 (2), 51-77. Docket EPA-HQ-
OAR-2010-0162
    \609\ Dennis, R.L., Byun, D.W., Novak, J.H., Galluppi, K.J., 
Coats, C.J., and Vouk, M.A., 1996. The next generation of integrated 
air quality modeling: EPA's Models-3, Atmospheric Environment, 30, 
1925-1938. Docket EPA-HQ-OAR-2010-0162
    \610\ Carlton, A., Bhave, P., Napelnok, S., Edney, E., Sarwar, 
G., Pinder, R., Pouliot, G., and Houyoux, M. Model Representation of 
Secondary Organic Aerosol in CMAQv4.7. Ahead of Print in 
Environmental Science and Technology. Accessed at: http://pubs.acs.org/doi/abs/10.1021/es100636q?prevSearch=CMAQ&searchHistoryKey Docket EPA-HQ-OAR-2010-
0162.
    \611\ U.S. EPA (2007). Regulatory Impact Analysis of the 
Proposed Revisions to the National Ambient Air Quality Standards for 
Ground-Level Ozone. EPA document number 442/R-07-008, July 2007. 
Docket EPA-HQ-OAR-2010-0162
    \612\ Hogrefe, C., Biswas, J., Lynn, B., Civerolo, K., Ku, J.Y., 
Rosenthal, J., et al. (2004). Simulating regional-scale ozone 
climatology over the eastern United States: model evaluation 
results. Atmospheric Environment, 38(17), 2627-2638.
    \613\ United States Environmental Protection Agency. (2008). 
Technical support document for the final locomotive/marine rule: Air 
quality modeling analyses. Research Triangle Park, N.C.: U.S. 
Environmental Protection Agency, Office of Air Quality Planning and 
Standards, Air Quality Assessment Division.
    \614\ Lin, M., Oki, T., Holloway, T., Streets, D.G., Bengtsson, 
M., Kanae, S., (2008). Long range transport of acidifying substances 
in East Asia Part I: Model evaluation and sensitivity studies. 
Atmospheric Environment, 42(24), 5939-5955.
    \615\ Brown, N., Allen, D., Amar, P., Kallos, G., McNider, R., 
Russell, A., Stockwell, W. (September 2011). Final Report: Fourth 
Peer Review of the CMAQ Model, NERL/ORD/EPA. U.S. EPA, Research 
Triangle Park, NC. http://www.epa.gov/asmdnerl/Reviews/2011_CMAQ_Review_FinalReport.pdf. It is available from the Community 
Modeling and Analysis System (CMAS) as well as previous peer-review 
reports at: http://www.cmascenter.org.
    \616\ CMAQ version 5.0.2 was released in April 2014. It is 
available from the Community Modeling and Analysis System (CMAS) Web 
site: http://www.cmascenter.org.
    \617\ Community Modeling and Analysis System (CMAS) Web site: 
http://www.cmascenter.org, RELEASE_NOTES for CMAQv5.0--February 
2012.
    \618\ Community Modeling and Analysis System (CMAS) Web site: 
http://www.cmascenter.org, RELEASE_NOTES for CMAQv5.0.1--July 2012.
    \619\ Community Modeling and Analysis System (CMAS) Web site: 
http://www.cmascenter.org. CMAQ version 5.0.2 (April 2014 release) 
Technical Documentation.--May 2014.
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IX. Economic and Other Impacts

    This section presents the costs, benefits and other economic 
impacts of the proposed Phase 2 standards. It is important to note that 
NHTSA's proposed fuel consumption standards and EPA's proposed GHG 
standards would both be in effect, and each would lead to average fuel 
efficiency increases and GHG emission reductions.
    The net benefits of the proposed Phase 2 standards consist of the 
effects of the program on:
     The vehicle program costs (costs of complying with the 
vehicle CO2 and fuel consumption standards),
     changes in fuel expenditures associated with reduced fuel 
use resulting from more efficient vehicles and increased fuel use 
associated with the ``rebound'' effect, both of which result from the 
program,
     the economic value of reductions in GHGs,
     the economic value of reductions in non-GHG pollutants,
     costs associated with increases in noise, congestion, and 
accidents resulting from increased vehicle use,
     savings in drivers' time from less frequent refueling,
     benefits of increased vehicle use associated with the 
``rebound'' effect,
     the economic value of improvements in U.S. energy 
security.
    The benefits and costs of these rules are analyzed using 3 percent 
and 7 percent discount rates, consistent with current OMB 
guidance.\620\ These rates are intended to represent consumers' 
preference for current over future consumption (3 percent), and the 
real rate of return on private investment (7 percent) which indicates 
the opportunity cost of capital. However, neither of these rates 
necessarily represents the discount rate that individual decision-
makers use.
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    \620\ The range of Social Cost of Carbon (SC-CO2) 
values uses several discount rates because the literature shows that 
the SC-CO2 is quite sensitive to assumptions about the 
discount rate, and because no consensus exists on the appropriate 
rate to use in an intergenerational context (where costs and 
benefits are incurred by different generations). Refer to Section 
F.1 for more information.
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    The program may also have other economic effects that are not 
included here. The agencies seek comment on whether any costs or 
benefits are omitted from this analysis, so that they can be explicitly 
recognized in the final rules. In particular, as discussed in Sections 
III through VI of this preamble and in Chapter 2 of the draft RIA, the 
technology cost estimates developed here take into account the costs to 
hold other vehicle attributes, such as size and performance, constant. 
With these assumptions, and because welfare losses represent monetary 
estimates of how much buyers would have to be compensated to be made as 
well off as they would have been in the absence of this 
regulation,\621\ price increases for new vehicles measure the welfare 
losses to the vehicle buyers.\622\ If the full technology cost gets 
passed along to the buyer as an increase in price, the technology cost 
thus measures the primary welfare loss of the standards, including 
impacts on buyers. Increasing fuel efficiency would have to lead to 
other changes in the vehicles that buyers find undesirable for there to 
be additional welfare losses that are not included in the technology 
costs.
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    \621\ This approach describes the economic concept of 
compensating variation, a payment of money after a change that would 
make a consumer as well off after the change as before it. A related 
concept, equivalent variation, estimates the income change that 
would be an alternative to the change taking place. The difference 
between them is whether the consumer's point of reference is her 
welfare before the change (compensating variation) or after the 
change (equivalent variation). In practice, these two measures are 
typically very close together.
    \622\ Indeed, it is likely to be an overestimate of the loss to 
the consumer, because the buyer has choices other than buying the 
same vehicle with a higher price; she could choose a different 
vehicle, or decide not to buy a new vehicle. The buyer would choose 
one of those options only if the alternative involves less loss than 
paying the higher price. Thus, the increase in price that the buyer 
faces would be the upper bound of loss of consumer welfare, unless 
there are other changes to the vehicle due to the fuel efficiency 
improvements that make the vehicle less desirable to consumers.
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    As the 2012-2016 and 2017-2025 light-duty GHG/CAFE rules discussed, 
if other vehicle attributes are not held constant, then the technology 
cost estimates do not capture the losses to vehicle buyers associated 
with these changes.\623\ The light-duty rules also discussed other 
potential issues that could affect the calculation of the welfare 
impacts of these types of changes, such as aspects of buyers' behavior 
that might affect the demand for technology investments, uncertainty in 
buyers' investment horizons, and the rate at which truck owners trade 
off higher vehicle purchase price against future fuel savings. The 
agencies seek comments, including supporting data and quantitative 
analyses, of any additional impacts of the proposed standards on 
vehicle attributes and performance, or other potential aspects that 
could positively or negatively affect the welfare implications of this 
proposed rulemaking.
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    \623\ Environmental Protection Agency and Department of 
Transportation, ``Light-Duty Vehicle Greenhouse Gas Emission 
Standards and Corporate Average Fuel Economy Standards; Final 
Rule,'' 75 FR 25324, May 7, 2010, especially Sections III.H.1 
(25510-25513) and IV.G.6 (25651-25657); Environmental Protection 
Agency and Department of Transportation, ''2017 and Later Model Year 
Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average 
Fuel Economy Standards; Final Rule,'' 77 FR 62624, October 15, 2012, 
especially Sections III.H.1 (62913-62919) and IV.G.5.a (63102-
63104).
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    Where possible, we identify the uncertain aspects of these economic 
impacts and attempt to quantify them (e.g., sensitivity ranges 
associated with quantified and monetized GHG impacts; range of dollar-
per-ton values to monetize non-GHG health benefits; uncertainty with 
respect to learning and markups). For HD pickups and vans, the agencies 
explicitly analyzed the uncertainty surrounding its estimates of the 
economic impacts from requiring higher fuel efficiency in Preamble 
Section VI. The agencies have also examined the sensitivity of oil 
prices on fuel expenditures; results of this sensitivity analysis can 
be found in Chapter 8 of the RIA. NHTSA's draft EIS also characterizes 
the uncertainty in economic impacts associated with the HD national 
program. For other impacts, however, there is inadequate information to 
inform a thorough, quantitative assessment of uncertainty. EPA and 
NHTSA continue to work toward developing a comprehensive strategy for 
characterizing the aggregate impact of uncertainty in key elements of 
its analyses and we will continue to work to refine these uncertainty 
analyses in the future as time and resources permit. The agencies seek 
comments on the methods and assumptions used to quantify uncertainty in 
this analysis, as well as comments on methods and data that might 
inform relevant uncertainty analyses not quantified in this analysis.
    This and other sections of the preamble address Section 317 of the 
Clean Air Act on economic analysis. Section IX.L addresses Section 321 
of the Clean Air Act on employment analysis. The total monetized 
benefits and costs of the program are summarized in Section IX.K for 
the preferred alternative and in Section X for all alternatives.
A. Conceptual Framework
    The HD Phase 2 proposed standards would implement both the 2007 
Energy Independence and Security Act requirement that NHTSA establish 
fuel

[[Page 40435]]

efficiency standards for medium- and heavy-duty vehicles and the Clean 
Air Act requirement that EPA adopt technology-based standards to 
control pollutant emissions from motor vehicles and engines 
contributing to air pollution that endangers public health and welfare. 
NHTSA's statutory mandate is intended to further the agency's long-
standing goals of reducing U.S. consumption and imports of petroleum 
energy to improve the nation's energy security.
    From an economics perspective, government actions to improve our 
nation's energy security and to protect our nation from the potential 
threats of climate change address ``externalities,'' or economic 
consequences of decisions by individuals and businesses that extend 
beyond those who make these decisions. For example, users of 
transportation fuels increase the entire U.S. economy's risk of having 
to make costly adjustments due to rapid increases in oil prices, but 
these users generally do not consider such costs when they decide to 
consume more fuel.
    Similarly, consuming transportation fuel also increases emissions 
of greenhouse gases and other more localized air pollutants that occur 
when fuel is refined, distributed, and consumed. Some of these 
emissions increase the likelihood and severity of potential climate-
related economic damages, and others cause economic damages by 
adversely affecting human health. The need to address these external 
costs and other adverse effects provides a well-established economic 
rationale that supports the statutory direction given to government 
agencies to establish regulatory programs that reduce the magnitude of 
these adverse effects at reasonable costs.
    The proposed Phase 2 standards would require manufacturers of new 
heavy-duty vehicles, including trailers (HDVs), to improve the fuel 
efficiency of the products that they produce. As HDV users purchase and 
operate these new vehicles, they would consume significantly less fuel, 
in turn reducing U.S. petroleum consumption and imports as well as 
emissions of GHGs and other air pollutants. Thus, as a consequence of 
the agencies' efforts to meet our statutory obligations to improve U.S. 
energy security and EPA's obligation to issue standards ``to regulate 
emissions of the deleterious pollutant . . . from motor vehicles'' that 
endangers public health and welfare,\624\ the proposed fuel efficiency 
and GHG emission standards would also reduce HDV operators' outlays for 
fuel purchases. These fuel savings are one measure of the proposed 
rule's effectiveness in promoting NHTSA's statutory goal of conserving 
energy, as well as EPA's obligation to assess the cost of standards 
under section 202(a)(1) and (2) of the Clean Air Act. Although these 
savings are not the agencies' primary motivation for adopting higher 
fuel efficiency standards, these substantial fuel savings represent 
significant additional economic benefits of this proposal.
---------------------------------------------------------------------------

    \624\ State of Massachusetts v. EPA, 549 U.S. at 533.
---------------------------------------------------------------------------

    Potential savings in fuel costs would appear to offer HDV buyers 
strong incentives to pay higher prices for vehicles that feature 
technology or equipment that reduces fuel consumption. These potential 
savings would also appear to offer HDV manufacturers similarly strong 
incentives to produce more fuel-efficient vehicles. Economic theory 
suggests that interactions between vehicle buyers and sellers in a 
normally-functioning competitive market would lead HDV manufacturers to 
incorporate all technologies that contribute to lower net costs into 
the vehicles they offer, and buyers to purchase them willingly. 
Nevertheless, many readily available technologies that appear to offer 
cost-effective increases in HDV fuel efficiency (when evaluated over 
their expected lifetimes using conventional discount rates) have not 
been widely adopted, despite their potential to repay buyers' initial 
investments rapidly.
    This economic situation is commonly known as the ``energy 
efficiency gap'' or ``energy paradox.'' This situation is perhaps more 
challenging to understand with respect to the heavy-duty sector versus 
the light-duty vehicle sector. Unlike light-duty vehicles--which are 
purchased and used mainly by individuals and households--the vast 
majority of HDVs are purchased and operated by profit-seeking 
businesses for which fuel costs represent a substantial operating 
expense. Nevertheless, on the basis of evidence reviewed below, the 
agencies believe that a significant number of fuel efficiency improving 
technologies would remain far less widely adopted in the absence of 
these proposed standards.
    Economic research offers several possible explanations for why the 
prospect of these apparent savings might not lead HDV manufacturers and 
buyers to adopt technologies that would be expected to reduce HDV 
operating costs. Some of these explanations involve failures of the HDV 
market for reasons other than the externalities caused by producing and 
consuming fuel. These include situations where information about the 
performance of fuel economy technologies is incomplete, costly to 
obtain, or available only to one party to a transaction (or 
``asymmetrical''), as well as behavioral rigidities in either the HDV 
manufacturing or HDV-operating industries, such as standardized or 
inflexibly administered operating procedures, or requirements of other 
regulations on HDVs. Other explanations for the limited use of 
apparently cost-effective technologies that do not involve market 
failures include HDV operators' concerns about the performance, 
reliability, or maintenance requirements of new technology under the 
demands of everyday use, uncertainty about the fuel savings they will 
actually realize, and questions about possible effects on carrying 
capacity or other aspects of HDVs' utility.
    In the HD Phase 1 rulemaking (which, in contrast to these proposed 
standards, did not apply to trailers), the agencies raised five 
hypotheses that might explain this energy efficiency gap or paradox:
     Imperfect information in the new vehicle market: 
Information available to prospective buyers about the effectiveness of 
some fuel-saving technologies for new vehicles may be inadequate or 
unreliable. If reliable information on their effectiveness in reducing 
fuel consumption is unavailable or difficult to obtain, HDV buyers will 
understandably be reluctant to pay higher prices to purchase vehicles 
equipped with unproven technologies.
     Imperfect information in the resale market: Buyers in the 
used vehicle market may not be willing to pay adequate premiums for 
more fuel efficient vehicles when they are offered for resale to ensure 
that buyers of new vehicles can recover the remaining value of their 
original investment in higher fuel efficiency. The prospect of an 
inadequate return on their original owners' investments in higher fuel 
efficiency may contribute to the short payback periods that buyers of 
new vehicles appear to demand.\625\
---------------------------------------------------------------------------

    \625\ Committee to Assess Fuel Economy Technologies for Medium- 
and Heavy-Duty Vehicles; National Research Council; Transportation 
Research Board (2010). ``Technologies and Approaches to Reducing the 
Fuel Consumption of Medium- and Heavy-Duty Vehicles,'' (hereafter, 
``NAS 2010''). Washington, DC. The National Academies Press. 
Available electronically from the National Academies Press Web site 
at http://www.nap.edu/catalog.php?record_id=12845 (accessed 
September 10, 2010).

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

[[Page 40436]]

     Principal-agent problems causing split incentives: An HDV 
buyer may not be directly responsible for its future fuel costs, or the 
individual who will be responsible for fuel costs may not participate 
in the HDV purchase decision. In these cases, the signal to invest in 
higher fuel efficiency normally provided by savings in fuel costs may 
not be transmitted effectively to HDV buyers, and the incentives of HDV 
buyers and fuel buyers will diverge, or be ``split.'' The trailers 
towed by heavy-duty tractors, which are typically not supplied by the 
tractor manufacturer or seller, present an obvious potential situation 
of split incentives that was not addressed in the HD Phase 1 
rulemaking, but it may apply in this rulemaking. If there is inadequate 
pass-through of price signals from trailer users to their buyers, then 
low adoption of fuel-saving technologies may result.
     Uncertainty about future fuel cost savings: HDV buyers may 
be uncertain about future fuel prices, or about maintenance costs and 
reliability of some fuel efficiency technologies. Buyers may react to 
this uncertainty by implicitly discounting potential future savings at 
rates above discount rates used in this analysis. In contrast, the 
costs of fuel-saving or maintenance-reducing technologies are immediate 
and thus not subject to discounting. In this situation, potential 
variability about buyers' expected returns on capital investments to 
achieve higher fuel efficiency may shorten the payback period--the time 
required to repay those investments--they demand in order to make them.
     Adjustment and transactions costs: Potential resistance to 
new technologies--stemming, for example, from drivers' reluctance or 
slowness to adjust to changes in the way vehicles operate--may slow or 
inhibit new technology adoption. If a conservative approach to new 
technologies leads HDV buyers to adopt them slowly, then successful new 
technologies would be adopted over time without market intervention, 
but only with potentially significant delays in achieving the fuel 
saving, environmental, and energy security benefits they offer. There 
also may be costs associated with training drivers to realize potential 
fuel savings enabled by new technologies, or with accelerating fleet 
operators' scheduled fleet turnover and replacement to hasten their 
acquisition of vehicles equipped with these technologies.
    Some of these explanations imply failures in the private market for 
fuel-saving technology beyond the externalities caused by producing and 
consuming fuel, while others suggest that complications in valuing or 
adapting to technologies that reduce fuel consumption may partly 
explain buyers' hesitance to purchase more fuel-efficient vehicles. In 
either case, adopting this proposed rule would provide regulatory 
certainty and generate important economic benefits in addition to 
reducing externalities.
    Since the HD Phase 1 rulemaking, new research has provided further 
insight into potential barriers to adoption of fuel-saving 
technologies. Several studies utilized focus groups and interviews 
involving small numbers of participants, who were people with time and 
inclination to join such studies, rather than selected at random.\626\ 
As a result, the information from these groups is not necessarily 
representative of the industry as a whole. While these studies cannot 
provide conclusive evidence about how all HDV buyers make their 
decisions, they do describe issues that arise for those that 
participated.
---------------------------------------------------------------------------

    \626\ Klemick, Heather, Elizabeth Kopits, Keith Sargent, and Ann 
Wolverton (2014). ``Heavy-Duty Trucking and the Energy Efficiency 
Paradox.'' US EPA NCEE Working Paper Series. Working Paper 14-02; 
Roeth, Mike, Dave Kircher, Joel Smith, and Rob Swim (2013). 
``Barriers to the Increased Adoption of Fuel Efficiency Technologies 
in the North American On-Road Freight Sector.'' NACFE report for the 
International Council on Clean Transportation; Aarnink, Sanne, 
Jasper Faber, and Eelco den Boer (2012). ``Market Barriers to 
Increased Efficiency in the European On-road Freight Sector.'' CE 
Delft report for the International Council on Clean Transportation.
---------------------------------------------------------------------------

    One common theme that emerges from these studies is the inability 
of HDV buyers to obtain reliable information about the fuel savings, 
reliability, and maintenance costs of technologies that improve fuel 
efficiency. In many product markets, such as consumer electronics, 
credible reviews and tests of product performance are readily available 
to potential buyers. In the trucking industry, however, the performance 
of fuel-saving technology is likely to depend on many firm-specific 
attributes, including the intensity of HDV use, the typical distance 
and routing of HDV trips, driver characteristics, road conditions, 
regional geography and traffic patterns.
    As a result, businesses that operate HDVs have strong preferences 
for testing fuel-saving technologies ``in-house'' because they are 
concerned that their patterns of vehicle use may lead to different 
results from those reported in published information. Businesses with 
less capability to do in-house testing often seek information from 
peers, yet often remain skeptical of its applicability due to 
differences in the nature of their operations. One source of imperfect 
information is the lack of availability of certain technologies from 
preferred suppliers. HDV buyers often prefer to have technology or 
equipment installed by their favored original equipment manufacturers. 
However, some technologies may not be available through these preferred 
sources, or may be available only as after-market installations from 
third parties (Aarnink et al. 2012, Roeth et al. 2013).
    Although these studies appear to show that information in the new 
HDV market is often limited or viewed as unreliable, the evidence for 
imperfect information in the market for used HDVs is mixed. On the one 
hand, some studies noted that fuel-saving technology is often not 
valued or demanded in the used vehicle market, because of imperfect 
information about its benefits, or greater mistrust of its performance 
among buyers in the used vehicle market than among buyers of new 
vehicles. The lack of demand might also be due to the intended use of 
the used HDV, which may not require or reward the presence of certain 
fuel-saving technologies. In other cases, however, fuel-saving 
technology can lead to a premium in the used market, as for instance to 
meet the more stringent requirements for HDVs operating in California.
    All of the recent research identifies split incentives, or 
principal-agent problems, as a potential barrier to technology 
adoption. These occur when those responsible for investment decisions 
are different from the main beneficiaries of the technology. For 
instance, businesses that own and lease trailers to HDV operators may 
not have an incentive to invest in trailer-specific fuel-saving 
technology, since they do not collect the savings from the lower fuel 
costs that result. Vernon and Meier (2012) estimate that 23 percent of 
trailers may be exposed to this kind of principal-agent problem, 
although they do not quantify its financial significance.\627\
---------------------------------------------------------------------------

    \627\ Vernon, David and Alan Meier (2012). ``Identification and 
quantification of principal-agent problems affecting energy 
efficiency investments and use decisions in the trucking industry.'' 
Energy Policy, 49(C), pp. 266-273.
---------------------------------------------------------------------------

    Split incentives can also exist when the HDV driver is not 
responsible for paying fuel costs. Some technologies require additional 
effort, training, or changes in driving behavior to achieve their 
promised fuel savings; drivers who do not pay for fuel may be reluctant 
to undertake those changes, thus reducing the fuel-saving benefits from 
the perspective of the individual or company paying for the fuel. For

[[Page 40437]]

instance, drivers might not consistently deploy boat-tails equipped on 
trailers to improve vehicle aerodynamics.\628\ Vernon and Meier also 
calculate that 91 percent of HDV fuel use is subject to this form of 
principal-agent problem, although they do not estimate how much it 
might reduce fuel savings to those who are paying for the fuel.
---------------------------------------------------------------------------

    \628\ Some boat-tails are being developed with technology to 
open them automatically when the trailer reaches a suitable speed, 
to reduce this problem.
---------------------------------------------------------------------------

    The studies based on focus groups and interviews (Klemick et al. 
2013, Aarnink et al. 2012, Roeth et al. 2013) provide mixed evidence on 
the severity of the split-incentive problem. Focus groups often do 
identify diverging incentives between drivers and the decision-makers 
responsible for purchasing vehicles, and economics literature 
recognizes that this split incentive can be a barrier to adopting new 
technology. Aarnink et al. (2012) and Roeth et al. (2013) cite examples 
of split incentives involving trailers and fuel surcharges, although 
the latter also cites other examples where these same issues do not 
lead to split incentives.
    In an effort to minimize problems that can arise from split 
incentives, many businesses that operate HDVs also train drivers in the 
use of specific technologies or to modify their driving behavior in 
order to improve fuel efficiency, while some also offer financial 
incentives to their drivers to conserve fuel. All of these options can 
help to reduce the split incentive problem, although they may not be 
effective where it arises from different ownership of combination 
tractors and trailers.
    Uncertainty about future costs for fuel and maintenance, or about 
the reliability of new technology, also appears to be a significant 
obstacle that can slow the adoption of fuel-saving technologies. These 
examples illustrate the problem of uncertain or unreliable information 
about the actual performance of fuel efficiency technology discussed 
above. In addition, businesses that operate HDVs may be concerned about 
how reliable new technologies will prove to be on the road, and whether 
significant additional maintenance costs or equipment malfunctions that 
result in costly downtime could occur. Roeth et al. (2013) and Klemick 
et al. (2013) both document the short payback periods that HDV buyers 
require on their investments--usually about 2 years--which may be 
partly attributable to these uncertainties.
    These studies also provide some support for the view that 
adjustment and transactions costs may impede HDV buyers from investing 
in higher fuel efficiency. As discussed above, several studies note 
that HDV buyers are less likely to select new technology when it is not 
available from their preferred manufacturers. Some technologies are 
only available as after-market additions, which can add other costs to 
adopting them.
    Some studies also cite driver acceptance of new equipment or 
technologies as a barrier to their adoption. HDV driver turnover is 
high in the U.S., and businesses that operate HDVs are concerned about 
retaining their best drivers. Therefore, they may avoid technologies 
that require significant new training or adjustments in driver 
behavior. For some technologies that can be used to meet the proposed 
standards, such as automatic tire inflation systems, training costs are 
likely to be minimal. Other technologies such as stop-start systems, 
however, may require drivers to adjust their expectations about vehicle 
operation, and it is difficult for the agencies to anticipate how 
drivers will respond to such changes.\629\
---------------------------------------------------------------------------

    \629\ The distinction between simply requiring drivers (or 
mechanics) to adjust their expectations and compromises in vehicle 
performance or utility is subtle. While the former may not impose 
significant compliance costs in the long run, the latter would 
represent additional economic costs of complying with the standard.
---------------------------------------------------------------------------

    In addition to these factors, the studies considered other possible 
explanations for HDV buyers' apparent reluctance or slowness to invest 
in fuel-saving equipment or technology. Financial constraints--access 
to lending sources willing to finance purchases of more expensive 
vehicles--do not appear to be a problem for the medium- and large-sized 
businesses participating in Klemick et al.'s (2013) study. However, 
Roeth et al. (2013) noted that access to capital can be a significant 
challenge to smaller or independent businesses, and that price is 
always a concern to buyers. In general, businesses that operate HDVs 
face a range of competing uses for available capital other than 
investing in fuel-saving technologies, and may assign higher priority 
to these other uses, even when investing in higher fuel efficiency HDVs 
appears to promise adequate financial returns.
    Other potentially important barriers to the adoption of measures 
that improve fuel efficiency may arise from ``network externalities,'' 
where the benefits to new users of a technology depend on how many 
others have already adopted it. One example where network externalities 
seem likely to arise is the market for natural gas-fueled HDVs: The 
limited availability of refueling stations may reduce potential buyers' 
willingness to purchase natural gas-fueled HDVs, while the small number 
of such HDVs in-use does not provide sufficient economic incentive to 
construct more natural gas refueling stations.
    Some businesses that operate HDVs may also be concerned about the 
difficulty in locating repair facilities or replacement parts, such as 
single-wide tires, wherever their vehicles operate. When a technology 
has been widely adopted, then it is likely to be serviceable even in 
remote or rural places, but until it becomes widely available, its 
early adopters may face difficulties with repairs or replacements. By 
accelerating the widespread adoption of these technologies, the 
proposed standards may assist in overcoming these difficulties.
    As discussed previously, the lack of availability of fuel-saving 
technologies from preferred manufactures can also be a significant 
barrier to adoption (Roeth et al. 2013). Manufacturers may be hesitant 
to offer technologies for which there is not strong demand, especially 
if the technologies require significant research and development 
expenses and other costs of bringing the technology to a market of 
uncertain demand.
    Roeth et al. (2013) also noted that it can take years, and 
sometimes as much as a decade, for a specific technology to become 
available from all manufacturers. Many manufacturers prefer to observe 
the market and follow other manufacturers rather than be the first to 
market with a specific technology. The ``first-mover disadvantage'' has 
been recognized in other research where the ``first-mover'' pays a 
higher proportion of the costs of developing technology, but loses the 
long-term advantage when other businesses follow quickly.\630\ In this 
way, there may be barriers to innovation on the supply side that result 
in lower adoption rates of fuel-efficiency technology than would be 
optimal.
---------------------------------------------------------------------------

    \630\ Blumstein, Carl and Margaret Taylor (2013). ``Rethinking 
the Energy-Efficiency Gap: Producers, Intermediaries, and 
Innovation,'' Energy Institute at Haas Working Paper 243, University 
of California at Berkeley; Tirole, Jean (1998). The Theory of 
Industrial Organization. Cambridge, MA: MIT Press, pp.400, 402. This 
first-mover disadvantage must large enough to overcome the incentive 
normally offered by the potential to for first movers to earn 
unusually high (but temporary) profit levels.
---------------------------------------------------------------------------

    In summary, the agencies recognize that businesses that operate 
HDVs are under competitive pressure to reduce operating costs, which 
should compel

[[Page 40438]]

HDV buyers to identify and rapidly adopt cost-effective fuel-saving 
technologies. Outlays for labor and fuel generally constitute the two 
largest shares of HDV operating costs, depending on the price of fuel, 
distance traveled, type of HDV, and commodity transported (if any), so 
businesses that operate HDVs face strong incentives to reduce these 
costs.631 632
---------------------------------------------------------------------------

    \631\ American Transportation Research Institute, An Analysis of 
the Operational Costs of Trucking, September 2013 (Docket ID: EPA-
HQ-OAR-2014-0827).
    \632\ Transport Canada, Operating Cost of Trucks, 2005. See 
http://www.tc.gc.ca/eng/policy/report-acg-operatingcost2005-2005-e-2-1727.htm, accessed on July 16, 2010 (Docket ID: EPA-HQ-OAR-2014-
0827).
---------------------------------------------------------------------------

    However, the short payback periods that buyers of new HDVs appear 
to require suggest that some combination of uncertainty about future 
cost savings, transactions costs, and imperfectly functioning markets 
impedes this process. Markets for both new and used HDVs may face these 
problems, although it is difficult to assess empirically the degree to 
which they actually do. Even if the benefits from widespread adoption 
of fuel-saving technologies exceed their costs, their use may remain 
limited or spread slowly because their early adopters bear a 
disproportionate share of those costs. In this case, the proposed 
standards may help to overcome such barriers by ensuring that these 
measures would be widely adopted.
    Providing information about fuel-saving technologies, offering 
incentives for their adoption, and sharing HDV operators' real-world 
experiences with their performance through voluntary programs such as 
EPA's SmartWay Transport Partnership should assist in the adoption of 
new cost-saving technologies. Nevertheless, other barriers that impede 
the diffusion of new technologies are likely to remain. Buyers who are 
willing to experiment with new technologies expect to find cost 
savings, but those savings may be difficult to verify or replicate. As 
noted previously, because benefits from employing these technologies 
are likely to vary with the characteristics of individual routes and 
traffic patterns, buyers of new HDVs may find it difficult to identify 
or verify the effects of fuel-saving technologies in their operations. 
Risk-averse buyers may also avoid new technologies out of concerns over 
the possibility of inadequate returns on their investments, or with 
other possible adverse impacts.
    Some HDV manufacturers may delay in investing in the development 
and production of new technologies, instead waiting for other 
manufacturers to bear the risks of those investments first. Competitive 
pressures in the HDV freight transport industry can provide a strong 
incentive to reduce fuel consumption and improve environmental 
performance. However, not every HDV operator has the requisite ability 
or interest to access and utilize the technical information, or the 
resources necessary to evaluate this information within the context of 
his or her own operations.
    As discussed previously, whether the technologies available to 
improve HDVs' fuel efficiency would be adopted widely in the absence of 
the program is challenging to assess. To the extent that these 
technologies would be adopted in its absence, neither their costs nor 
their benefits would be attributed to the program. To account for this 
possibility, the agencies analyzed the proposed standards and the 
regulatory alternatives against two reference cases, or baselines, as 
described in Section X.
    The first case uses a baseline that projects some improvement in 
fuel efficiency for new trailers, but no improvement in fuel efficiency 
for other vehicle segments in the absence of new Phase 2 standards. 
This first case is referred to as the less dynamic baseline, or 
Alternative 1a. The second case uses a baseline that projects some 
improvement in vehicle fuel efficiency for tractors, trailers, pickup 
trucks, and vans but not for vocational vehicles. This second case is 
referred to as the more dynamic baseline, or Alternative 1b.
    The agencies will continue to explore reasons for the slow adoption 
of readily available and apparently cost-effective technologies for 
improving fuel efficiency. We also seek comments on our hypotheses 
about its causes, as well as data or other information that can inform 
our understanding of why this situation seems to persist.

B. Vehicle-Related Costs Associated With the Program

(1) Technology Cost Methodology
(a) Direct Manufacturing Costs
    The direct manufacturing costs (DMCs) used throughout this analysis 
are derived from several sources. Many of the tractor, vocational and 
trailer DMCs can be sourced to the Phase 1 rule which, in turn, were 
sourced largely from a contracted study by ICF International for 
EPA.\633\ We have updated those costs by converting them to 2012 
dollars, as described in Section IX.B.1.e below, and by continuing the 
learning effects described in the Phase 1 rule and in Section IX.B.1.c 
below. The new tractor, vocational and trailer costs can be sourced to 
a more recent study conducted by Tetra Tech under contract to 
NHTSA.\634\ The cost methodology used by Tetra Tech was to estimate 
retail costs and work backward from there to derive a DMC for each 
technology. The agencies did not agree with the approach used by Tetra 
Tech to move from retail cost to DMC as the approach was to simply 
divide retail costs by 2 and use the result as a DMC. Our research, 
discussed below, suggests that a divisor of 2 is too high. Therefore, 
where we have used a Tetra Tech derived retail estimate, we have 
divided by our researched markups to arrive at many of the DMCs used in 
this analysis. In this way, the agencies have used an approach 
consistent with past GHG/CAFE/fuel consumption rules by dividing 
estimated retail prices by our estimated retail price equivalent (RPE) 
markups to derive an appropriate DMC for each technology. We describe 
our RPEs in Section IX.B.1.b, below.
---------------------------------------------------------------------------

    \633\ ICF International. Investigation of Costs for Strategies 
to Reduce Greenhouse Gas Emissions for Heavy-Duty On-Road Vehicles. 
July 2010.
    \634\ Schubert, R., Chan, M., Law, K. (2015). Commercial Medium- 
and Heavy-Duty (MD/HD) Truck Fuel Efficiency Cost Study. Washington, 
DC: National Highway Traffic Safety Administration.
---------------------------------------------------------------------------

    For HD pickups and vans, we have relied primarily on the Phase 1 
rule and the recent light-duty 2017-2025 model year rule since most 
technologies expected on these vehicles are, in effect, the same as 
those used on light-duty pickups. Many of those technology DMCs are 
based on cost teardown studies which the agencies consider to be the 
most robust method of cost estimation. However, because most of the HD 
versions of those technologies are expected to be more costly than 
their light-duty counterparts, we have scaled upward most of the light-
duty DMCs for this analysis. We have also used some costs developed 
under contract to NHTSA by Tetra Tech.\635\
---------------------------------------------------------------------------

    \635\ Schubert, R., Chan, M., Law, K. (2015). Commercial Medium- 
and Heavy-Duty (MD/HD) Truck Fuel Efficiency Cost Study. Washington, 
DC: National Highway Traffic Safety Administration.
---------------------------------------------------------------------------

    Importantly, in our methodology, all technologies are treated as 
being sourced from a supplier rather than being developed and produced 
in-house. As a result, some portion of the total indirect costs of 
making a technology or system--those costs incurred by the supplier for 
research, development, transportation, marketing etc.--are contained in 
the sales price to the engine and/or vehicle/trailer manufacturer 
(i.e., the original equipment manufacturer (OEM)). That

[[Page 40439]]

sale price paid by the OEM to the supplier is the DMC we estimate.
    We present the details--sources, DMC values, scaling from light-
duty values, markups, learning effects, adoption rates--behind all our 
costs in Chapter 2 of the draft RIA.
(b) Indirect Costs
    To produce a unit of output, engine and truck manufacturers incur 
direct and indirect costs. Direct costs include cost of materials and 
labor costs. Indirect costs are all the costs associated with producing 
the unit of output that are not direct costs--for example, they may be 
related to production (such as research and development [R&D]), 
corporate operations (such as salaries, pensions, and health care costs 
for corporate staff), or selling (such as transportation, dealer 
support, and marketing). Indirect costs are generally recovered by 
allocating a share of the costs to each unit of good sold. Although it 
is possible to account for direct costs allocated to each unit of good 
sold, it is more challenging to account for indirect costs allocated to 
a unit of goods sold. To make a cost analysis process more feasible, 
markup factors, which relate total indirect costs to total direct 
costs, have been developed. These factors are often referred to as 
retail price equivalent (RPE) multipliers.
    While the agencies have traditionally used RPE multipliers to 
estimate indirect costs, in recent GHG/CAFE/fuel consumption rules RPEs 
have been replaced in the primary analysis with indirect cost 
multipliers (ICMs). ICMs differ from RPEs in that they attempt to 
estimate not all indirect costs incurred to bring a product to point of 
sale, but only those indirect costs that change as a result of a 
government action or regulatory requirement. As such, some indirect 
costs, notably health and retirement benefits of retired employees, 
among other indirect costs, would not be expected to change due to a 
government action and, therefore, the portion of the RPE that covered 
those costs does not change.
    Further, the ICM is not a ``one-size-fits-all'' markup as is the 
traditional RPE. With ICMs, higher complexity technologies like 
hybridization or moving from a manual to automatic transmission may 
require higher indirect costs--more research and development, more 
integration work, etc.--suggesting a higher markup. Conversely, lower 
complexity technologies like reducing friction or adding passive aero 
features may require fewer indirect costs thereby suggesting a lower 
markup.
    Notably, ICMs are also not a simple multiplier as are traditional 
RPEs. The ICM is broken into two parts--warranty related and non-
warranty related costs. The warranty related portion of the ICM is 
relatively small while the non-warranty portion represents typically 
over 95 percent of indirect costs. These two portions are applied to 
different DMC values to arrive at total costs (TC). The warranty 
portion of the markup is applied to a DMC that decreases year-over-year 
due to learning effects (described below in Section IX.B.1.c).\636\ As 
learning effects decrease the DMC with production volumes, it makes 
sense that warranty costs would decrease since those parts replaced 
under warranty should be less costly. In contrast, the non-warranty 
portion of the markup is applied to a static DMC year-over-year 
resulting in static indirect costs. This is logical since the 
production plants and transportation networks and general overhead 
required to build parts, market them, deliver them and integrate them 
into vehicles do not necessarily decrease in cost year-over-year. 
Because the warranty and non-warranty portions of the ICM are applied 
differently, one cannot compare the markup itself to the RPE to 
determine which markup would result in higher indirect cost estimates, 
at least in the time periods typically considered in our rules (four to 
ten years).
---------------------------------------------------------------------------

    \636\ We note that the labor portion of warranty repairs does 
not decrease due to learning. However, we do not have data to 
separate this portion and so we apply learning to the entire 
warranty cost. Because warranty costs are a small portion of overall 
indirect costs, this has only a minor impact on the analysis.
---------------------------------------------------------------------------

    The agencies are concerned that some potential costs associated 
with this rulemaking may not be adequately captured by our ICMs. ICMs 
are estimated based on a few specific technologies and these 
technologies may not be representative of the changes actually made to 
meet the proposed requirements. Specifically, we may not have 
adequately estimated the costs for accelerated R&D or potential 
reliability issues with advanced technologies required by Alternative 
4. There is a great deal of uncertainty regarding these costs, and this 
makes estimates for this alternative of particular concern. We request 
comment on that aspect of our estimates and on all aspects of our 
indirect cost estimation approach.
    We provide more details on our ICM approach and the markups used 
for each technology in Chapter 2.12 of the draft RIA.
(c) Learning Effects on Direct and Indirect Costs
    For some of the technologies considered in this analysis, 
manufacturer learning effects would be expected to play a role in the 
actual end costs. The ``learning curve'' or ``experience curve'' 
describes the reduction in unit production costs as a function of 
accumulated production volume. In theory, the cost behavior it 
describes applies to cumulative production volume measured at the level 
of an individual manufacturer, although it is often assumed--as both 
agencies have done in past regulatory analyses--to apply at the 
industry-wide level, particularly in industries that utilize many 
common technologies and component supply sources. Both agencies believe 
there are indeed many factors that cause costs to decrease over time. 
Research in the costs of manufacturing has consistently shown that, as 
manufacturers gain experience in production, they are able to apply 
innovations to simplify machining and assembly operations, use lower 
cost materials, and reduce the number or complexity of component parts. 
All of these factors allow manufacturers to lower the per-unit cost of 
production (i.e., the manufacturing learning curve).\637\
---------------------------------------------------------------------------

    \637\ See ``Learning Curves in Manufacturing'', L. Argote and D. 
Epple, Science, Volume 247; ``Toward Cost Buy down Via Learning-by-
Doing for Environmental Energy Technologies, R. Williams, Princeton 
University, Workshop on Learning-by-Doing in Energy Technologies, 
June 2003; ``Industry Learning Environmental and the Heterogeneity 
of Firm Performance, N. Balasubramanian and M. Lieberman, UCLA 
Anderson School of Management, December 2006, Discussion Papers, 
Center for Economic Studies, Washington DC.
---------------------------------------------------------------------------

    In this analysis, the agencies are using the same approach to 
learning as done in past GHG/CAFE/fuel consumption rules. In short, 
learning effects result in rapid cost reductions in the early years 
following introduction of a new technology. The agencies have estimated 
those cost reductions as resulting in 20 percent lower costs for every 
doubling of production volume. As production volumes increase, learning 
rates continue at the same pace but flatten asymptotically due to the 
nature of the persistent doubling of production required to realize 
that cost reduction. As such, the cost reductions flatten out as 
production volumes continue to increase. Consistent with the Phase 1 
rule, we refer to these two distinct portions of the ``learning cost 
reduction curve'' or ``learning curve'' as the steeper and flatter 
portions of the curve. On that steep portion of the curve, costs are 
estimated to decrease by

[[Page 40440]]

20 percent for each double of production or, by proxy, in the third and 
then fifth year of production following introduction. On the flat 
portion of the curve, costs are estimated to decrease by 3 percent per 
year for 5 years, then 2 percent per year for 5 years, then 1 percent 
per year for 5 years. Also consistent with the Phase 1 rule, the 
majority of the technologies we expect would be adopted are considered 
to be on the flat portion of the learning curve meaning that the 20 
percent cost reductions are rarely applied. The agencies request 
comment on this approach to estimating these effects, and request that 
commenters provide data and forward-looking information to support any 
alternative methods or specific estimates.
    We provide more details on the concept of learning-by-doing and the 
learning effects applied in this analysis in Chapter 2 of the draft 
RIA.
(d) Technology Adoption Rates and Developing Package Costs
    Determining the stringency of the proposed standards involves a 
balancing of relevant factors--chiefly technology feasibility and 
effectiveness, costs, and lead time. For vocational vehicles, tractors 
and trailers, the agencies have projected a technology path to achieve 
the proposed standards reflecting an application rate of those 
technologies the agencies consider to be available at reasonable cost 
in the lead times provided. The agencies do not expect each of the 
technologies for which costs have been developed to be employed by all 
trucks and trailers across the board. Further, many of today's vehicles 
are already equipped with some of the technologies and/or are expected 
to adopt them by MY2018 to comply with the HD Phase 1 standards. 
Estimated adoption rates in both the reference and control cases are 
necessary for each vehicle/trailer category. The adoption rates for 
most technologies are zero in the reference case; however, for some 
technologies--notably aero and tire technologies--the adoption rate is 
not zero in the reference case. These reference and control case 
adoption rates are then applied to the technology costs with the result 
being a package cost for each vehicle/trailer category.
    For HD pickups and vans, the CAFE model determines the technology 
adoption rates that most cost effectively meet the standards being 
proposed. Similar to vocational vehicles, tractors and trailers, 
package costs are rarely if ever a simple sum of all the technology 
costs since each technology would be expected to be adopted at 
different rates. The methods for estimating technology adoption rates 
and resultant costs (and other impacts) for HD pickups and vans are 
discussed above in Section 6.
    We provide details of expected adoption rates in Chapter 2 of the 
draft RIA. We present package costs both in Sections III through VI of 
this preamble and in more detail in Chapter 2 of the draft RIA.
(e) Conversion of Technology Costs to 2012 U.S. Dollars
    As noted above in Section IX.B.1, the agencies are using technology 
costs from many different sources. These sources, having been published 
in different years, present costs in different year dollars (i.e., 2009 
dollars or 2010 dollars). For this analysis, the agencies sought to 
have all costs in terms of 2012 dollars to be consistent with the 
dollars used by AEO in its 2014 Annual Energy Outlook.\638\ The 
agencies have used the GDP Implicit Price Deflator for Gross Domestic 
Product as the converter, with the actual factors used as shown in 
Table IX-1.\639\
---------------------------------------------------------------------------

    \638\ U.S. Energy Information Administration, Annual Energy 
Outlook 2014, Early Release; Report Number DOE/EIA-0383ER (2014), 
December 16, 2013.
    \639\ Bureau of Economic Analysis, Table 1.1.9 Implicit Price 
Deflators for Gross Domestic Product; as revised on March 27, 2014.

                                   Table IX-1--Implicit Price Deflators and Conversion Factors for Conversion to 2012$
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     2006       2007       2008       2009       2010       2011       2012       2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Price index for GDP.............................................     94.818     97.335     99.236        100    101.211    103.199    105.002    106.588
Factor applied for 2012$........................................      1.107      1.079      1.058      1.050      1.037      1.017      1.000      0.985
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Compliance Program Costs
    The agencies have also estimated additional and/or new compliance 
costs associated with the proposed standards. Normally, compliance 
program costs would be considered part of the indirect costs and, 
therefore, would be accounted for via the markup applied to direct 
manufacturing costs. However, since the agencies are proposing new 
compliance elements that were not present during development of the 
indirect cost markups used in this analysis, additional compliance 
program costs are being accounted for via a separate ``line-item.'' New 
research and development costs (see below) are being handled in the 
same way.
    The new compliance program elements included in this proposal are 
new powertrain testing within the vocational vehicle program, and an 
all-new compliance program where none has existed to date within the 
trailer program. Note that for HD pickups and vans, HD engines, 
vocational vehicles and tractors, the Phase 1 rule included analogous 
compliance program costs meant to account for costs incurred in the 
all-new compliance program placed on the regulated firms by that rule. 
Compliance program costs cover costs associated with any necessary 
compliance testing and reporting to the agencies and differ somewhat by 
alternative since, for example, more manufacturers are expected to 
conduct powertrain testing under alternative 4 than under alternative 
3, etc. The details behind the estimated compliance program costs are 
provided in Chapter 7 of the draft RIA. We request comment on our 
estimated compliance costs.
(3) Research and Development Costs
    Much like the compliance program costs described above, we have 
estimated additional HDD engine, vocational vehicle and tractor R&D 
associated with the proposed standards that is not accounted for via 
the indirect cost markups used for these segments. Much like the Phase 
1 rule, EPA is estimating these additional R&D costs will occur over a 
4-year timeframe as the proposed standards come into force and industry 
works on means to comply. After that period, the additional R&D costs 
go to $0 as R&D expenditures return to their normal levels and R&D 
costs are accounted for via the ICMs--and the RPEs behind them--used 
for these segments. Note that, due to the accelerated implementation of 
some technologies, alternative 4 has higher R&D costs than does 
alternative 3. The details behind the estimated R&D costs are provided 
in Chapter 7 of the draft RIA. We request comment on our estimated R&D 
costs.

[[Page 40441]]

(4) Summary of Costs of the Proposed Vehicle Programs
    The agencies have estimated the costs of the proposed vehicle 
standards on an annual basis for the years 2018 through 2050, and have 
also estimated costs for the full model year lifetimes of MY2018 
through MY2029 vehicles. Table IX-2 shows the annual costs of the 
proposed standards along with net present values using both 3 percent 
and 7 percent discount rates. Table IX-3 shows the discounted model 
year lifetime costs of the proposed standards at both 3 percent and 7 
percent discount rates along with sums across applicable model years.

 Table IX-2--Annual Costs of the Preferred Alternative and Net Present Values at 3% and 7% Discount Rates Using
                               Method B and Relative to the Less Dynamic Baseline
                                             [$Millions of 2012$] a
----------------------------------------------------------------------------------------------------------------
                  Calendar year                   New technology    Compliance          R&D             Sum
----------------------------------------------------------------------------------------------------------------
2018............................................             116               0               0             116
2019............................................             113               0               0             113
2020............................................             112               0               0             112
2021............................................           2,173              18             240           2,432
2022............................................           2,161               6             240           2,407
2023............................................           2,224               6             240           2,470
2024............................................           3,455               6             240           3,701
2025............................................           3,647               6               0           3,653
2026............................................           3,736               6               0           3,742
2027............................................           5,309               6               0           5,315
2028............................................           5,334               6               0           5,340
2029............................................           5,376               6               0           5,381
2030............................................           5,399               6               0           5,405
2035............................................           5,856               6               0           5,862
2040............................................           6,316               6               0           6,322
2050............................................           6,987               6               0           6,992
NPV, 3%.........................................          85,926             104             759          86,789
NPV, 7%.........................................          40,516              56             561          41,133
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

[[Page 40442]]

                                 Table IX-3--Discounted MY Lifetime Costs of the Preferred Alternative Using Method B and Relative to the Less Dynamic Baseline
                                                                                     [$Millions of 2012$] a
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Discounted at 3%                                                Discounted at 7%
                           Model year                            -------------------------------------------------------------------------------------------------------------------------------
                                                                  New technology    Compliance          R&D             Sum       New technology    Compliance          R&D             Sum
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2018............................................................             104               0               0             104              91               0               0              91
2019............................................................              99               0               0              99              84               0               0              84
2020............................................................              95               0               0              95              77               0               0              77
2021............................................................           1,794              15             198           2,007           1,401              12             155           1,567
2022............................................................           1,731               5             193           1,928           1,302               3             145           1,450
2023............................................................           1,730               4             187           1,921           1,252               3             135           1,390
2024............................................................           2,610               4             181           2,795           1,818               3             126           1,947
2025............................................................           2,674               4               0           2,678           1,793               3               0           1,796
2026............................................................           2,660               4               0           2,664           1,717               3               0           1,719
2027............................................................           3,670               4               0           3,673           2,280               2               0           2,283
2028............................................................           3,580               4               0           3,583           2,141               2               0           2,143
2029............................................................           3,502               4               0           3,506           2,017               2               0           2,019
Sum.............................................................          24,248              48             759          25,055          15,973              33             561          16,568
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

[[Page 40443]]

    New technology costs begin in MY2018 as trailers begin to add new 
technology. Compliance costs begin with the new standards with capital 
cost expenditure in that year for building and upgrading test 
facilities to conduct the proposed powertrain testing in the vocational 
program. Research and development costs begin in 2021 and last for 4 
years as engine, tractor and vocational vehicle manufacturers conduct 
research and development testing to integrate new technologies into 
their engines and vehicles. We request comment on all aspects of our 
technology costs, both individual technology costs and package costs, 
as detailed in Chapter 2 of the draft RIA.

C. Changes in Fuel Consumption and Expenditures

(1) Changes in Fuel Consumption
    The new GHG and fuel consumption standards would result in 
significant improvements in the fuel efficiency of affected vehicles, 
and drivers of those vehicles would see corresponding savings 
associated with reduced fuel expenditures. The agencies have estimated 
the impacts on fuel consumption for the proposed standards. Details 
behind how these changes in fuel consumption were calculated are 
presented in Section VII of this preamble and in Chapter 5 of the draft 
RIA. The total number of miles that vehicles are driven each year is 
different under the regulatory alternatives than in the reference case 
due to the ``rebound effect'' (discussed below in Section IX.E), so the 
changes in fuel consumption associated with each alternative are not 
strictly proportional to differences in the fuel economy levels they 
require.
    The expected annual impacts on fuel consumption are shown in Table 
IX-4. Table IX-5 shows the MY lifetime changes in fuel consumption. The 
gallons shown in these tables as reductions in fuel consumption reflect 
reductions due to the proposed standards and include any increased 
consumption resulting from the rebound effect (discussed below in 
Section IX.E).

        Table IX-4--Annual Fuel Consumption Reductions Due to the Preferred Alternative Using Method B and Relative to the Less Dynamic Baseline
                                                                [Millions of gallons] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Gasoline                                         Diesel
                                                         -----------------------------------------------------------------------------------------------
                      Calendar year                                            Fuel                                            Fuel
                                                          Reference case    consumption    %  Reduction   Reference case    consumption    %  Reduction
                                                                             reduction                                       reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
2018....................................................           6,781               0               0          45,999              74               0
2019....................................................           6,799               0               0          46,362             150               0
2020....................................................           6,832               0               0          46,768             227               0
2021....................................................           6,884              10               0          47,236             523               1
2022....................................................           6,944              29               0          47,761             894               2
2023....................................................           7,005              57               1          48,309           1,276               3
2024....................................................           7,054              99               1          48,807           1,895               4
2025....................................................           7,113             151               2          49,400           2,523               5
2026....................................................           7,169             210               3          49,967           3,152               6
2027....................................................           7,221             291               4          50,420           3,890               8
2028....................................................           7,273             369               5          50,821           4,600               9
2029....................................................           7,332             445               6          51,262           5,278              10
2030....................................................           7,396             516               7          51,792           5,924              11
2035....................................................           7,732             801              10          54,602           8,517              16
2040....................................................           8,075             968              12          58,082          10,209              18
2050....................................................           8,806           1,127              13          65,937          12,310              19
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

  Table IX-5--Model Year Lifetime Fuel Consumption Reductions Due to the Preferred Alternative Using Method B and Relative to the Less Dynamic Baseline
                                                                [Millions of Gallons] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Gasoline                                         Diesel
                                                         -----------------------------------------------------------------------------------------------
                       Model year                                              Fuel                                            Fuel
                                                             Reference      consumption    %  Reduction      Reference      consumption    %  Reduction
                                                                             reduction                                       reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
2018....................................................               0               0               0          33,384             754               2
2019....................................................               0               0               0          33,922             745               2
2020....................................................               0               0               0          34,575             738               2
2021....................................................           7,128             113               2          47,792           4,424               9
2022....................................................           7,118             216               3          48,112           4,568               9
2023....................................................           7,106             317               4          48,366           4,703              10
2024....................................................           7,225             493               7          49,577           7,628              15
2025....................................................           7,376             602               8          51,050           7,967              16
2026....................................................           7,535             714               9          52,420           8,289              16
2027....................................................           7,628             982              13          53,532           9,984              19
2028....................................................           7,711             992              13          54,524          10,181              19
2029....................................................           7,769             999              13          55,421          10,360              19
                                                         -----------------------------------------------------------------------------------------------

[[Page 40444]]

 
Sum.....................................................          66,596           5,430               8         562,673          70,342              13
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

(2) Fuel Savings
    We have also estimated the changes in fuel expenditures, or the 
fuel savings, using fuel prices estimated in the Energy and Information 
Administration's 2014 Annual Energy Outlook.\640\ As the AEO fuel price 
projections go through 2040 and not beyond, fuel prices beyond 2040 
were set equal to the 2040 values. These estimates do not account for 
the significant uncertainty in future fuel prices; the monetized fuel 
savings would be understated if actual fuel prices are higher (or 
overstated if fuel prices are lower) than estimated. The Annual Energy 
Outlook (AEO) is a standard reference used by NHTSA and EPA and many 
other government agencies to estimate the projected price of fuel. This 
has been done using both the pre-tax and post-tax fuel prices. Since 
the post-tax fuel prices are the prices paid at fuel pumps, the fuel 
savings calculated using these prices represent the changes fuel 
purchasers would see. The pre-tax fuel savings measure the value to 
society of the resources saved when less fuel is refined and consumed. 
Assuming no change in fuel tax rates, the difference between these two 
columns represents the reduction in fuel tax revenues that would be 
received by state and federal governments, or about $240 million in 
2021 and $5.2 billion by 2050 as shown in Table IX-6 where annual 
changes in monetized fuel savings are shown along with net present 
values using 3 percent and 7 percent discount rates. Table IX-7 Table 
IX-8 show the discounted model year lifetime fuel savings using 3 
percent and 7 percent discount rates, respectively.
---------------------------------------------------------------------------

    \640\ U.S. Energy Information Administration, Annual Energy 
Outlook 2014, Early Release; Report Number DOE/EIA-0383ER (2014), 
December 16, 2013.

Table IX-6--Annual Fuel Savings and Net Present Values at 3% and 7% Discount Rates Using Method B for the Preferred Alternative and Relative to the Less
                                                                    Dynamic Baseline
                                                                [$Millions of 2012$] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Fuel savings--retail                            Fuel savings--untaxed
              Calendar year              ------------------------------------------------------------------------------------------------    Change in
                                             Gasoline         Diesel            Sum          Gasoline         Diesel            Sum          transfer
--------------------------------------------------------------------------------------------------------------------------------------------------------
2018....................................              $0            $261            $261              $0            $227            $227             $34
2019....................................               0             540             540               0             472             472              68
2020....................................               0             834             834               0             731             731             103
2021....................................              31           1,958           1,989              27           1,723           1,750             239
2022....................................              92           3,413           3,505              80           3,015           3,095             410
2023....................................             183           4,936           5,119             160           4,372           4,532             587
2024....................................             324           7,426           7,750             285           6,594           6,879             871
2025....................................             496          10,035          10,531             436           8,937           9,372           1,158
2026....................................             695          12,683          13,378             613          11,321          11,934           1,445
2027....................................             976          15,883          16,859             861          14,215          15,076           1,782
2028....................................           1,243          18,938          20,181           1,099          16,980          18,079           2,102
2029....................................           1,511          21,974          23,485           1,338          19,745          21,083           2,402
2030....................................           1,770          24,905          26,675           1,571          22,422          23,993           2,682
2035....................................           2,921          38,047          40,968           2,621          34,621          37,242           3,726
2040....................................           3,778          48,300          52,078           3,427          44,357          47,783           4,295
2050....................................           4,397          58,241          62,638           3,988          53,486          57,474           5,164
NPV, 3%.................................          37,319         506,971         544,290          33,603         461,992         495,595          48,695
NPR, 7%.................................          15,211         212,373         227,584          13,663         192,984         206,646          20,937
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

[[Page 40445]]

 Table IX-7--Discounted Model Year Lifetime Fuel Savings, 3% Discount Rate Using Method B for the Preferred Alternative and Relative to the Less Dynamic
                                                                        Baseline
                                                                [$Millions of 2012$] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Fuel savings--retail                            Fuel savings--untaxed
               Model year                ------------------------------------------------------------------------------------------------    Change in
                                             Gasoline         Diesel            Sum          Gasoline         Diesel            Sum          transfer
--------------------------------------------------------------------------------------------------------------------------------------------------------
2018....................................              $0          $2,183          $2,183              $0          $1,937          $1,937            $246
2019....................................               0           2,123           2,123               0           1,890           1,890             234
2020....................................               0           2,066           2,066               0           1,844           1,844             222
2021....................................             258          12,178          12,436             228          10,898          11,126           1,310
2022....................................             487          12,369          12,856             431          11,094          11,525           1,331
2023....................................             700          12,513          13,212             620          11,247          11,867           1,346
2024....................................           1,067          19,934          21,001             947          17,953          18,901           2,100
2025....................................           1,277          20,435          21,712           1,136          18,441          19,577           2,135
2026....................................           1,484          20,858          22,342           1,323          18,858          20,180           2,161
2027....................................           2,001          24,642          26,643           1,787          22,319          24,106           2,537
2028....................................           1,981          24,610          26,592           1,772          22,329          24,101           2,491
2029....................................           1,957          24,536          26,493           1,754          22,298          24,052           2,441
Sum.....................................          11,211         178,448         189,659           9,997         161,107         171,105          18,554
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

 Table IX-8--Discounted Model Year Lifetime Fuel Savings, 7% Discount Rate Using Method B for the Preferred Alternative and Relative to the Less Dynamic
                                                                        Baseline
                                                                 [Millions of 2012] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Fuel savings--retail                            Fuel savings--untaxed
               Model year                ------------------------------------------------------------------------------------------------    Change in
                                             Gasoline         Diesel            Sum          Gasoline         Diesel            Sum          transfer
--------------------------------------------------------------------------------------------------------------------------------------------------------
2018....................................              $0          $1,529          $1,529              $0          $1,352          $1,352            $176
2019....................................               0           1,428           1,428               0           1,267           1,267             161
2020....................................               0           1,331           1,331               0           1,185           1,185             146
2021....................................             163           7,538           7,701             143           6,731           6,874             827
2022....................................             295           7,383           7,678             260           6,608           6,869             810
2023....................................             408           7,200           7,607             361           6,458           6,819             789
2024....................................             599          11,055          11,654             531           9,938          10,469           1,186
2025....................................             690          10,917          11,607             613           9,834          10,447           1,160
2026....................................             772          10,734          11,505             687           9,688          10,374           1,131
2027....................................           1,003          12,215          13,218             894          11,046          11,940           1,278
2028....................................             956          11,741          12,697             854          10,636          11,490           1,206
2029....................................             909          11,269          12,179             814          10,228          11,041           1,137
Sum.....................................           5,794          94,339         100,134           5,157          84,971          90,128          10,005
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

D. Maintenance Expenditures

    The agencies expect minimal increases in maintenance costs under 
the proposed standards, having estimated increased maintenance costs 
associated only with installation of lower rolling resistance tires. We 
expect that, when replaced, the lower rolling resistance tires would be 
replaced by equivalent performing tires throughout the vehicle 
lifetime. As such, the incremental increases in costs for lower rolling 
resistance tires would be incurred throughout the vehicle lifetime at 
intervals consistent with current tire replacement intervals. Those 
intervals are difficult to quantify given the variety of vehicles and 
operating modes within the HD industry. We detail the inputs used to 
estimate maintenance impacts in Chapter 7.3.3 of the draft RIA. We 
request comment on all aspects of the maintenance estimates. 
Specifically, for electrified vehicles (mild/strong hybrids) which are 
expected in alternatives 3 and 4 and in each vehicle category, we have 
not estimated any increased maintenance costs. We have heard from at 
least one source \641\ that strong hybrid maintenance can be higher in 
some ways, including possible battery replacement, but may also be much 
lower for some vehicle systems like brakes and general engine wear. 
Given the uncertainty, we have not estimated maintenance costs 
specifically for these electrified vehicles but request comment so that 
we might be able to include potential costs in the final rule. We also 
request comment on any other maintenance costs that should be 
considered along with supporting data.
---------------------------------------------------------------------------

    \641\ Allison Transmission's Responses to EPA's Hybrid 
Questions, November 6, 2014.
---------------------------------------------------------------------------

    Table IX-9 shows the annual increased maintenance costs of the 
preferred alternative along with net present values using both 3 
percent and 7 percent discount rates. Table IX-10 shows the discounted 
model year lifetime increased maintenance costs of the preferred 
alternative at both 3 percent and 7 percent discount rates along with 
sums across applicable model years.

[[Page 40446]]

 Table IX-9--Annual Maintenance Expenditure Increase Due to the Proposal
  and Net Present Values at 3% and 7% Discount Rates Using Method B and
                  Relative to the Less Dynamic Baseline
                        [$Millions of 2012$] \a\
------------------------------------------------------------------------
                                                            Maintenance
                      Calendar year                         expenditure
                                                             increase
------------------------------------------------------------------------
2018....................................................              $6
2019....................................................              11
2020....................................................              16
2021....................................................              28
2022....................................................              39
2023....................................................              50
2024....................................................              64
2025....................................................              78
2026....................................................              90
2027....................................................             104
2028....................................................             116
2029....................................................             127
2030....................................................             127
2035....................................................             127
2040....................................................             127
2050....................................................             127
NPV, 3%.................................................           1,796
NPV, 7%.................................................             860
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table IX-10--Discounted MY Lifetime Maintenance Expenditure Increase due
to the Proposal using Method B and Relative to the Less Dynamic Baseline
                        [$Millions of 2012$] \a\
------------------------------------------------------------------------
                                            3% Discount     7% Discount
               Model year                      rate            rate
------------------------------------------------------------------------
2018....................................              51              36
2019....................................              49              33
2020....................................              47              31
2021....................................              90              57
2022....................................              89              54
2023....................................              89              52
2024....................................             112              63
2025....................................             113              61
2026....................................             102              53
2027....................................             116              58
2028....................................             111              54
2029....................................             101              47
                                         -------------------------------
    Sum.................................           1,071             600
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

E. Analysis of the Rebound Effect

    The ``rebound effect'' has been defined a number of ways in the 
literature, and one common definition states that the rebound effect is 
the increase in demand for an energy service when the cost of the 
energy service is reduced due to efficiency improvements.\642\ \643\ 
\644\ In the context of heavy-duty vehicles (HDVs), this can be 
interpreted as an increase in HDV fuel consumption resulting from more 
intensive vehicle use in response to increased vehicle fuel 
efficiency.\645\ Although much of this vehicle use increase is likely 
to take the form of increases in the number of miles vehicles are 
driven, it can also take the form of increases in the loaded weight at 
which vehicles operate or changes in traffic and road conditions 
vehicles encounter as operators alter their routes and schedules in 
response to improved fuel efficiency. Because this more intensive use 
consumes fuel and generates emissions, it reduces the fuel savings and 
avoided emissions that would otherwise be expected to result from the 
increases in fuel efficiency this rulemaking proposes.
---------------------------------------------------------------------------

    \642\ Winebrake, J.J., Green, E.H., Comer, B., Corbett, J.J., 
Froman, S., 2012. Estimating the direct rebound effect for on-road 
freight transportation. Energy Policy 48, 252-259.
    \643\ Greene, D.L., Kahn, J.R., Gibson, R.C., 1999, ``Fuel 
economy rebound effect for U.S. household vehicles'', The Energy 
Journal, 20.
    \644\ For a discussion of the wide range of definitions found in 
the literature, see Appendix D: Discrepancy in Rebound Effect 
Definitions, in EERA (2014), ``Research to Inform Analysis of the 
Heavy-Duty vehicle Rebound Effect'', Excerpts of Draft Final Report 
of Phase 1 under EPA contract EP-C-13-025. (Docket ID: EPA-HQ-OAR-
2014-0827). See also Greening, L.A., Greene, D.L., Difiglio, C., 
2000, ``Energy efficiency and consumption--the rebound effect--a 
survey'', Energy Policy, 28, 389-401.
    \645\ We discuss other potential rebound effects in section 
IX.D.3, such as the indirect and economy-wide rebound effects. Note 
also that there is more than one way to measure HDV energy services 
and vehicle use. The agencies' analyses use VMT as a measure (as 
discussed below); other potential measures include ton-miles, cube-
miles, and fuel consumption.
---------------------------------------------------------------------------

    Unlike the light-duty vehicle (LDV) rebound effect, the HDV rebound 
effect has not been extensively studied. According to a 2010 HDV report 
published by the National Research Council of the National Academies 
(NRC),\646\ it is ``not possible to provide

[[Page 40447]]

a confident measure of the rebound effect,'' yet NRC concluded that a 
HDV rebound effect probably exists and that, ``estimates of fuel 
savings from regulatory standards will be somewhat misestimated if the 
rebound effect is not considered.'' Although we believe the HDV rebound 
effect needs to be studied in more detail, we have nevertheless 
attempted to capture its potential effect in our analysis of these 
proposed rules, rather than to await further study. We have elected to 
do so because the magnitude of the rebound effect is an important 
determinant of the actual fuel savings and emission reductions that are 
likely to result from adopting stricter fuel efficiency and GHG 
emission standards.
---------------------------------------------------------------------------

    \646\ Committee to Assess Fuel Economy Technologies for Medium- 
and Heavy-Duty Vehicles; National Research Council; Transportation 
Research Board (2010). ``Technologies and Approaches to Reducing the 
Fuel Consumption of Medium- and Heavy-Duty Vehicles,'' Washington, 
DC. The National Academies Press. Available electronically from the 
National Academies Press Web site at http://www.nap.edu/catalog.php?record_id=12845 (last accessed September 10, 2010).
---------------------------------------------------------------------------

    In our analysis and discussion below, we focus on one widely-used 
metric to estimate the rebound effect associated with all types of more 
intensive vehicle use, the increase in vehicle miles traveled (VMT) 
that results from improved fuel efficiency. VMT can often provide a 
reasonable approximation for all types of more intensive vehicle use. 
For simplicity, we refer to this as ``the VMT rebound effect'' or ``VMT 
rebound'' throughout this section, although we acknowledge that it is 
an approximation to the rebound effect associated with all types of 
more intensive vehicle use. The agencies use our VMT rebound estimates 
to generate VMT inputs that are then entered into the EPA MOVES 
national emissions inventory model and the Volpe Center's HD CAFE 
model. Both of these models use these inputs along with many others to 
generate projected emissions and fuel consumption changes resulting 
from each of the regulatory alternatives analyzed.
    Using VMT rebound to approximate the fuel consumption impact from 
all types of more intensive vehicle use may not be completely accurate. 
Many factors other than distance traveled--for example, a vehicle's 
loaded weight--play a role in determining its fuel consumption, so it 
is also important to consider how changes in these factors are 
correlated with variation in vehicle miles traveled. Empirical 
estimates of the effect of weight on HDV fuel consumption vary, but 
universally show that loaded weight has some effect on fuel consumption 
that is independent of distance traveled. Therefore, the product of 
vehicle payload and miles traveled, which typically is expressed in 
units of ``ton-miles'' or ``ton-kilometers'', has also been considered 
as a metric to approximate the rebound effect. Because this metric's 
value depends on both payload and distance, it is important to note 
that changes in these two variables can have different impacts on HDV 
fuel consumption. This is because the fuel consumed by HDV freight 
transport is determined by several vehicle attributes including engine 
and accessory efficiencies, aerodynamic characteristics, tire rolling 
resistance and total vehicle mass--including payload carried, if any.
    Other factors such as vehicle route and traffic patterns can also 
affect how each of these vehicle attributes contributes to the overall 
fuel consumption of a vehicle. While it seems intuitive that if all of 
these other conditions remain constant, a vehicle driving the same 
route and distance twice will consume twice as much fuel as driving 
that same route once. However, because of the other vehicle attributes, 
it is less intuitive how a change in vehicle payload would affect 
vehicle fuel consumption. We request comment on how the agencies should 
consider the relationship between changes in vehicle miles traveled, 
changes in vehicle ton-miles achieved, and overall fuel consumption 
when considering how best to measure the rebound effect.
    Because the factors influencing HDV VMT rebound are generally 
different from those affecting LDV VMT rebound, much of the research on 
the LDV sector is likely to not apply to the HDV sector. For example, 
the owners and operators of LDVs may respond to the costs and benefits 
associated with changes in their personal vehicle's fuel efficiency 
very differently than a HDV fleet owner or operator would view the 
costs and benefits (e.g., profits, offering more competitive prices for 
services) associated with changes in their HDVs' fuel efficiency. To 
the extent the response differs, such differences may be smaller for HD 
pickups and vans, which share some similarities with LDVs. As discussed 
in the 2010 NRC HD report, one difference from the LDV case is that 
when calculating the change in HDV costs that causes the rebound 
effect, it is more important to consider all components of HDV 
operating costs. The costs of labor and fuel generally constitute the 
two largest shares of HDV operating costs, depending on the price of 
petroleum, distance traveled, type of vehicle, and commodity 
transported (if any).647 648 Equipment depreciation costs 
associated with the purchase or lease of an HDV are another significant 
component of total operating costs. Even when HDV purchases involve 
upfront, one-time payments, HDV operators must recover the depreciation 
in the value of their vehicles resulting from their use, so this is 
likely to be considered as an operating cost they will attempt to pass 
on to final consumers of HDV operator services.
---------------------------------------------------------------------------

    \647\ American Transportation Research Institute, An Analysis of 
the Operational Costs of Trucking, September 2013.
    \648\ Transport Canada, Operating Cost of Trucks, 2005. See 
http://www.tc.gc.ca/eng/policy/report-acg-operatingcost2005-2005-e-2-1727.htm, accessed on July 16, 2010.
---------------------------------------------------------------------------

    Estimates of the impact of fuel efficiency standards on HDV VMT, 
and hence fuel consumption, should account for changes in all of these 
components of HDV operating costs. The higher the net savings in total 
operating costs is, the higher the expected rebound effect would be. 
Conversely, if higher HDV purchase costs outweigh future cost savings 
and total operating costs increase, HDV costs could rise, which would 
likely result in a decrease in HDV VMT. In theory, other cost changes 
resulting from any requirement to achieve higher fuel efficiency, such 
as changes in maintenance costs or insurance rates, should also be 
taken into account, although information on these elements of HDV 
operating costs is extremely limited. In this analysis, the agencies 
adapt estimates of the VMT rebound effect to project the response of 
HDV use to the estimated changes in total operating costs that result 
from the proposed Phase 2 standards. We seek comment and data on how 
our proposed standards could impact these and other types of HDV 
operating costs, as well as on our procedure for adapting the VMT 
rebound effect to estimate the response of HDV use to changes in total 
operating costs.
    Since businesses are profit-driven, one would expect their 
decisions to be based on the costs and benefits of different operating 
decisions, both in the near-term and long-term. Specifically, one would 
expect commercial HDV operators to take into account changes in overall 
operating costs per mile when making decisions about HDV use and 
setting rates they charge for their services. If demand for those 
services is sensitive to the rates HDV operators charge, HDV VMT could 
change in response to the effect of higher fuel efficiency on the rates 
HDV operators charge. If demand for HDV services is insensitive to 
price (e.g., due to lack of good substitutes), however, or if changes 
in HDV operating costs due to the proposed standards are not

[[Page 40448]]

passed on to final consumers of HDV operator services, the proposed 
standards may have a limited impact on HDV VMT.
    The following sections describe the factors affecting the magnitude 
of HDV VMT rebound; review the econometric and other evidence related 
to HDV VMT rebound; and summarize how we estimated the HDV rebound 
effect for this proposal.
(1) Factors Affecting the Magnitude of HDV VMT Rebound
    The magnitude and timing of HDV VMT rebound result from the 
interaction of many different factors.\649\ Fuel savings resulting from 
fuel efficiency standards may cause HDV operators and their customers 
to change their patterns of HDV use and fuel consumption in a variety 
of ways. For example, HDV operators may pass on the fuel cost savings 
to their customers by decreasing prices for shipping products or 
providing services, which in turn could stimulate more demand for those 
products and services (e.g., increases in freight output), and result 
in higher VMT. As discussed later in this section, HDV VMT rebound 
estimates determined via other proxy elasticities vary widely, but in 
no case has there been an estimate that fully offsets the fuel saved 
due to efficiency improvements (i.e., no rebound effect greater than or 
equal to 100 percent).
---------------------------------------------------------------------------

    \649\ These factors are discussed more fully in a report to EPA 
from EERA, which illustrates in a series of diagrams the complex 
system of decisions and decision-makers that could influence the 
magnitude and timing of the rebound effect. See Sections 2.2.2, 
2.2.3, 2.2.4, and 2.3 in EERA (2014), ``Research to Inform Analysis 
of the Heavy-Duty Vehicle Rebound Effect'', Excerpts of Draft Final 
Report of Phase 1 under EPA contract EP-C-13-025.
---------------------------------------------------------------------------

    If fuel cost savings are passed on to the HDV operators' customers 
(e.g., logistics businesses, manufacturers, retailers, municipalities, 
utilities consumers), those customers might reorganize their logistics 
and distribution networks over time to take advantage of lower 
operating costs. For example, customers might order more frequent 
shipments or choose products that entail longer shipping distances, 
while freight carriers might divert some shipments to trucks from other 
shipping modes such as rail, barge or air. In addition, customers might 
choose to reduce their number of warehouses, reduce shipment rates or 
make smaller but more frequent shipments, all of which could lead to an 
increase in HDV VMT. Ultimately, fuel cost savings could ripple through 
the entire economy, thus increasing demand for goods and services 
shipped by trucks, and therefore increase HDV VMT due to increased 
gross domestic product (GDP).
    Conversely, if fuel efficiency standards lead to net increases in 
the total costs of HDV operation because fuel cost savings do not fully 
offset the increase in HDV purchase prices and associated depreciation 
costs, then the price of HDV services could rise. This is likely to 
spur a decrease in HDV VMT, and perhaps a shift to alternative shipping 
modes. These effects could also ripple through the economy and affect 
GDP. Note, however, that we project fuel cost savings will offset 
technology costs in our analysis supporting our proposed standards.
    It is also important to note that any increase in HDV VMT resulting 
from our proposed standards may be offset, to some extent, by a 
decrease in VMT by older HDVs. This may occur if lower fuel costs 
resulting from our standards cause multi-vehicle fleet operators to 
shift VMT to newer, more efficient HDVs in their fleet or cause 
operators with newer, more efficient HDVs to be more successful at 
winning contracts than operators with older HDVs.
    Also, as discussed in Chapter 8.3.3 of the Draft RIA, the magnitude 
of the rebound effect is likely to be influenced by the extent of any 
market failures that affect the demand for more fuel efficient HDVs, as 
well as by HDV operators' responses to their perception of the tradeoff 
between higher upfront HDV purchase costs versus lower but uncertain 
future expenditures on fuel.
(2) Econometric and Other Evidence Related to HDV VMT Rebound
    As discussed above, HDV VMT rebound is defined as the change in HDV 
VMT that occurs in response to an increase in HDV fuel efficiency. We 
are not aware of any studies that directly estimate this elasticity 
\650\ for the U.S. This section discusses econometric analyses of other 
related elasticities that could potentially be used as a proxy for 
measuring HDV VMT rebound, as well as other analyses that may provide 
insight into the magnitude of HDV VMT rebound. We seek comment on the 
applicability of the findings from these analyses, as well as 
additional data and research on the topic of HDV VMT rebound.
---------------------------------------------------------------------------

    \650\ Elasticity is the measurement of how responsive an 
economic variable is to a change in another. For example: price 
elasticity of demand is a measure used in economics to show the 
responsiveness, or elasticity, of the quantity demanded of a good or 
service to a change in its price. More precisely, it gives the 
percentage change in quantity demanded in response to a one percent 
change in price.
---------------------------------------------------------------------------

    One of the challenges to developing robust econometric analyses of 
HDV VMT rebound in the U.S. is data limitations. For example, the main 
source of time-series HDV fuel efficiency data in the U.S. is derived 
from aggregate fuel consumption and HDV VMT data. This may introduce 
interdependence or ``simultaneity'' between measures of HDV VMT and HDV 
fuel efficiency, because estimates of HDV fuel efficiency are derived 
partly from HDV VMT. This mutual interdependence makes it difficult to 
isolate the causal effect of HDV fuel efficiency on HDV VMT and to 
measure the response of HDV VMT to changes in HDV fuel efficiency.
    Data on other important determinants of HDV VMT, such as freight 
shipping rates, shipment sizes, HDV payloads, and congestion levels on 
key HDV routes is also limited, of questionable reliability, or 
unavailable. Additionally, data on HDVs and their use is usually only 
available at an aggregate level, making it difficult to evaluate 
potential differences in determinants of VMT for different types of HDV 
operations (e.g., long-haul freight vs. regional delivery operations) 
or vehicle sub-classes (e.g., utility vehicles vs. school buses).
    Another challenge inherent in using econometric techniques to 
measure the response of HDV VMT to HDV fuel efficiency is developing 
model specifications that incorporate the mathematical form and range 
of explanatory variables necessary to produce reliable estimates of HDV 
VMT rebound. Many different factors can influence HDV VMT, and the 
complex relationships among those factors should be considered when 
measuring the rebound effect.\651\
---------------------------------------------------------------------------

    \651\ A useful framework for understanding how various responses 
interact to determine the rebound effect is presented in Section 2 
and Appendix B of De Borger, B. and Mulalic, I. (2012), ``The 
determinants of fuel use in the trucking industry--volume, fleet 
characteristics and the rebound effect'', Transportation Policy, 
Volume 24, pp. 284-295. See also Section 3.4 of EERA (2014), 
``Research to Inform Analysis of the Heavy-Duty vehicle Rebound 
Effect'', Excerpts of Draft Final Report of Phase 1 under EPA 
contract EP-C-13-025.
---------------------------------------------------------------------------

    In practice, however, most studies have employed simplified models. 
Many use price variables (e.g., price per gallon of fuel, or fuel cost 
per mile driven) and some measure of aggregate economic activity, such 
as GDP. However, some of these studies exclude potentially important 
variables such as the amount of road capacity (which affects travel 
speeds and may be related to other important characteristics of highway 
infrastructure), or the price or availability of competing forms of 
freight transport such as rail or barge (i.e., characteristics of the 
overall freight transport network).

[[Page 40449]]

(a) Fuel Price and Fuel Cost Elasticities
    This sub-section reviews econometric analyses of the change in HDV 
use (measured in VMT, ton-mile, or fuel consumption) in response to 
changes in fuel price ($/gallon) or fuel cost ($/mile or $/ton-mile). 
The studies presented below attempt to estimate these elasticities in 
the HDV sector using varying approaches and data sources.
    Gately (1990) employed an econometric analysis of U.S. data for the 
years 1966-1988 to examine the relationship between HDV VMT and average 
fuel cost per mile, real Gross National Product (GNP), and variables 
capturing the effects of fuel shortages in 1974 and 1979.\652\ The 
study found no statistically significant relationship between HDV VMT 
and fuel cost per mile. Gately's estimates of the elasticity of HDV VMT 
with respect to fuel cost per mile were -0.035 with and -0.029 without 
the fuel shortage variables, but both estimates had large standard 
errors. However, Gately's study was beset by numerous statistical 
problems, which raise serious questions about the reliability of its 
results.\653\
---------------------------------------------------------------------------

    \652\ Gately, D., The U.S. Demand for Highway Travel and Motor 
Fuels, The Energy Journal, Volume 11, No. 3, July 1990, pp.59-73.
    \653\ The most important of these problems--similar historical 
time trends in the model's dependent variable and the measures used 
to explain its historical variation--can lead to ``spurious 
regressions,'' or the appearance of behavioral relationships that 
are simply artifacts of the similarity (or correlation) in 
historical trends among the model's variables.
---------------------------------------------------------------------------

    More recently, Matos and Silva (2011) analyzed road freight 
transportation sector data for the years 1987-2006 in Portugal to 
identify the determinants of demand for HDV freight 
transportation.\654\ Using a reduced-form equation relating HDV use 
(measured in ton-km) to economic activity (GDP) and the energy cost of 
HDV use (measured in fuel cost per ton-km carried), these authors 
estimated the elasticity of HDV ton-km with respect to energy costs to 
be -0.241. An important strength of Matos and Silva's study is that it 
also estimated this same elasticity using a procedure that accounted 
for the effect of potential mutual causality between HDV ton-km and 
energy costs, and arrived at an identical value.
---------------------------------------------------------------------------

    \654\ Matos, F.J.F., and Silva, F.J.F., ``The Rebound Effect on 
Road Freight Transport: Empirical Evidence from Portugal,'' Energy 
Policy, 39, 2011, pp. 2833-2841.
---------------------------------------------------------------------------

    Differences between HDV use and the level of highway service in 
Portugal and in the U.S. might limit the applicability of Matos and 
Silva's result to the U.S. The volume and mix of commodities could 
differ between the two nations, as could the levels of congestion on 
their respective highway networks, transport distances, the extent of 
intermodal competition, and the characteristics of HDVs themselves. 
HDVs also operate over a more limited highway network in Portugal than 
in the United States. Unfortunately, it is difficult to anticipate how 
these differences might cause Matos and Silva's elasticity estimates to 
differ from what we might find in the U.S. Finally, their analysis 
focused on HDV freight transport and did not consider non-freight uses 
of HDVs, which somewhat limits its usefulness in the analysis of this 
proposed rulemaking.
    De Borger and Mulalic (2012) examined the determinants of fuel use 
in the Denmark HDV freight transport sector for the years 1980-2007. 
The authors developed a system of equations that capture linkages among 
the demand for HDV freight transport, HDV fleet characteristics, and 
HDV fuel consumption.\655\ As De Borger and Mulalic state, ``we 
precisely define and estimate a rebound effect of improvements in fuel 
efficiency in the trucking industry: Behavioral adjustments in the 
industry imply that an exogenous improvement in fuel efficiency reduces 
fuel use less than proportionately. Our best estimate of this effect is 
approximately 10 percent in the short run and 17 percent in the long 
run, so that a 1 percent improvement in fuel efficiency reduces fuel 
use by 0.90 percent (short-run) to 0.83 percent (long-run).''
---------------------------------------------------------------------------

    \655\ De Borger, B. and Mulalic, I., ``The determinates of fuel 
use in the trucking industry--volume, fleet characteristics and the 
rebound effect'', Transportation Policy, Volume 24, November 2012, 
pp. 284-295.
---------------------------------------------------------------------------

    While De Borger and Mulalic capture a number of important responses 
that contribute to the rebound effect, some caution is appropriate when 
using their results to estimate the VMT rebound effect for this 
proposal. Like the Matos and Silva study, this study examined HDV 
activity in another country, Denmark, which has a less-developed 
highway system, lower levels of freight railroad service than the U.S., 
and is also likely to have a different composition of freight shipping 
activity. Although the effect of some of these differences is unclear, 
greater competition from rail shipping in the U.S. and the resulting 
potential for lower trucking costs to divert some rail freight to truck 
could cause the VMT rebound effect to be larger in the U.S. than De 
Borger and Mulalic's estimate for Denmark.
    On the other hand, if freight networks are denser and commodity 
types are more homogenous in Denmark than the U.S., then shippers may 
have wider freight trucking options. If this is the case, shippers in 
Denmark might be more sensitive to changes in freight costs, which 
could cause the rebound effect in Denmark to be larger than the U.S. 
Like the Matos and Silva study, this analysis also focuses on freight 
trucking and does not consider non-freight HDVs (e.g. vocational 
vehicles). We have been unable to identify adequate data to employ De 
Borger and Mulalic's model for the U.S. (mainly because time-series 
data on freight carriage by trucks, driver wages, and vehicle prices in 
the U.S. are limited).
    The Volpe National Transportation Systems Center previously has 
developed a series of travel forecasting models for the Federal Highway 
Administration (FHWA).\656\ Work conducted by the Volpe Center during 
2009-2011 to develop the original version of FHWA's forecasting model 
was presented in the Regulatory Impact Analysis for the HD GHG Phase 1 
rule (see Table 9-2 in that document, which is reproduced below as 
Table IX-11).\657\ In the analysis for the Phase 1 rule, Volpe 
estimated both state-level and national aggregate models to forecast 
HDV single unit and combination truck VMT that included fuel cost per 
mile as an explanatory variable. This analysis used data from 1970-2008 
for its national aggregate model, and data for the 50 individual states 
from 1994-2008 for its state-level model.658 659
---------------------------------------------------------------------------

    \656\ FHWA Travel Analysis Framework Development of VMT 
Forecasting Models for Use by the Federal Highway Administration May 
12, 2014 http://www.fhwa.dot.gov/policyinformation/tables/vmt/vmt_model_dev.pdf. Volpe's work was advised by a panel of 
approximately 20 experts in the measurement, analysis, and 
forecasting of travel, including academic researchers, 
transportation consultants, and members of local, state, and federal 
government transportation agencies. It was also summarized in the 
paper ``Developing a Multi-Level Vehicle Miles of Travel Forecasting 
Model,'' November, 2011, which was presented to the Transportation 
Research Board's 91st Annual Meeting in January, 2012.
    \657\ EPA/NHTSA, August 2011. Chapter 9.3.3, Final Rulemaking to 
Establish Greenhouse gas Emission Standards & Fuel Efficiency 
Standards for Medium-and Heavy-Duty Engines and Vehicles, Regulatory 
Impact Analysis. EPA-420-R-11-901. (http://www.epa.gov/otaq/climate/documents/420r11901.pdf).
    \658\ Combination trucks are defined as ``all [Class 7/8] trucks 
designed to be used in combination with one or more trailers with a 
gross vehicle weight rating over 26,000 lbs.'' (AFDC, 2014; ORNL, 
2013c). Single-unit trucks are defined as ``single frame trucks that 
have 2-axles and at least 6 tires or a gross vehicle weight rating 
exceeding 10,000 lbs.'' (FHWA, 2013).
    \659\ The national-level and functional class VMT forecasting 
models utilize aggregate time-series data for the nation as a whole, 
so that only a single measure of each variable is available during 
each time period (i.e., year). In contrast, the state-level VMT 
models have an additional data dimension, since both their dependent 
variable (VMT) and most explanatory variables have 51 separate 
observations available for each time period (one for each of the 50 
states as well as Washington, DC). In this context, the states 
represent a ``cross-section,'' and a continuous annual sequence of 
these cross-sections is available.

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

[[Page 40450]]

    Volpe analysts tested a large number of different specifications 
for its national and state level models that incorporated the effects 
of factors such as aggregate economic activity and its composition, the 
volume of U.S. exports and imports, and factors affecting the cost of 
producing trucking services (e.g., driver wage rates, truck purchase 
prices, and fuel costs), and the extent and capacity of the U.S. and 
states' highway networks.
    Table IX-11 summarizes Volpe's Phase 1 estimates of the elasticity 
of truck VMT with respect to fuel cost per mile.\660\ As it indicates, 
these estimates vary widely, and the estimates based on state-level and 
national data differ substantially.
---------------------------------------------------------------------------

    \660\ One drawback of the fuel cost measure employed in Volpe's 
models is that it is based on estimates of fuel economy derived from 
truck VMT and fuel consumption, which introduces the potential for 
mutual causality (or ``simultaneity'') between VMT and the fuel cost 
measure and makes the effect of the latter difficult to isolate. 
This may cause their estimates of the sensitivity of truck VMT to 
fuel costs to be inaccurate, although the direction of any resulting 
bias is difficult to anticipate.

  Table IX-11--Summary of Volpe Center Estimates of Elasticity of Truck VMT With Respect to Fuel Cost per Mile
----------------------------------------------------------------------------------------------------------------
                                                          National data                     State data
                   Truck type                   ----------------------------------------------------------------
                                                    Short run        Long run        Short run       Long run
----------------------------------------------------------------------------------------------------------------
Single Unit....................................          13-22%          28-45%             3-8%          12-21%
Combination....................................             N/A          12-14%              N/A            4-5%
----------------------------------------------------------------------------------------------------------------

    Volpe staff conducted additional analysis of the models that 
yielded the estimates of the elasticity of truck VMT with respect to 
fuel cost per mile reported in Table IX-11, using updated information 
on fuel costs and other variables appearing in these models, together 
with revised historical data on truck VMT provided by DOT's Federal 
Highway Administration. The newly-available data, statistical 
procedures employed in conducting this additional analysis, and its 
results are summarized in materials that can be found in the docket for 
this rulemaking. This new Volpe analysis was not available at the time 
the agencies selected the values of the rebound effect for this 
proposal, but the agencies will consider this work and any other work 
in the analysis supporting the final rule.
    Finally, EPA has contracted with Energy and Environmental Research 
Associates (EERA), LLC to analyze the HDV rebound effect for regulatory 
assessment purposes. Excerpts of EERA's initial report to EPA are 
included in the docket and contain detailed qualitative discussions of 
the rebound effect as well as data sources that could be used in 
quantitative analysis.\661\ EERA also conducted follow-on quantitative 
analyses focused on estimating the impact of fuel prices on VMT and 
fuel consumption. We have included a working paper in the docket on 
this work, and we seek comment on this work.\662\ Note that EERA's 
working paper was not available at the time the agencies conducted the 
analysis of the rebound effect for this proposal, but the agencies will 
consider this work and any other work in the analysis supporting the 
final rule.
---------------------------------------------------------------------------

    \661\ EERA (2014), ``Research to Inform Analysis of the Heavy-
Duty vehicle Rebound Effect'', Excerpts of Draft Final Report of 
Phase 1 under EPA contract EP-C-13-025.
    \662\ EERA (2015), ``Working Paper on Fuel Price Elasticities 
for Heavy Duty Vehicles'', Draft Final Report of Phase 2 under EPA 
contract EP-C-11-046.
---------------------------------------------------------------------------

    There are reasons to be cautious about interpreting the 
elasticities from the studies reviewed in this section as a measure of 
VMT rebound resulting from our proposed standards. For example, vehicle 
capacity and loaded weight can vary dynamically in the HDV sector--
possibly in response to changes in fuel price and fuel efficiency--and 
data on these measures are limited. This makes it difficult to 
confidently infer a direct relationship between trucking output (e.g., 
ton-miles carried) and VMT assuming a constant average payload.
    In addition, fuel cost per mile--calculated by multiplying fuel 
price per gallon by fuel efficiency in gallons per mile--and fuel price 
may be imprecise proxies for an improvement in fuel efficiency, because 
the response of VMT to these variables may differ. For example, if 
truck operators are more attentive to variation in fuel prices than to 
changes in fuel efficiency, then fuel price or fuel cost elasticities 
may overstate the true magnitude of the rebound effect.
    Similarly, there is some evidence in the literature that demand for 
crude petroleum and refined fuels is more responsive to increases than 
to decreases in their prices, although this research is not specific to 
the HDV sector.\663\ Since improved fuel efficiency typically causes 
fuel costs for HDVs to fall (and assuming fuel costs are not fully 
offset by increases in vehicle purchase prices), fuel price or cost 
elasticities derived from historical periods when fuel prices were 
increasing or fuel efficiency was declining may also overstate the 
magnitude of the rebound effect. An additional unknown is that HDV 
operators may factor fuel prices and fuel costs into their decision-
making about rates to charge for their service differently from the way 
they incorporate initial vehicle purchase costs.
---------------------------------------------------------------------------

    \663\ Gately, D. 1993. The Imperfect Price-Reversibility of 
World Oil Demand. The Energy Journal, International Association for 
Energy Economics, vol. 14 (4), pp. 163-182; Dargay, J.M., Gately, D. 
1997. The demand for transportation fuels: Imperfect price-
reversibility? Transportation Research Part B 31(1); and Sentenac-
Chemin, E., 2012. Is the price effect on fuel consumption symmetric? 
Some evidence from an empirical study. Energy Policy, vol. 41, pp. 
59-65.
---------------------------------------------------------------------------

    Despite these limitations, elasticities with respect to fuel price 
and fuel cost can provide some insight into the magnitude of the HDV 
VMT rebound effect. The agencies request comment on all of the studies 
presented in this section.
(b) Freight Price Elasticities
    Freight price elasticities measure the percent change in demand for 
freight in response to a percent change in freight prices, controlling 
for other variables that may influence freight demand such as GDP, the 
extent that goods are traded internationally, and road supply and 
capacity. This type of elasticity is only applicable to the HDV 
subcategory of freight trucks (i.e., combination tractors and 
vocational vehicles that transport freight). One desirable attribute of 
such measures for purposes of this analysis is that they show the 
response of freight

[[Page 40451]]

trucking activity to changes to trucking rates, including changes that 
result from fuel cost savings as well as increases in HDV technology 
costs.\664\
---------------------------------------------------------------------------

    \664\ Note however that a percent change in freight activity in 
response to a percent change in freight rates should theoretically 
be larger than a percent change in freight activity in response to a 
percent change in fuel efficiency because fuel efficiency only 
impacts a portion of freight operating costs (e.g., fuel and vehicle 
costs, but not likely driver wages or highway tolls).
---------------------------------------------------------------------------

    Freight price elasticities, however, are imperfect proxies for the 
rebound effect in freight trucks for a number of reasons.\665\ For 
example, in order to apply these elasticities we must assume that our 
proposed rule's impact on fuel and vehicle costs is fully reflected in 
freight rates. This may not be the case if truck operators adjust their 
profit margins or other operational practices (e.g., loading practices, 
truck driver's wages) instead of freight rates. It is not well 
understood how trucking firms respond to different types of cost 
changes (e.g., changes to fuel costs versus labor costs).
---------------------------------------------------------------------------

    \665\ Winebrake, J.J., Green, E.H., Comer, B., Corbett, J.J., 
Froman, S., 2012. Estimating the direct rebound effect for on-road 
freight transportation. Energy Policy 48, 252-259.
---------------------------------------------------------------------------

    Freight price elasticity estimates in the literature typically 
measure freight activity in tons or ton-miles, rather than VMT. As 
discussed in the previous section, average truck capacity and payload 
in the HDV sector varies dynamically--possibly in response to changes 
in fuel price and fuel efficiency--and data on these measures are 
limited. This makes it difficult to confidently infer a direct 
relationship between ton-miles and VMT by assuming a constant average 
payload. Inferring a direct relationship between tons and VMT is even 
less straightforward. Additionally, there are significant limitations 
on national freight rate and freight truck ton-mile data in the U.S., 
making it difficult to confidently measure the impact of a change in 
freight rates on ton-miles.\666\
---------------------------------------------------------------------------

    \666\ See, for example, Appendix E in EERA (2014), ``Research to 
Inform Analysis of the Heavy-Duty Vehicle Rebound Effect'', Draft 
Final Report of Phase 1 under EPA contract EP-C-13-025.
---------------------------------------------------------------------------

    Finally, freight price elasticity estimates in the literature vary 
significantly based on commodity type, length of haul, region, 
availability of alternative modes (discussed further in Section 
IX.E.b.iii below), and functional form of the model (i.e., log-linear, 
linear, translog) making it difficult to confidently apply any single 
estimate reported in the literature to nationwide freight activity. For 
example, elasticity estimates for longer trips tend to be larger in 
magnitude than those for shorter trips, while demand to ship bulk 
commodities tends to be less elastic than for non-bulk commodities.
    Although these factors explain some of the differences among 
reported estimates, much of the observed variation cannot be explained 
quantitatively. For example, one study that controlled for mode, 
commodity class, demand elasticity measure (i.e., tons or ton-miles), 
model estimation form, country, and temporal nature of data only 
accounted for about half of the observed variation.\667\
---------------------------------------------------------------------------

    \667\ Li, Z., D.A. Hensher, and J.M. Rose, Identifying sources 
of systematic variation in direct price elasticities from revealed 
preference studies of inter-city freight demand. Transport Policy, 
2011.
---------------------------------------------------------------------------

(c) Mode Shift Case Study
    Although the total demand for freight transport is generally 
determined by economic activity, there is often the choice of shipping 
freight on modes other than HDVs. This is because the United States has 
extensive rail, waterway, pipeline, and air transport networks in 
addition to an extensive highway network; these networks often closely 
parallel each other and are often viable choices for freight transport 
for many long-distance shipping routes within the continental U.S. If 
rates for one mode decline, demand for that mode is likely to increase, 
and some of this new demand could represent shifts from other 
modes.\668\ The ``cross-price elasticity of demand,'' which measures 
the percentage change in demand for shipping by another mode (e.g., 
rail) given a percentage change in the price of HDV freight transport 
services, provides a measure of the importance of such mode shifting. 
Aggregate estimates of cross-price elasticities vary widely,\669\ and 
there is no general consensus on the most appropriate value to use for 
analytical purposes.
---------------------------------------------------------------------------

    \668\ Rail lines in parts of the U.S. are thought to be 
currently oversubscribed. If that is the case, and new freight 
demand is already being satisfied by trucks, then this would limit 
the potential for intermodal freight shifts between trucks and rail 
as the result of this proposed rule.
    \669\ Winebrake, J.J., Green, E.H., Comer, B., Corbett, J.J., 
Froman, S., 2012. Estimating the direct rebound effect for on-road 
freight transportation. Energy Policy 48, 252-259.
---------------------------------------------------------------------------

    When considering intermodal shift, one of the most relevant kinds 
of shipments are those that are competitive between rail and HDV modes. 
These trips generally include long-haul shipments greater than 500 
miles, which weigh between 50,000 and 80,000 lbs (the legal road limit 
in many states). Special kinds of cargo like coal and short-haul 
deliveries are of less interest because they are generally not 
economically transferable between HDV and rail modes, so they would not 
be expected to shift modes except under an extreme price change. 
However, to the best of our knowledge, the total amount of freight that 
could potentially be subject to mode shifting has not been studied 
extensively.
    In order to explore the potential for HDV fuel efficiency standards 
to produce economic conditions that favor a mode shift from rail to 
HDVs, EPA commissioned GIFT Solutions, LLC to perform case studies on 
the HD GHG Phase 1 rule using a number of data sources, including the 
Commodity Flow Survey, interviews with trucking firms, and the 
Geospatial Intermodal Freight Transportation (GIFT) model developed by 
Winebrake and Corbett, which includes information on infrastructure and 
other route characteristics in the U.S.670 671
---------------------------------------------------------------------------

    \670\ Winebrake, James and James J. Corbett (2010). ``Improving 
the Energy Efficiency and Environmental Performance of Goods 
Movement,'' in Sperling, Daniel and James S. Cannon (2010) Climate 
and Transportation Solutions: Findings from the 2009 Asilomar 
Conference on Transportation and Energy Policy. See http://www.its.ucdavis.edu/events/2009book/Chapter13.pdf.
    \671\ Winebrake, J.J.; Corbett, J.J.; Falzarano, A.; Hawker, 
J.S.; Korfmacher, K.; Ketha, S.; Zilora, S., Assessing Energy, 
Environmental, and Economic Tradeoffs in Intermodal Freight 
Transportation, Journal of the Air & Waste Management Association, 
58(8), 2008 (Docket ID: EPA-HQ-OAR-2010-0162-0008).
---------------------------------------------------------------------------

    A central assumption in the case studies was that economic 
conditions would favor a shift from rail to HDVs if either the price 
per ton-mile to ship a commodity by HDV, or the price to ship a given 
quantity of a commodity by HDV, became lower relative to rail transport 
options post-regulation. The results of the case studies indicate that 
the HD Phase 1 rule would not seem to create obvious economic 
conditions that lead to a mode shift from rail to truck, but there are 
a number of limitations and caveats to this analysis, which are 
discussed in the final report to EPA by GIFT.672 673 For 
example, even if trucking did not become less expensive than rail post-
regulation, a relative decrease in the truck versus rail rates might be 
enough to produce a shift, given that other factors could influence 
shippers' decisions on modal choice. The study did not, however, 
consider these other factors such as time-of-delivery and modal 
capacity. As another example, the analysis assumes all fuel cost 
savings and incremental vehicle

[[Page 40452]]

costs from the HD Phase 1 rule would be passed on to shippers via 
changes in freight rates, even though the analysis found some evidence 
that this might not occur (in two cases, the charges for shipping a 
truckload over a given route and distance were the same despite 
differences in payloads that should have been reflected in their fuel 
costs). Given these limitations, more work is needed in this area to 
explore the potential for mode shift in response to HD fuel efficiency 
standards.
---------------------------------------------------------------------------

    \672\ See GIFT Solutions, LLC, ``Potential for Mode Shift due to 
Heavy Duty Vehicle Fuel Efficiency Improvements''. February, 2012.
    \673\ Winebrake, James, J. Corbett, J. Silberman, E. Erin, & B. 
Comer, 2012. Potential for Mode Shift due to Heavy Duty Vehicle Fuel 
Efficiency Improvements: A Case Study Approach. GIFT Solutions, LLC.
---------------------------------------------------------------------------

(d) Case Study Using Freight Price Elasticities
    Cambridge Systematics, Inc. (CSI) employed a case study approach 
using freight price elasticity estimates in the literature to show 
several examples of the magnitude of the HDV rebound effect.\674\ In 
their unpublished paper commissioned by the National Research Council 
of the National Academies in support of its 2010 HDV report, CSI 
estimated the effect on HDV VMT from a net decrease in operating costs 
associated with fuel efficiency improvements, using two different 
technology cost and fuel savings scenarios for Class 8 combination 
tractors. Scenario 1 increased average fuel efficiency of the tractor 
from 5.59 miles per gallon to 6.8 miles per gallon, with an additional 
cost of $22,930 for purchasing the improved tractor. Scenario 2 
increased the average fuel efficiency to 9.1 miles per gallon, at an 
incremental cost of $71,630 per tractor. Both of these scenarios were 
based on the technologies and targets from a report authored by the 
Northeast States Center for a Clean Air Future (NESCCAF) and 
International Council on Clean Transportation (ICCT).\675\
---------------------------------------------------------------------------

    \674\ Cambridge Systematics, Inc., Assessment of Fuel Economy 
Technologies for Medium and Heavy Duty Vehicles: Commissioned Paper 
on Indirect Costs and Alternative Approaches, 2009.
    \675\ Northeast States Center for a Clean Air Future, Southeast 
Research Institute, TIAX, LLC., and International Council on Clean 
Transportation, Reducing Heavy-Duty Long Haul Truck Fuel Consumption 
and CO2 Emissions, September 2009. See http://www.nescaum.org/documents/heavy-duty-truck-ghg_report_final-200910.pdf.
---------------------------------------------------------------------------

    The CSI estimates were based on a range of direct (or ``own-
price'') freight elasticities (-0.5 to -1.5) \676\ and cross-price 
freight elasticities (0.35 to 0.59) \677\ obtained from the 
literature.\678\ In their calculations, CSI assumed 142,706 million 
miles of tractor VMT and 1,852 billion ton-miles were affected. The 
tractor VMT was based on the Bureau of Transportation Statistics' (BTS) 
estimate of highway miles for combination tractors in 2006, and the 
rail ton-miles were based on the BTS estimate of total railroad miles 
during 2006. This assumption is likely to overstate the rebound effect, 
since not all freight shipments occur on routes where tractors and rail 
service shipments compete directly. Nevertheless, this assumption 
appears to be reasonable in the absence of more detailed information on 
the percentage of total miles and ton-miles that are subject to 
potential mode shifting.
---------------------------------------------------------------------------

    \676\ Graham and Glaister, ``Road Traffic Demand Elasticity 
Estimates: A Review,'' Transport Reviews Volume 24, 3, pp. 261-274, 
2004.
    \677\ Based upon a study for the National Cooperative Highway 
Research Program by Cambridge Systematics, Inc., Characteristics and 
Changes in Freight Transportation Demand: A Guidebook for Planners 
and Policy Analysts Phase II Report, National Cooperative Highway 
Research Program Project 8-30, June 1995.
    \678\ The own (i.e., self) price elasticity provides a measure 
for describing how the volume of truck shipping (demand) changes 
with its price while the cross-price elasticity provides a measure 
for describing how the volume of rail shipping changes with truck 
price. In general, an elasticity describes the percent change in one 
variable (e.g. demand for trucking) in response to a percent-change 
in another (e.g. price of truck operations).
---------------------------------------------------------------------------

    For CSI's calculations, all costs except fuel costs and vehicle 
costs were taken from a 2008 ATRI study.\679\ It is not clear from the 
report how the new vehicle costs were incorporated into CSI's 
calculations of per-mile tractor operating costs. For example, neither 
the ATRI report nor the CSI report discusses assumptions about 
depreciation, useful lifetimes of tractors, and the opportunity cost of 
capital.
---------------------------------------------------------------------------

    \679\ American Transportation Research Institute, ``An Analysis 
of the Operational Costs of Trucking'', October 2008.
---------------------------------------------------------------------------

    Based on these two scenarios, CSI estimated the change in tractor 
VMT in response to a net decrease in operating costs (i.e., accounting 
for fuel cost and changes in tractor purchase costs) associated with 
fuel efficiency improvement of 11-31 percent for Scenario 1 and 5-16 
percent for Scenario 2, without accounting for any fuel savings from 
reduced rail service. When the fuel savings from reduced rail usage 
were included in the calculations, they estimated the change in tractor 
VMT in response to a net decrease in operating costs associated with 
fuel efficiency improvement would be 9-30 percent for Scenario 1, and 
3-15 percent for Scenario 2.
    Note that these estimates reflect changes to tractor VMT with 
respect to total operating costs, so they should theoretically be 
larger than a percent change in tractor VMT with respect to a percent 
change in fuel efficiency because fuel efficiency only impacts a 
portion of truck operating costs (e.g., fuel and vehicle costs, but not 
likely driver wages or highway tolls).
    CSI included caveats associated with these calculations. For 
example, their report states that freight price elasticity estimates 
derived from the literature are ``heavily reliant on factors including 
the type of demand measures analyzed (vehicle-miles of travel, ton-
miles, or tons), geography, trip lengths, markets served, and 
commodities transported.'' These factors can increase variability in 
the results. Also, estimates in CSI's study have the limitation of 
using freight price elasticities to estimate the HDV rebound effect 
discussed previously in Section IV.D.2.b.
(e) Simulation Model Study Using Freight Price Elasticities
    Guerrero (2014) constructs a freight simulation model of the 
California trucking sector to measure the impact of fuel saving 
investments and fleet management on GHG emissions.\680\ Rather than 
estimating these impacts using econometric analysis of raw data, the 
study uses values from the existing literature. Guerrero determines 
that ``. . . improving the performance of trucking also increases the 
number of trips demanded because the market price also decreases. This 
`rebound' effect offsets around 40-50 percent of these vehicle 
efficiency emission reductions, with 9-14 percent of the effect coming 
from increased pavement deterioration and 31-36 percent coming from 
increased fuel combustion.'' Note that to the extent that trip lengths 
also vary in response to improvements in HDV fuel efficiency, changes 
in the number of HDV trips may not exactly reflect changes in the total 
number of miles the vehicles are operated.
---------------------------------------------------------------------------

    \680\ Guerrero, Sebastian. Modeling fuel saving investments and 
fleet management in the trucking industry: The impact of shipment 
performance on GHG emissions. Transportation Research Part E, May 
2014.
---------------------------------------------------------------------------

    However, these findings are based on freight price elasticities, 
which--as we discuss in Section IV.D.2.b and in the context of the CSI 
study above--have significant limitations. The study also simulates 
only one state's freight network (California), which may not be a good 
representation of national activity.
(3) How the Agencies Estimated the HDV Rebound Effect for This Proposal
(a) Values Used in the Phase 1 Analysis
    At the time the agencies conducted their analysis of the Phase 1 
fuel efficiency and GHG emissions standards, the only evidence on the 
HDV rebound effect were the previously

[[Page 40453]]

described studies from CSI and the Volpe Center.\681\ The agencies 
determined that this evidence did not lend itself to a specific 
quantitative value for use in the analysis. Rather, based on a 
qualitative assessment of this evidence informed by the agencies' best 
professional judgement, the agencies chose rebound effects of 15 
percent for vocational vehicles and 5 percent for combination tractors, 
both of which were toward the lower end of the range of values from 
these studies. The agencies found no evidence on the rebound effect for 
HD pickup trucks and vans, but concluded it would be inappropriate to 
use the values selected for vocational vehicles or combination tractors 
for those vehicles. Because the usage patterns of HD pickup trucks and 
vans can more closely resemble those of large light-duty vehicles, the 
agencies used our judgement to select the 10 percent rebound effect we 
had employed in our most recent light-duty rulemaking to analyze the 
Phase 1 standards for 2b/3 vehicles.
---------------------------------------------------------------------------

    \681\ The Gately study was also available, however, the agencies 
were not aware of the work at the time.
---------------------------------------------------------------------------

(b) How the Agencies Analyzed VMT Rebound in This Proposal
    After considering the new evidence that has become available since 
the HD Phase 1 final rule, the agencies elected to continue using the 
rebound effect estimates we used previously in the HD Phase 1 rule in 
our analysis of Phase 2 proposed standards. In arriving at this 
decision, the agencies considered the shortcomings and limitations of 
the newly-available studies described previously, particularly the 
limited applicability of the two published studies using data from 
European nations to the U.S. context. After weighing these attributes 
of the more recent studies, the agencies concluded that we had 
insufficient evidence to justify revising the rebound effect values 
that were used in the Phase 1 analysis.
    In our assessment, we do not differentiate between short-run and 
long-run rebound effects, although these effects may differ. The 
vocational and combination truck estimates are based on the Volpe 
Center analysis presented in the HD Phase 1 rule and the case study 
from CSI. As with the HD Phase 1 rule, we did not find any literature 
specifically examining the HD pickup and truck sector. Since these 
vehicles are used for very different purposes than combination tractors 
and vocational vehicles, and they are more similar in use to large 
light-duty vehicles, we have chosen the light-duty rebound effect of 10 
percent used in the final rule establishing fuel economy and GHG 
standards for MYs 2017-2025 light-duty vehicles in our analysis of HD 
pickup trucks and vans.
    While for this proposal, the agencies have selected to use these 
rebound effect values of 5 percent for combination tractors, 10 percent 
for heavy duty pickup trucks and vans and 15 percent for vocational 
vehicles, we acknowledge the literature shows a wide range of rebound 
effect estimates. Therefore, we will review and consider revising these 
estimates in the final rule, taking into consideration all available 
data and analysis, including submissions from public commenters and new 
research on the rebound effect.
    It should be noted that the rebound estimates we have selected for 
our analysis represent the VMT impact from our proposed standards with 
respect to changes in the fuel cost per mile driven. As described 
previously, the HDV rebound effect should ideally be a measure of the 
change in fuel consumed with respect to the change in overall operating 
costs due to a change in HDV fuel efficiency. Such a measure would 
incorporate all impacts from our proposal, including those from 
incremental increases in vehicle prices that reflect costs for 
improving their fuel efficiency. Therefore, VMT rebound estimates with 
respect to fuel costs per mile must be ``scaled'' to apply to total 
operating costs, by dividing them by the fraction of total operating 
costs accounted for by fuel.
    The agencies made simplifying assumptions in the VMT rebound 
analysis for this proposal, similar to the approach taken during the 
development of the HD GHG Phase 1 final rule. However, for the HD Phase 
2 final rulemaking, we plan to use a more comprehensive approach. Due 
to timing constraints during the development of this proposal, the 
agencies did not have the technology package costs for each of the 
alternatives prior to the need to conduct the inventory analysis, 
except for the pickup truck and van category in analysis Method A. 
Therefore, the same ``overall'' VMT rebound values were used for 
Alternatives 2 through 5 (as discussed in Chapter 8.3.3 of the Draft 
RIA and analyzed in Chapter 6 of the Draft RIA), despite the fact that 
each alternative results in a different change in incremental 
technology and fuel costs. For the final rulemaking, we plan to 
determine VMT rebound separately for each HDV category and for each 
alternative. Tables 64 through 66 in Chapter 7 of the Draft RIA present 
VMT rebound for each HDV sector that we estimated for the preferred 
alternative. These VMT impacts are reflected in the estimates of total 
fuel savings and reductions in emissions of GHG and other air 
pollutants presented in Section VI and VII of this preamble for all 
categories.
    Section 9.3.3 in the draft RIA provides more details on our 
assessment of HDV VMT rebound. We invite comment on our approach, the 
rebound estimates, and the related assumptions we made. In particular, 
we invite comment on the most appropriate methodology for factoring new 
vehicle purchase or leasing costs into the per-mile operating costs. 
For the purposes of this proposal, we have not taken into account any 
potential fuel savings or GHG emission reductions from the rail sector 
due to mode shift because estimates of this effect seem too speculative 
at this time. We invite comment on this assumption, as well as 
suggestions on alternative modeling frameworks that could be used to 
assess mode shifting implications of our proposed regulations. 
Similarly, we have not taken into account any fuel savings or GHG 
emissions reductions from the potential shift in VMT from older HDVs to 
newer, more efficient HDVs because we have found no evidence of this 
potential effect from fuel efficiency standards. We invite comment on 
suggested modeling frameworks or data that could be used to assess the 
potential for activity to shift from older to newer, more efficient 
HDVs in response to our proposed standards.
    Note that while we focus on the VMT rebound effect in our analysis 
of this proposed rule, there are at least two other types of rebound 
effects discussed in the economics literature. In addition to VMT 
rebound effects, there are ``indirect'' rebound effects, which refers 
to the purchase of other goods or services (that consume energy) with 
the costs savings from energy efficiency improvements; and ``economy-
wide'' rebound effects, which refers to the increased demand for energy 
throughout the economy in response to the reduced market price of 
energy that happens as a result of energy efficiency improvements.
    Research on indirect and economy-wide rebound effects is nascent, 
and we have not identified any that attempts to quantify indirect or 
economy-wide rebound effects for HDVs. In particular, the agencies are 
not aware of any data to indicate that the magnitude of indirect or 
economy-wide rebound effects, if any, would be significant for this 
proposed rule.\682\ Therefore, we rely

[[Page 40454]]

the same analysis of vehicle miles traveled to estimate the rebound 
effect in this proposal that we did for the HD Phase 1 rule, where we 
attempted to quantify only rebound effects from our rule that impact 
HDV VMT. We welcome comments and any new work in this area that helps 
to assess and quantify different rebound effects that could result from 
improvements in HDV efficiency, including different types of more 
intensive truck usage that affect fuel consumption but not VMT such as 
loaded weight, truck routing, and scheduling.
---------------------------------------------------------------------------

    \682\ One entity sought reconsideration of the Phase 1 rule on 
the grounds that indirect rebound effects had not been considered by 
the agencies and could negate all of the benefits of the standards. 
This assertion rested on an unsupported affidavit lacking any peer 
review or other indicia of objectivity. This affidavit cited only 
one published study. The study cited did not deal with vehicle 
efficiency, has methodological limitations (many of them 
acknowledged), and otherwise was not pertinent. EPA and NHTSA thus 
declined to reconsider the Phase 1 rule based on these speculative 
assertions. See generally 77 FR 51703-51704, August 27, 2012 and 77 
FR 51502-51503, August 24, 2012.
---------------------------------------------------------------------------

    In order to test the effect of alternative assumptions about the 
rebound effect, NHTSA examined the sensitivity of its estimates of 
benefits and costs of the Phase 2 Preferred Alternative for HD pickups 
and vans to alternative assumptions about the rebound effect. While the 
main analysis for pickups and vans assumes a 10 percent rebound effect, 
the sensitivity analysis estimates the benefits and costs of the 
proposed standards under the assumptions of 5, 15, and 20 percent 
rebound effects.
    Alternative values of the rebound effect change the estimates of 
benefits and costs from the proposed standards in three ways. First, 
higher values of the rebound effect increase the amount of additional 
VMT that results from improved fuel efficiency; this increases costs 
associated with additional congestion, accidents, and noise, thus 
increasing total costs associated with the proposed standards. 
Conversely, smaller values of the rebound effect reduce costs from 
additional congestion, accidents, and noise, so they reduce total costs 
of the proposed standards. Larger increases in VMT associated with 
higher values of the rebound effect reduce the value of fuel savings 
and related benefits (such as reductions in GHG emissions) by 
progressively larger amounts, while smaller values of the rebound 
effect cause smaller reductions in these benefits. At the same time, 
however, a higher rebound effect generates larger benefits from 
increased vehicle use, while a smaller rebound effect reduces these 
benefits. Thus the impact of alternative values of the rebound effect 
on total benefits from the proposed standards depends on the exact 
magnitudes of these latter two effects. On balance, these three effects 
can cause net benefits to increase or decrease for alternative values 
of the rebound effect.

 Table IX-12--Sensitivity of Preferred Alternative Impacts Under Different Assumptions About Rebound Effect for
                                    Pickups and Vans, Using 3% Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                          Rebound effect
                                                 ---------------------------------------------------------------
                                                           Main analysis              Sensitivity cases using
               HD pickups and vans               --------------------------------       alternative rebound
                                                                                            assumptions
                                                        10%             5%       -------------------------------
                                                                                        15%             20%
----------------------------------------------------------------------------------------------------------------
Fuel Reductions (Billion Gallons)...............             7.8             8.2             7.5             7.1
GHG Reductions (MMT CO2 eq).....................            94.1            95.7            87.2            83.0
Total Costs ($ billion).........................             5.5             5.0             6.5             7.2
Total Benefits ($ billion)......................            23.5            23.0            22.9            22.8
Net Benefits ($ billion)........................            18.0            18.0            16.4            15.5
----------------------------------------------------------------------------------------------------------------

    Table IX-12 summarizes the impact of these alternative assumptions 
on fuel and GHG emissions savings, total costs, total benefits, and net 
benefits. As it indicates, using a 5 percent value for the rebound 
effect reduces benefits and costs of the proposed standards by 
identical amounts, leaving net benefits unaffected. As the table also 
shows, rebound effects of 15 percent and 20 percent increase costs and 
reduce benefits compared to their values in the main analysis, thus 
reducing net benefits of the proposed standards. Nevertheless, the 
preferred alternative has significant net benefits under each 
alternative assumption about the magnitude of the rebound effect for HD 
pickups and vans. Thus, these alternative values of the rebound effect 
would not have affected the agencies' selection of the preferred 
alternative, as that selection is based on NHTSA's assessment of the 
maximum feasible fuel efficiency standards and EPA's selection of 
appropriate GHG standards to address energy security and the 
environment.

F. Impact on Class Shifting, Fleet Turnover, and Sales

    The agencies considered two additional potential indirect effects 
which may lead to unintended consequences of the program to improve the 
fuel efficiency and reduce GHG emissions from HD trucks. The next 
sections cover the agencies' qualitative discussions on potential class 
shifting and fleet turnover effects.
(1) Class Shifting
    Heavy-duty vehicles are typically configured and purchased to 
perform a function. For example, a concrete mixer truck is purchased to 
transport concrete, a combination tractor is purchased to move freight 
with the use of a trailer, and a Class 3 pickup truck could be 
purchased by a landscape company to pull a trailer carrying lawnmowers. 
The purchaser makes decisions based on many attributes of the vehicle, 
including the gross vehicle weight rating of the vehicle, which in part 
determines the amount of freight or equipment that can be carried. If 
the proposed Phase 2 standards impact either the performance of the 
vehicle or the marginal cost of the vehicle relative to the other 
vehicle classes, then consumers may choose to purchase a different 
vehicle, resulting in the unintended consequence of increased fuel 
consumption and GHG emissions in-use.
    The agencies, along with the NAS panel, found that there is little 
or no literature which evaluates class shifting between trucks.\683\ 
NHTSA and EPA qualitatively evaluated the proposed rules in light of 
potential class shifting. The agencies looked at four potential cases 
of shifting:--From light-duty pickup trucks to heavy-duty pickup 
trucks; from sleeper cabs to day cabs;

[[Page 40455]]

from combination tractors to vocational vehicles; and within vocational 
vehicles.
---------------------------------------------------------------------------

    \683\ See 2010 NAS Report, page 152.
---------------------------------------------------------------------------

    Light-duty pickup trucks, those with a GVWR of less than 8,500 lbs, 
are currently regulated under the existing GHG/CAFE Phase 1 program and 
will meet GHG/CAFE Phase 2 emission standards beginning in 2017. The 
increased stringency of the light-duty 2017-2025 MY vehicle rule has 
led some to speculate that vehicle consumers may choose to purchase 
heavy-duty pickup trucks that are currently regulated under the HD 
Phase 1 program if the cost of the light-duty regulation is high 
relative to the cost to buy the larger heavy-duty pickup trucks. Since 
fuel consumption and GHG emissions rise significantly with vehicle 
mass, a shift from light-duty trucks to heavy-duty trucks would likely 
lead to higher fuel consumption and GHG emissions, an untended 
consequence of the regulations. Given the significant price premium of 
a heavy-duty truck (often five to ten thousand dollars more than a 
light-duty pickup), we believe that such a class shift would be 
unlikely even absent this program. These proposed rules would continue 
to diminish any incentive for such a class shift because they would 
narrow the GHG and fuel efficiency performance gap between light-duty 
and heavy-duty pickup trucks. The proposed regulations for the HD 
pickup trucks, and similarly for vans, are based on similar 
technologies and therefore reflect a similar expected increase in cost 
when compared to the light-duty GHG regulation. Hence, the combination 
of the two regulations provides little incentive for a shift from 
light-duty trucks to HD trucks. To the extent that our proposed 
regulation of heavy-duty pickups and vans could conceivably encourage a 
class shift towards lighter pickups, this unintended consequence would 
in fact be expected to lead to lower fuel consumption and GHG emissions 
as the smaller light-duty pickups have significantly better fuel 
economy ratings than heavy-duty pickup trucks.
    The projected cost increases for this proposed action differ 
between Class 8 day cabs and Class 8 sleeper cabs, reflecting our 
expectation that compliance with the proposed standards would lead 
truck consumers to specify sleeper cabs equipped with APUs while day 
cab consumers would not. Since Class 8 day cab and sleeper cab trucks 
perform essentially the same function when hauling a trailer, this 
raises the possibility that the higher cost for an APU equipped sleeper 
cab could lead to a shift from sleeper cab to day cab trucks. We do not 
believe that such an intended consequence would occur for the following 
reasons. The addition of a sleeper berth to a tractor cab is not a 
consumer-selectable attribute in quite the same way as other vehicle 
features. The sleeper cab provides a utility that long-distance 
trucking fleets need to conduct their operations--an on-board sleeping 
berth that lets a driver comply with federally-mandated rest periods, 
as required by the Department of Transportation Federal Motor Carrier 
Safety Administration's hours-of-service regulations. The cost of 
sleeper trucks is already higher than the cost of day cabs, yet the 
fleets that need this utility purchase them.\684\ A day cab simply 
cannot provide this utility with a single driver. The need for this 
utility would not be changed even if the additional costs to reduce 
greenhouse gas emissions from sleeper cabs exceed those for reducing 
greenhouse gas emissions from day cabs.\685\
---------------------------------------------------------------------------

    \684\ A baseline tractor price of a new day cab is $89,500 
versus $113,000 for a new sleeper cab based on information gathered 
by ICF in the ``Investigation of Costs for Strategies to Reduce 
Greenhouse Gas Emissions for Heavy-Duty On-Road Vehicles'', July 
2010. Page 3. Docket Identification Number EPA-HQ-OAR-2014--0827.
    \685\ The average marginal cost difference between sleeper cabs 
and day cabs in the proposal is roughly $2,500.
---------------------------------------------------------------------------

    A trucking fleet could instead decide to put its drivers in hotels 
in lieu of using sleeper berths, and switch to day cabs. However, this 
is unlikely to occur in any great number, since the added cost for the 
hotel stays would far overwhelm differences in the marginal cost 
between day and sleeper cabs. Even if some fleets do opt to buy hotel 
rooms and switch to day cabs, they would be highly unlikely to purchase 
a day cab that was aerodynamically worse than the sleeper cab they 
replaced, since the need for features optimized for long-distance 
hauling would not have changed. So in practice, there would likely be 
little difference to the environment for any switching that might 
occur. Further, while our projected costs assume the purchase of an APU 
for compliance, in fact our proposed regulatory structure would allow 
compliance using a near zero cost software utility that eliminates 
tractor idling after five minutes. Using this compliance approach, the 
cost difference between a Class 8 sleeper cab and day cab due to our 
proposed regulations is small. We are proposing this alternative 
compliance approach reflecting that some sleeper cabs are used in team 
driving situations where one driver sleeps while the other drives. In 
that situation, an APU is unnecessary since the tractor is continually 
being driven when occupied. When it is parked, it would automatically 
eliminate any additional idling through the shutdown software. If 
trucking businesses choose this option, then costs based on purchase of 
APUs may overestimate the costs of this program to this sector.
    Class shifting from combination tractors to vocational vehicles may 
occur if a customer deems the additional marginal cost of tractors due 
to the regulation to be greater than the utility provided by the 
tractor. The agencies initially considered this issue when deciding 
whether to include Class 7 tractors with the Class 8 tractors or 
regulate them as vocational vehicles. The agencies' evaluation of the 
combined vehicle weight rating of the Class 7 shows that if these 
vehicles were treated significantly differently from the Class 8 
tractors, then they could be easily substituted for Class 8 tractors. 
Therefore, the agencies are proposing to continue to include both 
classes in the tractor category. The agencies believe that a shift from 
tractors to vocational vehicles would be limited because of the ability 
of tractors to pick up and drop off trailers at locations which cannot 
be done by vocational vehicles.
    The agencies do not envision that the proposed regulatory program 
would cause class shifting within the vocational vehicle class. The 
marginal cost difference due to the regulation of vocational vehicles 
is minimal. The cost of LRR tires on a per tire basis is the same for 
all vocational vehicles so the only difference in marginal cost of the 
vehicles is due to the number of axles. The agencies believe that the 
utility gained from the additional load carrying capability of the 
additional axle would outweigh the additional cost for heavier 
vehicles.\686\
---------------------------------------------------------------------------

    \686\ The proposed rule projects the difference in costs between 
the HHD and MHD vocational vehicle technologies is approximately 
$30.
---------------------------------------------------------------------------

    In conclusion, NHTSA and EPA believe that the proposed regulatory 
structure for HD trucks would not significantly change the current 
competitive and market factors that determine purchaser preferences 
among truck types. Furthermore, even if a small amount of shifting 
would occur, any resulting GHG impacts would likely to be negligible 
because any vehicle class that sees an uptick in sales is also being 
regulated for fuel efficiency. Therefore, the agencies did not include 
an impact of class shifting on the vehicle populations used to assess 
the benefits of the proposed program.

[[Page 40456]]

(2) Fleet Turnover and Sales Effects
    A regulation that affects the cost to purchase and/or operate 
trucks could affect whether a consumer decides to purchase a new truck 
and the timing of that purchase. The term pre-buy refers to the idea 
that truck purchases may occur earlier than otherwise planned to avoid 
the additional costs associated with a new regulatory requirement. 
Slower fleet turnover, or low-buys, may occur when owners opt to keep 
their existing truck rather than purchase a new truck due to the 
incremental cost of the regulation.
    The 2010 NAS HD Report discussed the topics associated with HD 
truck fleet turnover. NAS noted that there is some empirical evidence 
of pre-buy behavior in response to the 2004 and 2007 heavy-duty engine 
emission standards, with larger impacts occurring in response to higher 
costs.\687\ However, those regulations increased upfront costs to firms 
without any offsetting future cost savings from reduced fuel purchases. 
In summary, NAS stated that:
---------------------------------------------------------------------------

    \687\ Committee to Assess Fuel Economy Technologies for Medium- 
and Heavy-Duty Vehicles; National Research Council; Transportation 
Research Board (2010). ``Technologies and Approaches to Reducing the 
Fuel Consumption of Medium- and Heavy-Duty Vehicles,'' (hereafter, 
``NAS Report''). Washington, DC, the National Academies Press. 
Available electronically from the National Academies Press Web site 
at http://www.nap.edu/catalog.php?record_id=12845. pp. 150-151.

. . . during periods of stable or growing demand in the freight 
sector, pre-buy behavior may have significant impact on purchase 
patterns, especially for larger fleets with better access to capital 
and financing. Under these same conditions, smaller operators may 
simply elect to keep their current equipment on the road longer, all 
the more likely given continued improvements in diesel engine 
durability over time. On the other hand, to the extent that fuel 
economy improvements can offset incremental purchase costs, these 
impacts will be lessened. Nevertheless, when it comes to efficiency 
investments, most heavy-duty fleet operators require relatively 
quick payback periods, on the order of two to three years.\688\
---------------------------------------------------------------------------

    \688\ See NAS Report, Note 687, page 151.

    The proposed regulations are projected to return fuel savings to 
the truck owners that offset the cost of the regulation within a few 
years. The effects of the regulation on purchasing behavior and sales 
will depend on the nature of the market failures and the extent to 
which firms consider the projected future fuel savings in their 
purchasing decisions.
    If trucking firms account for the rapid payback, they are unlikely 
to strategically accelerate or delay their purchase plans at additional 
cost in capital to avoid a regulation that will lower their overall 
operating costs. As discussed in Section IX. A. this scenario may occur 
if this proposed program reduces uncertainty about fuel-saving 
technologies. More reliable information about ways to reduce fuel 
consumption allows truck purchasers to evaluate better the benefits and 
costs of additional fuel savings, primarily in the original vehicle 
market, but possibly in the resale market as well. In addition, the 
proposed standards are expected to lead manufacturers to install more 
fuel-saving technologies and promote their purchase; the increased 
availability and promotion may encourage sales.
    Other market failures may leave open the possibility of some pre-
buy or delayed purchasing behavior. Firms may not consider the full 
value of the future fuel savings for several reasons. For instance, 
truck purchasers may not want to invest in fuel efficiency because of 
uncertainty about fuel prices. Another explanation is that the resale 
market may not fully recognize the value of fuel savings, due to lack 
of trust of new technologies or changes in the uses of the vehicles. 
Lack of coordination (also called split incentives--see Section IX. A.) 
between truck purchasers (who may emphasize the up-front costs of the 
trucks) and truck operators, who would like the fuel savings, can also 
lead to pre-buy or delayed purchasing behavior. If these market 
failures prevent firms from fully internalizing fuel savings when 
deciding on vehicle purchases, then pre-buy and delayed purchase could 
occur and could result in a slight decrease in the GHG benefits of the 
regulation.
    Thus, whether pre-buy or delayed purchase is likely to play a 
significant role in the truck market depends on the specific behaviors 
of purchasers in that market. Without additional information about 
which scenario is more likely to be prevalent, the agencies are not 
projecting a change in fleet turnover characteristics due to this 
regulation.
    Whether vehicle sales appear to be affected by the HD Phase 1 
standards could provide some insight into the impacts of the proposed 
standards. At the time of this proposed rule, sales data are not yet 
available for 2014 model year, the first year of the Phase 1 standards. 
In addition, any trends in sales are likely to be affected by 
macroeconomic conditions, which have been recovering since 2009-2010. 
As a result, it is unlikely to be possible, even when vehicle sales 
data are available, to separate the effects of the existing standards 
from other confounding factors.

G. Monetized GHG Impacts

(1) Monetized CO2 Impacts--The Social Cost of Carbon (SC-
CO2)
    We estimate the global social benefits of CO2 emission 
reductions expected from the proposed heavy-duty GHG and fuel 
efficiency standards using the social cost of carbon (SC-
CO2) estimates presented in the 2013 Technical Support 
Document: Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866 (2013 SCC TSD).\689\ (The 
SC-CO2 estimates are presented in Table IX-11). We refer to 
these estimates, which were developed by the U.S. government, as ``SC-
CO2 estimates.'' The SC-CO2 is a metric that 
estimates the monetary value of impacts associated with marginal 
changes in CO2 emissions in a given year. It includes a wide 
range of anticipated climate impacts, such as net changes in 
agricultural productivity and human health, property damage from 
increased flood risk, and changes in energy system costs, such as 
reduced costs for heating and increased costs for air conditioning. It 
is used in regulatory impact analyses to quantify the benefits of 
reducing CO2 emissions, or the disbenefit from increasing 
emissions.
---------------------------------------------------------------------------

    \689\ Docket ID EPA-HQ-OAR-2014-0827, Technical Support 
Document: Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866, Interagency 
Working Group on Social Cost of Carbon, with participation by 
Council of Economic Advisers, Council on Environmental Quality, 
Department of Agriculture, Department of Commerce, Department of 
Energy, Department of Transportation, Environmental Protection 
Agency, National Economic Council, Office of Energy and Climate 
Change, Office of Management and Budget, Office of Science and 
Technology Policy, and Department of Treasury (May 2013, Revised 
November 2013). Available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
---------------------------------------------------------------------------

    The SC-CO2 estimates used in this analysis were 
developed over many years, using the best science available, and with 
input from the public. Specifically, an interagency working group (IWG) 
that included EPA, DOT, and other executive branch agencies and offices 
used three integrated assessment models (IAMs) to develop the SC-
CO2 estimates and recommended four global values for use in 
regulatory analyses. The SC-CO2 estimates were first 
released in February 2010 \690\ and

[[Page 40457]]

updated in 2013 using new versions of each IAM. These estimates were 
published in the 2013 SCC TSD. The 2013 update did not revisit the 2010 
modeling decisions (e.g., with regard to the discount rate, reference 
case socioeconomic and emission scenarios or equilibrium climate 
sensitivity). Rather, improvements in the way damages are modeled are 
confined to those that have been incorporated into the latest versions 
of the models by the developers themselves and used for analyses in 
peer-reviewed publications. The 2010 SCC Technical Support Document 
(2010 SCC TSD) provides a complete discussion of the methods used to 
develop these estimates and the 2013 SCC TSD presents and discusses the 
updated estimates.
---------------------------------------------------------------------------

    \690\ Docket ID EPA-HQ-OAR-2009-0472-114577, Technical Support 
Document: Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866, Interagency Working Group on Social Cost of 
Carbon, with participation by the Council of Economic Advisers, 
Council on Environmental Quality, Department of Agriculture, 
Department of Commerce, Department of Energy, Department of 
Transportation, Environmental Protection Agency, National Economic 
Council, Office of Energy and Climate Change, Office of Management 
and Budget, Office of Science and Technology Policy, and Department 
of Treasury (February 2010). Also available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.
---------------------------------------------------------------------------

    The 2010 SCC TSD noted a number of limitations to the SC-
CO2 analysis, including the incomplete way in which the IAMs 
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. Current IAMs do not assign value to all of the 
important physical, ecological, and economic impacts of climate change 
recognized in the climate change literature due to a lack of precise 
information on the nature of damages and because the science 
incorporated into these models understandably lags behind the most 
recent research. Nonetheless, these estimates and the discussion of 
their limitations represent the best available information about the 
social benefits of CO2 reductions to inform benefit-cost 
analysis; see RIA of this rule and the SCC TSDs for additional details. 
The new versions of the models used to estimate the values presented 
below offer some improvements in these areas, although further work is 
warranted.
    Accordingly, EPA and other agencies continue to engage in research 
on modeling and valuation of climate impacts with the goal to improve 
these estimates. The EPA and other federal agencies have considered the 
extensive public comments on ways to improve SC-CO2 
estimation received via the notice and comment periods that were part 
of numerous rulemakings. In addition, OMB's Office of Information and 
Regulatory Affairs sought public comment on the approach used to 
develop the SC-CO2 estimates (78 FR 70586, November 26, 
2013). The comment period ended on February 26, 2014, and OMB is 
reviewing the comments received. OMB also responded in January 2014 to 
concerns submitted in a Request for Correction on the SCC TSDs.\691\
---------------------------------------------------------------------------

    \691\ OMB's 1/24/14 response to the petition is available at 
https://www.whitehouse.gov/sites/default/files/omb/inforeg/ssc-rfc-under-iqa-response.pdf.
---------------------------------------------------------------------------

    The four global SC-CO2 estimates, updated in 2013, are 
as follows: $13, $46, $68, and $140 per metric ton of CO2 
emissions in the year 2020 (2012$).\692\ The first three values are 
based on the average SC-CO2 from the three IAMs, at discount 
rates of 5, 3, and 2.5 percent, respectively. SC-CO2 
estimates for several discount rates are included because the 
literature shows that the SC-CO2 is quite sensitive to 
assumptions about the discount rate, and because no consensus exists on 
the appropriate rate to use in an intergenerational context (where 
costs and benefits are incurred by different generations). The fourth 
value is the 95th percentile of the SC-CO2 from all three 
models at a 3 percent discount rate. It is included to represent 
higher-than-expected impacts from temperature change further out in the 
tails of the SC-CO2 distribution (representing less likely, 
but potentially catastrophic, outcomes). The SC-CO2 
increases over time because future emissions are expected to produce 
larger incremental damages as economies grow and physical and economic 
systems become more stressed in response to greater climate change. The 
SC-CO2 values are presented in Table IX-11.
---------------------------------------------------------------------------

    \692\ The 2013 SCC TSD presents the SC-CO2 estimates 
in $2007. These estimates were adjusted to 2012$ using the GDP 
Implicit Price Deflator. Bureau of Economic Analysis, Table 1.1.9 
Implicit Price Deflators for Gross Domestic Product; last revised on 
March 27, 2014.
---------------------------------------------------------------------------

    Applying the global SC-CO2 estimates, shown in Table IX-
13, to the estimated reductions in domestic CO2 emissions 
for the proposed program, yields estimates of the dollar value of the 
climate related benefits for each analysis year. These estimates are 
then discounted back to the analysis year using the same discount rate 
used to estimate the SC-CO2. For internal consistency, the 
annual benefits are discounted back to net present value terms using 
the same discount rate as each SC-CO2 estimate (i.e. 5 
percent, 3 percent, and 2.5 percent) rather than the discount rates of 
3 percent and 7 percent used to derive the net present value of other 
streams of costs and benefits of the proposed rule.\693\ The SC-
CO2 benefit estimates for each calendar year are shown in 
Table IX-14. The SC-CO2 benefit estimates for each model 
year are shown in Table IX-15.
---------------------------------------------------------------------------

    \693\ See more discussion on the appropriate discounting of 
climate benefits using SC-CO2 in the 2010 SCC TSD. Other 
benefits and costs of proposed regulations unrelated to 
CO2 emissions are discounted at the 3% and 7% rates 
specified in OMB guidance for regulatory analysis.

                                Table IX-13--Social Cost of CO\2\, 2012-2050 \a\
                                            (in 2012$ per metric ton)
----------------------------------------------------------------------------------------------------------------
                                                                                                    3%, 95th
            Calendar year                 5% Average         3% Average        2.5% Average        Percentile
----------------------------------------------------------------------------------------------------------------
2012................................                $12                $37                $58               $100
2015................................                 12                 40                 61                120
2020................................                 13                 46                 69                140
2025................................                 15                 51                 74                150
2030................................                 17                 56                 81                170
2035................................                 20                 60                 86                190
2040................................                 23                 66                 93                210
2045................................                 26                 71                 99                220
2050................................                 28                 77                100                240
----------------------------------------------------------------------------------------------------------------
Note:
\a\ The SC-CO2values are dollar-year and emissions-year specific and have been rounded to two significant
  digits. Unrounded numbers from the 2013 SCC TSD were used to calculate the CO2 benefits.

[[Page 40458]]

   Table IX-14--Upstream and Downstream Annual CO2 Benefits for the Given SC-CO2 Value \a\ Using Method B and
                                      Relative to the Less Dynamic Baseline
                                             [millions of 2012$] \b\
----------------------------------------------------------------------------------------------------------------
                                                                                                    3%, 95th
            Calendar year                 5% Average         3% Average        2.5% Average        Percentile
----------------------------------------------------------------------------------------------------------------
2018................................                $13                $43                $65               $130
2019................................                 26                 91                130                270
2020................................                 40                140                210                420
2021................................                 92                330                500              1,000
2022................................                170                590                880              1,800
2023................................                250                860              1,300              2,600
2024................................                400              1,300              1,900              4,000
2025................................                540              1,800              2,600              5,500
2026................................                720              2,300              3,400              7,000
2027................................                890              2,900              4,200              8,900
2028................................              1,100              3,500              5,100             11,000
2029................................              1,300              4,200              5,900             13,000
2030................................              1,500              4,800              6,900             15,000
2035................................              2,500              7,400             11,000             23,000
2040................................              3,300              9,700             14,000             30,000
2050................................              5,000             14,000             19,000             42,000
NPV.................................             22,000            100,000            160,000            320,000
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ The SC-CO2 values are dollar-year and emissions-year specific.
\b\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

   Table IX-15--Upstream and Downstream Discounted Model Year Lifetime CO2 Benefits for the Given SC-CO2 Value
                            Using Method B and Relative to the Less Dynamic Baseline
                                             [millions of 2012$] a b
----------------------------------------------------------------------------------------------------------------
                                                                                                    3%, 95th
             Model year                   5% Average         3% Average        2.5% Average        Percentile
----------------------------------------------------------------------------------------------------------------
2018................................                $93               $380               $580             $1,100
2019................................                 90                370                570              1,100
2020................................                 87                360                560              1,100
2021................................                520              2,200              3,400              6,600
2022................................                540              2,300              3,500              6,900
2023................................                550              2,300              3,600              7,200
2024................................                870              3,700              5,800             11,000
2025................................                900              3,900              6,100             12,000
2026................................                920              4,000              6,300             12,000
2027................................              1,100              4,800              7,600             15,000
2028................................              1,100              4,800              7,600             15,000
2029................................              1,100              4,900              7,700             15,000
Sum.................................              7,800             34,000             53,000            100,000
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ The SC-CO2 values are dollar-year and emissions-year specific.
\b\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(2) Sensitivity Analysis--Monetized Non-CO2 GHG Impacts
    One limitation of the primary benefits analysis is that it does not 
include the valuation of non-CO2 GHG impacts (e.g., 
CH4, N2O, HFC-134a). Specifically, the 2010 and 
2013 SCC TSDs do not include estimates of the social costs of non-
CO2 GHG emissions using an approach analogous to the one 
used to estimate the SC-CO2. However, EPA recognizes that 
non-CO2 GHG impacts associated with this rulemaking (e.g., 
net reductions in CH4,N2O, and HFC-134a) would 
provide additional benefits to society. To understand the potential 
implication of omitting these benefits, EPA has conducted sensitivity 
analysis using two approaches: (1) An approximation approach based on 
the global warming potentials (GWP) of non-CO2 GHGs, which 
has been used in previous rulemakings, and (2) a set of recently 
published SC-CH4 and SC-N2O estimates that are 
consistent with the modeling assumptions underlying the SC-
CO2 estimates (Marten et al. 2014). This section presents 
estimates of the non-CO2 benefits of the proposed rulemaking 
using both approaches. Other unquantified non-CO2 benefits 
are discussed in this section as well. Additional details are provided 
in the RIA of these rules.
    Currently, EPA is undertaking a peer review of the application of 
the Marten et al. (2014) non-CO2 social cost estimates in 
regulatory analysis. Pending a favorable peer review, EPA plans to 
include monetized benefits of CH4 and N2O 
emission reductions in the main benefit-cost analysis of the RIA for 
the final rule, using the directly modeled estimates of SC-
CH4 and SC-N2O from Marten et al. EPA seeks 
comments on the use of directly modeled estimates for the social cost 
of non-CO2 GHGs.

[[Page 40459]]

(a) Non-CO2 GHG Benefits Based on the GWP Approximation 
Approach
    In the absence of directly modeled estimates, one potential method 
for approximating the value of marginal non-CO2 GHG emission 
reductions is to convert non-CO2 emissions reductions to 
CO2-equivalents that may then be valued using the SC-
CO2. Conversion to CO2-equivalents is typically 
based on the global warming potentials (GWPs) for the non-
CO2 gases. This approach, henceforth referred to as the 
``GWP approach,'' has been used in sensitivity analyses to estimate the 
non-CO2 benefits in previous EPA rulemakings (see U.S. EPA 
2012, 2013).\694\ EPA has not presented these estimates in a main 
benefit-cost analysis due to the limitations associated with using the 
GWP approach to value changes in non-CO2 GHG emissions, and 
considered the GWP approach as an interim method of analysis until 
social cost estimates for non-CO2 GHGs, consistent with the 
SC-CO2 estimates, were developed.
---------------------------------------------------------------------------

    \694\ U.S. EPA. (2012). ``Regulatory impact analysis supporting 
the 2012 U.S. Environmental Protection Agency final new source 
performance standards and amendments to the national emission 
standards for hazardous air pollutants for the oil and natural gas 
industry.'' Retrieved from http://www.epa.gov/ttn/ecas/regdata/RIAs/oil_natural_gas_final_neshap_nsps_ria.pdf.
---------------------------------------------------------------------------

    The GWP is a simple, transparent, and well-established metric for 
assessing the relative impacts of non-CO2 emissions compared 
to CO2 on a purely physical basis. However, as discussed 
both in the 2010 SCC TSD and previous rulemakings (e.g., U.S. EPA 2012, 
2013), the GWP approximation approach to measuring non-CO2 
GHG benefits has several well-documented limitations. These metrics are 
not ideally suited for use in benefit-cost analyses to approximate the 
social cost of non-CO2 GHGs because the approach would 
assume all subsequent linkages leading to damages are linear in 
radiative forcing, which would be inconsistent with the most recent 
scientific literature. Detailed discussion of limitations of the GWP 
approach can be found in the RIA.
    Similar to the approach used in the RIA of the Final Rulemaking for 
2017-2025 Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards (U.S. EPA, 2013), EPA applies 
the GWP approach to estimate the benefits associated with reductions of 
CH4, N2O and HFCs in each calendar year. Under 
the GWP Approach, EPA converted CH4, N2O and HFC-
134a to CO2 equivalents using the AR4 100-year GWP for each 
gas: CH4 (25), N2O (298), and HFC-134a 
(1,430).\695\ These CO2-equivalent emission reductions are 
multiplied by the SC-CO2 estimate corresponding to each year 
of emission reductions. As with the calculation of annual benefits of 
CO2 emission reductions, the annual benefits of non-
CO2 emission reductions based on the GWP approach are 
discounted back to net present value terms using the same discount rate 
as each SC-CO2 estimate. The estimated non-CO2 
GHG benefits using the GWP approach are presented in Table IX-16 
through Table IX-18. The total net present value of the GHG benefits 
for this proposed rulemaking would increase by about $760 million to 
$11 billion (2012$), depending on discount rate, or roughly 3 percent 
if these non-CO2 estimates were included.
---------------------------------------------------------------------------

    \695\ Source: Table 2.14 (Errata). Lifetimes, radiative 
efficiencies and direct (except for CH4) GWPs relative to 
CO2. IPCC Fourth Assessment Report ``Climate Change 2007: 
Working Group I: The Physical Science Basis.''

 Table IX-16--Annual Upstream and Downstream CH4 Benefits for the Given SC-CO2 Value Using Method B and Relative
                            to the Less Dynamic Baseline, Using the GWP Approach a b
                                            [$Millions of 2012$] \b\
----------------------------------------------------------------------------------------------------------------
                                                                          CH4
                                     ---------------------------------------------------------------------------
            Calendar year                                                                           3%, 95th
                                          5% Average         3% Average        2.5% Average        Percentile
----------------------------------------------------------------------------------------------------------------
2018................................               $0.3               $1.1               $1.6               $3.2
2019................................                0.6                2.2                3.3                6.6
2020................................                1.0                3.5                5.2                 10
2021................................                3.1                 11                 17                 33
2022................................                6.0                 20                 30                 62
2023................................                8.8                 30                 45                 93
2024................................                 14                 46                 68                140
2025................................                 19                 62                 91                190
2026................................                 25                 79                120                240
2027................................                 30                 99                140                300
2028................................                 36                120                170                360
2029................................                 43                140                200                420
2030................................                 49                160                230                480
2035................................                 82                240                350                760
2040................................                110                320                440                990
2050................................                160                440                600              1,400
NPV.................................                730              3,400              5,400             11,000
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ The SC-CO2 values are dollar-year and emissions-year specific
\b\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

[[Page 40460]]

 Table IX-17--Annual Upstream and Downstream N2O Benefits for the Given SC-CO2 Value Using Method B and Relative
                          to the Less Dynamic Baseline, Using the GWP Approach \a\ \b\
                                            [$Millions of 2012$] \b\
----------------------------------------------------------------------------------------------------------------
                                                                          N2O
                                     ---------------------------------------------------------------------------
            Calendar year                                                                           3%, 95th
                                          5% Average         3% Average        2.5% Average        Percentile
----------------------------------------------------------------------------------------------------------------
2018................................               $0.0               $0.0               $0.1               $0.2
2019................................                0.0                0.1                0.2                0.3
2020................................                0.0                0.2                0.2                0.5
2021................................                0.1                0.4                0.5                1.1
2022................................                0.2                0.6                1.0                1.9
2023................................                0.3                0.9                1.4                2.8
2024................................                0.4                1.4                2.1                4.4
2025................................                0.6                2.0                2.9                6.0
2026................................                0.8                2.6                3.7                7.8
2027................................                1.0                3.2                4.7                 10
2028................................                1.2                3.9                5.7                 12
2029................................                1.5                4.6                6.6                 14
2030................................                1.6                5.3                7.7                 16
2035................................                2.8                8.3                 12                 26
2040................................                3.8                 11                 15                 34
2050................................                5.6                 15                 21                 47
NPV.................................                 25                120                180                360
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ The SC-CO2 values are dollar-year and emissions-year specific.
\b\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

   Table IX-18--Annual Upstream and Downstream HFC-134a Benefits for the Given SC-CO2 Value Using Method B and
                      Relative to the Less Dynamic Baseline, Using the GWP Approach \a\ \b\
                                            [$Millions of 2012$] \b\
----------------------------------------------------------------------------------------------------------------
                                                                       HFC-134a
                                     ---------------------------------------------------------------------------
            Calendar year                                                                           3%, 95th
                                          5% Average         3% Average        2.5% Average        Percentile
----------------------------------------------------------------------------------------------------------------
2018................................               $0.0               $0.0               $0.0               $0.0
2019................................                0.0                0.0                0.0                0.0
2020................................                0.0                0.0                0.0                0.0
2021................................                0.2                0.8                1.3                2.6
2022................................                0.5                1.7                2.6                5.3
2023................................                0.8                2.7                4.0                8.1
2024................................                1.1                3.7                5.4                 11
2025................................                1.4                4.7                6.9                 14
2026................................                1.8                5.9                8.6                 18
2027................................                2.2                7.1                 10                 22
2028................................                2.5                8.3                 12                 25
2029................................                3.0                 10                 14                 29
2030................................                3.4                 11                 16                 34
2035................................                5.2                 15                 22                 48
2040................................                6.1                 18                 25                 56
2050................................                8.4                 23                 31                 71
NPV.................................                 44                200                320                630
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ The SC-CO2 values are dollar-year and emissions-year specific.
\b\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(b) Non-CO2 GHG Benefits Based on Directly Modeled Estimates
    Several researchers have directly estimated the social cost of non-
CO2 emissions using integrated assessment models (IAMs), 
though the number of such estimates is small compared to the large 
number of SC-CO2 estimates available in the literature. As 
discussed in previous RIAs (e.g., EPA 2012), there is considerable 
variation among these published estimates in the models and input 
assumptions they employ. These studies differ in the emission 
perturbation year, employ a wide range of constant and variable 
discount rate specifications, and consider a range of baseline 
socioeconomic and emissions scenarios that have been developed over the 
last 20 years. However, none of the other published estimates of the 
social cost of non-CO2 GHG are consistent with the SC-
CO2 estimates, and most are likely underestimates due to 
changes in the underlying science since their publication.
    Recently, a paper by Marten et al. (2014) provided the first set of 
published SC-CH4 and SC-N2O

[[Page 40461]]

estimates that are consistent with the modeling assumptions underlying 
the SC-CO2.\696\ Specifically, the estimation approach of 
Marten et al. (2014) used the same set of three IAMs, five 
socioeconomic-emissions scenarios, equilibrium climate sensitivity 
distribution, three constant discount rates, and aggregation approach 
used to develop the SC-CO2 estimates.
---------------------------------------------------------------------------

    \696\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold & 
A. Wolverton (2014). Incremental CH4 and N2O 
mitigation benefits consistent with the U.S. Government's SC-
CO2 estimates, Climate Policy, DOI: 10.1080/
14693062.2014.912981.
---------------------------------------------------------------------------

    The resulting SC-CH4 and SC-N2O estimates are 
presented in Table IX-19. More detailed discussion of their 
methodology, results and a comparison to other published estimates can 
be found in the RIA and in Marten et al. (2014). The tables do not 
include HFC-134a because EPA is unaware of analogous estimates.

                                    Table IX-19--Social Cost of CH4 and N2O, 2012-2050 \a\ [in 2012$ per metric ton]
                                                              [Source: Marten et al., 2014]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        SC-CH4                                              SC-N2O
                                                 -------------------------------------------------------------------------------------------------------
                      Year                                                      2.5%       3% 95th                                  2.5%       3%  95th
                                                   5% Average   3% Average    Average     percentile   5% Average  3%  Average    Average     percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2012............................................         $440       $1,000       $1,400       $2,800       $4,000      $14,000      $20,000      $37,000
2015............................................          500        1,200        1,500        3,100        4,400       15,000       22,000       39,000
2020............................................          590        1,300        1,700        3,500        5,200       16,000       24,000       44,000
2025............................................          710        1,500       19,000        4,100        6,000       18,000       27,000       50,000
2030............................................          840        1,700        2,300        4,600        7,000       20,000       29,000       55,000
2035............................................          990        2,000        2,500        5,400        8,100       23,000       32,000       61,000
2040............................................        1,200        2,300        2,800        6,000        9,300       25,000       35,000       67,000
2045............................................        1,300        2,500        3,100        6,800       11,000       27,000       38,000       73,000
2050............................................        1,500        2,700        3,300        7,400       12,000       29,000       41,000       80,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:
\a\ The values are emissions-year specific and have been rounded to two significant digits. Unrounded numbers were used to calculate the GHG benefits.

    The application of directly modeled estimates from Marten et al. 
(2014) to benefit-cost analysis of a regulatory action is analogous to 
the use of the SC-CO2 estimates. Specifically, the SC-
CH4 and SC-N2O estimates in Table IX-19 are used 
to monetize the benefits of changes in CH4 and 
N2O emissions expected as a result of the proposed 
rulemaking. Forecast changes in CH4 and N2O 
emissions in a given year resulting from the regulatory action are 
multiplied by the SC-CH4 and SC-N2O estimate for 
that year, respectively. To obtain a present value estimate, the 
monetized stream of future non-CO2 benefits are discounted 
back to the analysis year using the same discount rate used to estimate 
the social cost of the non-CO2 GHG emission changes.
    The CH4 and N2O benefits based on Marten et 
al. (2014) are presented for each calendar year in Table IX-20. 
Including these benefits would increase the total net present value of 
the GHG benefits for this proposed rulemaking by about $1.5 billion to 
$12 billion (2012$), or roughly 4 to 7 percent, depending on discount 
rate.

     Table IX-20--Annual Upstream and Downstream non-CO2 GHG Benefits for the Given SC-Non-CO2 Value Using Method B and Relative to the Less Dynamic
                                                  Baseline, Using the Directly Modeled Approach \a\ \b\
                                                                 [Millions of 2012$] \c\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          CH4                                                 N2O
                                                 -------------------------------------------------------------------------------------------------------
                  Calendar year                                                 2.5%       3% 95th                                  2.5%       3%  95th
                                                   5% Average   3% Average    Average     percentile  5%  Average  3%  Average    Average     percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2018............................................         $0.6         $1.3         $1.6         $3.3         $0.0         $0.1         $0.1         $0.2
2019............................................          1.1          2.6          3.4          6.8          0.0          0.1          0.2          0.3
2020............................................          1.8          3.9          5.2           10          0.1          0.2          0.3          0.5
2021............................................          5.8           13           17           35          0.1          0.4          0.6          1.2
2022............................................           11           24           31           65          0.3          0.8          1.1          2.1
2023............................................           17           35           49           97          0.4          1.1          1.7          3.1
2024............................................           26           56           72          150          0.6          1.8          2.5          4.7
2025............................................           35           74           95          200          0.8          2.4          3.5          6.5
2026............................................           46           99          130          260          1.0          3.0          4.5          8.4
2027............................................           57          120          150          320          1.3          4.0          5.8           11
2028............................................           69          140          190          390          1.6          4.8          6.9           13
2029............................................           82          170          220          460          1.9          5.8          8.2           15
2030............................................           95          190          260          520          2.2          6.5          9.3           18
2035............................................          160          330          400          870          3.7           10           15           28
2040............................................          230          430          540        1,200          5.2           14           19           37
2050............................................          350          620          770        1,700          7.9           20           27           53
NPV.............................................        1,500        4,600        6,400       12,000           34          150          230          400
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:

[[Page 40462]]

 
\a\ The SC-CH4 and SC-N2O values are dollar-year and emissions-year specific.
\b\ Note that net present discounted values of reduced GHG emissions is are calculated differently than other benefits. The same discount rate used to
  discount the value of damages from future emissions (SC-CH4 and SC-N2O at 5, 3, and 2.5 percent) is used to calculate net present value discounted
  values of SC-CH4 and SC-N2O for internal consistency. Refer to SCC TSD for more detail.
\c\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.

    As illustrated above, compared to the use of directly modeled 
estimates the GWP-based approximation approach underestimates the 
climate benefits of the CH4 emission reductions by 12 
percent to 52 percent and the climate benefits of N2O 
reductions by 10 percent to 26 percent, depending on the discount rate 
assumption.
(c) Additional Non-CO2 GHGs Co-Benefits
    In determining the relative social costs of the different gases, 
the Marten et al. (2014) analysis accounts for differences in lifetime 
and radiative efficiency between the non-CO2 GHGs and 
CO2. The analysis also accounts for radiative forcing 
resulting from methane's effects on tropospheric ozone and 
stratospheric water vapor, and for at least some of the fertilization 
effects of elevated carbon dioxide concentrations. However, there exist 
several other differences between these gases that have not yet been 
captured in this analysis, namely the non-radiative effects of methane-
driven elevated tropospheric ozone levels on human health, agriculture, 
and ecosystems, and the effects of carbon dioxide on ocean 
acidification. Inclusion of these additional non-radiative effects 
would potentially change both the absolute and relative value of the 
various gases.
    Of these effects, the human health effect of elevated tropospheric 
ozone levels resulting from methane emissions is the closest to being 
monetized in a way that would be comparable to the SCC. Premature 
ozone-related cardiopulmonary deaths resulting from global increases in 
tropospheric ozone concentrations produced by the methane oxidation 
process have been the focus of a number of studies over the past decade 
(e.g., West et al. 2006 \697\ ). Recent studies have produced an 
estimate of a monetized benefit of methane emissions reductions, with 
results on the order of $1,000 per metric ton of CH4 
emissions reduced (Anenberg et al. 2012 \698\; Shindell et al. 2012 
\699\), an estimate similar in magnitude to the climate benefits of 
CH4 reductions estimated by the Marten et al. or GWP 
methods. However, though EPA is continuing to monitor this area of 
research as it evolves, EPA is not applying them for benefit estimates 
at this time.
---------------------------------------------------------------------------

    \697\ West JJ, Fiore AM, Horowitz LW, Mauzerall DL (2006) Global 
health benefits of mitigating ozone pollution with methane emission 
controls. Proc Natl Acad Sci USA 103(11):3988-3993. doi:10.1073/
pnas.0600201103.
    \698\ Anenberg SC, Schwartz J, Shindell D, Amann M, Faluvegi G, 
Klimont Z, . . ., Vignati E (2012) Global air quality and health co-
benefits of mitigating near-term climate change through methane and 
black carbon emission controls. Environ Health Perspect 120(6):831. 
doi:10.1289/ehp.1104301.
    \699\ Shindell D, Kuylenstierna JCI, Vignati E, van Dingenen R, 
Amann M, Klimont Z, . . . , Fowler D (2012) Simultaneously 
Mitigating Near-Term Climate Change and Improving Human Health and 
Food Security. Science 335 (6065):183-189. doi:10.1126/
science.1210026.
---------------------------------------------------------------------------

H. Monetized Non-GHG Health Impacts

    This section analyzes the economic benefits from reductions in 
health and environmental impacts resulting from non-GHG emission 
reductions that can be expected to occur as a result of the proposed 
Phase 2 standards. CO2 emissions are predominantly the 
byproduct of fossil fuel combustion processes that also produce 
criteria and hazardous air pollutant emissions. The vehicles that are 
subject to the proposed standards are also significant sources of 
mobile source air pollution such as direct PM, NOX, VOCs and 
air toxics. The proposed standards would affect exhaust emissions of 
these pollutants from vehicles and would also affect emissions from 
upstream sources that occur during the refining and distribution of 
fuel. Changes in ambient concentrations of ozone, PM2.5, and 
air toxics that would result from the proposed standards are expected 
to affect human health by reducing premature deaths and other serious 
human health effects, as well as other important improvements in public 
health and welfare.
    It is important to quantify the health and environmental impacts 
associated with the proposed standards because a failure to adequately 
consider these ancillary impacts could lead to an incorrect assessment 
of their costs and benefits. Moreover, the health and other impacts of 
exposure to criteria air pollutants and airborne toxics tend to occur 
in the near term, while most effects from reduced climate change are 
likely to occur only over a time frame of several decades or longer.
    Although EPA typically quantifies and monetizes the health and 
environmental impacts related to both PM and ozone in its regulatory 
impact analyses (RIAs), it was unable to do so in time for this 
proposal. Instead, EPA has applied PM-related ``benefits per-ton'' 
values to its estimated emission reductions as an interim approach to 
estimating the PM-related benefits of the proposal. 700 701 
EPA also characterizes the health and environmental impacts that will 
be quantified and monetized for the final rulemaking.
---------------------------------------------------------------------------

    \700\ Fann, N., Baker, K.R., and Fulcher, C.M. (2012). 
Characterizing the PM2.5-related health benefits of emission 
reductions for 17 industrial, area and mobile emission sectors 
across the U.S., Environment International, 49, 241-151, published 
online September 28, 2012.
    \701\ See also: http://www.epa.gov/airquality/benmap/sabpt.html. 
The current values available on the Web page have been updated since 
the publication of the Fann et al., 2012 paper. For more information 
regarding the updated values, see: http://www.epa.gov/airquality/benmap/models/Source_Apportionment_BPT_TSD_1_31_13.pdf (accessed 
September 9, 2014).
---------------------------------------------------------------------------

    This section is split into two sub-sections: the first presents the 
benefits-per-ton values used to monetize the benefits from reducing 
population exposure to PM associated with the proposed standards; the 
second explains what PM- and ozone-related health and environmental 
impacts EPA will quantify and monetize in the analysis for the final 
rule. EPA bases its analyses on peer-reviewed studies of air quality 
and health and welfare effects and peer-reviewed studies of the 
monetary values of public health and welfare improvements, and is 
generally consistent with benefits analyses performed for the analysis 
of the final Tier 3 Vehicle Rule,\702\ the final 2012 p.m. NAAQS 
Revision,\703\ and the final

[[Page 40463]]

2017-2025 Light Duty Vehicle GHG Rule.\704\
---------------------------------------------------------------------------

    \702\ U.S. Environmental Protection Agency. (2014). Control of 
Air Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and 
Fuel Standards Final Rule: Regulatory Impact Analysis, Assessment 
and Standards Division, Office of Transportation and Air Quality, 
EPA-420-R-14-005, March 2014. Available on the Internet: http://www.epa.gov/otaq/documents/tier3/420r14005.pdf.
    \703\ U.S. Environmental Protection Agency. (2012). Regulatory 
Impact Analysis for the Final Revisions to the National Ambient Air 
Quality Standards for Particulate Matter, Health and Environmental 
Impacts Division, Office of Air Quality Planning and Standards, EPA-
452-R-12-005, December 2012. Available on the Internet: http://www.epa.gov/ttnecas1/regdata/RIAs/finalria.pdf.
    \704\ U.S. Environmental Protection Agency (U.S. EPA). (2012). 
Regulatory Impact Analysis: Final Rulemaking for 2017-2025 Light-
Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average 
Fuel Economy Standards, Assessment and Standards Division, Office of 
Transportation and Air Quality, EPA-420-R-12-016, August 2012. 
Available on the Internet at: http://www.epa.gov/otaq/climate/documents/420r12016.pdf.
---------------------------------------------------------------------------

    Though EPA is characterizing the changes in emissions associated 
with toxic pollutants, we are not able to quantify or monetize the 
human health effects associated with air toxic pollutants for either 
the proposal or the final rule analyses (see Section VIII.G.1.b.iii for 
more information). Please refer to Section VIII for more information 
about the air toxics emissions impacts associated with the proposed 
standards.
(1) Economic Value of Reductions in Criteria Pollutants
    As described in Section VIII, the proposed standards would reduce 
emissions of several criteria and toxic pollutants and their 
precursors. In this analysis, EPA estimates the economic value of the 
human health benefits associated with the resulting reductions in 
PM2.5 exposure. Due to analytical limitations with the 
benefit per ton method, this analysis does not estimate benefits 
resulting from reductions in population exposure to other criteria 
pollutants such as ozone.\705\ Furthermore, the benefits per-ton 
method, like all air quality impact analyses, does not monetize all of 
the potential health and welfare effects associated with reduced 
concentrations of PM2.5.
---------------------------------------------------------------------------

    \705\ The air quality modeling that underlies the PM-related 
benefit per ton values also produced estimates of ozone levels 
attributable to each sector. However, the complex non-linear 
chemistry governing ozone formation prevented EPA from developing a 
complementary array of ozone benefit per ton values. This limitation 
notwithstanding, we anticipate that the ozone-related benefits 
associated with reducing emissions of NOX and VOC could 
be substantial.
---------------------------------------------------------------------------

    This analysis uses estimates of the benefits from reducing the 
incidence of the specific PM2.5-related health impacts 
described below. These estimates, which are expressed per ton of 
PM2.5-related emissions eliminated by the proposed rules, 
represent the monetized value of human health benefits (including 
reductions in both premature mortality and premature morbidity) from 
reducing each ton of directly emitted PM2.5 or its 
precursors (SO2 and NOX), from a specified 
source. Ideally, the human health benefits would be estimated based on 
changes in ambient PM2.5 as determined by full-scale air 
quality modeling. However, the length of time needed to prepare the 
necessary emissions inventories, in addition to the processing time 
associated with the modeling itself, has precluded us from performing 
air quality modeling for this proposal. We will conduct this modeling 
for the final rule.
    The dollar-per-ton estimates used in this analysis are provided in 
Table IX-21. As the table indicates, these values differ among 
pollutants, and also depend on their original source, because emissions 
from different sources can result in different degrees of population 
exposure and resulting health impacts. In the summary of costs and 
benefits, Section IX.K of this preamble, EPA presents the monetized 
value of PM-related improvements associated with the proposal.

                                                          Table IX-21--Benefits-per-Ton Values
                                                                 [Thousands, 2012$] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      On-road mobile sources                           Upstream sources \d\
                        Year \c\                         -----------------------------------------------------------------------------------------------
                                                           Direct PM2.5         SO2             NOX        Direct PM2.5         SO2             NOX
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Estimated Using a 3 Percent Discount Rate \b\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2016....................................................       $380-$850         $20-$45        $7.7-$18       $330-$750        $69-$160        $6.8-$16
2020....................................................         400-910           22-49          8.1-18         350-790          75-170          7.4-17
2025....................................................       440-1,000           24-55          8.8-20         390-870          83-190          8.1-18
2030....................................................       480-1,100           27-61          9.6-22         420-950          91-200          8.7-20
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Estimated Using a 7 Percent Discount Rate \b\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2016....................................................       $340-$770         $18-$41        $6.9-$16       $290-$670        $63-$140        $6.2-$14
2020....................................................         370-820           20-44          7.4-17         320-720          67-150          6.6-15
2025....................................................         400-910           22-49          8.0-18         350-790          75-170          7.3-17
2030....................................................         430-980           24-55          8.6-20         380-850          81-180          7.9-18
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ The benefit-per-ton estimates presented in this table are based on a range of premature mortality estimates derived from the ACS study (Krewski et
  al., 2009) and the Six-Cities study (Lepeule et al., 2012). See Chapter VIII of the RIA for a description of these studies.
\b\ The benefit-per-ton estimates presented in this table assume either a 3 percent or 7 percent discount rate in the valuation of premature mortality
  to account for a twenty-year segmented premature mortality cessation lag.
\c\ Benefit-per-ton values were estimated for the years 2016, 2020, 2025 and 2030. We hold values constant for intervening years (e.g., the 2016 values
  are assumed to apply to years 2017-2019; 2020 values for years 2021-2024; 2030 values for years 2031 and beyond).
\d\ We assume for the purpose of this analysis that total ``upstream emissions'' are most appropriately monetized using the refinery sector benefit per-
  ton values. The majority of upstream emission reductions associated with the proposed rule are related to domestic onsite refinery emissions and
  domestic crude production. While total upstream emissions also include storage and transport sources, as well as sources upstream from the refinery,
  we have chosen to simply apply the refinery values. Full-scale air quality modeling, and the associated benefits analysis, will include upstream
  emissions from all sources in the FRM.

    The benefit-per-ton technique has been used in previous analyses, 
including EPA's 2017-2025 Light-Duty Vehicle Greenhouse Gas Rule,\706\ 
the Reciprocating Internal Combustion Engine rules,707 708 
and the Residential

[[Page 40464]]

Wood Heaters NSPS.\709\ Table IX-22 shows the quantified 
PM2.5-related co-benefits captured in those benefit per-ton 
estimates, as well as unquantified effects the benefit per-ton 
estimates are unable to capture.
---------------------------------------------------------------------------

    \706\ U.S. Environmental Protection Agency (U.S. EPA). (2012). 
Regulatory Impact Analysis: Final Rulemaking for 2017-2025 Light-
Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average 
Fuel Economy Standards, Assessment and Standards Division, Office of 
Transportation and Air Quality, EPA-420-R-12-016, August 2012. 
Available on the Internet at: http://www.epa.gov/otaq/climate/documents/420r12016.pdf.
    \707\ U.S. Environmental Protection Agency (U.S. EPA). (2013). 
Regulatory Impact Analysis for the Reconsideration of the Existing 
Stationary Compression Ignition (CI) Engines NESHAP, Office of Air 
Quality Planning and Standards, Research Triangle Park, NC. January. 
EPA-452/R-13-001. Available at <http://www.epa.gov/ttnecas1/regdata/RIAs/RICE_NESHAPreconsideration_Compression_Ignition_Engines_RIA_final2013_EPA.pdf.
    \708\ U.S. Environmental Protection Agency (U.S. EPA). (2013). 
Regulatory Impact Analysis for Reconsideration of Existing 
Stationary Spark Ignition (SI) RICE NESHAP, Office of Air Quality 
Planning and Standards, Research Triangle Park, NC. January. EPA-
452/R-13-002. Available at <http://www.epa.gov/ttnecas1/regdata/RIAs/NESHAP_RICE_Spark_Ignition_RIA_finalreconsideration2013_EPA.pdf>
.
    \709\ U.S. Environmental Protection Agency (U.S. EPA). (2015). 
Regulatory Impact Analysis for Residential Wood Heaters NSPS 
Revision. Office of Air Quality Planning and Standards, Research 
Triangle Park, NC. February. EPA-452/R-15-001. Available at <http://www2.epa.gov/sites/production/files/2015-02/documents/20150204-residential-wood-heaters-ria.pdf>.

         Table IX-22--Human Health and Welfare Effects of PM2.5
------------------------------------------------------------------------
                      Quantified and monetized    Unquantified effects
  Pollutant/ effect     in primary estimates           Changes in:
------------------------------------------------------------------------
PM2.5...............  Adult premature           Chronic and subchronic
                       mortality.                bronchitis cases.
                      Acute bronchitis........  Strokes and
                                                 cerebrovascular
                                                 disease.
                      Hospital admissions:      Low birth weight.
                       Respiratory and          Pulmonary function.
                       cardiovascular.
                      Emergency room visits     Chronic respiratory
                       for asthma.               diseases other than
                                                 chronic bronchitis.
                      Nonfatal heart attacks    Non-asthma respiratory
                       (myocardial infarction).  emergency room visits.
                      Lower and upper           Visibility.
                       respiratory illness.
                      Minor restricted-         Household soiling.
                       activity days.
                      Work loss days..........
                      Asthma exacerbations
                       (asthmatic population).
                      Infant mortality........
------------------------------------------------------------------------

    A more detailed description of the benefit-per-ton estimates is 
provided in Chapter VIII of the Draft RIA that accompanies this 
rulemaking. Readers interested in reviewing the complete methodology 
for creating the benefit-per-ton estimates used in this analysis can 
consult EPA's ``Technical Support Document: Estimating the Benefit per 
Ton of Reducing PM2.5 Precursors from 17 Sectors.'' \710\ 
Readers can also refer to Fann et al. (2012) \711\ for a detailed 
description of the benefit-per-ton methodology.
---------------------------------------------------------------------------

    \710\ For more information regarding the updated values, see: 
http://www.epa.gov/airquality/benmap/models/Source_Apportionment_BPT_TSD_1_31_13.pdf (accessed September 9, 
2014).
    \711\ Fann, N., Baker, K.R., and Fulcher, C.M. (2012). 
Characterizing the PM2.5-related health benefits of emission 
reductions for 17 industrial, area and mobile emission sectors 
across the U.S., Environment International, 49, 241-151, published 
online September 28, 2012.
---------------------------------------------------------------------------

    As Table IX-20 indicates, EPA projects that the per-ton values for 
reducing emissions of non-GHG pollutants from both vehicle use and 
upstream sources such as fuel refineries will increase over time.\712\ 
These projected increases reflect rising income levels, which increase 
affected individuals' willingness to pay for reduced exposure to health 
threats from air pollution.\713\ They also reflect future population 
growth and increased life expectancy, which expands the size of the 
population exposed to air pollution in both urban and rural areas, 
especially among older age groups with the highest mortality risk.\714\
---------------------------------------------------------------------------

    \712\ As we discuss in the emissions chapter of the DRIA 
(Chapter V), the rule would yield emission reductions from upstream 
refining and fuel distribution due to decreased petroleum 
consumption.
    \713\ The issue is discussed in more detail in the 2012 p.m. 
NAAQS RIA, Section 5.6.8. See U.S. Environmental Protection Agency. 
(2012). Regulatory Impact Analysis for the Final Revisions to the 
National Ambient Air Quality Standards for Particulate Matter, 
Health and Environmental Impacts Division, Office of Air Quality 
Planning and Standards, EPA-452-R-12-005, December 2012. Available 
on the internet: http://www.epa.gov/ttnecas1/regdata/RIAs/finalria.pdf.
    \714\ For more information about EPA's population projections, 
please refer to the following: http://www.epa.gov/air/benmap/models/BenMAPManualAppendicesAugust2010.pdf (See Appendix K).
---------------------------------------------------------------------------

(2) Human Health and Environmental Benefits for the Final Rule
(a) Human Health and Environmental Impacts
    To model the ozone and PM air quality benefits of the final rule, 
EPA will use the Community Multiscale Air Quality (CMAQ) model (see 
Section VIII for a description of the CMAQ model). The modeled ambient 
air quality data will serve as an input to the Environmental Benefits 
Mapping and Analysis Program--Community Edition (BenMAP CE).\715\ 
BenMAP CE is a computer program developed by EPA that integrates a 
number of the modeling elements used in previous RIAs (e.g., 
interpolation functions, population projections, health impact 
functions, valuation functions, analysis and pooling methods) to 
translate modeled air concentration estimates into health effects 
incidence estimates and monetized benefits estimates.
---------------------------------------------------------------------------

    \715\ Information on BenMAP, including downloads of the 
software, can be found at http://www.epa.gov/air/benmap/.
---------------------------------------------------------------------------

    Chapter VIII in the DRIA that accompanies this proposal lists the 
co-pollutant health effect concentration-response functions EPA will 
use to quantify the non-GHG incidence impacts associated with the 
proposed heavy-duty vehicle standards. These include PM- and ozone-
related premature mortality, nonfatal heart attacks, hospital 
admissions (respiratory and cardiovascular), emergency room visits, 
acute bronchitis, minor restricted activity days, and days of work and 
school lost.
(b) Monetized Impacts
    To calculate the total monetized impacts associated with quantified 
health impacts, EPA applies values derived from a number of sources. 
For premature mortality, EPA applies a value of a statistical life 
(VSL) derived from the mortality valuation literature. For certain 
health impacts, such as a number of respiratory-related ailments, EPA 
applies willingness-to-pay estimates derived from the valuation 
literature. For the remaining health impacts, EPA applies values 
derived from current cost-of-illness and/or wage estimates. Chapter 
VIII in the DRIA that accompanies this proposal presents the monetary 
values EPA will apply to changes in the incidence of health and welfare 
effects associated with reductions in non-GHG pollutants that will 
occur when these GHG control strategies are finalized.

[[Page 40465]]

(c) Other Unquantified Health and Environmental Impacts
    In addition to the co-pollutant health and environmental impacts 
EPA will quantify for the analysis of the final standard, there are a 
number of other health and human welfare endpoints that EPA will not be 
able to quantify or monetize because of current limitations in the 
methods or available data. These impacts are associated with emissions 
of air toxics (including benzene, 1,3-butadiene, formaldehyde, 
acetaldehyde, acrolein, naphthalene and ethanol), ambient ozone, and 
ambient PM2.5 exposures. Chapter VIII of the DRIA lists 
these unquantified health and environmental impacts.
    While there will be impacts associated with air toxic pollutant 
emission changes that result from the final standard, EPA will not 
attempt to monetize those impacts. This is primarily because currently 
available tools and methods to assess air toxics risk from mobile 
sources at the national scale are not adequate for extrapolation to 
incidence estimations or benefits assessment. The best suite of tools 
and methods currently available for assessment at the national scale 
are those used in the National-Scale Air Toxics Assessment (NATA). 
EPA's Science Advisory Board specifically commented in their review of 
the 1996 NATA that these tools were not yet ready for use in a 
national-scale benefits analysis, because they did not consider the 
full distribution of exposure and risk, or address sub-chronic health 
effects.\716\ While EPA has since improved the tools, there remain 
critical limitations for estimating incidence and assessing benefits of 
reducing mobile source air toxics.\717\ EPA continues to work to 
address these limitations; however, EPA does not anticipate having 
methods and tools available for national-scale application in time for 
the analysis of the final rules.\718\
---------------------------------------------------------------------------

    \716\ Science Advisory Board. 2001. NATA--Evaluating the 
National-Scale Air Toxics Assessment for 1996--an SAB Advisory. 
http://www.epa.gov/ttn/atw/sab/sabrev.html.
    \717\ Examples include gaps in toxicological data, uncertainties 
in extrapolating results from high-dose animal experiments to 
estimate human effects at lower does, limited ambient and personal 
exposure monitoring data, and insufficient economic research to 
support valuation of the health impacts often associated with 
exposure to individual air toxics. See Gwinn et al., 2011. Meeting 
Report: Estimating the Benefits of Reducing Hazardous Air 
Pollutants--Summary of 2009 Workshop and Future Considerations. 
Environ Health Perspect. Jan 2011; 119(1): 125-130.
    \718\ In April, 2009, EPA hosted a workshop on estimating the 
benefits of reducing hazardous air pollutants. This workshop built 
upon the work accomplished in the June 2000 in an earlier (2000) 
Science Advisory Board/EPA Workshop on the Benefits of Reductions in 
Exposure to Hazardous Air Pollutants, which generated thoughtful 
discussion on approaches to estimating human health benefits from 
reductions in air toxics exposure, but no consensus was reached on 
methods that could be implemented in the near term for a broad 
selection of air toxics. Please visit http://epa.gov/air/toxicair/2009workshop.html for more information about the workshop and its 
associated materials.
---------------------------------------------------------------------------

I. Energy Security Impacts

    The Phase 2 standards are designed to require improvements in the 
fuel efficiency of medium- and heavy-duty vehicles and, thereby, reduce 
fuel consumption and GHG emissions. In turn, the Phase 2 standards help 
to reduce U.S. 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 U.S., thus 
increasing U.S. energy security. This section summarizes the agency's 
estimates of U.S. oil import reductions and energy security benefits of 
the proposed Phase 2 standards. Additional discussion of this issue can 
be found in Chapter 8 of the draft RIA.
(1) Implications of Reduced Petroleum Use on U.S. Imports
    U.S. energy security is broadly defined as the continued 
availability of energy sources at an acceptable price. Most discussion 
of U.S. energy security revolves around the topic of the economic costs 
of U.S. dependence on oil imports. However, it is not imports alone, 
but both imports and consumption of petroleum from all sources and 
their role in economic activity, that expose the U.S. to risk from 
price shocks in the world oil price. The relative significance of 
petroleum consumption and import levels for the macroeconomic 
disturbances that follow from oil price shocks is not fully understood. 
Recognizing that changing petroleum consumption will change U.S. 
imports, this assessment of oil costs focuses on those incremental 
social costs that follow from the resulting changes in imports, 
employing the usual oil import premium measure. The agencies request 
comment on how to incorporate the impact of changes in oil consumption, 
rather than imports exclusively, into our energy security analysis.
    While the U.S. has reduced its consumption and increased its 
production of oil in recent years, it still relies on oil from 
potentially unstable sources. In addition, oil exporters with a large 
share of global production have the ability to raise the price of oil 
by exerting the monopoly power associated with a cartel, the 
Organization of Petroleum Exporting Countries (OPEC), to restrict oil 
supply relative to demand. These factors contribute to the 
vulnerability of the U.S. economy to episodic oil supply shocks and 
price spikes. In 2012, U.S. net expenditures for imports of crude oil 
and petroleum products were $290 billion and expenditures on both 
imported oil and domestic petroleum and refined products totaled $634 
billion (see Figure IX-1).\719\ Import costs have declined since 2011 
but total oil expenditures (domestic and imported) remain near 
historical highs, at roughly triple the inflation-adjusted levels 
experienced by the U.S. from 1986 to 2002.
---------------------------------------------------------------------------

    \719\ See EIA Annual Energy Review, various editions. For data 
2011-2013, and projected data: EIA Annual Energy Outlook (AEO) 2014 
(Reference Case). See Table 11, file ``aeotab_11.xls.''
---------------------------------------------------------------------------

    In 2010, just over 40 percent of world oil supply came from OPEC 
nations and the AEO 2014 (Early Release) \720\ projects that this share 
will rise gradually to over 45 percent by 2040. Approximately 31 
percent of global supply is from Middle East and North African 
countries alone, a share that is also expected to grow. Measured in 
terms of the share of world oil resources or the share of global oil 
export supply, rather than oil production, the concentration of global 
petroleum resources in OPEC nations is even larger. As another measure 
of concentration, of the 137 countries/principalities that export 
either crude or refined products, the top 12 have recently accounted 
for over 55 percent of exports.\721\ Eight of these countries are 
members of OPEC, and a ninth is Russia.\722\ In a market where even a 
1-2 percent supply loss can raise prices noticeably, and where a 10 
percent supply loss could lead to an unprecedented price shock, this 
regional concentration is of concern.\723\

[[Page 40466]]

Historically, the countries of the Middle East have been the source of 
eight of the ten major world oil disruptions,\724\ with the ninth 
originating in Venezuela, an OPEC country, and the tenth being 
Hurricanes Katrina and Rita.
---------------------------------------------------------------------------

    \720\ The agencies used the AEO 2014 (Early Release) since this 
version of AEO was available at the time that fuel savings from the 
rule were being estimated. The AEO 2014 (Early Release) and the AEO 
2014 have very similar energy market and economic projections. For 
example, world oil prices are the same between the two forecasts.
    \721\ Based on data from the CIA, combining various recent 
years, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2242rank.html.
    \722\ The other three are Norway, Canada, and the EU, an 
exporter of product.
    \723\ For example, the 2005 Hurricanes Katrina/Rita and the 2011 
Libyan conflict both led to a 1.8 percent reduction in global crude 
supply. While the price impact of the latter is not easily 
distinguished given the rapidly rising post-recession prices, the 
former event was associated with a 10-15 percent world oil price 
increase. There are a range of smaller events with smaller but 
noticeable impacts. Somewhat larger events, such as the 2002/3 
Venezuelan Strike and the War in Iraq, corresponded to about a 2.9 
percent sustained loss of supply, and was associated with a 28 
percent world oil price increase.
    \724\ IEA 2011 ``IEA Response System for Oil Supply 
Emergencies.''
[GRAPHIC] [TIFF OMITTED] TP13JY15.017

    The agencies used EPA's MOVES model to estimate the reductions in 
U.S. fuel consumption due to this proposed rule for vocational vehicles 
and tractors. For HD pickups and vans, the agencies used both DOT's 
CAFE model and EPA's MOVES model to estimate the fuel consumption 
impacts. (Detailed explanations of the MOVES and CAFE models can be 
found in Chapters 5 and 10 of the draft RIA. See IX.C of the preamble 
for estimates of reduced fuel consumption from the proposed rule). 
Based on a detailed analysis of differences in U.S. fuel consumption, 
petroleum imports, and imports of petroleum products, the agencies 
estimate that approximately 90 percent of the reduction in fuel 
consumption resulting from adopting improved GHG emission standards and 
fuel efficiency standards is likely to be reflected in reduced U.S. 
imports of crude oil and net imported petroleum products.\726\ Thus, on 
balance, each gallon of fuel saved as a consequence of the HD GHG and 
fuel efficiency standards is anticipated to reduce total U.S. imports 
of petroleum by 0.90 gallons.\727\ Based upon the fuel savings 
estimated by the MOVES/CAFE models and the 90 percent oil import 
factor, the reduction in U.S. oil imports from these proposed rules are 
estimated for the years 2020, 2025, 2030, 2040, and 2050 (in millions 
of barrels per day (MMBD)) in Table IX-25 below. For comparison 
purposes, Table IX-25 also shows U.S. imports of crude oil in 2020, 
2025, 2030 and 2040 as projected by DOE in the Annual Energy Outlook 
2014 (Early Release) Reference Case. U.S. Gross Domestic

[[Page 40467]]

Product (GDP) is projected to grow by roughly 59 percent over the same 
time frame (e.g., from 2020 to 2040) in the same AEO projections.
---------------------------------------------------------------------------

    \725\ For historical data: EIA Annual Energy Review, various 
editions. For data 2011-2013, and projected data: EIA Annual Energy 
Outlook (AEO) 2014 (Reference Case). See Table 11, file 
``aeotab_11.xls''.
    \726\ We looked at changes in crude oil imports and net 
petroleum products in the Reference Case in comparison to two cases 
from the AEO 2014. The two cases are the Low (i.e., Economic Growth) 
Demand and Low VMT cases. See the spreadsheet ``Impacts on Fuel 
Demands and ImportsJan9.xlsx'' comparing the AEO 2014 Reference Case 
to the Low Demand Case. See the spreadsheet ``Impact of Fuel Demand 
and Impacts January20VMT.xlsl'' for a comparison of AEO 2014 
Reference Case and the Low VMT Case. We also considered a paper 
entitled ``Effect of a U.S. Demand Reduction on Imports and Domestic 
Supply Levels'' by Paul Leiby, 4/16/2013. This paper suggests that 
``Given a particular reduction in oil demand stemming from a policy 
or significant technology change, the fraction of oil use savings 
that shows up as reduced U.S. imports, rather than reduced U.S. 
supply, is actually quite close to 90 percent, and probably close to 
95 percent''.
    \727\ The NHTSA analysis uses a slightly different value that 
was estimated using unique runs of the National Energy Modeling 
System (NEMS) that forms the foundation of the Annual Energy 
Outlook. NHTSA ran a version of NEMS from 2012 (which would have 
been used in the 2013 AEO) and computed the change in imports of 
petroleum products with and without the Phase 1 MDHD program to 
estimate the relationship between changes in fuel consumption and 
oil imports. The analysis found that reducing gasoline consumption 
by 1 gallon reduces imports of refined gasoline by 0.06 gallons and 
domestic refining from imported crude by 0.94 gallons. Similarly, 
one gallon of diesel saved by the Phase 1 rule was estimated to 
reduce imports of refined diesel by 0.26 gallons and domestic 
refining of imported crude by 0.74 gallons. The agencies will update 
this analysis for the Final Rule using the model associated with 
AEO2014, modeling the Phase 2 Preferred Alternative explicitly.

  Table IX-23--Projected U.S. Imports of Crude Oil and U.S. Oil Import
 Reductions Resulting From the Proposed Phase 2 Heavy-Duty Vehicle Rule
  in 2020, 2025, 2030, 2040 and 2050 Using Method B and Relative to the
                          Less Dynamic Baseline
                 [Millions of barrels per day (MMBD)] a
------------------------------------------------------------------------
                                                            Reductions
                  Year                       U.S. oil      from proposed
                                              imports         HD rule
------------------------------------------------------------------------
2020....................................            4.93            0.01
2025....................................            5.04            0.16
2030....................................            5.35            0.37
2040....................................            5.92            0.65
2050....................................               *            0.78
------------------------------------------------------------------------
Notes:
* The AEO 2014 (Early Release) only projects energy market and economic
  trends through 2040.
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(2) Energy Security Implications
    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. The energy security 
estimates provided below are based upon a methodology developed in a 
peer-reviewed study entitled, ``The Energy Security Benefits of Reduced 
Oil Use, 2006-2015,'' completed in March 2008. This ORNL study is an 
updated version of the approach used for estimating the energy security 
benefits of U.S. oil import reductions developed in a 1997 ORNL 
Report.\728\ For EPA and NHTSA rulemakings, the ORNL methodology is 
updated periodically to account for forecasts of future energy market 
and economic trends reported in the U.S. Energy Information 
Administration's Annual Energy Outlook.
---------------------------------------------------------------------------

    \728\ Leiby, Paul N., Donald W. Jones, T. Randall Curlee, and 
Russell Lee, Oil Imports: An Assessment of Benefits and Costs, ORNL-
6851, Oak Ridge National Laboratory, November, 1997.
---------------------------------------------------------------------------

    When conducting this analysis, ORNL considered the full cost of 
importing petroleum into the U.S. The full economic cost is defined to 
include two components in addition to the purchase price of petroleum 
itself. These are: (1) The higher costs for oil imports resulting from 
the effect of U.S. demand on the world oil price (i.e., the ``demand'' 
or ``monopsony'' costs); and (2) the risk of reductions in U.S. 
economic output and disruption to the U.S. economy caused by sudden 
disruptions in the supply of imported oil to the U.S. (i.e., 
macroeconomic disruption/adjustment costs).
    The literature on the energy security for the last two decades has 
routinely combined the monopsony and the macroeconomic disruption 
components when calculating the total value of the energy security 
premium. However, in the context of using a global value for the Social 
Cost of Carbon (SCC) the question arises: How should the energy 
security premium be used when some benefits from the rule, such as the 
benefits of reducing greenhouse gas emissions, are calculated from a 
global perspective? Monopsony benefits represent avoided payments by 
U.S. consumers to oil producers that result from a decrease in the 
world oil price as the U.S. decreases its demand for oil. Although 
there is clearly an overall benefit to the U.S. when considered from a 
domestic perspective, the decrease in price due to decreased demand in 
the U.S. also represents a loss to oil producing countries, one of 
which is the United States. Given the redistributive nature of this 
monopsony effect from a global perspective, and the fact that an 
increasing fraction of it represents a transfer between U.S. consumers 
and producers, it is excluded in the energy security benefits 
calculations for these proposed rules.
    In contrast, the other portion of the energy security premium, the 
avoided U.S. macroeconomic disruption and adjustment cost that arises 
from reductions in U.S. petroleum imports, does not have offsetting 
impacts outside of the U.S., and, thus, is included in the energy 
security benefits estimated for these proposed rules. To summarize, the 
agencies have included only the avoided macroeconomic disruption 
portion of the energy security benefits to estimate the monetary value 
of the total energy security benefits of these proposed rules.
    For this rulemaking, ORNL updated the energy security premiums by 
incorporating the most recent oil price forecast and energy market 
trends, particularly regional oil supplies and demands, from the AEO 
2014 (Early Release) into its model.\729\ ORNL developed energy 
security premium estimates for a number of different years. Table IX-24 
provides estimates for energy security premiums for the years 2020, 
2025, 2030 and 2040,\730\ as well as a breakdown of the components of 
the energy security premiums for each year. The components of the 
energy security premiums and their values are discussed below.
---------------------------------------------------------------------------

    \729\ Leiby, P., Factors Influencing Estimate of Energy Security 
Premium for Heavy-Duty Phase 2 Proposed Rule, 11/1/2014, Oak Ridge 
National Laboratory.
    \730\ AEO 2014 (Early Release) forecasts energy market trends 
and values only to 2040. The post-2040 energy security premium 
values are assumed to be equal to the 2040 estimate.

[[Page 40468]]

                       Table IX-24--Energy Security Premiums in 2020, 2025, 2030 and 2040
                                                [2012$/Barrel] *
----------------------------------------------------------------------------------------------------------------
                                                                                 Avoided
                                                                              macroeconomic
                      Year (range)                       Monopsony (range)     disruption/      Total mid-point
                                                                             adjustment costs       (range)
                                                                                 (range)
----------------------------------------------------------------------------------------------------------------
2020...................................................              $4.91              $6.35             $11.25
                                                               (1.63-9.15)       (3.07-10.15)       (6.67-16.53)
2025...................................................              $5.46              $7.29             $12.75
                                                              (1.81-10.47)       (3.57-11.67)       (7.58-18.65)
2030...................................................              $6.04              $8.39             $14.43
                                                              (2.00-11.67)       (4.12-13.41)       (8.54-21.13)
2040...................................................              $7.17             $10.74             $17.91
                                                              (2.32-14.03)       (5.36-17.22)            -26.14)
----------------------------------------------------------------------------------------------------------------
Note:
* Top values in each cell are the midpoints, the values in parentheses are the 90 percent confidence intervals.

(a) Effect of Oil Use on the Long-Run Oil Price
    The first component of the full economic costs of importing 
petroleum into the U.S. follows from the effect of U.S. import demand 
on the world oil price over the long-run. Because the U.S. is a 
sufficiently large purchaser of global oil supplies, its purchases can 
affect the world oil price. This monopsony power means that increases 
in U.S. petroleum demand can cause the world price of crude oil to 
rise, and conversely, that reduced U.S. petroleum demand can reduce the 
world price of crude oil. Thus, one benefit of decreasing U.S. oil 
purchases, due to improvements in the fuel efficiency of medium- and 
heavy-duty vehicles, is the potential decrease in the crude oil price 
paid for all crude oil purchased.
    A variety of oil market and economic factors have contributed to 
lowering the estimated monopsony premium compared to monopsony premiums 
cited in recent EPA/NHTSA rulemakings. Three principal factors 
contribute to lowering the monopsony premium: Lower world oil prices, 
lower U.S. oil imports and less responsiveness of world oil prices to 
changes in U.S. oil demand. For example, between 2012 (using the AEO 
2012 (Early Release)) and 2014 (using the AEO 2014 (Early Release)), 
there has been a general downward revision in world oil price 
projections in the near term (e.g. 19 percent in 2020) and a sharp 
reduction in projected U.S. oil imports in the near term, due to 
increased U.S. supply (i.e., a 41 percent reduction in U.S. oil imports 
by 2017 and a 36 percent reduction in 2020). Over the longer term, 
oil's share of total U.S. imports is projected to gradually increase 
after 2020 but still remain 27 percent below the AEO2012 (Early 
Release) projected level in 2035.
    Another factor influencing the monopsony premium is that U.S. 
demand on the global oil market is projected to decline, suggesting 
diminished overall influence and some reduction in the influence of 
U.S. oil demand on the world price of oil. Outside of the U.S., 
projected OPEC supply remains roughly steady as a share of world oil 
supply compared to the AEO2012 (Early Release). OPEC's share of world 
oil supply outside of the U.S. actually increases slightly. Since OPEC 
supply is estimated to be more price sensitive than non-OPEC supply, 
this means that under AEO2014 (Early Release) world oil supply is 
slightly more responsive to changes in U.S. oil demand. Together, these 
factors suggest that changes in U.S. oil import reductions have a 
somewhat smaller effect on the long-run world oil price than changes 
based on 2012 estimates.
    These changes in oil price and import levels lower the monopsony 
portion of energy security premium since this portion of the security 
premium is related to the change in total U.S. oil import costs that is 
achieved by a marginal reduction in U.S oil imports. Since both the 
price and the quantity of oil imports are lower, the monopsony premium 
component is 46-57 percent lower over the years 2017-2025 than the 
estimates based upon the AEO 2012 (Early Release) projections.
    There is disagreement in the literature about the magnitude of the 
monopsony component, and its relevance for policy analysis. Brown and 
Huntington (2013),\731\ for example, argue that the United States' 
refusal to exercise its market power to reduce the world oil price does 
not represent a proper externality, and that the monopsony component 
should not be considered in calculations of the energy security 
externality. However, they also note in their earlier discussion paper 
(Brown and Huntington 2010) \732\ that this is a departure from the 
traditional energy security literature, which includes sustained wealth 
transfers associated with stable but higher-price oil markets. On the 
other hand, Greene (2010) \733\ and others in prior literature (e.g., 
Toman 1993) \734\ have emphasized that the monopsony cost component is 
policy-relevant because the world oil market is non-competitive and 
strongly influenced by cartelized and government-controlled supply 
decisions. Thus, while sometimes couched as an externality, Greene 
notes that the monopsony component is best viewed as stemming from a 
completely different market failure than an externality (Ledyard 
2008),\735\ yet still implying marginal social costs to importers.
---------------------------------------------------------------------------

    \731\ Brown, Stephen P.A. and Hillard G. Huntington. 2013. 
Assessing the U.S. Oil Security Premium. Energy Economics, vol. 38, 
pp 118-127.
    \732\ Reassessing the Oil Security Premium. RFF Discussion Paper 
Series, (RFF DP 10-05). doi: RFF DP 10-05
    \733\ Greene, D.L. 2010. Measuring energy security: Can the 
United States achieve oil independence? Energy Policy, 38(4), 1614-
1621. doi:10.1016/j.enpol.2009.01.041.
    \734\ Reassessing the Oil Security Premium. RFF Discussion Paper 
Series, (RFF DP 10-05). doi:RFF DP 10-05.
    \735\ Ledyard, John O. ``Market Failure.'' The New Palgrave 
Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and 
Lawrence E. Blume. Palgrave Macmillan, 2008.
---------------------------------------------------------------------------

    There is also a question about the ability of gradual, long-term 
reductions, such as those resulting from this proposed rule, to reduce 
the world oil price in the presence of OPEC's monopoly power. OPEC is 
currently the world's marginal petroleum supplier, and could 
conceivably respond to gradual reductions in U.S. demand with gradual 
reductions in supply over the course of several years as the fuel

[[Page 40469]]

savings resulting from this rule grow. However, if OPEC opts for a 
long-term strategy to preserve its market share, rather than maintain a 
particular price level (as they have done recently in response to 
increasing U.S. petroleum production), reduced demand would create 
downward pressure on the global price. The Oak Ridge analysis assumes 
that OPEC does respond to demand reductions over the long run, but 
there is still a price effect in the model. Under the mid-case 
behavioral assumption used in the premium calculations, OPEC responds 
by gradually reducing supply to maintain market share (consistent with 
the long-term self-interested strategy suggested by Gately (2004, 
2007)).\736\
---------------------------------------------------------------------------

    \736\ Gately, Dermot 2004. ``OPEC's Incentives for Faster Output 
Growth'', The Energy Journal, 25 (2):75-96; Gately, Dermot 2007. 
``What Oil Export Levels Should We Expect From OPEC?'', The Energy 
Journal, 28(2):151-173.
---------------------------------------------------------------------------

    It is important to note that the decrease in global petroleum 
prices resulting from this rulemaking could spur increased consumption 
of petroleum in other sectors and countries, leading to a modest uptick 
in GHG emissions outside of the United States. This increase in global 
fuel consumption could offset some portion of the GHG reduction 
benefits associated with these proposed rules. The agencies have not 
quantified this increase in global GHG emissions. We request comments, 
data sources and methodologies for how global rebound effects may be 
quantified.
(b) Macroeconomic Disruption Adjustment Costs
    The second component of the oil import premium, ``avoided 
macroeconomic disruption/adjustment costs'', arises from the effect of 
oil imports on the expected cost of supply disruptions and accompanying 
price increases. A sudden increase in oil prices triggered by a 
disruption in world oil supplies has two main effects: (1) It increases 
the costs of oil imports in the short-run and (2) it can lead to 
macroeconomic contraction, dislocation and Gross Domestic Product (GDP) 
losses. For example, ORNL estimates the combined value of these two 
factors to be $6.34/barrel when U.S. oil imports are reduced in 2020, 
with a range from $3.07/barrel to $10.15/barrel of imported oil 
reduced.
    Since future disruptions in foreign oil supplies are an uncertain 
prospect, each of the disruption cost components must be weighted by 
the probability that the supply of petroleum to the U.S. will actually 
be disrupted. Thus, the ``expected value'' of these costs--the product 
of the probability that a supply disruption will occur and the sum of 
costs from reduced economic output and the economy's abrupt adjustment 
to sharply higher petroleum prices--is the relevant measure of their 
magnitude. Further, when assessing the energy security value of a 
policy to reduce oil use, it is only the change in the expected costs 
of disruption that results from the policy that is relevant. The 
expected costs of disruption may change from lowering the normal (i.e., 
pre-disruption) level of domestic petroleum use and imports, from any 
induced alteration in the likelihood or size of disruption, or from 
altering the short-run flexibility (e.g., elasticity) of petroleum use.
    With updated oil market and economic factors, the avoided 
macroeconomic disruption component of the energy security premiums is 
slightly lower in comparison to avoided macroeconomic disruption 
premiums used in previous rulemakings. Factors that contribute to 
moderately lowering the avoided macroeconomic disruption component are 
lower projected GDP, moderately lower oil prices and slightly smaller 
price increases during prospective shocks. For example, oil price 
levels are 5-19 percent lower over the 2020-2035 period, and the likely 
increase in oil prices in the event of an oil shock are somewhat 
smaller, given small increases in the responsiveness of oil supply to 
changes in the world price of oil. Overall, the avoided macroeconomic 
disruption component estimates for the oil security premiums are 2-19 
percent lower over the period from 2020-2035 based upon different 
projected oil market and economic trends in the AEO2014 (Early Release) 
compared to the AEO2012 (Early Release).
    There are several reasons why the avoided macroeconomic disruption 
premiums change only moderately. One reason is that the macroeconomic 
sensitivity to oil price shocks is assumed unchanged in recent years 
since U.S. oil consumption levels and the value share of oil in the 
U.S. economy remain at high levels. For example, Figure IX-2 below 
shows that under AEO2014 (Early Release), projected U.S. real annual 
oil expenditures continue to rise after 2015 to over $800 billion 
(2012$) by 2030. The value share of oil use in the U.S. economy remains 
between three and four percent, well above the levels observed from 
1985 to 2005. A second factor is that oil disruption risks are little 
changed. The two factors influencing disruption risks are the 
probability of global supply interruptions and the world oil supply 
share from OPEC. Both factors are not significantly different from 
previous forecasts of oil market trends.
    The energy security costs estimated here follow the oil security 
premium framework, which is well established in the energy economics 
literature. The oil import premium gained attention as a guiding 
concept for energy policy around the time of the second and third major 
post-war oil shocks (Bohi and Montgomery 1982, EMF 1982).\737\ Plummer 
(1982) \738\ provided valuable discussion of many of the key issues 
related to the oil import premium as well as the analogous oil 
stockpiling premium. Bohi and Montgomery (1982) \739\ detailed the 
theoretical foundations of the oil import premium established many of 
the critical analytic relationships through their thoughtful analysis. 
Hogan (1981) \740\ and Broadman and Hogan (1986, 1988)\741\ revised and 
extended the established analytical framework to estimate optimal oil 
import premia with a more detailed accounting of macroeconomic effects.
---------------------------------------------------------------------------

    \737\Bohi, Douglas R. And W. David Montgomery 1982. Social Cost 
of Imported and Import Policy, Annual Review of Energy, 7:37-60. 
Energy Modeling Forum, 1981. World Oil, EMF Report 6 (Stanford 
University Press: Stanford 39 CA. https//emf.stanford.edu/publications/emf-6-world-oil.
    \738\ Plummer, James L. (Ed.) 1982. Energy Vulnerability, 
``Basic Concepts, Assumptions and Numerical Results'', pp. 13-36, 
(Cambridge MA: Ballinger Publishing Co.)
    \739\ Bohi, Douglas R. And W. David Montgomery 1982. Social Cost 
of Imported and U.S. Import Policy, Annual Review of Energy, 7:37-
60.
    \740\ Hogan, William W., 1981. ``Import Management and Oil 
Emergencies'', Chapter 9 in Deese, 5 David and Joseph Nye, eds. 
Energy and Security. Cambridge, MA: Ballinger Publishing Co.
    \741\Broadman, H.G. 1986. ``The Social Cost of Imported Oil,'' 
Energy Policy 14(3):242-252. Broadman H.G. and W.W. Hogan, 1988. 
``Is an Oil Import Tariff Justified? An American Debate: The Numbers 
Say `Yes'.'' The Energy Journal 9: 7-29.
---------------------------------------------------------------------------

    Since the original work on energy security was undertaken in the 
1980's, there have been several reviews on this topic. For example, 
Leiby, Jones, Curlee and Lee (1997) \742\ provided an extended review 
of the literature and issues regarding the estimation of the premium. 
Parry and Darmstadter (2004) \743\ also provided an overview of extant 
oil security premium estimates

[[Page 40470]]

and estimated of some premium components.
---------------------------------------------------------------------------

    \742\ Leiby, Paul N., Donald W. Jones, T. Randall Curlee, and 
Russell Lee, Oil Imports: An Assessment of Benefits and Costs, ORNL-
6851, Oak Ridge National Laboratory, November 1, 1997.
    \743\ Parry, Ian W.H. and Joel Darmstadter 2004. ``The Costs of 
U.S. Oil Dependency,'' Resources for the Future, November 17, 2004 
(also published as NCEP Technical Appendix Chapter 1: Enhancing Oil 
Security, the National Commission on Energy Policy 2004 Ending the 
Energy Stalemate--A Bipartisan Strategy to Meet America's Energy 
Challenges.)
---------------------------------------------------------------------------

    The recent economics literature on whether oil shocks are a threat 
to economic stability that they once were is mixed. Some of the current 
literature asserts that the macroeconomic component of the energy 
security externality is small. For example, the National Research 
Council (2009) argued that the non-environmental externalities 
associated with dependence on foreign oil are small, and potentially 
trivial.\744\ Analyses by Nordhaus (2007) and Blanchard and Gali (2010) 
question the impact of more recent oil price shocks on the 
economy.\745\ They were motivated by attempts to explain why the 
economy actually expanded immediately after the last shocks, and why 
there was no evidence of higher energy prices being passed on through 
higher wage inflation. Using different methodologies, they conclude 
that the economy has largely gotten over its concern with dramatic 
swings in oil prices.
---------------------------------------------------------------------------

    \744\ National Research Council, 2009. Hidden Costs of Energy: 
Unpriced Consequences of Energy Production and Use. National Academy 
of Science, Washington, DC.
    \745\ See, William Nordhaus, ``Who's Afraid of a Big Bad Oil 
Shock?,'' available at http://aida.econ.yale.edu/~nordhaus/homepage/
Big_Bad_Oil_Shock_Meeting.pdf, and Olivier Blanchard and Jordi Gali, 
``The macroeconomic Effects of Oil price Shocks: Why are the 2000s 
so different from the 1970s?,'' pp. 373-421, in The International 
Dimensions of Monetary Policy, Jordi Gali and Mark Gertler, editors, 
University of Chicago Press, February 2010, available at http://www.nber.org/chapters/c0517.pdf.
---------------------------------------------------------------------------

    One reason, according to Nordhaus, is that monetary policy has 
become more accommodating to the price impacts of oil shocks. Another 
is that consumers have simply decided that such movements are 
temporary, and have noted that price impacts are not passed on as 
inflation in other parts of the economy. He also notes that real 
changes to productivity due to oil price increases are incredibly 
modest,\746\ and that the general direction of the economy matters a 
great deal regarding how the economy responds to a shock. Estimates of 
the impact of a price shock on aggregate demand are insignificantly 
different from zero.
---------------------------------------------------------------------------

    \746\ In fact, ``. . . energy-price changes have no effect on 
multifactor productivity and very little effect on labor 
productivity.'' Page 19. He calculates the productivity effect of a 
doubling of oil prices as a decrease of 0.11 percent for one year 
and 0.04 percent a year for ten years. Page 5. (The doubling 
reflects the historical experience of the post-war shocks, as 
described in Table 7.1 in Blanchard and Gali, p. 380.)
---------------------------------------------------------------------------

    Blanchard and Gali (2010) contend that improvements in monetary 
policy (as noted above), more flexible labor markets, and lessening of 
energy intensity in the economy, combined with an absence of concurrent 
shocks, all contributed to lessen the impact of oil shocks after 1980. 
They find ``. . . the effects of oil price shocks have changed over 
time, with steadily smaller effects on prices and wages, as well as on 
output and employment.'' \747\ In a comment at the chapter's end, this 
work is summarized as follows: ``The message of this chapter is thus 
optimistic in that it suggests a transformation in U.S. institutions 
has inoculated the economy against the responses that we saw in the 
past.''
---------------------------------------------------------------------------

    \747\ Blanchard and Gali, p. 414.
---------------------------------------------------------------------------

    At the same time, the implications of the ``Shale Oil Revolution'' 
are now being felt in the international markets, with current prices at 
four year lows. Analysts generally attribute this result in part to the 
significant increase in supply resulting from U.S. production, which 
has put liquid petroleum production on par with Saudi Arabia. The price 
decline is also attributed to the sustained reductions in U.S. 
consumption and global demand growth from fuel efficiency policies and 
high oil prices. The resulting decrease in foreign imports, down to 
about one-third of domestic consumption (from 60 percent in 2005, for 
example \748\), effectively permits U.S. supply to act as a buffer 
against artificial or other supply restrictions (the latter due to 
conflict or natural disaster, for example).
---------------------------------------------------------------------------

    \748\ See, Oil Price Drops on Oversupply, http://www.oil-price.net/en/articles/oil-price-drops-on-oversupply.php, 10/6/2014.
---------------------------------------------------------------------------

    However, other papers suggest that oil shocks, particularly sudden 
supply shocks, remain a concern. Both Blanchard and Gali's and Nordhaus 
work were based on data and analysis through 2006, ending with a period 
of strong global economic growth and growing global oil demand. The 
Nordhaus work particularly stressed the effects of the price increase 
from 2002-2006 that were comparatively gradual (about half the growth 
rate of the 1973 event and one-third that of the 1990 event). The 
Nordhaus study emphasizes the robustness of the U.S. economy during a 
time period through 2006. This time period was just before rapid 
further increases in the price of oil and other commodities with oil 
prices more-than-doubling to over $130/barrel by mid-2008, only to drop 
after the onset of the largest recession since the Great Depression.
    Hamilton (2012) reviewed the empirical literature on oil shocks and 
suggested that the results are mixed, noting that some work (e.g. 
Rasmussen and Roitman (2011) finds less evidence for economic effects 
of oil shocks, or declining effects of shocks (Blanchard and Gali 
2010), while other work continues to find evidence regarding the 
economic importance of oil shocks. For example, Baumeister and Peersman 
(2011) found that an oil price increase of a given size seems to have a 
decreasing effect over time, but noted that the declining price-
elasticity of demand meant that a given physical disruption had a 
bigger effect on price and turned out to have a similar effect on 
output as in the earlier data.'' \749\ Hamilton observes that ``a 
negative effect of oil prices on real output has also been reported for 
a number of other countries, particularly when nonlinear functional 
forms have been employed'' (citing as recent examples Kim 2012, 
Engemann, Kliesen, and Owyang 2011 and Daniel, et. al. 2011). 
Alternatively, rather than a declining effect, Ramey and Vine (2010) 
found ``remarkable stability in the response of aggregate real 
variables to oil shocks once we account for the extra costs imposed on 
the economy in the 1970s by price controls and a complex system of 
entitlements that led to some rationing and shortages.'' \750\
---------------------------------------------------------------------------

    \749\ Hamilton, J.D. (2012). Oil Prices, Exhaustible Resources, 
and Economic Growth. In Handbook of Energy and Climate Change. 
Retrieved from http://econweb.ucsd.edu/~jhamilto/
handbook_climate.pdf.
    \750\ Ramey, V.A., & Vine, D.J. (2010). ``Oil, Automobiles, and 
the U.S. Economy: How Much have Things Really Changed?'', National 
Bureau of Economic Research Working Papers, WP 16067 (June). 
Retrieved from http://www.nber.org/papers/w16067.pdf.
---------------------------------------------------------------------------

    Some of the recent literature on oil price shocks has emphasized 
that economic impacts depend on the nature of the oil shock, with 
differences between price increases caused by sudden supply loss and 
those caused by rapidly growing demand. Most recent analyses of oil 
price shocks have confirmed that ``demand-driven'' oil price shocks 
have greater effects on oil prices and tend to have positive effects on 
the economy while ``supply-driven'' oil shocks still have negative 
economic impacts (Baumeister, Peersman and Robays, 2010). A recent 
paper by Kilian and Vigfusson (2014), for example, assigned a more 
prominent role to the effects of price increases that are unusual, in 
the sense of being beyond range of recent experience. Kilian and 
Vigfussen also conclude that the difference in response to oil shocks 
may well stem from the different effects of demand- and supply-based 
price increases: ``One explanation is that oil price shocks are 
associated with a range of oil demand and oil supply shocks, some of 
which stimulate the U.S.

[[Page 40471]]

economy in the short run and some of which slow down U.S. growth (see 
Kilian 2009a). How recessionary the response to an oil price shock is 
thus depends on the average composition of oil demand and oil supply 
shocks over the sample period.''
    The general conclusion that oil supply-driven shocks reduce 
economic output is also reached in a recently published paper by Cashin 
et al. (2014) for 38 countries from 1979-2011. ``The results indicate 
that the economic consequences of a supply-driven oil-price shock are 
very different from those of an oil-demand shock driven by global 
economic activity, and vary for oil-importing countries compared to 
energy exporters,'' and ``oil importers [including the U.S.] typically 
face a long-lived fall in economic activity in response to a supply-
driven surge in oil prices'' but almost all countries see an increase 
in real output for an oil-demand disturbance. Note that the energy 
security premium calculation in this analysis is based on price shocks 
from potential future supply events only.
    Finally, despite continuing uncertainty about oil market behavior 
and outcomes and the sensitivity of the U.S. economy to oil shocks, it 
is generally agreed that it is beneficial to reduce petroleum fuel 
consumption from an energy security standpoint. Reducing fuel 
consumption reduces the amount of domestic economic activity associated 
with a commodity whose price depends on volatile international markets. 
Also, reducing U.S. oil import levels reduces the likelihood and 
significance of supply disruptions.
---------------------------------------------------------------------------

    \751\ Historical data are from EIA Annual Energy Review, various 
editions. For data since 2011 and projected data: Source is EIA 
Annual Energy Outlook (AEO) 2014 (Reference Case). See Table 11, 
file ``aeotab_11.xlsx'' and Table 20 (Macroeconomic Indicators,'' 
(file ``aeotab_20.xlsx'').
[GRAPHIC] [TIFF OMITTED] TP13JY15.018

(c) Cost of Existing U.S. Energy Security Policies
    The last often-identified component of the full economic costs of 
U.S. oil imports are the costs to the U.S. taxpayers of existing U.S. 
energy security policies. The two primary examples are maintaining the 
Strategic Petroleum Reserve (SPR) and maintaining a military presence 
to help secure a stable oil supply from potentially vulnerable regions 
of the world. The SPR is the largest stockpile of government-owned 
emergency crude oil in the world. Established in the aftermath of the 
1973/1974 oil embargo, the SPR provides the U.S. with a response option 
should a disruption in commercial oil supplies threaten the U.S. 
economy. It also allows the U.S. to meet part of its International 
Energy Agency obligation to maintain emergency oil stocks, and it 
provides a national defense fuel reserve. While the costs for building 
and maintaining the SPR are more clearly related to U.S. oil use and 
imports, historically these costs have not varied in response to 
changes in U.S. oil import levels. Thus, while the effect of the SPR in 
moderating price shocks is factored into the ORNL analysis, the cost of 
maintaining the SPR is excluded.
    U.S. military costs are excluded from the analysis performed by 
ORNL because their attribution to particular missions or activities is 
difficult, and because it is not clear that these outlays would decline 
in response to incremental reductions in U.S. oil imports. Most 
military forces serve a broad range of security and foreign policy 
objectives. The agencies also recognize that attempts to attribute some 
share of U.S. military costs to oil imports are further challenged by 
the need to estimate how those costs might

[[Page 40472]]

vary with incremental variations in U.S. oil imports.
(3) Energy Security Benefits of This Program
    Using the ORNL ``oil premium'' methodology, updating world oil 
price values and energy trends using AEO 2014 (Early Release) and using 
the estimated fuel savings from the proposed rules estimated from the 
MOVES/CAFE models, the agencies has calculated the annual energy 
security benefits of this proposed rule through 2050.\752\ Since the 
agencies are taking a global perspective with respect to valuing 
greenhouse gas benefits from the rules, only the avoided macroeconomic 
adjustment/disruption portion of the energy security premium is used in 
the energy security benefits estimates present below. These results are 
shown below in Table IX-25. The agencies have also calculated the net 
present value at 3 percent and 7 percent discount rates of model year 
lifetime benefits associated with energy security; these values are 
presented in Table IX-26.
---------------------------------------------------------------------------

    \752\ In order to determine the energy security benefits beyond 
2040, we use the 2040 energy security premium multiplied by the 
estimate fuel savings from the proposed rule. Since the AEO 2014 
(Early Release) only goes to 2040, we only calculate energy security 
premiums to 2040.

   Table IX-25--Annual U.S. Energy Security Benefits of the Preferred
  Alternative and Net Present Values at 3% and 7% Discount Rates Using
           Method B and Relative to the Less Dynamic Baseline
                       [In millions of 2012$] \a\
------------------------------------------------------------------------
                                                               Benefits
                            Year                               (2012$)
------------------------------------------------------------------------
2018.......................................................           10
2019.......................................................           20
2020.......................................................           31
2021.......................................................           77
2022.......................................................          140
2023.......................................................          211
2024.......................................................          328
2025.......................................................          456
2026.......................................................          596
2027.......................................................          770
2028.......................................................          947
2029.......................................................        1,126
2030.......................................................        1,306
2035.......................................................        2,156
2040.......................................................        2,920
2050.......................................................        3,498
NPV, 3%....................................................       28,947
NPV, 7%....................................................       11,857
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table IX-26--Discounted Model Year Lifetime Energy Security Benefits Due
 to the Preferred Alternative at 3% and 7% Discount Rates Using Method B
                and Relative to the Less Dynamic Baseline
                         [Millions of 2012$] \a\
------------------------------------------------------------------------
                                                3% discount  7% discount
                 Calendar year                      rate         rate
------------------------------------------------------------------------
2018..........................................           86           60
2019..........................................           85           56
2020..........................................           84           53
2021..........................................          534          326
2022..........................................          579          341
2023..........................................          621          353
2024..........................................          996          546
2025..........................................        1,060          560
2026..........................................        1,121          571
2027..........................................        1,375          676
2028..........................................        1,388          657
2029..........................................        1,397          637
                                               -------------------------
Sum...........................................        9,325        4,837
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

J. Other Impacts

(1) Costs of Noise, Congestion and Accidents Associated With Additional 
(Rebound) Driving
    Although it provides benefits to drivers as described above, 
increased vehicle use associated with the rebound effect also 
contributes to increased traffic congestion, motor vehicle accidents, 
and highway noise. Depending on how the additional travel is 
distributed over the day and where it takes place, additional vehicle 
use can contribute to traffic congestion and delays by increasing the 
number of vehicles using facilities that are already heavily traveled. 
These added delays impose higher costs on drivers and other vehicle 
occupants in the form of increased travel time and operating expenses. 
At the same time, this additional travel also increases costs 
associated with traffic accidents and vehicle noise.
    The agencies estimate these costs using the same methodology as 
used in the two light-duty and the HD Phase 1 rule analyses, which 
relies on estimates of congestion, accident, and noise costs imposed by 
automobiles and light trucks developed by the Federal Highway 
Administration to estimate these increased external costs caused by 
added driving.\753\ We provide the details behind the estimates in 
Chapter 8.7 of the draft RIA. The agencies request comment on all input 
metrics used in the analysis of accidents, congestion and noise and on 
the calculation methodology. Table IX-27 presents the estimated annual 
impacts associated with accidents, congestion and noise along with net 
present values at both 3 percent and 7 percent discount rates. Table 
IX-28 presents the estimated discounted model year lifetime impacts 
associated with accidents, congestion and noise.
---------------------------------------------------------------------------

    \753\ These estimates were developed by FHWA for use in its 1997 
Federal Highway Cost Allocation Study; http://www.fhwa.dot.gov/policy/hcas/final/index.htm (last accessed July 8, 2012).

   Table IX-27--Annual Costs Associated With Accidents, Congestion and
 Noise and Net Present Values at 3% and 7% Discount Rates Using Method B
                and Relative to the Less Dynamic Baseline
                         [Millions of 2012$] \a\
------------------------------------------------------------------------
                                                             Costs of
                                                            accidents,
                      Calendar year                         congestion,
                                                             and noise
------------------------------------------------------------------------
2018....................................................              $0
2019....................................................               0
2020....................................................               0
2021....................................................             117
2022....................................................             172
2023....................................................             226
2024....................................................             279
2025....................................................             330
2026....................................................             379
2027....................................................             425
2028....................................................             467
2029....................................................             506
2030....................................................             542
2035....................................................             676
2040....................................................             758
2050....................................................             871
NPV, 3%.................................................           9,334
NPV, 7%.................................................           4,202
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

[[Page 40473]]

     Table IX-28--Discounted Model Year Lifetime Costs of Accidents,
   Congestion and Noise at 3% and 7% Discount Rates Using Method B and
                  Relative to the Less Dynamic Baseline
                         [Millions of 2012$] \a\
------------------------------------------------------------------------
                                                3% discount  7% discount
                 Calendar year                      rate         rate
------------------------------------------------------------------------
2018..........................................          132           85
2019..........................................          146           94
2020..........................................          162          103
2021..........................................          450          284
2022..........................................          438          266
2023..........................................          427          250
2024..........................................          424          239
2025..........................................          422          229
2026..........................................          420          219
2027..........................................          415          209
2028..........................................          409          198
2029..........................................          402          187
                                               -------------------------
  Sum.........................................        4,247        2,362
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(2) Benefits Associated With Reduced Refueling Time
    By reducing the frequency with which drivers typically refuel their 
vehicles and by extending the upper limit of the range that can be 
traveled before requiring refueling (i.e., future fuel tank sizes 
remain constant), savings would be realized associated with less time 
spent refueling vehicles. Alternatively, refill intervals may remain 
the same (i.e., future fuel tank sizes get smaller), resulting in the 
same number of refills as today but less time spent per refill because 
there would be less fuel to refill. The agencies have estimated this 
impact using the former approach--by assuming that future tank sizes 
remain constant.
    The savings in refueling time are calculated as the total amount of 
time the driver of a typical truck in each class would save each year 
as a consequence of pumping less fuel into the vehicle's tank. The 
calculation does not include any reduction in time spent searching for 
a fueling station or other time spent at the station; it is assumed 
that time savings occur only when truck operators are actually 
refueling their vehicles.
    The calculation uses the reduced number of gallons consumed by 
truck type and divides that value by the tank volume and refill amount 
to get the number of refills, then multiplies that by the time per 
refill to determine the number of hours saved in a given year. The 
calculation then applies DOT-recommended values of travel time savings 
to convert the resulting time savings to their economic value, 
including a 1.2 percent growth rate in those time savings going 
forward.\754\ The input metrics used in the analysis are presented in 
greater detail in draft RIA Chapter 9.7. The annual benefits associated 
with reduced refueling time are shown in Table IX-29 along with net 
present values at both 3 percent and 7 percent discount rates. The 
discounted model year lifetime benefits are shown in Table IX-30.
---------------------------------------------------------------------------

    \754\ U.S. Department of Transportation, Valuation of Travel 
Guidance, July 9, 2014, at page 14.

 Table IX-29--Annual Refueling Benefits and Net Present Values at 3% and
    7% Discount Rates Using Method B and Relative to the Less Dynamic
                                Baseline
                         [Millions of 2012$] \a\
------------------------------------------------------------------------
                                                              Refueling
                       Calendar year                           benefits
------------------------------------------------------------------------
2018.......................................................            3
2019.......................................................            6
2020.......................................................            9
2021.......................................................           25
2022.......................................................           47
2023.......................................................           72
2024.......................................................          113
2025.......................................................          157
2026.......................................................          205
2027.......................................................          266
2028.......................................................          327
2029.......................................................          386
2030.......................................................          444
2035.......................................................          698
2040.......................................................          890
2050.......................................................        1,195
NPV, 3%....................................................        9,410
NPV, 7%....................................................        3,868
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

  Table IX-30--Discounted Model Year Lifetime Refueling Benefits Using
           Method B and Relative to the Less Dynamic Baseline
                         [Millions of 2012$] \a\
------------------------------------------------------------------------
                                                3% discount  7% discount
                  Model year                        rate         rate
------------------------------------------------------------------------
2018..........................................           23           16
2019..........................................           22           15
2020..........................................           21           14
2021..........................................          163          101
2022..........................................          184          110
2023..........................................          203          117
2024..........................................          325          181
2025..........................................          349          187
2026..........................................          372          191
2027..........................................          466          231
2028..........................................          465          222
2029..........................................          463          213
                                               -------------------------
  Sum.........................................        3,055        1,597
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

(3) Benefits of Increased Travel Associated With Rebound Driving
    The increase in travel associated with the rebound effect produces 
additional benefits to vehicle owners and operators, which reflect the 
value of the added (or more desirable) social and economic 
opportunities that become accessible with additional travel. The 
analysis estimates the economic benefits from increased rebound-effect 
driving as the sum of fuel expenditures incurred plus the consumer 
surplus from the additional accessibility it provides. As evidenced by 
the fact that vehicles make more frequent or longer trips when the cost 
of driving declines, the benefits from this added travel exceed added 
expenditures for the fuel consumed. The amount by which the benefits 
from this increased driving exceed its increased fuel costs measures 
the net benefits from the additional travel, usually referred to as 
increased consumer surplus.
    The agencies' analysis estimates the economic value of the 
increased consumer surplus provided by added driving using the 
conventional approximation, which is one half of the product of the 
decline in vehicle operating costs per vehicle-mile and the resulting 
increase in the annual number of miles driven. Because it depends on 
the extent of improvement in fuel economy, the value of benefits from 
increased vehicle use changes by model year and varies among 
alternative standards. Under even those alternatives that would impose 
the highest standards, however, the magnitude of the consumer surplus 
from additional vehicle use represents a small fraction of this 
benefit.
    The annual benefits associated with increased travel are shown in 
Table IX-31 along with net present values at both

[[Page 40474]]

3 percent and 7 percent discount rates. The discounted model year 
lifetime benefits are shown in Table IX-32.

 Table IX-31--Annual Value of Increased Travel and Net Present Values at
3% and 7% Discount Rates Using Method B and Relative to the Less Dynamic
                                Baseline
                         [Millions of 2012$] \a\
------------------------------------------------------------------------
                                                             Benefits of
                       Calendar year                          increased
                                                                travel
------------------------------------------------------------------------
2018.......................................................            0
2019.......................................................            0
2020.......................................................            0
2021.......................................................          445
2022.......................................................          636
2023.......................................................          821
2024.......................................................        1,001
2025.......................................................        1,179
2026.......................................................        1,346
2027.......................................................        1,506
2028.......................................................        1,647
2029.......................................................        1,783
2030.......................................................        1,909
2035.......................................................        2,445
2040.......................................................        2,873
2050.......................................................        3,286
NPV, 3%....................................................       34,240
NPV, 7%....................................................       15,316
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table IX-32--Discounted Model Year Lifetime Value of Increased Travel at
3% and 7% Discount Rates Using Method B and Relative to the Less Dynamic
                                Baseline
                         [Millions of 2012$] \a\
------------------------------------------------------------------------
           Calendar year             3% discount rate   7% discount rate
------------------------------------------------------------------------
2018..............................               $554               $353
2019..............................                618                390
2020..............................                686                429
2021..............................              1,510                942
2022..............................              1,488                894
2023..............................              1,463                847
2024..............................              1,434                799
2025..............................              1,442                774
2026..............................              1,447                748
2027..............................              1,421                708
2028..............................              1,415                678
2029..............................              1,406                649
                                   -------------------------------------
  Sum.............................             14,884              8,211
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

K. Summary of Benefits and Costs

    This section presents the costs, benefits, and other economic 
impacts of the proposed Phase 2 standards. It is important to note that 
NHTSA's proposed fuel consumption standards and EPA's proposed GHG 
standards would both be in effect, and would jointly lead to increased 
fuel efficiency and reductions in GHG and non-GHG emissions. The 
individual categories of benefits and costs presented in the tables 
below are defined more fully and presented in more detail in Chapter 8 
of the draft RIA. These include:
     The vehicle program costs (costs of complying with the 
vehicle CO2 and fuel consumption standards),
     changes in fuel expenditures associated with reduced fuel 
use by more efficient vehicles and increased fuel use associated with 
the ``rebound'' effect, both of which result from the program,
     the global economic value of reductions in GHGs,
     the economic value of reductions in non-GHG pollutants,
     costs associated with increases in noise, congestion, and 
accidents resulting from increased vehicle use,
     savings in drivers' time from less frequent refueling,
     benefits of increased vehicle use associated with the 
``rebound'' effect, and
     the economic value of improvements in U.S. energy security 
impacts.

For a discussion of the cost of ownership and the agencies' payback 
analysis of vehicles covered by this proposal, please see Section IX.M.
    The agencies conducted coordinated and complementary analyses using 
two analytical methods referred to as Method A and Method B. For an 
explanation of these methods, please see Section I.D. And as discussed 
in Section X.A.1, the agencies present estimates of benefits and costs 
that are measured against two different assumptions about improvements 
in fuel efficiency that might occur in the absence of the Phase 2 
standards. The first case (Alternative 1a) uses a baseline that 
projects very little improvement in new vehicles in the absence of new 
Phase 2 standards, and the second (Alternative 1b) uses a more dynamic 
baseline that projects more significant improvements in vehicle fuel 
efficiency.

[[Page 40475]]

    Table IX-33 shows benefits and costs for the proposed standards 
from the perspective of a program designed to improve the nation's 
energy security and conserve energy by improving fuel efficiency. From 
this viewpoint, technology costs occur when the vehicle is purchased. 
Fuel savings are counted as benefits that occur over the lifetimes of 
the vehicles produced during the model years subject to the Phase 2 
standards as they consume less fuel. The table shows that benefits far 
outweigh the costs, and the preferred alternative is anticipated to 
result in large net benefits to the U.S economy.

  Table IX-33--Lifetime Benefits & Costs of the Preferred Alternative for Model Years 2018-2029 Vehicles Using
                                                Analysis Method A
                                   [Billions of 2012$ discounted at 3% and 7%]
----------------------------------------------------------------------------------------------------------------
                                                            Baseline 1a                     Baseline 1b
                    Category                     ---------------------------------------------------------------
                                                        3%              7%              3%              7%
----------------------------------------------------------------------------------------------------------------
Vehicle Program: Technology and Indirect Costs,             25.4            17.1            25.0            16.8
 Normal Profit on Additional Investments........
Additional Routine Maintenance..................             1.1             0.6             1.0             0.6
Congestion, Accidents, and Noise from Increased              4.7             2.8             4.5             2.6
 Vehicle Use....................................
                                                 ---------------------------------------------------------------
    Total Costs.................................            31.1            20.5            30.5            20.0
Fuel Savings (valued at pre-tax prices).........           175.1            94.2           165.1            89.2
Savings from Less Frequent Refueling............             3.1             1.6             2.9             1.5
Economic Benefits from Additional Vehicle Use...            15.1             8.4            14.7             8.2
Reduced Climate Damages from GHG Emissions \a\..            34.9            34.9            32.9            32.9
Reduced Health Damages from Non-GHG Emissions...            38.8            20.7            37.2            20.0
Increased U.S. Energy Security..................             8.9             4.7             8.1             4.3
                                                 ---------------------------------------------------------------
    Total Benefits..............................             276             165             261             156
                                                 ---------------------------------------------------------------
        Net Benefits............................             245             144             231             136
----------------------------------------------------------------------------------------------------------------
Note:
\a\ Benefits and net benefits use the 3 percent average global SCC value applied only to CO2 emissions; GHG
  reductions include CO2, CH4, N2O and HFC reductions, and include benefits to other nations as well as the U.S.
  See Draft RIA Chapter 8.5 and Preamble Section IX.G for further discussion.

    Table IX-34, Table IX-35, and Table IX-36 report benefits and cost 
from the perspective of reducing GHG. Table IX-34 shows the annual 
impacts and net benefits of the preferred alternative for selected 
future years, together with the net present values of cumulative annual 
impacts from 2018 through 2050, discounted at 3 percent and 7 percent 
rates. Table IX-35 and Table IX-36 show the discounted lifetime costs 
and benefits for each model year affected by the Phase 2 standards at 3 
percent and 7 percent discount rates, respectively.

 Table IX-34--Annual Benefits & Costs of the Preferred Alternative and Net Present Values at 3% and 7% Discount
                         Rates Using Method B and Relative to the Less Dynamic Baseline
                                             [Billions of 2012$] \a\
----------------------------------------------------------------------------------------------------------------
                                       2018    2021    2024    2030    2035    2040    2050    NPV, 3%   NPV, 7%
----------------------------------------------------------------------------------------------------------------
Vehicle program.....................    -0.1    -2.4    -3.7    -5.4    -5.9    -6.3    -7.0     -86.8     -41.1
Maintenance.........................     0.0     0.0    -0.1    -0.1    -0.1    -0.1    -0.1      -1.8      -0.9
Pre-tax fuel........................     0.2     1.7     6.9    24.0    37.2    47.8    57.5     495.6     206.7
Energy security.....................     0.0     0.1     0.3     1.3     2.2     2.9     3.5      28.9      11.9
Accidents/Congestion/Noise..........     0.0    -0.1    -0.3    -0.5    -0.7    -0.8    -0.9      -9.3      -4.2
Refueling impacts...................     0.0     0.0     0.1     0.4     0.7     0.9     1.2       9.4       3.9
Travel value........................     0.0     0.4     1.0     1.9     2.4     2.9     3.3      34.2      15.3
Non-GHG impacts.....................     0.0     0.4     1.0     3.3     4.8     5.7     7.0       69.      26.6
                                          to      to      to      to      to      to      to        to        to
                                         0.1     0.9     2.4     8.3    12.1    14.3    17.5     157.0      60.4
SCCb c
SCC_CO2; 5% Avg.....................     0.0     0.1     0.4     1.5     2.5     3.3     5.0      22.1      22.1
SCC_CO2; 3% Avg.....................     0.0     0.3     1.3     4.8     7.4     9.7    13.6     103.1     103.1
SCC_CO2; 2.5% Avg...................     0.1     0.5     1.9     6.9    10.6    13.7    18.5     164.1     164.1
SCC_CO2; 3% 95th....................     0.1     1.0     4.0    14.6    23.2    30.3    42.0     320.5     320.5
Net benefits \ d\
SCC_CO2; 5% Avg.....................     0.2     0.4     6.4    28.8    46.8    60.6    74.6     605.8     257.1
SCC_CO2; 3% Avg.....................     0.2     0.7     7.3    32.1    51.7    66.9    83.2     686.8     338.1
SCC_CO2; 2.5% Avg...................     0.2     0.8     7.9    34.2    54.9    70.9    88.2     747.8     399.1
SCC_CO2; 3% 95th....................     0.3     1.3    10.0    41.9    67.5    87.6   111.7     904.1     555.5
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Positive values denote decreased social costs (benefits); negative values denote increased social costs. For
  an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic
  baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Net present value of reduced CO2 emissions is calculated differently than other benefits. The same discount
  rate used to discount the value of damages from future emissions (SC-CO2 at 5, 3, 2.5 percent) is used to
  calculate net present value of SC-CO2 for internal consistency. Refer to the SCC TSD for more detail.
\c\ Section IX.G notes that SCCO2 increases over time. For the years 2012-2050, the SC-CO2 estimates range as
  follows: for Average SC-CO2 at 5%: $12-$28; for Average SC-CO2 at 3%: $37-$77; for Average SC-CO2 at 2.5%: $58-
  $105; and for 95th percentile SC-CO2 at 3%: $105-$237. Section IX.G also presents these SC-CO2 estimates.

[[Page 40476]]

 
\d\ Net impacts are the summation of results within columns of the table with the exception that the net impacts
  at each SC-CO2 value include only the SC-CO2 impacts at that value.

   Table IX-35--Discounted Model Year Lifetime Benefits & Costs of the Preferred Alternative Using Method B and Relative to the Less Dynamic Baseline
                                                        [Billions of 2012$ discounted at 3%] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               2018    2019    2020    2021    2022    2023    2024    2025    2026    2027    2028     2029       Sum
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vehicle program.............................    -0.1    -0.1    -0.1    -2.0    -1.9    -1.9    -2.8    -2.7    -2.7    -3.7    -3.6      -3.5     -25.1
Maintenance.................................    -0.1     0.0     0.0    -0.1    -0.1    -0.1    -0.1    -0.1    -0.1    -0.1    -0.1      -0.1      -1.1
Pre-tax fuel................................     1.9     1.9     1.8    11.1    11.5    11.9    18.9    19.6    20.2    24.1    24.1      24.1     171.1
Energy security.............................     0.1     0.1     0.1     0.5     0.6     0.6     1.0     1.1     1.1     1.4     1.4       1.4       9.3
Accidents/Congestion/Noise..................    -0.1    -0.1    -0.2    -0.4    -0.4    -0.4    -0.4    -0.4    -0.4    -0.4    -0.4      -0.4      -4.2
Refueling...................................     0.0     0.0     0.0     0.2     0.2     0.2     0.3     0.3     0.4     0.5     0.5       0.5       3.1
Travel value................................     0.6     0.6     0.7     1.5     1.5     1.5     1.4     1.4     1.4     1.4     1.4       1.4      14.9
Non-GHG.....................................     0.2     0.2     0.2     2.0     2.0     2.0     2.9     3.0     2.6     3.1     3.1       3.1      24.4
                                                  to      to      to      to      to      to      to      to      to      to      to        to        to
                                                 0.5     0.4     0.4     4.5     4.5     4.5     6.6     6.8     5.9     6.9     6.9       7.0      55.0
    SCC; b c................................
SCC_CO2; 5% Avg.............................     0.1     0.1     0.1     0.5     0.5     0.5     0.9     0.9     0.9     1.1     1.1       1.1       7.8
SCC_CO2; 3% Avg.............................     0.4     0.4     0.4     2.2     2.3     2.3     3.7     3.9     4.0     4.8     4.8       4.9      34.0
SCC_CO2; 2.5% Avg...........................     0.6     0.6     0.6     3.4     3.5     3.6     5.8     6.1     6.3     7.6     7.6       7.7      53.4
SCC_CO2; 3% 95th............................     1.1     1.1     1.1     6.6     6.9     7.2    11.5    12.0    12.4    14.9    15.0      15.1     105.0
Net benefits \ d\
SCC_CO2; 5% Avg.............................     2.8     2.7     2.7    14.6    15.1    15.5    23.9    25.0    25.1    29.2    29.4      29.4     215.5
SCC_CO2; 3% Avg.............................     3.0     3.0     3.0    16.2    16.8    17.3    26.8    28.0    28.2    33.0    33.1      33.2     241.7
SCC_CO2; 2.5% Avg...........................     3.2     3.2     3.2    17.4    18.1    18.6    28.9    30.2    30.5    35.7    35.9      36.0     261.1
SCC_CO2; 3% 95th............................     3.8     3.8     3.7    20.7    21.5    22.1    34.5    36.0    36.6    43.1    43.3      43.5     312.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Positive values denote decreased social costs (benefits); negative values denote increased social costs. For an explanation of analytical Methods A
  and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.c
\b\ Net present value of reduced CO2 emissions is calculated differently than other benefits. The same discount rate used to discount the value of
  damages from future emissions (SC-CO2 at 5, 3, 2.5 percent) is used to calculate net present value of SC-CO2 for internal consistency. Refer to the
  SCC TSD for more detail.
\c\ Section IX.G notes that SCC increases over time. For the years 2012-2050, the SCC estimates range as follows: for Average SC-CO2 at 5%: $12-$28; for
  Average SC-CO2 at 3%: $37-$77; for Average SC-CO2 at 2.5%: $58-$105; and for 95th percentile SC-CO2 at 3%: $105-$237. Section IX.G also presents these
  SCC estimates.
\d\ Net impacts are the summation of results within columns of the table with the exception that the net impacts at each SC-CO2 value include only the
  SCCO2 impacts at that value.

   Table IX-36--Discounted Model Year Lifetime Benefits & Costs of the Preferred Alternative Using Method B and Relative to the Less Dynamic Baseline
                                                       [Billions of 2012$ discounted at 7%] \a b\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               2018    2019    2020    2021    2022    2023    2024    2025    2026    2027    2028     2029       Sum
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vehicle program.............................    -0.1    -0.1    -0.1    -1.6    -1.4    -1.4    -1.9    -1.8    -1.7    -2.3    -2.1      -2.0     -16.6
Maintenance.................................     0.0     0.0     0.0    -0.1    -0.1    -0.1    -0.1    -0.1    -0.1    -0.1    -0.1       0.0      -0.6
Pre-tax fuel................................     1.4     1.3     1.2     6.9     6.9     6.8    10.5    10.4    10.4    11.9    11.5      11.0      90.1
Energy security.............................     0.1     0.1     0.1     0.3     0.3     0.4     0.5     0.6     0.6     0.7     0.7       0.6       4.8
Accidents/Congestion/Noise..................    -0.1    -0.1    -0.1    -0.3    -0.3    -0.2    -0.2    -0.2    -0.2    -0.2    -0.2      -0.2      -2.4
Refueling...................................     0.0     0.0     0.0     0.1     0.1     0.1     0.2     0.2     0.2     0.2     0.2       0.2       1.6
Travel value................................     0.4     0.4     0.4     0.9     0.9     0.8     0.8     0.8     0.7     0.7     0.7       0.6       8.2
Non-GHG.....................................     0.1     0.1     0.1     1.1     1.1     1.0     1.4     1.4     1.2     1.3     1.3       1.3      11.5
                                                  to      to      to      to      to      to      to      to      to      to      to        to        to
                                                 0.3     0.3     0.3     2.5     2.4     2.3     3.3     3.2     2.7     3.0     2.9       2.8      26.0
SCC b c
SCC_CO2; 5% Avg.............................     0.1     0.1     0.1     0.5     0.5     0.5     0.9     0.9     0.9     1.1     1.1       1.1       7.8
SCC_CO2; 3% Avg.............................     0.4     0.4     0.4     2.2     2.3     2.3     3.7     3.9     4.0     4.8     4.8       4.9      34.0
SCC_CO2; 2.5% Avg...........................     0.6     0.6     0.6     3.4     3.5     3.6     5.8     6.1     6.3     7.6     7.6       7.7      53.4
SCC_CO2; 3% 95th............................     1.1     1.1     1.1     6.6     6.9     7.2    11.5    12.0    12.4    14.9    15.0      15.1     105.0
Net benefits \d\
SCC_CO2; 5% Avg.............................     1.9     1.8     1.7     8.7     8.7     8.7    13.0    13.1    12.7    14.3    13.8      13.4     111.8
SCC_CO2; 3% Avg.............................     2.2     2.1     2.0    10.3    10.4    10.5    15.8    16.1    15.8    18.0    17.6      17.2     138.0
SCC_CO2; 2.5% Avg...........................     2.4     2.3     2.2    11.5    11.7    11.8    17.9    18.3    18.1    20.7    20.4      20.0     157.4
SCC_CO2; 3% 95th............................     2.9     2.8     2.8    14.8    15.1    15.3    23.6    24.2    24.2    28.1    27.8      27.4     209.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ Positive values denote decreased social costs (benefits); negative values denote increased social costs. For an explanation of analytical Methods A
  and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.
\b\ Net present value of reduced CO2 emissions is calculated differently than other benefits. The same discount rate used to discount the value of
  damages from future emissions (SC-CO2 at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to the SCC
  TSD for more detail.
\c\ Section IX.G notes that SC-CO2 increases over time. For the years 2012-2050, the SC-CO2 estimates range as follows: for Average SC-CO2 at 5%: $12-
  $28; for Average SC-CO2 at 3%: $37-$77; for Average SC-CO2 at 2.5%: $58-$105; and for 95th percentile SCCO2 at 3%: $105-$237. Section IX.G also
  presents these SC-CO2 estimates.
\d\ Net impacts are the summation of results within columns of the table with the exception that the net impacts at each SC-CO2 value include only the
  SC-CO2 impacts at that value.

    The agencies note that this proposal accounts for other regulations 
that have been finalized. Until regulations are finalized, there is no 
assurance they will be implemented and thus any potential provisions of 
those potential regulations are uncertain. The agencies note that NHTSA 
has started the rulemaking process for regulations that involve 
technologies that could potentially affect medium- and heavy-duty fuel 
consumption (e.g. vehicle speed

[[Page 40477]]

limiters, etc.). If any such rulemakings are finalized prior to this 
rulemaking becoming final, this rulemaking will take those regulations 
into account.

L. Employment Impacts

    Executive Order 13563 (January 18, 2011) directs federal agencies 
to consider regulatory impacts on, among other criteria, job 
creation.\755\ According to the Executive Order ``Our regulatory system 
must protect public health, welfare, safety, and our environment while 
promoting economic growth, innovation, competitiveness, and job 
creation. It must be based on the best available science.'' Analysis of 
employment impacts of a regulation is not part of a standard benefit-
cost analysis (except to the extent that labor costs contribute to 
costs). Employment impacts of federal rules are of general interest, 
however, and have been particularly so, historically, in the auto 
sector during periods of challenging labor market conditions. For this 
reason, we are describing the connections of these proposed standards 
to employment in the regulated sector, the motor vehicle manufacturing 
sector, as well as the motor vehicle body and trailer and motor vehicle 
parts manufacturing sectors.
---------------------------------------------------------------------------

    \755\ Available at http://www.whitehouse.gov/sites/default/files/omb/inforeg/eo12866/eo13563_01182011.pdf.
---------------------------------------------------------------------------

    The overall effect of the proposed rules on motor vehicle sector 
employment depends on the relative magnitude of output and substitution 
effects, described below. Because we do not have quantitative estimates 
of the output effect, and only a partial estimate of the substitution 
effect, we cannot reach a quantitative estimate of the overall 
employment effects of the proposed rules on motor vehicle sector 
employment or even whether the total effect will be positive or 
negative.
    According to the U.S. Bureau of Labor Statistics, in 2014, about 
850,000 people in the U.S. were employed in the Motor Vehicle and Parts 
Manufacturing Sector (NAICS 3361, 3362, and 3363),\756\ the directly 
regulated sector. The employment effects of these proposed rules are 
expected to expand beyond the regulated sector. Though some of the 
parts used to achieve the proposed standards are likely to be built by 
motor vehicle manufacturers (including trailer manufacturers) 
themselves, the motor vehicle parts manufacturing sector also plays a 
significant role in providing those parts, and will also be affected by 
changes in vehicle sales. Changes in truck sales, discussed in Section 
IX.F. (2), could also affect employment for truck and trailer vendors. 
As discussed in Section IX.C., this proposed rule is expected to reduce 
the amount of fuel these vehicles use, and thus affect the petroleum 
refinery and supply industries as well. Finally, since the net 
reduction in cost associated with these proposed rules is expected to 
lead to lower transportation and shipping costs, in a competitive 
market a substantial portion of those cost savings will be passed along 
to consumers, who then will have additional discretionary income (how 
much of the cost is passed along to consumers depends on market 
structure and the relative price elasticities). The proposed rules are 
not expected to have any notable inflationary or recessionary effect.
---------------------------------------------------------------------------

    \756\ U.S. Department of Labor, Bureau of Labor Statistics. 
``Automotive Industry; Employment, Earnings, and Hours.'' http://www.bls.gov/iag/tgs/iagauto.htm, accessed 8/18/14.
---------------------------------------------------------------------------

    The employment effects of environmental regulation are difficult to 
disentangle from other economic changes and business decisions that 
affect employment, over time and across regions and industries. In 
light of these difficulties, we lean on economic theory to provide a 
constructive framework for approaching these assessments and for better 
understanding the inherent complexities in such assessments. 
Neoclassical microeconomic theory describes how profit-maximizing firms 
adjust their use of productive inputs in response to changes in their 
economic conditions.\757\ Berman and Bui (2001, pp. 274-75) model two 
components that drive changes in firm-level labor demand: Output 
effects and substitution effects.\758\ Regulation can affect the 
profit-maximizing quantity of output by changing the marginal cost of 
production. If regulation causes marginal cost to increase, it will 
place upward pressure on output prices, leading to a decrease in the 
quantity demanded, and resulting in a decrease in production. The 
output effect describes how, holding labor intensity constant, a 
decrease in production causes a decrease in labor demand. As noted by 
Berman and Bui, although many assume that regulation increases marginal 
cost, it need not be the case. A regulation could induce a firm to 
upgrade to less polluting and more efficient equipment that lowers 
marginal production costs, or it may induce use of technologies that 
may prove popular with buyers or provide positive network externalities 
(see Section IX. A. for discussion of this effect). In such a case, 
output could increase.
---------------------------------------------------------------------------

    \757\ See Layard, P.R.G., and A.A. Walters (1978), Microeconomic 
Theory (McGraw-Hill, Inc.), Chapter 9 (Docket ID EPA-HQ-OAR-2014-
0827), a standard microeconomic theory textbook treatment, for a 
discussion.
    \758\ Berman, E. and L.T.M. Bui (2001). ``Environmental 
Regulation and Labor Demand: Evidence from the South Coast Air 
Basin.'' Journal of Public Economics 79(2): 265-295 (Docket EPA-HQ-
OAR-2014-0827). The authors also discuss a third component, the 
impact of regulation on factor prices, but conclude that this effect 
is unlikely to be important for large competitive factor markets, 
such as labor and capital. Morgenstern, Pizer and Shih (Morgenstern, 
Richard D., William A. Pizer, and Jhih-Shyang Shih (2002). ``Jobs 
versus the Environment: An Industry-Level Perspective.'' Journal of 
Environmental Economics and Management 43: 412-436) use a similar 
model, but they break the employment effect into three parts: (1) A 
demand effect; (2) a cost effect; and (3) a factor-shift effect.
---------------------------------------------------------------------------

    The substitution effect describes how, holding output constant, 
regulation affects labor intensity of production. Although increased 
environmental regulation may increase use of pollution control 
equipment and energy to operate that equipment, the impact on labor 
demand is ambiguous. For example, equipment inspection requirements, 
specialized waste handling, or pollution technologies that alter the 
production process may affect the number of workers necessary to 
produce a unit of output. Berman and Bui (2001) model the substitution 
effect as the effect of regulation on pollution control equipment and 
expenditures required by the regulation and the corresponding change in 
labor intensity of production.
    In summary, as output and substitution effects may be positive or 
negative, theory alone cannot predict the direction of the net effect 
of regulation on labor demand at the level of the regulated firm. 
Operating within the bounds of standard economic theory, empirical 
estimation of net employment effects on regulated firms is possible 
when data and methods of sufficient detail and quality are available. 
The literature, however, illustrates difficulties with empirical 
estimation. For example, studies sometimes rely on confidential plant-
level employment data from the U.S. Census Bureau, possibly combined 
with pollution abatement expenditure data that are too dated to be 
reliably informative. In addition, the most commonly used empirical 
methods do not permit estimation of net effects.
    The conceptual framework described thus far focused on regulatory 
effects on plant-level decisions within a regulated industry. 
Employment impacts at an individual plant do not necessarily represent 
impacts for the sector as a whole. The approach must be modified when 
applied at the industry level.
    At the industry level, labor demand is more responsive if: (1) The 
price elasticity of demand for the product is high, (2) other factors 
of production can

[[Page 40478]]

be easily substituted for labor, (3) the supply of other factors is 
highly elastic, or (4) labor costs are a large share of total 
production costs.\759\ For example, if all firms in an industry are 
faced with the same regulatory compliance costs and product demand is 
inelastic, then industry output may not change much, and output of 
individual firms may change slightly.\760\ In this case, the output 
effect may be small, while the substitution effect depends on input 
substitutability. Suppose, for example, that new equipment for fuel 
efficiency improvements requires labor to install and operate. In this 
case, the substitution effect may be positive, and with a small output 
effect, the total effect may be positive. As with potential effects for 
an individual firm, theory cannot determine the sign or magnitude of 
industry-level regulatory effects on labor demand. Determining these 
signs and magnitudes requires additional sector-specific empirical 
study. For environmental rules, much of the data needed for these 
empirical studies is not publicly available, would require significant 
time and resources in order to access confidential U.S. Census data for 
research, and also would not be necessary for other components of a 
typical RIA.
---------------------------------------------------------------------------

    \759\ See Ehrenberg, Ronald G., and Robert S. Smith (2000), 
Modern Labor Economics: Theory and Public Policy (Addison Wesley 
Longman, Inc.), p. 108.
    \760\ This discussion draws from Berman, E. and L.T.M. Bui 
(2001). ``Environmental Regulation and Labor Demand: Evidence from 
the South Coast Air Basin.'' Journal of Public Economics 79(2): 265-
295 (Docket EPA-HQ-OAR-2014-0827), p. 293.
---------------------------------------------------------------------------

    In addition to changes to labor demand in the regulated industry, 
net employment impacts encompass changes in other related sectors. For 
example, the proposed standards are expected to increase demand for 
fuel-saving technologies. This increased demand may increase revenue 
and employment in the firms providing these technologies. At the same 
time, the regulated industry is purchasing the equipment, and these 
costs may impact labor demand at regulated firms. Therefore, it is 
important to consider the net effect of compliance actions on 
employment across multiple sectors or industries.
    If the U.S. economy is at full employment, even a large-scale 
environmental regulation is unlikely to have a noticeable impact on 
aggregate net employment.\761\ Instead, labor would primarily be 
reallocated from one productive use to another, and net national 
employment effects from environmental regulation would be small and 
transitory (e.g., as workers move from one job to another).\762\
---------------------------------------------------------------------------

    \761\ Full employment is a conceptual target for the economy 
where everyone who wants to work and is available to do so at 
prevailing wages is actively employed. The unemployment rate at full 
employment is not zero.
    \762\ Arrow et al. (1996). ``Benefit-Cost Analysis in 
Environmental, Health, and Safety Regulation: A Statement of 
Principles.'' American Enterprise Institute, the Annapolis Center, 
and Resources for the Future. See discussion on bottom of p. 6. In 
practice, distributional impacts on individual workers can be 
important, as discussed later in this section.
---------------------------------------------------------------------------

    Affected sectors may experience transitory effects as workers 
change jobs. Some workers may retrain or relocate in anticipation of 
new requirements or require time to search for new jobs, while 
shortages in some sectors or regions could bid up wages to attract 
workers. These adjustment costs can lead to local labor disruptions. 
Although the net change in the national workforce is expected to be 
small, localized reductions in employment may adversely impact 
individuals and communities just as localized increases may have 
positive impacts.
    If the economy is operating at less than full employment, economic 
theory does not clearly indicate the direction or magnitude of the net 
impact of environmental regulation on employment; it could cause either 
a short-run net increase or short-run net decrease.\763\ An important 
research question is how to accommodate unemployment as a structural 
feature in economic models. This feature may be important in assessing 
large-scale regulatory impacts on employment.\764\
---------------------------------------------------------------------------

    \763\ Schmalensee, Richard, and Robert N. Stavins. ``A Guide to 
Economic and Policy Analysis of EPA's Transport Rule.'' White paper 
commissioned by Excelon Corporation, March 2011.
    \764\ Klaiber, H. Allen, and V. Kerry Smith (2012). ``Developing 
General Equilibrium Benefit Analyses for Social Programs: An 
Introduction and Example.'' Journal of Benefit-Cost Analysis 3(2).
---------------------------------------------------------------------------

    Environmental regulation may also affect labor supply. In 
particular, pollution and other environmental risks may impact labor 
productivity or employees' ability to work.\765\ While the theoretical 
framework for analyzing labor supply effects is analogous to that for 
labor demand, it is more difficult to study empirically. There is a 
small emerging literature described in the next section that uses 
detailed labor and environmental data to assess these impacts.
---------------------------------------------------------------------------

    \765\ E.g. Graff Zivin, J., and M. Neidell (2012). ``The Impact 
of Pollution on Worker Productivity.'' American Economic Review 102: 
3652-3673.
---------------------------------------------------------------------------

    To summarize, economic theory provides a framework for analyzing 
the impacts of environmental regulation on employment. The net 
employment effect incorporates expected employment changes (both 
positive and negative) in the regulated sector and elsewhere. Labor 
demand impacts for regulated firms, and also for the regulated 
industry, can be decomposed into output and substitution effects which 
may be either negative or positive. Estimation of net employment 
effects for regulated sectors is possible when data of sufficient 
detail and quality are available. Finally, economic theory suggests 
that labor supply effects are also possible. In the next section, we 
discuss the empirical literature.
(1) Current State of Knowledge Based on the Peer-Reviewed Literature
    In the labor economics literature there is an extensive body of 
peer-reviewed empirical work analyzing various aspects of labor demand, 
relying on the above theoretical framework.\766\ This work focuses 
primarily on the effects of employment policies, e.g. labor taxes, 
minimum wage, etc.\767\ In contrast, the peer-reviewed empirical 
literature specifically estimating employment effects of environmental 
regulations is very limited. Several empirical studies \768\ suggest 
that net employment impacts may be zero or slightly positive but small 
even in the regulated sector. Other research suggests that more highly 
regulated counties may generate fewer jobs than less regulated 
ones.\769\ However, since these latter studies compare more regulated 
to less regulated counties, they overstate the net national impact of 
regulation to the extent that regulation causes plants to locate in one 
area of the country rather than another. List et al. (2003) \770\ find

[[Page 40479]]

some evidence that this type of geographic relocation may be occurring. 
Overall, the peer-reviewed literature does not contain evidence that 
environmental regulation has a large impact on net employment (either 
negative or positive) in the long run across the whole economy.
---------------------------------------------------------------------------

    \766\ See Hamermesh (1993), Labor Demand (Princeton, NJ: 
Princeton University Press), Chapter 2 (Docket EPA-HQ-OAR-2014-0827) 
for a detailed treatment.
    \767\ See Ehrenberg, Ronald G., and Robert S. Smith (2000), 
Modern Labor Economics: Theory and Public Policy (Addison Wesley 
Longman, Inc.), Chapter 4 (Docket EPA-HQ-OAR-2014-0827), for a 
concise overview.
    \768\ Berman, E. and L.T.M. Bui (2001). ``Environmental 
Regulation and Labor Demand: Evidence from the South Coast Air 
Basin.'' Journal of Public Economics 79(2): 265-295 (Docket EPA-HQ-
OAR-2014-0827). Morgenstern, Richard D., William A. Pizer, and Jhih-
Shyang Shih. ``Jobs Versus the Environment: An Industry-Level 
Perspective.'' Journal of Environmental Economics and Management 43 
(2002): 412-436; Gray et al. (2014), and Ferris, Shadbegian and 
Wolverton (2014).
    \769\ Greenstone, M. (2002). ``The Impacts of Environmental 
Regulations on Industrial Activity: Evidence from the 1970 and 1977 
Clean Air Act Amendments and the Census of Manufactures,'' Journal 
of Political Economy 110(6): 1175-1219 (Docket EPA-HQ-OAR-2014-
0827); Walker, Reed. (2011). ``Environmental Regulation and Labor 
Reallocation.'' American Economic Review: Papers and Proceedings 
101(3): 442-447 (Docket EPA-HQ-OAR-2014-0827).
    \770\ List, J.A., D.L. Millimet, P.G. Fredriksson, and W.W. 
McHone (2003). ``Effects of Environmental Regulations on 
Manufacturing Plant Births: Evidence from a Propensity Score 
Matching Estimator.'' The Review of Economics and Statistics 85(4): 
944-952 (Docket EPA-HQ-OAR-2014-0827).
---------------------------------------------------------------------------

    Analytic challenges make it very difficult to accurately produce 
net employment estimates for the whole economy that would appropriately 
capture the way in which costs, compliance spending, and environmental 
benefits propagate through the macro-economy. Quantitative estimates 
are further complicated by the fact that macroeconomic models often 
have very little sectoral detail and usually assume that the economy is 
at full employment. EPA is currently in the process of seeking input 
from an independent expert panel on modeling economy-wide impacts, 
including employment effects. For more information, see: https://federalregister.gov/a/2014-02471.
(2) Employment Impacts in the Motor Vehicle and Parts Manufacturing 
Sector
    This section describes changes in employment in the motor vehicle, 
trailer, and parts (hence, motor vehicle) manufacturing sectors due to 
these proposed rules. We focus on the motor vehicle manufacturing 
sector because it is directly regulated, and because it is likely to 
bear a substantial share of changes in employment due to these proposed 
rules. We include discussion of effects on the parts manufacturing 
sector, because the motor vehicle manufacturing sector can either 
produce parts internally or buy them from an external supplier, and we 
do not have estimates of the likely breakdown of effort between the two 
sectors.
    We follow the theoretical structure of Berman and Bui \771\ of the 
impacts of regulation in employment in the regulated sectors. In Berman 
and Bui's (2001, p. 274-75) theoretical model, as described above, the 
change in a firm's labor demand arising from a change in regulation is 
decomposed into two main components: Output and substitution 
effects.\772\ As the output and substitution effects may be both 
positive, both negative, or some combination, standard neoclassical 
theory alone does not point to a definitive net effect of regulation on 
labor demand at regulated firms.
---------------------------------------------------------------------------

    \771\ Berman, E. and L.T.M. Bui (2001). ``Environmental 
Regulation and Labor Demand: Evidence from the South Coast Air 
Basin.'' Journal of Public Economics 79(2): 265-295 (Docket EPA-HQ-
OAR2014-0827).
    \772\ The authors also discuss a third component, the impact of 
regulation on factor prices, but conclude that this effect is 
unlikely to be important for large competitive factor markets, such 
as labor and capital. Morgenstern, Pizer and Shih (2002) use a 
similar model, but they break the employment effect into three 
parts: (1) The demand effect; (2) the cost effect; and (3) the 
factor-shift effect. See Morgenstern, Richard D., William A. Pizer, 
and Jhih-Shyang Shih. ``Jobs Versus the Environment: An Industry-
Level Perspective.'' Journal of Environmental Economics and 
Management 43 (2002): 412-436 (Docket EPA-HQ-OAR-2014-0827).
---------------------------------------------------------------------------

    Following the Berman and Bui framework for the impacts of 
regulation on employment in the regulated sector, we consider two 
effects for the motor vehicle sector: The output effect and the 
substitution effect.
(a) The Output Effect
    If truck or trailer sales increase, then more people will be 
required to assemble trucks, trailers, and their components. If truck 
or trailer sales decrease, employment associated with these activities 
will decrease. The effects of this proposed rulemaking on HD vehicle 
sales thus depend on the perceived desirability of the new vehicles. On 
one hand, this proposed rulemaking will increase truck and trailer 
costs; by itself, this effect would reduce truck and trailer sales. In 
addition, while decreases in truck performance would also decrease 
sales, this program is not expected to have any negative effect on 
truck performance. On the other hand, this proposed rulemaking will 
reduce the fuel costs of operating the trucks; by itself, this effect 
would increase truck sales, especially if potential buyers have an 
expectation of higher fuel prices. The agencies have not made an 
estimate of the potential change in truck or trailer sales. However, as 
discussed in IX. E., the agencies have estimated an increase in vehicle 
miles traveled (i.e., VMT rebound) due to the reduced operating costs 
of trucks meeting these proposed standards. Since increased VMT is most 
likely to be met with more drivers and more trucks, our projection of 
VMT rebound is suggestive of an increase in vehicle sales and truck 
driver employment (recognizing that these increases may be partially 
offset by a decrease in manufacturing and sales for equipment of other 
modes of transportation such as rail cars or barges).
(b) The Substitution Effect
    The output effect, above, measures the effect due to new truck and 
trailer sales only. The substitution effect includes the impacts due to 
the changes in technologies needed for vehicles to meet the proposed 
standards, separate from the effect on output (that is, as though 
holding output constant). This effect includes both changes in 
employment due to incorporation of abatement technologies and overall 
changes in the labor intensity of manufacturing. We present estimates 
for this effect to provide a sense of the order of magnitude of 
expected impacts on employment, which we expect to be small in the 
automotive sector, and to repeat that regulations may have positive as 
well as negative effects on employment.
    One way to estimate this effect, given the cost estimates for 
complying with the proposed rule, is to use the ratio of workers to 
each $1 million of expenditures in that sector. The use of these ratios 
has both advantages and limitations. It is often possible to estimate 
these ratios for quite specific sectors of the economy: For instance, 
it is possible to estimate the average number of workers in the motor 
vehicle body and trailer manufacturing sector per $1 million spent in 
the sector, rather than use the ratio from another, more aggregated 
sector, such as motor vehicle manufacturing. As a result, it is not 
necessary to extrapolate employment ratios from possibly unrelated 
sectors. On the other hand, these estimates are averages for the 
sectors, covering all the activities in those sectors; they may not be 
representative of the labor required when expenditures are required on 
specific activities, or when manufacturing processes change 
sufficiently that labor intensity changes. For instance, the ratio for 
the motor vehicle manufacturing sector represents the ratio for all 
vehicle manufacturing, not just for emissions reductions associated 
with compliance activities. In addition, these estimates do not include 
changes in sectors that supply these sectors, such as steel or 
electronics producers. They thus may best be viewed as the effects on 
employment in the motor vehicle sector due to the changes in 
expenditures in that sector, rather than as an assessment of all 
employment changes due to these changes in expenditures. In addition, 
this approach estimates the effects of increased expenditures while 
holding constant the labor intensity of manufacturing; it does not take 
into account changes in labor intensity due to changes in the nature of 
production. This latter effect could either increase or

[[Page 40480]]

decrease the employment impacts estimated here.\773\
---------------------------------------------------------------------------

    \773\ As noted above, Morgenstern et al. (2002) separate the 
effect of holding output constant into two effects: The cost effect, 
which holds labor intensity constant, and the factor shift effect, 
which estimates those changes in labor intensity.
---------------------------------------------------------------------------

    Some of the costs of these proposed rules will be spent directly in 
the motor vehicle manufacturing sector, but it is also likely that some 
of the costs will be spent in the motor vehicle body and trailer and 
motor vehicle parts manufacturing sectors. The analysis here draws on 
estimates of workers per $1 million of expenditures for each of these 
sectors.
    There are several public sources for estimates of employment per $1 
million expenditures. The U.S. Bureau of Labor Statistics (BLS) 
provides its Employment Requirements Matrix (ERM),\774\ which provides 
direct estimates of the employment per $1 million in sales of goods in 
202 sectors. The values considered here are for Motor Vehicle 
Manufacturing (NAICS 3361), Motor Vehicle Body and Trailer 
Manufacturing (NAICS 3362), and Motor Vehicle Parts Manufacturing 
(NAICS 3363) for 2012.
---------------------------------------------------------------------------

    \774\ http://www.bls.gov/emp/ep_data_emp_requirements.htm.
---------------------------------------------------------------------------

    The Census Bureau provides the Annual Survey of Manufacturers \775\ 
(ASM), a subset of the Economic Census, based on a sample of 
establishments; though the Census itself is more complete, it is 
conducted only every 5 years, while the ASM is annual. Both include 
more sectoral detail than the BLS ERM: For instance, while the ERM 
includes the Motor Vehicle Manufacturing sector, the ASM and Economic 
Census have detail at the 6-digit NAICS code level (e.g., light truck 
and utility vehicle manufacturing). While the ERM provides direct 
estimates of employees/$1 million in expenditures, the ASM and Economic 
Census separately provide number of employees and value of shipments; 
the direct employment estimates here are the ratio of those values. At 
this time, the Economic Census values for 2012 (the most recent year) 
are not fully available; we therefore do not report them, and instead 
provide the 2011 ASM results (the most recent available). The values 
reported are for Motor Vehicle Manufacturing (NAICS 3361), Light Truck 
and Utility Vehicle Manufacturing (NAICS 336112), Heavy Duty Truck 
Manufacturing (NAICS 33612), Motor Vehicle Body and Trailer 
manufacturing (NAICS 3362), and Motor Vehicle Parts Manufacturing 
(NAICS 3363).
---------------------------------------------------------------------------

    \775\ http://www.census.gov/manufacturing/asm/index.html.
---------------------------------------------------------------------------

    Draft RIA Chapter 9.9 provides the details on the values of workers 
per $1 million in expenditures for the sectors mentioned above. In 
2012$, these range from 0.4 workers per $1 million for light truck & 
utility vehicle manufacturing in the ASM, to 2.8 workers per $1 million 
in expenditures for Motor Vehicle Body and Trailer Manufacturing in the 
ASM. These values are then adjusted to remove the employment effects of 
imports through use of a ratio of domestic production to domestic sales 
of 0.78.\776\
---------------------------------------------------------------------------

    \776\ To estimate the proportion of domestic production affected 
by the change in sales, we use data from Ward's Automotive Group for 
total truck production in the U.S. compared to total truck sales in 
the U.S. For the period 2004-2013, the proportion is 78 percent 
(Docket EPA-HQ-OAR-2014-0827), ranging from 68 percent (2009) to 83 
percent (2012) over that time.
---------------------------------------------------------------------------

    Over time, the amount of labor needed in the motor vehicle industry 
has changed: Automation and improved methods have led to significant 
productivity increases. The BLS ERM, for instance, provided estimates 
that, in 1993, 1.33 workers in the Motor Vehicle Manufacturing sector 
were needed per $1 million, but only 0.46 workers by 2012 (in 
2005$).\777\ Because the ERM is available annually for 1993-2012, we 
used these data to estimate productivity improvements over time. We 
then used these productivity estimates to project the ERM through 2027, 
and to adjust the ASM values for 2011. RIA Chapter 9.9.2.2 provides 
detail on these calculations.
---------------------------------------------------------------------------

    \777\ http://www.bls.gov/emp/ep_data_emp_requirements.htm; this 
analysis used data for sectors 81 (Motor Vehicle Manufacturing), 82 
(Motor Vehicle Body and Trailer Manufacturing), and 83 (Motor 
Vehicle Parts Manufacturing) from ``Chain-weighted (2005 dollars) 
real domestic employment requirements tables.''
---------------------------------------------------------------------------

    Finally, to simplify the presentation and give a range of 
estimates, we compared the projected employment among the 3 sectors for 
the ERM and ASM, and we provide only the maximum and minimum employment 
effects estimated for the ERM and the ASM. We provide the range rather 
than a point estimate because of the inherent difficulties in 
estimating employment impacts; the range gives an estimate of the 
expected magnitude. The ERM estimates in the Motor Vehicle Parts 
Manufacturing Sector are consistently the maximum values. The ERM 
estimates in the Motor Vehicle Body and Trailer Manufacturing Sector 
are the minimum values for all years but 2018-2019, when the ASM values 
for Light Truck and Utility Vehicle Manufacturing provide the minimum 
values.
    Section 0 of the Preamble discusses the vehicle cost estimates 
developed for these proposed rules. The final step in estimating 
employment impacts is to multiply costs (in $ millions) by workers per 
$1 million in costs, to estimate employment impacts in the regulated 
and parts manufacturing sectors. Increased costs of vehicles and parts 
would, by itself, and holding labor intensity constant, be expected to 
increase employment between 2018 and 2027 from none to a few thousand 
jobs each year.
    While we estimate employment impacts, measured in job-years, 
beginning with program implementation, some of these employment gains 
may occur earlier as motor vehicle manufacturers and parts suppliers 
hire staff in anticipation of compliance with the standards. A job-year 
is a way to calculate the amount of work needed to complete a specific 
task. For example, a job-year is one year of work for one person.

Table IX-37--Employment Effects Due to Increased Costs of Vehicles and Parts (Substitution Effect), in Job-Years
----------------------------------------------------------------------------------------------------------------
                                                                                          Maximum employment due
                                                                 Minimum employment due   to substitution effect
                                          Costs (millions of     to substitution effect      (ERM estimates,
                 Year                           2012$)              (ERM estimates,        expenditures in the
                                                                  expenditures in the     Body and Trailer  Mfg
                                                                   Parts Sector \a\)             Sector)
----------------------------------------------------------------------------------------------------------------
2018.................................                      116                        0                      100
2019.................................                      113                        0                      100

[[Page 40481]]

 
2020.................................                      112                        0                      100
2021.................................                    2,173                      300                    2,300
2022.................................                    2,161                      300                    2,200
2023.................................                    2,224                      200                    2,100
2024.................................                    3,455                      300                    3,200
2025.................................                    3,647                      200                    3,200
2026.................................                    3,736                      200                    3,100
2027.................................                    5,309                      200                    4,200
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For 2018 and 2019, the minimum employment effects are associated with the ASM's Light Truck and Utility
  Vehicle Manufacturing sector.

(c) Summary of Employment Effects in the Motor Vehicle Sector
    The overall effect of these proposed rules on motor vehicle sector 
employment depends on the relative magnitude of the output effect and 
the substitution effect. Because we do not have quantitative estimates 
of the output effect, and only a partial estimate of the substitution 
effect, we cannot reach a quantitative estimate of the overall 
employment effects of these proposed rules on motor vehicle sector 
employment or even whether the total effect will be positive or 
negative.
    The proposed standards are not expected to provide incentives for 
manufacturers to shift employment between domestic and foreign 
production. This is because the proposed standards will apply to 
vehicles sold in the U.S. regardless of where they are produced. If 
foreign manufacturers already have increased expertise in satisfying 
the requirements of the standards, there may be some initial incentive 
for foreign production, but the opportunity for domestic manufacturers 
to sell in other markets might increase. To the extent that the 
requirements of these proposed rules might lead to installation and use 
of technologies that other countries may seek now or in the future, 
developing this capacity for domestic production now may provide some 
additional ability to serve those markets.
(3) Employment Impacts in Other Affected Sectors
(a) Transport and Shipping Sectors
    Although not directly regulated by these proposed rules, employment 
effects in the transport and shipping sector are likely to result from 
these regulations. If the overall cost of shipping a ton of freight 
decreases because of increased fuel efficiency (taking into account the 
increase in upfront purchasing costs), in a perfectly competitive 
industry some of these costs savings, depending on the relative 
elasticities of supply and demand, will be passed along to customers. 
With lower prices, demand for shipping would lead to an increase in 
demand for truck shipping services (consistent with the VMT rebound 
effect analysis) and therefore an increase in employment in the truck 
shipping sector. In addition, if the relative cost of shipping freight 
via trucks becomes cheaper than shipping by other modes (e.g., rail or 
barge), then employment in the truck transport industry is likely to 
increase. If the trucking industry is more labor intensive than other 
modes, we would expect this effect to lead to an overall increase in 
employment in the transport and shipping sectors.778 779 
Such a shift would, however, be at the expense of employment in the 
sectors that are losing business to trucking. The first effect--a gain 
due to lower shipping costs--is likely to lead to a net increase in 
employment. The second effect, due to mode-shifting, may increase 
employment in trucking, but decrease employment in other shipping 
sectors (e.g., rail or barge), with the net effects dependent on the 
labor-intensity of the sectors and the volumes.
---------------------------------------------------------------------------

    \778\ American Transportation Research Institute, ``An Analysis 
of the Operational Costs of Trucking: 2011 Update.'' See http://www.atri-online.org/research/results/Op_Costs_2011_Update_one_page_summary.pdf.
    \779\ Association of American Railroads, ``All Inclusive Index 
and Rail Adjustment Factor.'' June 3, 2011. See http://www.aar.org/
~/media/aar/RailCostIndexes/AAR-RCAF-2011-Q3.ashx.
---------------------------------------------------------------------------

(b) Fuel Suppliers
    In addition to the effects on the trucking industry and related 
truck parts sector, these proposed rules will result in reductions in 
fuel use that lower GHG emissions. Fuel saving, principally reductions 
in liquid fuels such as diesel and gasoline, will affect employment in 
the fuel suppliers industry sectors, principally the Petroleum Refinery 
sector.
    Section IX. C. of this Preamble provides estimates of the effects 
of these proposed standards on expected fuel consumption. While reduced 
fuel consumption represents savings for purchasers of fuel, it also 
represents a loss in value of output for the petroleum refinery 
industry, which will result in reduced sectoral employment. Because 
this sector is material-intensive, the employment effect is not 
expected to be large.\780\
---------------------------------------------------------------------------

    \780\ In the 2012 BLS ERM cited above, the Petroleum and Coal 
Products Manufacturing sector has a ratio of workers per $1 million 
of 0.242, lower than all but two of the 181 sectors with non-zero 
employment per $1 million.
---------------------------------------------------------------------------

(c) Fuel Savings
    As a result of this proposed rulemaking, it is anticipated that 
trucking firms will experience fuel savings. Fuel savings lower the 
costs of transportation goods and services. In a competitive market, 
some of the fuel savings that initially accrue to trucking firms are 
likely to be passed along as lower transportation costs that, in turn, 
could result in lower prices for final goods and services. Some of the 
savings might also be retained by firms for investments or for 
distributions to firm owners. Again, how much accrues to customers 
versus firm owners will depend on the relative elasticities of supply 
and demand. Regardless, the savings will accrue to some segment of 
consumers: Either owners of trucking firms or the general public, and 
the

[[Page 40482]]

effect will be increased spending by consumers in other sectors of the 
economy, creating jobs in a diverse set of sectors, including retail 
and service industries.
    As described in Section IX. C. (2) the value of fuel savings from 
this proposed rulemaking is projected to be $15.1 billion (2012$) in 
2027, according to Table IX-6. If all those savings are spent, the fuel 
savings will stimulate increased employment in the economy through 
those expenditures. If the fuel savings accrue primarily to firm 
owners, they may either reinvest the money or take it as profit. 
Reinvesting the money in firm operations could increase employment 
directly. If they take the money as profit, to the extent that these 
owners are wealthier than the general public, they may spend less of 
the savings, and the resulting employment impacts would be smaller than 
if the savings went to the public. Thus, while fuel savings are 
expected to decrease employment in the refinery sector, they are 
expected to increase employment through increased consumer 
expenditures.
(4) Summary of Employment Impacts
    The primary employment effects of these rules are expected to be 
found throughout several key sectors: Truck and engine manufacturers, 
the trucking industry, truck parts manufacturing, fuel production, and 
consumers. These rules initially takes effect in model year 2018, a 
time period sufficiently far in the future that the unemployment rate 
at that time is unknowable. In an economy with full employment, the 
primary employment effect of a rulemaking is likely to be to move 
employment from one sector to another, rather than to increase or 
decrease employment. For that reason, we focus our partial quantitative 
analysis on employment in the regulated sector, to examine the impacts 
on that sector directly. We discuss the likely direction of other 
impacts in the regulated sector as well as in other directly related 
sectors, but we do not quantify those impacts, because they are more 
difficult to quantify with reasonable accuracy, particularly so far 
into the future.
    For the regulated sector, we have not quantified the output effect. 
The substitution effect is associated with potential increased 
employment from none to a few thousand jobs per year between 2018 and 
2027, depending on the share of employment impacts in the affected 
sectors (Motor Vehicle Manufacturing, Motor Vehicle Body and Trailer 
Manufacturing, and Motor Vehicle Parts Manufacturing). These estimates 
do not include potential changes, either greater or less, in labor 
intensity of production. As mentioned above, some of these job gains 
may occur earlier as auto manufacturers and parts suppliers hire staff 
to prepare to comply with the standard.
    Lower prices for shipping are expected to lead to an increase in 
demand for truck shipping services and, therefore, an increase in 
employment in that sector, though this effect may be offset somewhat by 
changes in employment in other shipping sectors. Reduced fuel 
production implies less employment in the fuel provision sectors. 
Finally, any net cost savings would be expected to be passed along to 
some segment of consumers: Either the general public or the owners of 
trucking firms, who are expected then to increase employment through 
their expenditures. Under conditions of full employment, any changes in 
employment levels in the regulated sector due to this program are 
mostly expected to be offset by changes in employment in other sectors.

M. Cost of Ownership and Payback Analysis

    This section examines the economic impacts of the Phase 2 proposed 
standards from the perspective of buyers, operators, and subsequent 
owners of new HD vehicles, first in the aggregate and then at the level 
of individual purchasers of different types of vehicles. In each case, 
the analysis assumes that HD vehicle manufacturers are able to recover 
their costs for improving fuel efficiency--including direct technology 
outlays, indirect costs, and normal profits on any additional capital 
investments--by charging higher prices to HD vehicle buyers. As 
summarized below, HDV buyers in the aggregate would experience 
substantial savings in fuel costs that would more than offset higher 
initial outlays to buy more fuel-efficient new vehicles.
    Table IX-38 reports aggregate benefits and costs to buyers and 
operators of new HD vehicles for the Preferred Alternative using Method 
A. The table reports economic impacts on buyers using only the 7 
percent discount rate, since that rate is intended to represent the 
opportunity cost of capital that HD vehicle buyers and users must 
divert from other investment opportunities to purchase more costly 
vehicles. As it shows, fuel savings and the other benefits from 
increased fuel efficiency--savings from less frequent refueling and 
benefits from additional truck use--far outweigh the higher costs to 
buyers of new HD vehicles. As a consequence, buyers, operators, and 
subsequent owners of HD vehicles subject to the Phase 2 standards are 
together projected to experience large economic gains under the 
Preferred Alternative. It should be noted that, because the original 
buyers may not hold the vehicles for their lifetimes, and because those 
who own or operate the vehicles may not pay for the fuel, these 
benefits and costs do not necessarily represent benefits and costs to 
identifiable individuals.
    As Table IX-38 shows, the agencies have estimated the increased 
costs for maintenance of the new technologies that HD vehicle 
manufacturers would employ to decrease fuel consumption, and these 
costs are included together with those for purchasing more fuel-
efficient vehicles. Manufacturers' efforts to comply with the Phase 2 
standards could also result in changes to vehicle performance and 
capacity for certain vehicles. For example, reducing the mass of HD 
vehicles in order to improve fuel efficiency could be used to improve 
their load-carrying capabilities, while some engine technologies and 
aerodynamic modifications could reduce payload capacity. The agencies 
request comment on possible changes to vehicle performance and load-
carrying capacity as a result of the proposal along with supporting 
information.

  Table IX-38--MY 2018-2029 Lifetime Aggregate Impacts of the Preferred
    Alternative on All HD Vehicle Buyers and Operators Using Method A
                [Billions of 2012$, Discounted at 7%] \a\
------------------------------------------------------------------------
                                       Baseline 1a        Baseline 1b
------------------------------------------------------------------------
Vehicle costs.....................               17.1               16.8
Maintenance costs.................                0.6                0.6
                                   -------------------------------------
    Total costs to HD vehicle                    17.7               17.4
     buyers.......................

[[Page 40483]]

 
Fuel savings \b\..................              104.6               99.1
(valued at retail prices).........
Refueling benefits................                1.6                1.5
Increased travel benefits.........                8.4                8.2
                                   -------------------------------------
    Total benefits to HD vehicle                114.7              108.9
     buyers/operators.............
Net benefits to HD vehicle buyers/               97.0               91.5
 operators\ c\....................
------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.
\b\ Fuel savings includes fuel consumed during additional rebound
  driving.
\c\ Net benefits shown do not include benefits associated with carbon or
  other co-pollutant emission reductions, accidents/congestion/noise
  impacts, energy security, etc.

    Table IX-38 shows aggregate benefits and costs to buyers and 
operators of new HD vehicles for the Preferred Alternative using Method 
B, again for only the 7 percent discount rate. As it shows, fuel 
savings and the other benefits outweigh the higher prices and added 
maintenance costs that buyers and operators of new HD vehicles pay, so 
they are again expected to experience large economic gains from the 
Preferred Alternative. Again, because the original buyers may not hold 
the vehicles for their lifetimes, and because those who own or operate 
the vehicles may not pay for the fuel, these benefits and costs do not 
necessarily represent benefits and costs to identifiable individuals.

  Table IX-39 MY 2018-2029 Lifetime Aggregate Impacts of the Preferred
    Alternative on All HD Vehicle Buyers and Operators Using Method B
                [Billions of 2012$, Discounted at 7%] \a\
------------------------------------------------------------------------
                                                          Baseline 1b
------------------------------------------------------------------------
Vehicle costs........................................               16.6
Maintenance costs....................................                0.6
                                                      ------------------
    Total costs to HD vehicle buyers.................               17.2
Fuel savings \b\ (valued at retail prices)...........              100.1
Refueling benefits...................................                1.6
Increased travel benefits............................                8.2
                                                      ------------------
    Total benefits to HD vehicle buyers/operators....              109.9
Net benefits to HD vehicle buyers/operators \ c\.....               92.7
------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.
\b\ Fuel savings includes fuel consumed during additional rebound
  driving.
\c\ Net benefits shown do not include benefits associated with carbon or
  other co-pollutant emission reductions, accidents/congestion/noise
  impacts, energy security, etc.

    It is also useful to examine the cost of purchasing and owning a 
new vehicle that complies with the Phase 2 standards and its payback 
period--the point at which cumulative savings from lower fuel 
expenditures outpace increased vehicle costs. For example, a new MY2027 
tractor is estimated to cost roughly $11,684 more (on average, or 
roughly 12 percent of a typical $100,000 reference case tractor) due to 
the addition of new GHG reducing/fuel consumption improving technology. 
This new technology would result in lower fuel consumption and, 
therefore, reduced fuel expenditures. But how many months or years 
would pass before the reduced fuel expenditures would surpass the 
increased upfront costs?
    Table IX-40 presents the discounted annual increased vehicle costs 
and fuel savings associated with owning a new MY2027 HD pickup or van 
using both 3 percent and 7 percent discount rates. Table IX-41 and 
Table IX-42 show the same information for a MY2027 vocational vehicle 
and a tractor/trailer, respectively. These comparisons include sales 
taxes, excise taxes (for vocational and tractor/trailer) and increased 
insurance expenditures on the higher value vehicles, as well as 
maintenance costs associated with replacement of lower rolling 
resistance tires throughout the lifetimes of affected vehicles. 
Importantly, the values behind the tables in this payback analysis do 
not include rebound miles driven and/or rebound gallons consumed. 
Instead, the tables use reference case miles driven combined with 
policy case fuel consumption. We detail these input metrics in Chapter 
7 of the draft RIA.
    The fuel expenditure column uses retail fuel prices specific to 
gasoline and diesel fuel as projected in AEO2014.\781\ This payback 
analysis does not include other impacts, such as reduced refueling 
events, the value of driving potential rebound miles, or noise, 
congestion and accidents. We use retail fuel prices and

[[Page 40484]]

exclude these other private and social impacts because the analysis is 
intended to focus on those factors that are most important to buyers 
when considering a new vehicle purchase, and to include only those 
factors that have clear dollar impacts on HD vehicle buyers.
---------------------------------------------------------------------------

    \781\ U.S. Energy Information Administration, Annual Energy 
Outlook 2014, Early Release; Report Number DOE/EIA-0383ER(2014), 
December 16, 2013.
---------------------------------------------------------------------------

    As shown, payback would occur in the 3rd year of ownership for HD 
pickups and vans (the first year where cumulative net costs turn 
negative), in the 5th year for vocational vehicles (at a 3 percent 
discount rate, 6th year at a 7 percent discount rate) and early in the 
2nd year for tractor/trailers. Note that each table reflects the 
average vehicle and reflects proper weighting of fuel consumption/costs 
(gasoline vs. diesel). We request comment and supporting data on all 
aspects of our payback analysis.

     Table IX-40--Discounted Annual Incremental Expenditures for a MY 2027 HD Pickup or Van Using Method B and Relative to the Less Dynamic Baseline
                                                                       [2012$] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   3% Discount rate                                    7% Discount rate
                                                 -------------------------------------------------------------------------------------------------------
                  Age in years                                                            Cumulative                                          Cumulative
                                                  Vehicle \b\   Maint \c\     Fuel \d\       Net      Vehicle \b\   Maint \c\     Fuel \d\       net
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................       $1,587           $4        -$759         $832       $1,558           $3        -$745         $817
2...............................................           25            3         -734          126           23            3         -694          150
3...............................................           23            3         -714         -561           21            3         -649         -476
4...............................................           22            3         -693       -1,229           19            3         -606       -1,060
5...............................................           20            3         -651       -1,857           17            2         -549       -1,590
6...............................................           19            3         -611       -2,446           15            2         -496       -2,067
7...............................................           18            2         -571       -2,997           14            2         -446       -2,497
8...............................................           16            2         -536       -3,514           12            2         -403       -2,886
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
\b\ Includes new technology costs, insurance costs and sales taxes.
\c\ Maintenance costs.
\d\ Uses AEO2014 retail fuel prices.

    Table IX-41--Discounted Annual Incremental Expenditures for a MY 2027 Vocational Vehicle Using Method B and Relative to the Less Dynamic Baseline
                                                                       [2012$] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   3% Discount rate                                    7% Discount rate
                                                 -------------------------------------------------------------------------------------------------------
                  Age in years                                                            Cumulative                                          Cumulative
                                                  Vehicle \b\   Maint \c\     Fuel \d\       Net      Vehicle \b\   Maint \c\     Fuel \d\       net
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................       $3,998          $10        -$965       $3,043       $3,924          $10        -$947       $2,987
2...............................................           63            9         -937        2,178           59            9         -885        2,169
3...............................................           59            9         -914        1,331           53            8         -832        1,399
4...............................................           55            9         -891          504           48            8         -780          675
5...............................................           51            8         -829         -265           43            7         -699           27
6...............................................           48            7         -771         -981           39            6         -625         -554
7...............................................           45            7         -716       -1,645           35            5         -559       -1,073
8...............................................           42            6         -667       -2,264           31            5         -501       -1,538
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
\b\ Includes new technology costs, insurance costs, excise and sales taxes.
\c\ Maintenance costs.
\d\ Uses AEO2014 retail fuel prices.

     Table IX-42--Discounted Annual Incremental Expenditures for a MY 2027 Tractor/Trailer Using Method B and Relative to the Less Dynamic Baseline
                                                                       [2012$] \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   3% Discount rate                                    7% Discount rate
                                                 -------------------------------------------------------------------------------------------------------
                  Age in years                                                            Cumulative                                          Cumulative
                                                  Vehicle \b\   Maint \c\     Fuel \d\       Net      Vehicle \b\   Maint \c\     Fuel \d\       Net
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................      $15,194          $48     -$14,649         $593      $14,914          $47     -$14,379         $582
2...............................................          238           46      -14,204      -13,327          225           43      -13,421      -12,571
3...............................................          223           44      -13,809      -26,869          203           40      -12,561      -24,889
4...............................................          209           42      -13,416      -40,034          183           37      -11,746      -36,415
5...............................................          195           39      -12,391      -52,191          164           33      -10,443      -46,661
6...............................................          182           35      -11,411      -63,385          148           29       -9,258      -55,743
7...............................................          170           32      -10,511      -73,694          133           25       -8,209      -63,794

[[Page 40485]]

 
8...............................................          158           29       -9,704      -83,211          119           22       -7,295      -70,949
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic
  baseline, 1b, please see Section X.A.1.
\b\ Includes new technology costs, insurance costs, excise and sales taxes.
\c\ Maintenance costs.
\d\ Uses AEO2014 retail fuel prices.

N. Safety Impacts

(1) Summary of Supporting HD Vehicle Safety Research
    NHTSA and EPA considered the potential safety impact of 
technologies that improve HD vehicle fuel efficiency and GHG emissions 
as part of the assessment of regulatory alternatives. The safety 
assessment of the technologies in this proposal was informed by two NAS 
reports, an analysis of safety effects of HD pickups and vans using 
estimates from the DOT report on the effect of mass reduction and 
vehicle size on safety, and agency-sponsored safety testing and 
research. A summary of the literature and work considered by the 
agencies follows.
(2) National Academy of Sciences HD Phase 1 and Phase 2 Reports
    As required by EISA, the National Research Council has conducted 
two studies of the technologies and approaches for reducing the fuel 
consumption of medium- and heavy-duty vehicles. The first was 
documented in a report issued in 2010, ``Technologies and Approaches to 
Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles'' 
(``NAS Report''). The second was documented in a report issued in 2014, 
``Reducing the Fuel Consumption and Greenhouse Gas Emissions of Medium- 
and Heavy-Duty Vehicles, Phase Two-First Report'' (``NAS HD Phase 2 
First Report''). While the reports primarily focused on reducing 
vehicle fuel consumption and emissions through technology application, 
and examined potential regulatory frameworks, both reports additionally 
contain findings and recommendations on safety. In developing this 
proposal, the agencies carefully considered both of the reports' 
findings related to safety. Some of the reports' key findings related 
to safety follow.
    NAS commented that idle reduction strategies in actual can be 
sophisticated to provide for the safety of the driver in hot and cold 
weather.\782\ The agencies considered this comment in our approach for 
idle reduction technologies and allow override provisions, as discussed 
in Section III. Override is allowed if the external ambient temperature 
reaches a level below which or above which the cabin temperature cannot 
be maintained within reasonable heat or cold exposure threshold limit 
values for the health and safety of the operator (not merely comfort). 
NAS commented extensively on the recent emergence of natural gas (NG) 
as a viable technology option for commercial vehicles, but alluded to 
the existence of uncertainties regarding its safety. The committee 
found that while the public crash databases do not contain information 
on vehicle fuel type, the existing information indicates that the 
crash-related safety risk for NG storage on vehicles does not appear to 
be appreciably different from diesel fuel risks. The committee also 
found that while there are two existing SAE-recommended practice 
standards for NG-powered HD vehicles, the industry could benefit from 
best practice directives to minimize crash risks for NG fuel tanks, 
such as on shielding to prevent punctures during crashes. As a final 
point, NAS stated that manufacturers and operators have a great 
incentive to prevent possible NG leakage from a vehicle fuel system 
because it would be a significant safety concern and reduce vehicle 
range. No recommendations were made for additional Federal safety 
regulations for these vehicles. In response, the agencies have reviewed 
and discuss the existing NG vehicle standards and best practices cited 
by NAS in Section XI.
---------------------------------------------------------------------------

    \782\ Id., p. 33.
---------------------------------------------------------------------------

    In the NAS Committee's Phase 1 report, the Committee commented that 
aerodynamic fairings detaching from trucks on the road was a potential 
safety issue. However, the Phase 2 interim report stated that 
``Anecdotal information gained during the observations of on-road 
trailers indicates a few skirts badly damaged or missing from one side. 
The skirt manufacturers report no safety concerns (such as side skirts 
falling off) and little maintenance needed.''
    The NAS report also identified the link between tire inflation and 
condition and vehicle stopping distance and handling, which impacts 
overall safety. The committee found that tire pressure monitoring 
systems and automatic tire inflation systems are being adopted by 
fleets at an increasing rate. However, the committee noted that there 
are no standards for performance, display, and system validation. The 
committee recommended that NHTSA issue a white paper on the minimum 
performance of tire pressure systems from a safety perspective.
    The agencies considered the safety findings in both NAS reports in 
developing this proposal and conducted additional research on safety to 
further examine information and findings of the reports.
(3) DOT CAFE Model HD Pickup and Van Safety Analysis
    This analysis considered the potential effects on crash safety of 
the technologies manufacturers may apply to their HD pickups and vans 
to meet each of the regulatory alternatives evaluated. NHTSA research 
has shown that vehicle mass reduction affects overall societal 
fatalities associated with crashes and, most relevant to this proposal, 
that mass reduction in heavier light- and medium-duty vehicles has an 
overall beneficial effect on societal fatalities. Reducing the mass of 
a heavier vehicle involved in a crash with another vehicle(s) makes it 
less likely that there will be fatalities among the occupants of the 
other vehicles. In addition to the effects of mass reduction, the 
analysis anticipates that the proposed standards, by reducing the

[[Page 40486]]

cost of driving HD pickups and vans, would lead to increased travel by 
these vehicles and, therefore, more crashes involving these vehicles. 
The Method A analysis considers overall impacts from both of these 
factors, using a methodology similar to NHTSA's analyses for the MYs 
2017-2025 CAFE and GHG emission standards.
    The Method A analysis includes estimates of the extent to which HD 
pickups and vans produced during MYs 2014-2030 may be involved in fatal 
crashes, considering the mass, survival, and mileage accumulation of 
these vehicles, taking into account changes in mass and mileage 
accumulation under each regulatory alternative. These calculations make 
use of the same coefficients applied to light trucks in the MYs 2017-
2025 CAFE rulemaking analysis. As discussed above, vehicle miles 
traveled may increase due to the fuel economy rebound effect, resulting 
from improvements in vehicle fuel efficiency and cost of fuel, as well 
as the assumed future growth in average vehicle use. Increases in total 
lifetime mileage increase exposure to vehicle crashes, including those 
that result in fatalities. Consequently, the modeling system computes 
total fatalities attributed to vehicle use for vehicles of a given 
model year based on safety class and weight threshold. These 
calculations also include a term that accounts for the fact that 
vehicles involved in future crashes will be certified to more stringent 
safety standards than those involved with past crashes upon which the 
base rates of involvement in fatal crashes were estimated. Since the 
use of mass reducing technology is present within the model, safety 
impacts may also be observed whenever a vehicle's base weight 
decreases. Thus, in addition to computing total fatalities related to 
vehicle use, the modeling system also estimates changes in fatalities 
due to reduction in a vehicle's curb weight.
    The total fatalities attributed to vehicle use and vehicle weight 
change for vehicles of a given model year are then summed. Lastly, 
total fatalities occurring within the industry in a given model year 
are accumulated across all vehicles. In addition to using inputs to 
estimate the future involvement of modeled vehicles in crashes 
involving fatalities, the model also applies inputs defining other 
accident-related externalities estimated on a dollar per mile basis. 
For vehicles above 4,594 lbs--i.e., the majority of the HD pickup and 
van fleet--mass reduction is estimated to reduce the net incidence of 
highway fatalities by 0.34 percent per 100 lbs of removed curb weight. 
For the few HD pickups and vans below 4,594 lbs, mass reduction is 
estimated to increase the net incidence of highway fatalities by 0.52 
percent per 100 lbs. Because there are many more HD pickups and vans 
above 4,594 lbs than below 4,594 lbs, the overall effect of mass 
reduction in the segment is estimated to reduce the incidence of 
highway fatalities. The estimated increase in vehicle miles traveled 
due to the fuel economy rebound effect is estimated to increase 
exposure to vehicle crashes and offset these reductions.
(4) Volpe Research on MD/HD Fuel Efficiency Technologies
    The 2010 National Research Council report ``Technologies and 
Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty 
Vehicles'' recommended that NHTSA perform a thorough safety analysis to 
identify and evaluate potential safety issues with fuel efficiency-
improving technologies. The Department of Transportation Volpe Center's 
2015 report titled ``Review and Analysis of Potential Safety Impacts 
and Regulatory Barriers to Fuel Efficiency Technologies and Alternative 
Fuels in Medium- and Heavy-Duty Vehicles'' summarizes research and 
analysis findings on potential safety issues associated with both the 
diverse alternative fuels (natural gas-CNG and LNG, propane, biodiesel, 
and power train electrification), and the specific FE technologies 
recently adopted by the MD/HDV fleets.\783\ These include Intelligent 
Transportation Systems (ITS) and telematics, speed limiters, idle 
reduction devices, tire technologies (single-wide tires, and tire 
pressure monitoring systems-TPMS and Automated Tire Inflation Systems-
ATIS), aerodynamic components, vehicle light-weighting materials, and 
Long Combination Vehicles (LCVs).
---------------------------------------------------------------------------

    \783\ Brecher, A., Epstein, A.K., & Breck, A. (2015, June). 
Review and analysis of potential safety impacts of and regulatory 
barriers to fuel efficiency technologies and alternative fuels in 
medium- and heavy-duty vehicles. (Report No. DOT HS 812 159). 
Washington, DC: National Highway Traffic Safety Administration.
---------------------------------------------------------------------------

    Chapter 1 provides an overview of the study's rationale, 
background, and key objective, namely, to identify the technical and 
operational/behavioral safety benefits and disbenefits of MD/HDVs 
equipped with FE technologies and using emerging alternative fuels 
(AFs). Recent MD/HDV national fleet crash safety statistical averages 
are also provided for context, although no information exists in crash 
reports relating to specific vehicle FE technologies and fuels. (NHTSA/
FARS and FMCSA/CSA databases do not include detailed information on 
vehicle fuel economy technologies, since the state crash report forms 
are not coded down to an individual fuel economy technology level).
    Chapters 2 and 3 are organized by clusters of functionally-related 
FE technologies for vehicles and trailers (e.g., tire systems, ITS, 
light-weighting materials, and aerodynamic systems) and alternative 
fuels, which are described and their respective associated potential 
safety issues are discussed. Chapter 2 summarizes the findings from a 
comprehensive review of available technical and trade literature and 
Internet sources regarding the benefits, potential safety hazards, and 
the applicable safety regulations and standards for deployed FE 
technologies and alternative fuels. Chapter 2 safety-relevant fuel-
specific findings include:
     Both CNG- and LNG-powered vehicles present potential 
hazards, and call for well-known engineering and process controls to 
assure safe operability and crashworthiness. However, based on the 
reported incident rates of NGVs and the experiences of adopting fleets, 
it appears that NGVs can be operated at least as safely as diesel MD/
HDVs.
     There are no safety contraindications to the large scale 
fleet adoption of CNG or LNG fueled heavy duty trucks and buses, and 
there is ample experience with the safe operation of large public 
transit fleets. Voluntary industry standards and best practices suffice 
for safety assurance, though improved training of CMV operators and 
maintenance staff in natural gas safety of equipment and operating 
procedures is needed.
     Observing CNG and LNG fuel system and maintenance facility 
standards, coupled with sound design, manufacture, and inspection of 
natural gas storage tanks will further reduce the potential for leaks, 
tank ruptures, fires, and explosions.
     Biodiesel blends used as drop-in fuels have presented some 
operational safety concerns dependent on blending fraction, such as 
material compatibility, bio-fouling sludge accumulation, or cold-
weather gelling. However, best practices for biodiesel storage, and 
improved gaskets and seals that are biodiesel resistant, combined with 
regular maintenance and leak inspection schedules for the fuel lines 
and components enable the safe use of biodiesel in newer MD/HDVs.
     Propane (LPG, or autogas) presents well-known hazards 
including ignition (due to leaks or crash) that are

[[Page 40487]]

preventable by using Overfill Prevention Devices (OPDs), which 
supplement the automatic stop-fill system on the fueling station side, 
and pressure release devices (PRDs). Established best practices and 
safety codes (e.g., NFPA) have proven that propane fueled MD/HDVs can 
be as operationally safe as the conventionally-fueled counterparts.
     As the market penetration of hybrid and electric 
drivetrain accelerates, and as the capacity and reliability of lithium 
ion batteries used in Rechargeable Energy Storage Systems (RESS) 
improve, associated potential safety hazards (e.g., electrocution from 
stranded energy, thermal runaway leading to battery fire) have become 
well understood, preventable, and manageable. Existing and emerging 
industry technical and safety voluntary standards, applicable NHTSA 
regulations and guidance, and the growing experience with the operation 
of hybrid and electric MD/HDVs will enable the safe operation and 
large-scale adoption of safer and more efficient power-train 
electrification technologies.
    The safety findings from literature review pertaining to the 
specific FE technologies implemented to date in the MD/HDV fleet 
include:
     Telematics--integrating on-board sensors, video, and audio 
alerts for MD/HDV drivers--offer potential improvements in both driver 
safety performance and fuel efficiency. Both camera and non-camera 
based telematics setups are currently integrated with available crash 
avoidance systems (such as ESC, RSC, LDWS, etc.) and appear to be well 
accepted by MD/HDV fleet drivers.
     Both experience abroad and the cited US studies of trucks 
equipped with active speed limiters indicated a safety benefit, as 
measured by up to 50 percent reduced crash rates, in addition to fuel 
savings and other benefits, with good CMV driver acceptance. Any 
negative aspects were small and avoidable if all the speed limitation 
devices were set to the same speed, so there would be less need for 
overtaking at highway speeds.
     No literature reports of adverse safety impacts were found 
regarding implementation of on-board idle-reduction technologies in MD/
HDVs (such as automatic start-stop, direct-fired heaters, and APUs).
     There was no clear consensus from the literature regarding 
the relative crash rates and highway safety impacts of LCVs, due to 
lack of sufficient data and controls and inconsistent study 
methodologies. Recent safety evaluations of LCVs and ongoing MAP-21 
mandated studies will clarify and quantify this issue.
     Tire technologies for FE (including ATIS, TPMS, LRR and 
single-wide tires) literature raised potential safety concerns 
regarding lower stability or loss of control, e.g., when tire pressure 
is uneven or a single wide tire blows out on the highway. However, 
systems such as automated tire monitoring systems and stability 
enhancing electronic systems (ABS, ESC, RSC) may compensate and 
mitigate any adverse safety impacts.
     Aerodynamic technologies that offer significant fuel 
savings have raised potential concerns about vehicle damage or injury 
in case of detached fairings or skirts, although there were no 
documented incidents of this type in the literature.
     Some light weighting materials may pose some fire safety 
and crashworthiness hazards, depending on their performance in 
structural or other vehicle subsystem applications (chassis, power-
train, crash box or safety cage). Some composites (fiberglass, 
plastics, CFRC, foams) may become brittle on impact or due to 
weathering from UV exposure or extreme cold. Industry has developed 
advanced, high performance lightweight material options tailored to 
their automotive applications, e.g., thermoplastics resistant to UV and 
weathering. No examples of such lightweight material failures on MD/
HDVs were identified in the literature.
    Chapter 3 provides complementary inputs on the potential safety 
issues associated with FE technologies and alternative fuels obtained 
from Subject Matter Experts (SMEs). The broad cross-section of SMEs 
consulted had experience with the operation of ``green'' truck and bus 
fleets, were Federal program managers, or were industry developers of 
FE systems for MD/HDVs. Safety concerns raised by the SMEs can be 
prevented or mitigated by complying with applicable regulations and 
safety standards and best practices, and are being addressed by 
evolving technologies, such as electronic collision prevention devices. 
Although SMEs raised some safety concerns, their experience indicates 
that system- or fuel-specific hazards can be prevented or mitigated by 
observing applicable industry standards, and by training managers, 
operators and maintenance staff in safety best practices. Specific 
safety concerns raised by SMEs based on their experience included:
     Alternative fuels did not raise major safety concerns, but 
generally required better education and training of staff and 
operators. There was a concern expressed regarding high pressure (4000 
psi) CNG cylinders that could potentially explode in a crash scenario 
or if otherwise ruptured. However, aging CNG fuel tank safety can be 
assured by enforcing regulations such as FMVSS No. 304, and by periodic 
inspection and end-of-life disposal and replacement. A propane truck 
fleet manager stated that the fuel was as safe as or safer than 
gasoline, and reported no safety issues with the company's propane, nor 
with hybrid gasoline-electric trucks. OEMs of drivetrain hybridization 
and electrification systems, including advanced Lithium Ion batteries 
for RESS, indicated that they undergo multiple safety tests and are 
designed with fail-safes for various misuse and abuse scenarios. 
Integration of hybrid components downstream by bodybuilders in 
retrofits, as opposed to new vehicles, was deemed a potential safety 
risk. Another potential safety concern raised was the uncertain battery 
lifetime due to variability of climate, duty-cycles, and aging. Without 
state-of-charge indicators, this could conceivably leave vehicles 
underpowered or stranded if the battery degrades and is not serviced or 
replaced in a timely manner.
     ITS and telematics raised no safety concerns; on the 
contrary, fleet managers stated that ``efficient drivers are safer 
drivers.'' Monitoring and recording of driver behavior, combined with 
coaching, appeared to reduce distracted and aggressive driving and 
provided significant FE and safety benefits.
     A wide-base single tire safety concern was the decrease in 
tire redundancy in case of a tire blowout at highway speeds. For LRRs, 
a concern was that they could negatively affect truck stopping distance 
and stability control.
     A speed-limiter safety concern was related to scenarios 
when such trucks pass other vehicles on the highway instead of staying 
in the right-hand lane behind other vehicles. By combining speed 
limiters with driver training programs, overall truck safety could 
actually improve, as shown by international practice.
     Aerodynamic systems' safety performance to date was 
satisfactory, with no instances of on-road detaching. However, covering 
underside or other components with aerodynamic fairings can make them 
harder to inspect, such as worn lugs, CNG relief valve shrouds, wheel 
covers, and certain fairings. Drivers and inspectors need to be able to 
see through wheel covers and to be able to access lug nuts through 
them. These covers must also be durable to withstand frequent road 
abuse.

[[Page 40488]]

     For lightweighting materials, the safety concern raised 
was lower crashworthiness (debonding or brittle fracture on impact) and 
the potential for decreased survivability in vehicle fires depending on 
the specific material choice and its application.
    The key finding from the literature review and SME interviews is 
that there appear to be no major safety hazards preventing the adoption 
of FE technologies, or the increased use of alternative fuels and 
vehicle electrification. In view of the scarcity of hard data currently 
available on actual highway crashes that can be directly or causally 
attributed to adoption of FE technologies and/or alternative fuels by 
MD/HDVs, and the limited experience with commercial truck and transit 
bus fleets operations equipped with these technologies, it was not 
possible to perform a quantitative, probabilistic risk assessment, or 
even a semi-quantitative preliminary hazard analysis (PHA). Chapter 4 
employs a deterministic scenario-based hazard analysis of potential 
crash or other safety concerns identified from the literature review or 
raised by subject matter experts (SMEs) interviewed (e.g., interfaces 
with charging or refueling infrastructure). For each specific hazard 
scenario discussed, the recommended prevention or mitigation options, 
including compliance with applicable NHTSA or FMCSA regulations, and 
voluntary industry standards and best practices are identified, along 
with FE technology or fuel-specific operator training. SMEs safety 
concerns identified in Sec 3.3 were complemented with actual incidents, 
and developed into the hazard scenarios analyzed in Chapter 4.
    The scenario-based deterministic hazard analysis reflected not only 
the literature findings and SMEs' safety concerns, but also real truck 
or bus mishaps that have occurred in the past. Key hazard analysis 
scenarios included: CNG-fueled truck and bus vehicle fires or 
explosions due to tank rupture, when pressurized fuel tanks were 
degraded due to aging or when PRDs failed; LNG truck crashes leading to 
fires, or LNG refueling-related mishaps; the flammability or brittle 
fracture issues related to lightweighting materials in crashes; reduced 
safety performance for either LRR or wide-base tires; highway pile-ups 
when LCVs attempt to pass at highway speeds; aerodynamic components 
detaching while the vehicle traveled on a busy highway or urban 
roadway; and fires resulting in overheated lithium ion batteries in 
electric or hybrid buses. These hypothetical worst case scenarios 
appear to be preventable or able to be mitigated by observing safety 
regulations and voluntary standards, or with engineering and 
operational best practices.
    Chapter 5 reviews and discusses the existing federal and state 
regulatory framework for safely operating MD/HDVs equipped with FE 
technologies or powered by alternative fuels. The review identifies 
potential regulatory barriers to their large-scale deployment in the 
national fleet that could delay achievement of desired fuel consumption 
and environmental benefits, while ensuring equal or better safety 
performance.
    Chapter 6 summarizes the major findings and recommendations of this 
preliminary safety analysis of fuel efficiency technologies and 
alternative fuels adopted by MD/HDVs. The scenario-based hazard 
analysis, based on the literature review and experts' inputs, indicates 
that MD/HDVs equipped with advanced FE technologies and/or using 
alternative fuels have manageable potentially adverse safety impacts. 
The findings suggest that the potential safety hazards identified 
during operation, maintenance, and crash scenarios can be prevented or 
mitigated by complying with safety regulations and voluntary standards 
and industry best practices. The study also did not identify any major 
regulatory barriers to rapid adoption of FE technologies and 
alternative fuels by the MD/HDV fleet.
(5) Oak Ridge National Laboratory (ORNL) Research on Low Rolling 
Resistance Truck Tires
    DOT's Federal Motor Carrier Safety Administration and NHTSA 
sponsored a test program conducted by Oak Ridge National Laboratory to 
explore the effects of tire rolling resistance levels on Class 8 
tractor-trailer stopping distance performance over a range of loading 
and surface conditions. The objective was to determine whether there is 
a relationship between tire rolling resistance and stopping distance 
for vehicles of this type. The overall results of this research suggest 
that tire rolling resistance is not a reliable indicator of Class 8 
tractor-trailer stopping distance. The correlation coefficients (R2 
values) for linear regressions of wet and dry stopping distance versus 
overall vehicle rolling resistance values did not meet the minimum 
threshold for statistical significance for any of the test conditions. 
Correlation between CRR and stopping distance was found to be 
negligible for the dry tests for both loading conditions. While 
correlation was higher for the wet testing (showing a slight trend in 
which lower CRRs correspond to longer stopping distances), it still did 
not meet the minimum threshold for statistical significance. In terms 
of compliance with Federal safety standards, it was found that the 
stopping distance performance of the vehicle with the four tire sets 
studied in this research (with estimated tractor CRRs which varied by 
33 percent), were well under the FMVSS No. 121 stopping distance 
requirements.
(6) Additional Safety Considerations
    The agencies' considered the Organic Rankine Cycle waste heat 
recovery (WHR) as a fuel saving technology in the rulemaking timeframe. 
The basic approach of these systems is to use engine waste heat from 
multiple sources to evaporate a working fluid through a heat exchanger, 
which is then passed through a turbine or equivalent expander to create 
mechanical or electrical power. The working fluid is then condensed as 
it passes through a heat exchanger and returns to back to the fluid 
tank, and pulled back to the flow circuit through a pump to continue 
the cycle. Despite the promising performance of pre-prototype WHR 
systems, manufacturers have not yet arrived at a consensus on which 
working fluid(s) to be used in WHR systems to balance concerns 
regarding performance, global warming potential (GWP), and safety. 
Current working fluids have a high GWP (conventional refrigerant), are 
expensive (low GWP refrigerant), are hazardous (ammonia, etc.), are 
flammable (ethanol/methanol), or can freeze (water). One of the 
challenges is determining how to seal the working fluid properly under 
the vacuum condition with high temperature to avoid safety issues for 
flammable/hazardous working fluids. Because of these challenges, 
choosing a working fluid will be an important factor for system safety, 
efficiency, and overall production viability. The agencies believe 
manufacturers will require additional time and development effort to 
assure that a working fluid that is both appropriate, given the noted 
challenges, and has a low GWP for use in waste heat recovery systems. 
Based on this and other factors, the analysis for the Preferred 
Alternative assumes that WHR would not achieve a significant market 
penetration for diesel tractor engines (i.e., greater than 5 percent) 
until 2027, which would provide time for these considerations to be 
addressed. The agencies assume no use of this technology in the HD 
pickups and vans and vocational vehicle segments.

[[Page 40489]]

(7) The Agencies' Assessment of Potential Safety Impacts
    NHTSA and EPA considered the potential safety impact of 
technologies that improve HD vehicle fuel efficiency and GHG emissions 
as part of the assessment of regulatory alternatives. The safety 
assessment of the technologies in this proposal was informed by two NAS 
reports, an analysis of safety effects of HD pickups and vans using 
estimates from the DOT report on the effect of mass reduction and 
vehicle size on safety, and agency-sponsored safety testing and 
research. The agencies considered safety from the perspective of both 
direct effects and indirect effects.
    In terms of direct effects on vehicle safety, research from NAS and 
Volpe, and direct testing of technologies like the ORNL tire work, 
indicate that there are no major safety hazards associated with the 
adoption of technologies that improve HD vehicle fuel efficiency and 
GHG emissions or the increased use of alternative fuels and vehicle 
electrification. The findings suggest that the potential safety hazards 
identified during operation, maintenance, and crash scenarios can be 
prevented or mitigated by complying with safety regulations and 
voluntary standards and industry best practices. Tire testing showed 
tire rolling resistance did not impact of Class 8 tractor-trailer 
stopping distance for the tires tested. Also, because the majority of 
HD pickup and van fleet are above 4,594 lbs, the vehicle mass reduction 
in HD pickup and vans is estimated to reduce the net incidence of 
highway fatalities. Taken together, these studies suggest that the fuel 
efficiency improving technologies assessed in the studies can be 
implemented with no degradation in overall safety.
    However, analysis anticipates that the indirect effect of the 
proposed standards, by reducing the operating costs, would lead to 
increased travel by tractor-trailers and HD pickups and vans and, 
therefore, more crashes involving these vehicles.

X. Analysis of the Alternatives

    As discussed throughout this preamble, in developing this proposal 
the agencies considered a number of regulatory alternatives that could 
result in potentially fewer or greater GHG emission and fuel 
consumption reductions than the program we are proposing. This section 
summarizes the alternatives we considered and presents estimates of 
technology costs, CO2 reductions, fuel savings, and other 
costs and benefits associated with each alternative. The agencies 
request comment on each of these alternatives, as well as other 
potential levels of stringency and implementation timing. Note that 
since the impacts of these alternatives differ among the various heavy-
duty vehicle categories, commenters are encouraged to address the 
alternatives separately for each vehicle category.
    In developing alternatives, both agencies must consider a range of 
stringency. NHTSA must consider EISA's requirement for the MD/HD fuel 
efficiency program. In particular, 49 U.S.C. 32902(k)(2) and (3) 
contain the following three requirements specific to the MD/HD vehicle 
fuel efficiency improvement program: (1) The program must be ``designed 
to achieve the maximum feasible improvement''; (2) the various required 
aspects of the program must be appropriate, cost-effective, and 
technologically feasible for MD/HD vehicles; and (3) the standards 
adopted under the program must provide not less than four model years 
of lead time and three model years of regulatory stability. In 
considering these various requirements, NHTSA will also account for 
relevant environmental and safety considerations.
    As explained in the Phase 1 rule, NHTSA has broad discretion in 
balancing the above factors in determining the improvement that the 
manufacturers can achieve. The fact that the factors may often be 
conflicting gives NHTSA significant discretion to decide what weight to 
give each of the competing policies and concerns and then determine how 
to balance them--as long as NHTSA's balancing does not undermine the 
fundamental purpose of the EISA: Energy conservation, and as long as 
that balancing reasonably accommodates ``conflicting policies that were 
committed to the agency's care by the statute.'' \784\
---------------------------------------------------------------------------

    \784\ Center for Biological Diversity v. National Highway 
Traffic Safety Admin., 538 F.3d 1172, 1194 (9th Cir. 2008). For 
further discussion see 76 FR 57198.
---------------------------------------------------------------------------

    EPA also has significant discretion in considering a range of 
stringency. Section 202(a)(2) of the Clean Air Act requires only that 
the standards ``take effect 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.'' This language affords EPA considerable 
discretion in how to weight the critical statutory factors of emission 
reductions, cost, and lead time. See 76 FR 57129-57130.
    As discussed in this Preamble's Sections II (Engines), III 
(Tractors), IV (Trailers), V (Vocational Vehicles), And VI (Pickups And 
Vans), although NHTSA and EPA are proposing Alternative 3 for each 
vehicle category, we have also closely examined the potential 
feasibility of Alternative 4 for each category, and specifically direct 
commenters' attention to the analysis and discussions contained in 
those sections for both Alternatives 3 and 4. As discussed in those 
sections, if we reanalyze relevant existing information or receive 
relevant comments or new information between the proposal and final 
rule that supports a more accelerated implementation of the proposed 
standards, the agencies may consider establishing final fuel 
consumption and GHG standards at the Alternative 4 levels and timing if 
we deem them to be maximum feasible and reasonable for NHTSA and EPA, 
respectively. This Section X describes all of the alternatives 
considered, and provides context for the relative stringency, costs, 
and benefits associated with Alternatives 3 and 4, as compared to the 
other alternatives. The agencies seek comment on all of the 
alternatives, as well as whether we should consider more, fewer or 
different alternatives for the final rule analysis.

A. What are the alternatives that the Agencies considered?

    The five alternatives below represent a broad range of potential 
stringency levels, and thus a broad range of associated technologies, 
costs and benefits for a HD vehicle fuel efficiency and GHG emissions 
program. All of the alternatives were modeled using the same 
methodologies described in Chapter 5 of the draft RIA. The alternatives 
in order of increasing fuel efficiency and GHG emissions reductions are 
as follows:
(1) Alternative 1: No Action (The Baseline for Phase 2)
    OMB guidance regarding regulatory analysis indicates that proper 
evaluation of the benefits and costs of regulations and their 
alternatives requires agencies to identify a baseline:

``You need to measure the benefits and costs of a rule against a 
baseline. This baseline should be the best assessment of the way the 
world would look absent the proposed action. The choice of an 
appropriate baseline may require consideration of a wide range of 
potential factors, including:
     Evolution of the market,
     changes in external factors affecting expected benefits 
and costs,

[[Page 40490]]

     changes in regulations promulgated by the agency or other 
government entities, and
     the degree of compliance by regulated entities with other 
regulations.

It may be reasonable to forecast that the world absent the regulation 
will resemble the present. If this is the case, however, your baseline 
should reflect the future effect of current government programs and 
policies. For review of an existing regulation, a baseline assuming no 
change in the regulatory program generally provides an appropriate 
basis for evaluating regulatory alternatives. When more than one 
baseline is reasonable and the choice of baseline will significantly 
affect estimated benefits and costs, you should consider measuring 
benefits and costs against alternative baselines. In doing so you can 
analyze the effects on benefits and costs of making different 
assumptions about other agencies' regulations, or the degree of 
compliance with your own existing rules. In all cases, you must 
evaluate benefits and costs against the same baseline. You should also 
discuss the reasonableness of the baselines used in the sensitivity 
analyses. For each baseline you use, you should identify the key 
uncertainties in your forecast.'' 785

    \785\ OMB Circular A-4, September 17, 2003. Available at http://www.whitehouse.gov/omb/circulars_a004_a-4.
---------------------------------------------------------------------------

    A no-action alternative is also required as a baseline against 
which to measure environmental impacts of the proposed standards and 
alternatives. NHTSA, as required by the National Environmental Policy 
Act, is documenting these estimated impacts in the draft EIS published 
with this proposed rule.\786\
---------------------------------------------------------------------------

    \786\ NEPA requires agencies to consider a ``no action'' 
alternative in their NEPA analyses and to compare the effects of not 
taking action with the effects of the reasonable action alternatives 
to demonstrate the different environmental effects of the action 
alternatives. See 40 CFR 1502.2(e), and 1502.14(d). CEQ has 
explained that ``[T]he regulations require the analysis of the no 
action alternative even if the agency is under a court order or 
legislative command to act. This analysis provides a benchmark, 
enabling decision makers to compare the magnitude of environmental 
effects of the action alternatives. [See 40 CFR 1502.14(c).] * * * 
Inclusion of such an analysis in the EIS is necessary to inform 
Congress, the public, and the President as intended by NEPA. [See 40 
CFR 1500.1(a).]'' Forty Most Asked Questions Concerning CEQ's 
National Environmental Policy Act Regulations, 46 FR 18026 (1981) 
(emphasis added).
---------------------------------------------------------------------------

    As discussed later in this section, the agencies are requesting 
comment on Alternative 1 in order to ensure an appropriate analytical 
baseline (also termed `reference case') for the Phase 2 rulemaking. 
Alternative 1 is an analytical tool, but, as discussed below, no new 
standards beyond Phase 1 is not a potential outcome of the Phase 2 
rulemaking, as that outcome would not meet the requirements of either 
EISA or the CAA.
    The No Action Alternative for today's analysis, alternatively 
referred to as the ``baseline'' or ``reference case,'' assumes that the 
agencies would not issue new rules regarding MD/HD fuel efficiency and 
GHG emissions. That is, this alternative assumes that the Phase 1 MD/HD 
fuel efficiency and GHG emissions program's model year 2018 standards 
would be extended indefinitely and without change.
    The agencies recognize that there are a number of factors that 
create uncertainty in projecting a baseline against which to compare 
the future effects of the proposed action and the remaining 
alternatives. The composition of the future fleet--such as the relative 
position of individual manufacturers and the mix of products they each 
offer--cannot be predicted with certainty at this time. As reflected, 
in part, by the market forecast underlying the agencies' analysis, we 
anticipate that the baseline market for medium- and heavy-duty vehicles 
will continue to evolve within a competitive market that responds to a 
range of factors. Additionally, the heavy-duty vehicle market is 
diverse, as is the range of vehicle purchasers.
    Heavy-duty vehicle manufacturers have reported that their 
customers' purchasing decisions are influenced by their customers' own 
determinations of minimum total cost of ownership, which can be unique 
to a particular customer's circumstances. For example, some customers 
(e.g., less-than-truckload or package delivery operators) operate their 
vehicles within a limited geographic region and typically own their own 
vehicle maintenance and repair centers within that region. These 
operators tend to own their vehicles for long time periods, and 
sometimes for the entire service life of the vehicle. Their total cost 
of ownership is influenced by their ability to better control their own 
maintenance costs, and thus they can afford to consider fuel efficiency 
technologies that have longer payback periods, outside of the vehicle 
manufacturer's warranty period. Other customers (e.g. truckload or 
long-haul operators) tend to operate cross-country, and thus must 
depend upon truck dealer service centers for repair and maintenance. 
Some of these customers tend to own their vehicles for about four to 
seven years, so that they typically do not have to pay for repair and 
maintenance costs outside of either the manufacturer's warranty period 
or some other extended warranty period. Many of these customers tend to 
require seeing evidence of fuel efficiency technology payback periods 
on the order of 18 to 24 months before seriously considering evaluating 
a new technology for potential adoption within their fleet (NAS 2010, 
Roeth et al. 2013, Klemick et al. 2014). Purchasing decisions, however, 
are not based exclusively on payback period, but also include the 
considerations discussed in this section. For the baseline analysis, 
the agencies use payback period as a proxy for all of these 
considerations, and therefore the payback period for the baseline 
analysis is shorter than the payback period industry uses as a 
threshold for the further consideration of a technology.
    Purchasers of HD pickups and vans wanting better fuel efficiency 
will demand that fuel consumption improvements pay back within 
approximately one to three years, but not all purchasers fall into this 
category. Some HD pickup and van owners accrue relatively few vehicle 
miles traveled per year, such that they may be less likely to adopt new 
fuel efficiency technologies, while other owners who use their 
vehicle(s) with greater intensity may be even more willing to pay for 
fuel efficiency improvements. Regardless of the type of customer, their 
determination of minimum total cost of ownership involves the customer 
balancing their own unique circumstances with a heavy-duty vehicle's 
initial purchase price, availability of credit and lease options, 
expectations of vehicle reliability, resale value and fuel efficiency 
technology payback periods. The degree of the incentive to adopt 
additional fuel efficiency technologies also depends on customer 
expectations of future fuel prices, which directly impacts customer 
expectations of the payback period.
    Another factor the agencies considered is that other federal and 
state-level policies and programs are specifically aimed at stimulating 
fuel efficiency technology development and deployment. Particularly 
relevant to this sector are DOE's 21st Century Truck Partnership, EPA's 
voluntary SmartWay Transport program, and California's AB32 fleet 
requirements.787 788 789 The future availability of more 
cost-effective technologies to reduce fuel consumption could provide 
manufacturers an incentive to produce

[[Page 40491]]

more fuel-efficient medium- and heavy-duty vehicles, which in turn 
could provide customers an incentive to purchase these vehicles. The 
availability of more cost-effective technologies to reduce fuel 
consumption could also lead to a substitution of less cost-effective 
technologies, where overall fuel efficiency could remain fairly flat if 
buyers are less interested in fuel consumption improvements than in 
reduced vehicle purchase prices and/or improved vehicle performance 
and/or utility.
---------------------------------------------------------------------------

    \787\ http://energy.gov/eere/vehicles/vehicle-technologies-office-21st-century-truck.
    \788\ http://www.epa.gov/smartway/.
    \789\ State of California Global Warming Solutions Act of 2006 
(Assembly Bill 32, or AB32).
---------------------------------------------------------------------------

    Although we have estimated the cost and efficacy of fuel-saving 
technologies assuming performance and utility will be held constant, 
some uncertainty remains regarding whether these conditions will 
actually be observed. In particular, we have assumed payload will be 
preserved (and possibly improved via reduced vehicle curb weight); 
however, some fuel-saving technologies, such as natural gas fueled 
vehicles and hybrid electric vehicles, could reduce payload via 
increased curb weight due to the fuel tanks or added electrical 
machine, batteries and controls. It is also possible that under 
extended high power demand resulting from a vehicle towing up a road 
grade, certain types of hybrid powertrains could experience a temporary 
loss of towing capacity if the capacity of the hybrid's energy storage 
device (e.g., batteries, hydraulic accumulator) is insufficient for the 
extended power demand. We have also assumed that fuel-saving 
technologies will be no more or less reliable than technologies already 
in production. However, if manufacturers pursue risky technologies or 
if the agencies provide insufficient lead-time to fully develop new 
technologies, they could prove to be less reliable, perhaps leading to 
increased repair costs and out-of-service time. This was observed as an 
unintended consequence of certain manufacturers' initial introduction 
of certain emissions control technologies to meet EPA's most stringent 
heavy-duty engine standards. If the fuel-saving technologies considered 
here ultimately involve similar reliability problems, overall costs 
will be greater than we have estimated. We have assumed drivers will be 
as accepting of new fuel-saving technologies as they are of 
technologies already in service. However, drivers could be less 
accepting of newer technologies--particularly any which must be 
deployed manually. Except for increased costs to replace more efficient 
tires, we have assumed that routine maintenance costs will not increase 
or decrease. However, maintenance of new technologies could involve 
unique tools and parts. Therefore, maintenance costs could increase, 
and maintenance could involve increased vehicle out-of-service time. On 
the other hand new technologies can sometimes prove to be more reliable 
and require less maintenance than the technologies they replace. One 
example of this is the auxiliary power unit (APU) frequently installed 
on heavy-duty sleeper cab tractors. In the past these have been 
typically powered by small nonroad diesel engines that can require more 
frequent maintenance than the main engine of the tractor itself. 
However, more recently, as electric battery technology has advanced, 
some tractor manufacturers have introduced battery APUs instead of 
engine-driven APUs. A comparison of recent sales of small engine driven 
APUs versus battery APUs suggests that customers may prefer battery 
APUs,\790\ and some operators and tractor dealerships have also told 
the agencies that the decrease in routine maintenance was an important 
factor in purchase decisions in favor of battery APUs. Again, insofar 
as these unaccounted-for costs or savings actually occur, overall costs 
could be larger or smaller than we have estimated. We have also applied 
the EIA's AEO estimates of future fuel prices; however, heavy-duty 
vehicle customers could have different expectations about future fuel 
prices, and could therefore be more inclined or less inclined to apply 
new technology to reduce fuel consumption than might be expected based 
on EIA's forecast. We expect that vehicle customers will be uncertain 
about future fuel prices, and that this uncertainty will be reflected 
in the degree of enthusiasm to apply new technology to reduce fuel 
consumption.
---------------------------------------------------------------------------

    \790\ Confidence Report: Idle-Reduction Solutions, North 
American Council for Freight Efficiency, Lee, Tessa, 2014, p. 13.
---------------------------------------------------------------------------

    Considering all of these factors, the agencies have approached the 
definition of the No Action Alternative separately for each vehicle and 
engine category covered by today's proposal.
    For trailers, the agencies considered two No Action alternatives to 
cover a nominal range of uncertainty. The trailer category is unique in 
the context of this rulemaking because it is the only heavy-duty 
category not regulated under Phase 1. In both No Action cases, the 
agencies projected that the combination of EPA's voluntary SmartWay 
program, DOE's 21st Century Truck Partnership, California's AB32 
trailer requirements for fleets, and the potential for significantly 
reduced operating costs should result in continuing improvement to new 
trailers. Taking this into account, the agencies project that in 2018, 
50 percent of new 53' dry van and reefer trailers would have 
technologies qualifying for the SmartWay label (5 percent aerodynamic 
improvements and lower rolling resistance tires) and 50 percent would 
have automatic tire inflation systems to maintain optimal tire 
pressure. We also project that adoption of those same technologies 
would increase 1 percent per year until each technology is being used 
on 60 percent of new trailers. In the first case, Alternative 1a, this 
means that the agencies project that in the absence of new standards, 
the new trailer fleet technology would stabilize in 2027 to a level of 
60 percent adoption in 2027 for the No Action alternative. In the 
second case, Alternative 1b, the agencies projected that the fraction 
of the in-use fleet qualifying for SmartWay would continue to increase 
beyond 2027 as older trailers are replaced by newer trailers. We 
projected that these improvements would continue until 2040 when 75 
percent of new trailers would be assumed to include skirts.
    For vocational vehicles, the agencies considered one No Action 
alternative. For the vocational vehicle category the agencies 
recognized that these vehicles tend to operate over fewer vehicle miles 
travelled per year. Therefore, the projected payback periods for fuel 
efficiency technologies available for vocational vehicles are generally 
longer than the payback periods the agencies consider likely to lead to 
their adoption based solely on market forces. This is especially true 
for vehicles used in applications in which the vehicle operation is 
secondary to the primary business of the company using the vehicle. For 
example, since the fuel consumption of vehicles used by utility 
companies to repair power lines would generally be a smaller cost 
relative to the other costs of repairing lines, fuel saving 
technologies would generally not be as strongly demanded for such 
vehicles. Thus, the agencies project that fuel-saving technologies 
would either not be applied or only be applied as a substitute for more 
expensive fuel efficiency technologies, except as necessitated by the 
Phase 1 fuel consumption and GHG standards.
    For tractors, the agencies considered two No Action alternatives to 
cover a nominal range of uncertainty. For Alternative 1a the agencies 
project that fuel-saving technologies would either not be applied or 
only be applied as a substitute for more expensive fuel efficiency 
technologies to tractors (thereby enabling manufacturers to offer 
tractors that are less expensive to

[[Page 40492]]

purchase), except as necessitated by the Phase 1 fuel consumption and 
GHG standards. In Alternative 1b the agencies estimated that some 
available technologies would save enough fuel to pay back fairly 
quickly--within the first six months of ownership. The agencies 
considered a range of information to formulate these two baselines for 
tractors.
    Both public \791\ and confidential historical information shows 
that tractor trailer fuel efficiency improved steadily through 
improvements in engine efficiency and vehicle aerodynamics over the 
past 40 years, except for engine efficiency which decreased or was flat 
between 2000 and approximately 2007 as a consequence of incorporating 
technologies to meet engine emission regulations. Today vehicle 
manufacturers, the Federal Government, academia and others continue to 
invest in research to develop fuel efficiency improving technologies 
for the future.
---------------------------------------------------------------------------

    \791\ Committee to Assess Fuel Economy Technologies for Medium- 
and Heavy-Duty Vehicles; National Research Council; Transportation 
Research Board (2010). ``Technologies and Approaches to Reducing the 
Fuel Consumption of Medium- and Heavy-Duty Vehicles,'' (hereafter, 
``NAS 2010''). Washington, DC. The National Academies Press. 
Available electronically from the National Academies Press Web site 
at http://www.nap.edu/catalog.php?record_id=12845 (last accessed 
September 10, 2010).
---------------------------------------------------------------------------

    There is also evidence that manufacturers have, in the past, 
applied technologies to improve fuel efficiency absent a regulatory 
requirement to do so. Some manufacturers have even taken regulatory 
risk in order to increase fuel efficiency; in the 1990s, when fuel was 
comparatively inexpensive, some tractor manufacturers designed tractor 
engine controls to determine when the vehicle was not being emissions 
tested and, under such conditions, shift to more fuel-efficient 
operation even though doing so caused the vehicles to violate federal 
standards for NOX emissions. Also, some manufacturers have 
recently expressed concern that the Phase 1 tractor standards do not 
credit them for fuel-saving technologies they had already implemented 
before the Phase 1 standards were adopted.
    In public meetings and in meetings with the agencies, the trucking 
industry stated that fuel cost for tractors is the number one or number 
two expense for many operators, and therefore is a very important 
factor for their business. However, the pre-Phase 1 market suggests 
that, tractor manufacturers and operators could be slow to adopt some 
new technologies, even where the agencies have estimated that the 
technology would have paid for itself within a few months of operation. 
Tractor operators have told the agencies they generally require 
technologies to be demonstrated in their fleet before widespread 
adoption so they can assess the actual fuel savings for their fleet and 
any increase in cost associated with effects on vehicle operation, 
maintenance, reliability, mechanic training, maintenance and repair 
equipment, stocking unique parts and driver acceptance, as well as 
effects on vehicle resale value. Tractor operators have publicly stated 
they would consider conducting an assessment of technologies when 
provided with data that show the technologies may payback costs through 
fuel savings within 18 to 24 months, based on their assumptions about 
future fuel costs. In these cases, an operator may first conduct a 
detailed paper study of anticipated costs and benefits. If that study 
shows likely payback in 18 to 24 months for their business, the fleet 
may acquire one or several tractors with the technology to directly 
measure fuel savings, costs and driver acceptance for their fleet. 
Small fleets may not have resources to conduct assessments to this 
degree and may rely on information from larger fleets or observations 
of widespread acceptance of the technology within the industry before 
adopting a technology. This uncertainty over the actual fuel savings 
and costs and the lengthy process to assess technologies significantly 
slows the pace at which fuel efficiency technologies are adopted.
    The agencies believe that using the two baselines addresses the 
uncertainties we have identified for tractors. The six-month payback 
period of Alternative 1b reflects the agencies' consideration of 
factors, discussed above, that could limit--yet not eliminate--
manufacturers' tendencies to voluntarily improve fuel consumption. In 
contrast, Alternative 1a reflects a baseline for vehicles other than 
trailers wherein manufacturers either do not apply fuel efficiency 
technologies or only apply them as a substitute for more expensive fuel 
efficiency technologies, except as necessitated by the Phase 1 fuel 
consumption and GHG standards.
    For HD pickups and vans, the agencies considered two No Action 
alternatives to cover a nominal range of uncertainty. In Alternative 1b 
the agencies considered additional technology application, which 
involved the explicit estimation of the potential to add specific fuel-
saving technologies to each specific vehicle model included in the 
agencies' HD pickup and van fleet analysis, as discussed in Chapter VI. 
Estimated technology application and corresponding impacts depend on 
the modeled inputs. Also, under this approach a manufacturer that has 
improved fuel consumption and GHG emissions enough to achieve 
compliance with the standards is assumed to apply further improvements, 
provided those improvements reduce fuel outlays by enough (within a 
specified amount of time, the payback period) to offset the additional 
costs to purchase the new vehicle. These calculations explicitly 
account for and respond to fuel prices, vehicle survival and mileage 
accumulation, and the cost and efficacy of available fuel-saving 
technologies. Therefore, all else being equal, more technology is 
applied when fuel prices are higher and/or technology is more cost-
effective. Manufacturers of HD pickups and vans have reported to the 
agencies that buyers of these vehicles consider the total cost of 
vehicle ownership, not just new vehicle price, and that manufacturers 
plan as if buyers will expect fuel consumption improvements to ``pay 
back'' within periods ranging from approximately one to three years. 
For example, some manufacturers made decisions to introduce more 
efficient HD vans and HD pickup transmissions before such vehicles were 
subject to fuel consumption and/or GHG standards. However, considering 
factors discussed above that could limit manufacturers' tendency to 
voluntarily improve HD pickup and van fuel consumption, Alternative 1b 
applies a 6-month payback period. In contrast for Alternative 1a the 
agencies project that fuel-saving technologies would either not be 
applied or only be applied as a substitute for more expensive fuel 
efficiency technologies, except as necessitated by the Phase 1 fuel 
consumption and GHG standards. The Method A sensitivity analysis 
presented above in Section VI also examines other payback periods. In 
terms of impacts under reference case fuel prices, the payback period 
input plays a more significant role under the No-Action Alternatives 
(defined by a continuation of model year 2018 standards) than under the 
more stringent regulatory alternatives described next.
(2) Alternative 2: Less Stringent Than the Preferred Alternative
    For vocational vehicles and combination tractor-trailers, 
Alternative 2 represents a stringency level which is approximately half 
as stringent overall as the preferred alternative. The agencies 
developed Alternative 2 to consider a continuation of the Phase 1 
approach of applying off-the-shelf technologies rather than requiring 
the development of new technologies or

[[Page 40493]]

fundamental improvements to existing technologies. For tractors and 
vocational vehicles, this also involved less integrated optimization of 
the vehicles and engines. Put another way, Alternative 2 is not 
technology-forcing. See, e.g., Sierra Club v. EPA, 325 F. 3d 374, 378 
(D.C. Cir. 2003) (under a technology-forcing provision, EPA ``must 
consider future advances in pollution control capability''); see also 
similar discussion in Husqvarna AB v. EPA, 254 F. 3d 195, 201 (D.C. 
Cir. 2001).
    The agencies' decisions regarding which technologies could be 
applied to comply with Alternative 2 considered not only the use of 
off-the shelf technologies, but also considered other factors as well, 
such as how broadly certain technologies fit in-use applications and 
regulatory structure. The resulting Alternative 2 could be met with 
most of the same technologies the agencies project could be used to 
meet the proposed standards, although at lower application rates. 
Alternative 2 is estimated to be achievable without the application of 
some technologies, at any level. These and other differences are 
described below by category.
    The agencies project that Alternative 2 combination tractor 
standards could be met by applying lower adoption rates of the 
projected technologies for Alternative 3. This includes a projection of 
slightly lower per-technology effectiveness for Alternative 2 versus 3. 
Alternative 2 also assumes that there would be little optimization of 
combination tractor powertrains.
    The agencies project that the Alternative 2 vocational vehicle 
standard could be met without any use of strong hybrids. Rather, it 
could be met with lower adoption rates of the other technologies that 
could be used to meet Alternative 3, our proposed standards. This 
includes a projection of slightly lower per-technology effectiveness 
for Alternative 2 versus 3 and little optimization of vocational 
vehicle powertrains.
    The Alternative 2 trailer standards would apply to only 53-foot dry 
and refrigerated box trailers and could be met through the use of less 
effective aerodynamic technologies and higher rolling resistance tires 
versus what the agencies projected could be used to meet Alternative 3.
    As discussed above in Section VI.D., the HD pickup truck and van 
alternatives are characterized by an annual required percentage change 
(decrease) in the functions defining attribute-based targets for per-
mile fuel consumption and GHG emissions. Under the standards in each 
alternative, a manufacturer's fleet would, setting aside any changes in 
production mix, be required to achieve average fuel consumption/GHG 
levels that increase in stringency every year relative to the standard 
defined for MY2018 (and held constant through 2020) that establishes 
fuel consumption/GHG targets for individual vehicles. A manufacturer's 
specific fuel consumption/GHG requirement is the sales-weighted average 
of the targets defined by the work-factor curve in each year. 
Therefore, although the alternatives involve steady increases in the 
functions defining the targets, stringency increases faced by any 
individual manufacturer may not be steady if changes in the 
manufacturer's product mix cause fluctuations in the average fuel 
consumption and GHG levels required of the manufacturer. See Section 
VI.D. for additional discussion of this topic. Alternative 2 represents 
a 2.0 percent annual improvement through 2025 in fuel consumption/GHG 
emissions relative to the work-factor curve in 2020. This would be 0.5 
percent less stringent per year compared to the proposed standards of 
Alternative 3.
    For HD pickups and vans the agencies project that most 
manufacturers could comply with the standards defining Alternative 2 by 
applying technologies similar to those that could be applied in order 
to comply with the proposed standards, but at lower application rates 
than could be necessitated by the proposed standards. The biggest 
technology difference the agencies project between Alternative 2 and 
the proposed standards of Alternative 3 would be that we project that 
most manufacturers could meet the Alternative 2 standards without any 
use of stop-start or other mild or strong hybrid technologies.
    Of course, these estimates depend not only on the stringency of the 
standards defining this regulatory alternative, but also on other input 
estimates, in particular the detailed composition of the agencies' HD 
pickup and van market forecast; the agencies' estimates of the future 
availability, cost, and efficacy of fuel-saving HD pickup and van 
technologies; and the agencies' estimates of future fuel prices. Even 
without changes to the standards defining this regulatory alternative, 
changes to analysis inputs would lead to different estimates of the 
extent to which various technologies might be applied under this 
regulatory alternative.
    The agencies are not proposing Alternative 2 as a matter of both 
policy and law. Based on our current analysis for each of the 
subcategories, it presently appears that technically feasible alternate 
standards are available that provide for greater emission reductions 
and reduced fuel consumption, including the proposed standards. Such 
alternative standards, including the proposed standards and potentially 
Alternative 4, are feasible at reasonable cost, considering both per-
vehicle and per-engine cost, cost-effectiveness, and lead time. 
Consequently, at this point the agencies do not believe that the modest 
improvements in Alternative 2 would be appropriate or otherwise 
reasonable under Section 202(a)(1) and (2) of the Clean Air Act, or 
represent the ``maximum feasible improvement'' within the meaning of 49 
U.S.C. 32902(k)(2).
(3) Alternative 3: Preferred Alternative and Proposed Standards
    The agencies are proposing Alternative 3 for HD engines, HD pickup 
trucks and vans, Class 2b through Class 8 vocational vehicles, Class 7 
and 8 combination tractors, and most categories of trailers. Details 
regarding modeling of this alternative are included in Chapter 5 of the 
draft RIA.
    Unlike the Phase 1 standards where the agencies projected that 
manufacturers could meet the Phase 1 standards with off-the-shelf 
technologies only, the agencies project that Alternative 3 standards 
could be met through a combination of off-the-shelf technologies 
applied at higher market penetration rates and new technologies that 
are still in various stages of development and not yet in production. 
Although this alternative is technology-forcing, it must be kept in 
mind that the standards themselves are performance-based and thus do 
not mandate any particular technology be used to meet the standards. 
The agencies recognize that there is some uncertainty in projecting 
costs and effectiveness for those technologies not yet available on the 
market, but we do not believe, as discussed comprehensively in Sections 
II, III, IV, V, and VI, that such uncertainty is not sufficient to 
render Alternative 3 beyond the reasonable or maximum feasible level of 
stringency for each of the vehicle categories covered by this program. 
Given that all of the proposed standards are performance-based rather 
than mandates of specific technologies, and given that the lead time 
for the most stringent standards in Alternative 3 is greater than 10 
years, the agencies believe that the performance that would be required 
by these stringency levels of Alternative 3 would allow each 
manufacturer to choose to develop

[[Page 40494]]

technology and apply it to their vehicles in a way that balances their 
unique business constraints and reflects their specific market position 
and customers' needs.
    We have described in detail above, and also in Chapter 2 of the 
draft RIA, the precise bases for each of the proposed standards (that 
is, for each segment covered under the program). For HD pickups and 
vans, Alternative 3 represents a 2.5 percent compounded annual 
improvement through 2027 in fuel consumption/GHG emissions relative to 
the work-factor curve in 2020.
    Sections II through VI of this notice provide comprehensive 
explanations of the consideration that the agencies gave to proposing 
standards that are more accelerated than Alternative 3, based on the 
agencies' projection of how such standards could be met through the 
accelerated application of technologies and our reasons for concluding 
that the identified technologies for each of the vehicle and engine 
standards that constitute Alternative 3 represent the maximum feasible 
(within the meaning of 49 U.S.C. 32902(k)) and reasonable (for purposes 
of CAA section 202 (a)) based on all of the information available to 
the agencies at the time of this proposal.
(4) Alternative 4: More Accelerated Than the Preferred Alternative
    As indicated by its description in the title above, Alternative 4 
represents standards that are effective on a more accelerated timeline 
in comparison to the timeline of the proposed standards in Alternative 
3. The agencies believe that Alternative 4 could potentially be maximum 
feasible and appropriate, but at this time the agencies have identified 
sufficient uncertainty in the information that the agencies have 
considered with respect to the technologies' readiness, effectiveness 
and costs such that the agencies cannot yet conclude that Alternative 4 
represents maximum feasible and appropriate standards. Accordingly, 
although we are not proposing Alternative 4, we are requesting comment 
on adopting some or all of Alternative 4 in the final rule. The 
agencies would especially welcome data on the projected readiness, 
effectiveness, and costs of technologies the agencies consider for 
compliance with Alternative 4 standards, which in many cases are 
identical to the technologies considered for the Alternative 3 
standards. It would be especially helpful if commenters addressed each 
category separately; namely, tractors and vocational vehicles and their 
engines; trailers, and pickups and vans. The agencies would consider 
adopting Alternative 4's stringencies and lead time for the final rule, 
depending on the information and comments received in response to this 
notice and based on additional consideration of the information we 
already have in-hand.
    Alternatives 3 and 4 were both designed to achieve similar fuel 
efficiency and GHG emission levels in the long term but with 
Alternative 4 being accelerated in its implementation timeline. 
Specifically, alternative 4 reflects the same or similar standard 
stringency levels as alternative 3, but 3 years sooner (2 years for 
heavy-duty pickups and vans), so that the final phase of the standards 
would occur in MY 2024, or (for heavy duty pickups and vans) 2025.
    As discussed above and in the feasibility discussions in Sections 
II-VI, we are not proposing Alternative 4. By accelerating the adoption 
schedule, this option would result in several model years of 
incrementally greater fuel consumption and GHG emission reductions than 
Alternative 3, but it does raise concerns about adequacy of lead time. 
The agencies have outstanding questions regarding relative risks and 
benefits of Alternative 4 due to the timeframe envisioned by that 
alternative.
    The agencies recognize the potential for larger net benefits if 
Alternative 4 were selected, and we therefore welcome comments 
addressing the feasibility and availability of relevant technologies in 
the identified lead time. Commenters are particularly encouraged to 
address all aspects of feasibility analysis, including effectiveness 
and costs, the likelihood of developing available technologies to 
achieve sufficient reliability within the proposed lead time, and the 
extent to which the heavy-duty vehicle market would accept and utilize 
the technology. Comments should ideally address these issues separately 
for each type of technology, especially with respect to advanced 
technologies like waste heat recovery systems and hybrid powertrains. 
Although we summarize the specific differences below, readers are 
encouraged to see Sections II through VI for more detailed descriptions 
of how the agencies projected how manufacturers could implement certain 
technologies in order to meet the standards of Alternative 4.
    The agencies project that Alternative 4 combination tractor 
standards could be met by applying initially higher adoption rates of 
the projected technologies for Alternative 3. This includes a 
projection of slightly higher per-technology effectiveness for 
Alternative 4 versus 3. Alternative 4 also assumes that there would be 
more optimization of combination tractor powertrains and earlier market 
penetration of engine waste heat recovery systems.
    The agencies project that the Alternative 4 vocational vehicle 
standard could be met through earlier adoption rates of the same 
technology packages projected for Alternative 3. This includes a 
projection of slightly higher per-technology effectiveness for 
Alternative 4 versus 3.
    The Alternative 4 trailer standards could be met through earlier 
implementation of more effective aerodynamic technologies, including 
the use of aerodynamic skirts and boat tails. This would be in addition 
to implementing lower rolling resistance tires for nearly all trailers.
    HD pickup truck and van standards defining Alternative 4 represent 
a 3.5 percent annual improvement in fuel consumption and GHG emissions 
through 2025 relative to the work-factor curves in 2020. Of course, 
this finding depends not only on the stringency of the standards 
defining this regulatory alternative, but also on other input 
estimates, in particular the detailed composition of the agencies' HD 
pickup and van market forecast; the agencies' estimates of the future 
availability, cost, and efficacy of fuel-saving HD pickup and van 
technologies; and the agencies' estimates of future fuel prices. Even 
without changes to the standards defining this regulatory alternative, 
changes to analysis inputs will lead to different estimates of the 
extent to which various technologies might be applied under this 
regulatory alternative.
(5) Alternative 5: Even More Stringent Standards With No Additional 
Lead-Time
    Alternative 5 represents even more stringent standards compared to 
Alternatives 3 and 4, as well as the same implementation timeline as 
Alternative 4. As discussed above and in the feasibility discussions in 
Sections II-VI, we are not proposing Alternative 5 because we cannot 
project that manufacturers can develop and introduce in sufficient 
quantities the technologies that could be used to meet Alternative 5 
standards. We believe that for some or all of the categories, the 
Alternative 5 standards are technically infeasible within the lead time 
allowed. We have not fully estimated costs for this alternative for 
tractors and vocational vehicles because we believe that there would be 
such substantial

[[Page 40495]]

additional costs related to pulling ahead the development of so many 
additional technologies that we cannot accurately predict these costs. 
We also believe this alternative could result in a decrease in the in-
use reliability and durability of new heavy-duty vehicles and that we 
do not have the ability to accurately quantify the costs that would be 
associated with such problems. Instead we merely note that costs would 
be significantly greater than the estimated costs for Alternatives 3 
and 4.

B. How do these alternatives compare in overall fuel consumption and 
GHG emissions reductions and in benefits and costs?

    The following tables compare the overall fuel consumption and GHG 
emissions reductions and benefits and costs of each of the regulatory 
alternatives the agencies considered.
    Note that for tractors, trailers, pickups and vans the agencies 
compared overall fuel consumption and GHG emissions reductions and 
benefits and costs relative to two different baselines, described above 
in the section on the No Action alternative. Therefore, for tractors, 
trailers, pickups and vans two results are listed; one relative to each 
baseline, namely Alternative 1a and Alternative 1b.
    Also note that the agencies analyzed pickup and van overall fuel 
consumption and emissions reductions and benefits and costs using the 
NHTSA's CAFE model (Method A). In addition, the agencies used EPA's 
MOVES model to estimate pickup and van fuel consumption and emissions 
and a cost methodology that applied vehicle costs in different model 
years (Method B). In both cases, the agencies used the CAFE model to 
estimate average per vehicle cost, and this analysis extended through 
model year 2030.\792\ The agencies concluded that in these instances 
the choice of baseline and the choice of modeling approach (Method A 
versus Method B) did not impact the agencies' decision to propose 
Alternative 3 as the preferred alternative and hence the proposed 
standards for HD pickups and vans.
---------------------------------------------------------------------------

    \792\ Although the agencies have considered regulatory 
alternatives involving standards increasing in stringency through, 
at the latest, 2027, the agencies extended the CAFE modeling 
analysis through model year 2030 rather than model year 2027 in 
order to obtain more fully stabilized results given projected 
product cadence, multiyear planning, and application of earned 
credits.
---------------------------------------------------------------------------

    Table X-1 compares fuel savings, technology costs, avoided 
emissions, total costs, and benefits for the above regulatory 
alternatives as estimated under Method A. Table X-2 provides the same 
comparisons for Method B. Subsequent tables summarize segment-specific 
results and projections for longer-term impacts. The regulatory impact 
analysis (RIA) accompanying today's notice presents more detailed 
results of the agencies' analysis.
(1) Method A Tables

 Table X-1--Summary of Costs and Benefits Through MY 2029 by Alternative, Discounted at 3% (Relative to Baseline
                                                 1a), Method A a
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                   Discounted pre-tax fuel savings ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               11.7               18.3               22.3               24.8
Vocational Vehicles.................                5.6               18.4               24.3               38.5
Tractors/Trailers...................               88.1              138.4              151.7              196.8
                                     ---------------------------------------------------------------------------
    Total...........................              105.4              175.1              198.3              260.2
----------------------------------------------------------------------------------------------------------------
                                  Discounted Total technology costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                3.0                5.0                8.2                9.9
Vocational Vehicles.................                1.2                7.6               10.8               26.0
Tractors/Trailers...................                9.2               12.8               15.3               34.8
                                     ---------------------------------------------------------------------------
    Total...........................               13.4               25.4               34.3               70.6
----------------------------------------------------------------------------------------------------------------
                               Discounted value of emissions reductions ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                3.0                4.8                5.9                6.6
Vocational Vehicles.................                1.7                6.1                8.1               13.1
Tractors/Trailers...................               40.7               62.7               67.9               87.7
                                     ---------------------------------------------------------------------------
    Total...........................               45.4               73.7               82.0              107.4
----------------------------------------------------------------------------------------------------------------
                                             Total costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                3.5                5.7                9.1               15.2
Vocational Vehicles.................                3.0                9.5               12.8               28.1
Tractors/Trailers...................               11.5               15.5               18.1               37.5
                                     ---------------------------------------------------------------------------
    Total...........................               18.0               30.8               40.0               80.8
----------------------------------------------------------------------------------------------------------------
                                            Total benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               17.2               27.0               33.0               36.7
Vocational Vehicles.................               12.7               31.2               39.7               60.2
Tractors/Trailers...................              142.5              217.5              236.7              304.2
                                     ---------------------------------------------------------------------------
    Total...........................              172.4              275.8              309.4              401.1
----------------------------------------------------------------------------------------------------------------

[[Page 40496]]

 
                                             Net benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               13.7               21.3               23.9               21.5
Vocational Vehicles.................                9.6               21.7               26.9               32.1
Tractors/Trailers...................              131.0              202.0              218.7              266.7
                                     ---------------------------------------------------------------------------
    Total...........................              154.3              245.0              269.4              320.3
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

  Table X-2--Summary of Program Benefits and Costs Through MY 2029, Discounted at 3% (Relative to Baseline 1b),
                                                  Method A \a\
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                   Discounted pre-tax fuel savings ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                9.6               15.9               19.1               22.2
Vocational Vehicles.................                5.6               18.4               24.3               38.5
Tractors/Trailers...................               80.5              130.8              144.0              189.2
                                     ---------------------------------------------------------------------------
    Total...........................               95.6              165.1              187.4              250.0
----------------------------------------------------------------------------------------------------------------
                                  Discounted Total technology costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.5                5.0                7.2                9.7
Vocational Vehicles.................                1.2                7.6               10.8               25.9
Tractors/Trailers...................                8.9               12.5               15.0               34.4
                                     ---------------------------------------------------------------------------
    Total...........................               12.5               25.0               32.9               70.0
----------------------------------------------------------------------------------------------------------------
                               Discounted value of emissions reductions ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.8                4.5                5.4                6.3
Vocational Vehicles.................                1.7                6.1                8.1               13.1
Tractors/Trailers...................               37.5               59.4               64.6               84.4
                                     ---------------------------------------------------------------------------
    Total...........................               41.9               70.1               78.2              103.8
----------------------------------------------------------------------------------------------------------------
                                             Total costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.8                5.5                7.8               10.4
Vocational Vehicles.................                3.0                9.5               12.8               28.0
Tractors/Trailers...................               11.2               15.2               17.7               37.2
                                     ---------------------------------------------------------------------------
    Total...........................               17.0               30.3               38.4               75.7
----------------------------------------------------------------------------------------------------------------
                                            Total benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               14.1               23.5               28.3               32.9
Vocational Vehicles.................               12.7               31.2               39.7               60.2
Tractors/Trailers...................              131.1              206.2              225.4              292.8
                                     ---------------------------------------------------------------------------
    Total...........................              157.9              260.9              293.3              385.9
----------------------------------------------------------------------------------------------------------------
                                             Net benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               11.3               18.0               20.4               22.5
Vocational Vehicles.................                9.6               21.7               26.9               32.1
Tractors/Trailers...................              119.9              191.0              207.6              255.6
                                     ---------------------------------------------------------------------------
    Total...........................              140.9              230.7              254.9              310.3
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    The following two tables summarize results for each of the segments 
covered by today's proposal, discounted at 7 percent.

[[Page 40497]]

  Table X-3--Summary of Program Benefits and Costs Through MY 2029, Discounted at 7% (Relative to Baseline 1a),
                                                   Method A a
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                   Discounted pre-tax fuel savings ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                6.4                9.9               12.2               13.6
Vocational Vehicles.................                2.9                9.7               13.0               20.9
Tractors/Trailers...................               47.7               74.6               82.3              107.3
                                     ---------------------------------------------------------------------------
    Total...........................               57.0               94.2              107.5              141.8
----------------------------------------------------------------------------------------------------------------
                                  Discounted Total technology costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.1                3.4                5.7                6.9
Vocational Vehicles.................                0.8                5.0                7.3               17.8
Tractors/Trailers...................                6.3                8.7               10.5               23.9
                                     ---------------------------------------------------------------------------
    Total...........................                9.1               17.1               23.5               48.6
----------------------------------------------------------------------------------------------------------------
                               Discounted value of emissions reductions ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.7                4.3                5.3                5.9
Vocational Vehicles.................                1.4                5.0                6.6               10.6
Tractors/Trailers...................               29.9               46.3               50.4               65.4
                                     ---------------------------------------------------------------------------
    Total...........................               34.0               55.6               62.3               81.8
----------------------------------------------------------------------------------------------------------------
                                             Total costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.4                3.8                6.2               10.1
Vocational Vehicles.................                1.8                6.1                8.4               19.0
Tractors/Trailers...................                7.6               10.3               12.1               25.5
                                     ---------------------------------------------------------------------------
    Total...........................               11.8               20.2               26.7               54.6
----------------------------------------------------------------------------------------------------------------
                                            Total benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................               10.4               16.3               20.1               22.3
Vocational Vehicles.................                7.3               18.3               23.6               36.2
Tractors/Trailers...................               85.1              130.0              142.2              183.5
                                     ---------------------------------------------------------------------------
    Total...........................              102.9              164.6              185.8              242.1
----------------------------------------------------------------------------------------------------------------
                                             Net benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                8.1               12.4               13.9               12.2
Vocational Vehicles.................                5.5               12.2               15.2               17.2
Tractors/Trailers...................               77.5              119.7              130.1              158.0
                                     ---------------------------------------------------------------------------
    Total...........................               91.1              144.4              159.1              187.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

  Table X-4--Summary of Program Benefits and Costs Through MY 2029, Discounted at 7% (Relative to Baseline 1b),
                                                   Method A a
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                   Discounted pre-tax fuel savings ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                5.2                8.5               10.4               12.2
Vocational Vehicles.................                2.9                9.7               13.0               20.9
Tractors/Trailers...................               44.0               71.0               78.6              103.7
                                     ---------------------------------------------------------------------------
    Total...........................               52.2               89.2              102.0              136.8
----------------------------------------------------------------------------------------------------------------
                                  Discounted Total technology costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                1.7                3.4                4.9                6.7
Vocational Vehicles.................                0.8                5.0                7.3               17.8
Tractors/Trailers...................                6.0                8.4               10.3               23.7
                                     ---------------------------------------------------------------------------

[[Page 40498]]

 
    Total...........................                8.5               16.8               22.5               48.2
----------------------------------------------------------------------------------------------------------------
                               Discounted value of emissions reductions ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                2.5                4.0                4.8                5.5
Vocational Vehicles.................                1.4                5.0                6.6               10.6
Tractors/Trailers...................               27.5               43.9               48.0               63.0
                                     ---------------------------------------------------------------------------
    Total...........................               31.4               52.9               59.4               79.1
----------------------------------------------------------------------------------------------------------------
                                             Total costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                1.9                3.7                5.3                7.1
Vocational Vehicles.................                1.8                6.1                8.4               19.0
Tractors/Trailers...................                7.3               10.0               11.9               25.3
                                     ---------------------------------------------------------------------------
    Total...........................               11.1               19.8               25.6               51.4
----------------------------------------------------------------------------------------------------------------
                                            Total benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                8.6               14.1               17.1               20.0
Vocational Vehicles.................                7.3               18.3               23.6               36.2
Tractors/Trailers...................               78.9              123.7              135.9              177.3
                                     ---------------------------------------------------------------------------
    Total...........................               94.8              156.2              176.6              233.5
----------------------------------------------------------------------------------------------------------------
                                             Net benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                6.7               10.5               11.9               12.9
Vocational Vehicles.................                5.5               12.2               15.2               17.2
Tractors/Trailers...................               71.5              113.7              124.0              152.0
                                     ---------------------------------------------------------------------------
    Total...........................               83.7              136.4              151.1              182.2
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

    While the agencies' explicit analysis of manufacturers' potential 
responses to today's proposed standards extends through model year 
2030, the resulting fuel savings and avoided emissions summarized in 
the following two tables occur as those vehicles.

Table X-5--Fuel Savings and GHG Emissions Reductions by Vehicle Segment,
                   Relative to Baseline 1a, Method A a
------------------------------------------------------------------------
                                                           Upstream &
        MY 2018-2029 Total           Fuel reductions     downstream GHG
                                    (billion gallons)   reductions (MMT)
------------------------------------------------------------------------
                              Alternative 2
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                5.5               67.5
Vocational Vehicles...............                2.5               33.6
Tractors and Trailers.............               37.8              518.8
                                   -------------------------------------
    Total.........................               45.8              619.9
------------------------------------------------------------------------
                      Alt. 3--Preferred Alternative
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                8.8              107.6
Vocational Vehicles...............                8.3              110.3
Tractors and Trailers.............               59.5              816.4
                                   -------------------------------------
    Total.........................               76.7            1,034.3
------------------------------------------------------------------------
                                 Alt. 4
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............               10.7              130.5
Vocational Vehicles...............               10.9              143.8

[[Page 40499]]

 
Tractors and Trailers.............               65.0              892.1
                                   -------------------------------------
    Total.........................               86.7            1,166.4
------------------------------------------------------------------------
                                 Alt. 5
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............               12.0              145.4
Vocational Vehicles...............               17.3              226.9
Tractors and Trailers.............               84.2            1,155.1
                                   -------------------------------------
    Total.........................              113.4            1,527.4
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

Table X-6--Fuel Savings and GHG Emissions Reductions by Vehicle Segment,
                   Relative to Baseline 1b, Method A a
------------------------------------------------------------------------
                                                           Upstream &
        MY 2018-2029 Total           Fuel reductions     downstream GHG
                                    (billion gallons)   reductions (MMT)
------------------------------------------------------------------------
                              Alternative 2
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                4.5               55.5
Vocational Vehicles...............                2.5               33.6
Tractors and Trailers.............               34.4              471.9
                                   -------------------------------------
    Total.........................               41.4              561.0
------------------------------------------------------------------------
                      Alt. 3--Preferred Alternative
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                7.8               94.1
Vocational Vehicles...............                8.3              110.3
Tractors and Trailers.............               56.1              769.4
                                   -------------------------------------
    Total.........................               72.2              973.8
------------------------------------------------------------------------
                                 Alt. 4
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............                9.3              112.8
Vocational Vehicles...............               10.9              143.8
Tractors and Trailers.............               61.6              845.2
                                   -------------------------------------
    Total.........................               81.8            1,101.8
------------------------------------------------------------------------
                                 Alt. 5
------------------------------------------------------------------------
HD Pickup Trucks/Vans.............               10.8              130.5
Vocational Vehicles...............               17.3              226.9
Tractors and Trailers.............               80.7            1,108.2
                                   -------------------------------------
    Total.........................              108.8            1,465.6
------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section
  I.D; for an explanation of the less dynamic baseline, 1a, and more
  dynamic baseline, 1b, please see Section X.A.1.

    Results presented above are cumulative, spanning model years 2018-
2029. Underlying these results are estimates of impacts for each 
specific model year. As an example, Table X-7 shows costs, benefits, 
and net benefits specific to model year 2029.

[[Page 40500]]

Table X-7--Summary of Costs and Benefits for MY 2029 by Alternative, Discounted at 3% (Relative to Baseline 1b),
                                                   Method A a
----------------------------------------------------------------------------------------------------------------
           Vehicle segment                  Alt 2              Alt 3              Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
                                             Total Costs ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                0.3                0.8                0.9                1.1
Vocational Vehicles.................                0.3                1.5                1.5                2.9
Tractors/Trailers...................                1.2                1.9                1.9                3.9
                                     ---------------------------------------------------------------------------
    Total...........................                1.9                4.1                4.3                7.9
----------------------------------------------------------------------------------------------------------------
                                            Total Benefits ($billion)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                1.9                3.6                3.8                4.2
Vocational Vehicles.................                1.8                5.2                5.2                7.3
Tractors/Trailers...................               14.4               25.4               25.4               32.0
                                     ---------------------------------------------------------------------------
    Total...........................               18.0               34.1               34.4               43.6
----------------------------------------------------------------------------------------------------------------
                                             Net Benefits ($billon)
----------------------------------------------------------------------------------------------------------------
HD pickups and Vans.................                1.5                2.8                2.9                3.1
Vocational Vehicles.................                1.4                3.7                3.7                4.4
Tractors/Trailers...................               13.2               23.5               23.5               28.1
                                     ---------------------------------------------------------------------------
    Total...........................               16.1               30.0               30.1               35.6
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

(2) Method B Tables

   Table X-8--Annual GHG and Fuel Reductions in 2035 and 2050 Using Method B and Relative to the Less Dynamic
                                                   Baseline a
----------------------------------------------------------------------------------------------------------------
                                      Upstream & downstream GHG reductions    Fuel reductions (billion gallons)
                                                      (MMT)                -------------------------------------
                                     --------------------------------------
                                             2035               2050               2035               2050
----------------------------------------------------------------------------------------------------------------
Alt. 2 Less Stringent--Total........                 72                101                5.2                7.3
    Tractors and Trailers...........                 59                 84                4.2                6.0
    HD Pickup Trucks................                  8                 11                0.7                0.9
    Vocational Vehicles.............                  5                  7                0.3                0.5
Alt. 3 Preferred--Total.............                127                183                9.3               13.4
    Tractors and Trailers...........                 97                141                7.0               10.1
    HD Pickup Trucks................                 14                 19                1.1                1.6
    Vocational Vehicles.............                 16                 23                1.2                1.7
Alt. 4 More Stringent--Total........                132                184                9.7               13.5
    Tractors and Trailers...........                100                141                7.2               10.1
    HD Pickup Trucks................                 15                 19                1.2                1.6
    Vocational Vehicles.............                 17                 23                1.3                1.7
Alt. 5 More Stringent--Total........                168                232               12.4               17.0
    Tractors and Trailers...........                126                176                9.0               12.6
    HD Pickup Trucks................                 17                 22                1.4                1.8
    Vocational Vehicles.............                 26                 34                1.9                2.5
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table X-9--Benefit & Cost Comparison for Each Alternative Using Method B and Relative to Less Dynamic Baseline
                [Monetary values in billions of 2012$, GHG reductions in million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
          Benefit-cost category           Alt 2               Alt 3               Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
  2035  Vehicle program..........              -$2.6               -$5.9               -$6.2                 N/A
        Maintenance..............              -$0.06              -$0.13              -$0.14                N/A
        Fuel (pre-tax)...........              $20.9               $37.2               $38.7               $49.4
        Benefits.................              $12.8               $20.5               $21.1               $26.3
        Net benefits.............              $31.1               $51.7               $53.5                 N/A

[[Page 40501]]

 
        GHG reductions (MMT).....               71.9               127.1               132.0               168.3
  2050  Vehicle program..........              -$3.1               -$7.0               -$7.4                 N/A
        Maintenance..............              -$0.06              -$0.13              -$0.14                N/A
        Fuel (pre-tax)...........              $31.5               $57.5               $57.6               $72.7
        Benefits.................              $19.9               $32.9               $32.9               $40.6
        Net benefits.............              $48.3               $83.2               $83.0                 N/A
        GHG reductions (MMT).....              101.2               183.4               183.8               231.8
  NPV,  Vehicle program..........             -$39.8              -$86.8              -$98.6                 N/A
     3%
        Maintenance..............              -$0.88              -$1.80              -$1.91                N/A
        Fuel (pre-tax)...........             $280.0              $495.6              $517.6              $664.3
        Benefits.................             $175.2              $279.7              $289.7              $361.5
        Net benefits.............             $414.5              $686.8              $706.8                 N/A
  NPV,  Vehicle program..........             -$19.3              -$41.1              -$48.4                 N/A
     7%
        Maintenance..............              -$0.42              -$0.86              -$0.92                N/A
        Fuel (pre-tax)...........             $118.1              $206.7              $219.0              $283.0
        Benefits.................             $105.5              $173.5              $180.7              $228.0
        Net benefits.............             $203.8              $338.1              $350.5                 N/A
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table X-10--Benefit & Cost Comparison for Each Alternative Using Method B and Relative to Less Dynamic Baseline
                                             HD Pickup and Vans Only
                [Monetary values in billions of 2012$, GHG reductions in million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
          Benefit-cost category           Alt 2               Alt 3               Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
  2035  Vehicle program..........              -$0.5               -$0.9               -$1.2                 N/A
        Maintenance..............              -$0.01              -$0.01              -$0.01                N/A
        Fuel (pre-tax)...........               $2.5                $4.2                $4.4                $5.0
        Benefits.................               $1.4                $2.2                $2.3                $2.6
        Net benefits.............               $3.4                $5.5                $5.5                 N/A
        GHG reductions (MMT).....                8.1                13.9                14.6                16.6
  2050  Vehicle program..........              -$0.5               -$1.0               -$1.4                 N/A
        Maintenance..............              -$0.01              -$0.01              -$0.01                N/A
        Fuel (pre-tax)...........               $3.5                $6.3                $6.3                $7.2
        Benefits.................               $2.1                $3.5                $3.5                $4.0
        Net benefits.............               $5.1                $8.7                $8.4                 N/A
        GHG reductions (MMT).....               10.8                19.3                19.4                22.1
  NPV,  Vehicle program..........              -$7.5              -$13.5              -$19.6                 N/A
     3%
        Maintenance..............              -$0.18              -$0.18              -$0.18                N/A
        Fuel (pre-tax)...........              $31.4               $53.5               $56.8               $64.9
        Benefits.................              $18.7               $29.2               $30.7               $34.6
        Net benefits.............              $42.4               $69.1               $67.7                 N/A
  NPV,  Vehicle program..........              -$3.7               -$6.5               -$9.7                 N/A
     7%
        Maintenance..............              -$0.08              -$0.08              -$0.08                N/A
        Fuel (pre-tax)...........              $13.1               $21.9               $23.7               $27.1
        Benefits.................              $11.4               $18.2               $19.3               $21.8
        Net benefits.............              $20.7               $33.5               $33.2                 N/A
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table X-11--Benefit & Cost Comparison for Each Alternative Using Method B and Relative to Less Dynamic Baseline
                                            Vocational Vehicles Only
                [Monetary values in billions of 2012$, GHG reductions in million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
          Benefit-cost category           Alt 2               Alt 3               Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
  2035  Vehicle program..........              -$0.2               -$2.1               -$2.1                 N/A
        Maintenance..............              -$0.02              -$0.03              -$0.04                N/A
        Fuel (pre-tax)...........               $1.3                $4.7                $5.1                $7.6
        Benefits.................               $1.1                $2.6                $2.8                $3.9

[[Page 40502]]

 
        Net benefits.............               $2.2                $5.2                $5.8   .................
        GHG reductions (MMT).....                4.7                16.1                17.4                25.8
  2050  Vehicle program..........              -$0.3               -$2.4               -$2.4                 N/A
        Maintenance..............              -$0.02              -$0.03              -$0.04                N/A
        Fuel (pre-tax)...........               $2.0                $7.3                $7.3               $10.7
        Benefits.................               $1.7                $4.2                $4.2                $5.9
        Net benefits.............               $3.4                $9.0                $9.1                 N/A
        GHG reductions (MMT).....                6.5                23.2                23.3                33.9
  NPV,  Vehicle program..........              -$3.6              -$29.6              -$32.8                 N/A
     3%
        Maintenance..............              -$0.22              -$0.42              -$0.52                N/A
        Fuel (pre-tax)...........              $16.9               $60.6               $66.3               $99.9
        Benefits.................              $14.8               $34.8               $37.4               $52.7
        Net benefits.............              $27.9               $65.4               $70.3                 N/A
  NPV,  Vehicle program..........              -$1.7              -$13.8              -$16.0                 N/A
     7%
        Maintenance..............              -$0.10              -$0.19              -$0.24                N/A
        Fuel (pre-tax)...........               $6.9               $24.7               $27.9               $42.5
        Benefits.................               $8.3               $21.5               $23.4               $33.8
        Net benefits.............              $13.4               $32.2               $35.0                 N/A
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

 Table X-12--Benefit & Cost Comparison for Each Alternative Using Method B and Relative to Less Dynamic Baseline
                                              Tractor/Trailers Only
                [Monetary values in billions of 2012$, GHG reductions in million metric tons] \a\
----------------------------------------------------------------------------------------------------------------
          Benefit-cost category           Alt 2               Alt 3               Alt 4              Alt 5
----------------------------------------------------------------------------------------------------------------
  2035  Vehicle program..........              -$1.9               -$2.9               -$2.9                 N/A
        Maintenance..............              -$0.03              -$0.08              -$0.08                N/A
        Fuel (pre-tax)...........              $17.2               $28.4               $29.2               $36.8
        Benefits.................              $10.3               $15.7               $16.0               $19.7
        Net benefits.............              $25.6               $41.0               $42.2                 N/A
        GHG reductions (MMT).....               59.1                97.2               100.0               125.9
  2050  Vehicle program..........              -$2.3               -$3.6               -$3.6                 N/A
        Maintenance..............              -$0.03              -$0.08              -$0.08                N/A
        Fuel (pre-tax)...........              $26.1               $44.0               $44.0               $54.8
        Benefits.................              $16.1               $25.2               $25.2               $30.7
        Net benefits.............              $39.9               $65.5               $65.6                 N/A
        GHG reductions (MMT).....               83.8               140.9               141.1               175.7
  NPV,  Vehicle program..........             -$28.8              -$43.7              -$46.2                 N/A
     3%
        Maintenance..............              -$0.47              -$1.19              -$1.22                N/A
        Fuel (pre-tax)...........             $231.7              $381.5              $394.5              $499.5
        Benefits.................             $141.7              $215.7              $221.6              $274.2
        Net benefits.............             $344.1              $552.3              $568.8                 N/A
  NPV,  Vehicle program..........             -$13.9              -$20.9              -$22.7                 N/A
     7%
        Maintenance..............              -$0.23              -$0.59              -$0.60                N/A
        Fuel (pre-tax)...........              $98.1              $160.1              $167.5              $213.4
        Benefits.................              $85.8              $133.8              $138.1              $172.4
        Net benefits.............             $169.8              $272.4              $282.3                 N/A
----------------------------------------------------------------------------------------------------------------
Note:
\a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less
  dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

XI. Natural Gas Vehicles and Engines

    Both gasoline and diesel vehicles can be designed or modified to 
use natural gas. NGV America estimates that approximately 0.5 percent 
of the heavy-duty vehicle fleet use natural gas. A small but growing 
number of medium and heavy-duty natural gas vehicles have been produced 
and are in current use. Although these natural gas versions are similar 
in many ways to their petroleum counterparts, there are significant 
differences. There are also both similarities and differences in the 
production and distribution of natural gas relative to gasoline and 
diesel fuel.
    This combined rulemaking by EPA and NHTSA is designed to regulate 
two separate characteristics of heavy duty vehicles: Emissions of GHGs 
and fuel consumption. The use of natural gas as

[[Page 40503]]

a heavy-duty fuel can impact both of these. In the case of diesel or 
gasoline powered vehicles, there is a close relationship between these 
two characteristics. For natural gas fueled vehicles, which reduce or 
eliminate the use of petroleum, the situation is different. For 
example, a natural gas vehicle that achieves approximately the same 
fuel efficiency as a diesel powered vehicle would emit about 20 percent 
less CO2 when operating on natural gas; and a natural gas 
vehicle with the same fuel efficiency as a gasoline vehicle would emit 
about 30 percent less CO2. In Phase 1, the agencies balanced 
these facts by applying the gasoline and diesel CO2 
standards to natural gas engines based on the engine type of the 
natural gas engine. Fuel consumption for these vehicles is then 
calculated according to their tailpipe CO2 emissions. In 
essence, this applies a one-to-one relationship between fuel efficiency 
and tailpipe CO2 emissions for all vehicles, including 
natural gas vehicles. The agencies determined that this approach would 
likely create a small balanced incentive for natural gas use. See 76 FR 
57123; see also 77 FR 51705 (August 24, 2012) and 77 FR 51500 (August 
27, 2012) (EPA and NHTSA, respectively, further elaborating on basis 
for having Phase 1 apply at the tailpipe only, including for 
alternative fueled vehicles); see also Delta Construction Co. v. EPA, 
783 F. 3d 1291 (D.C. Cir. 2015) U.S. App. LEXIS 6780, F.3d (D.C. Cir. 
April 24, 2015) (dismissing challenge to Phase 1 GHG standards as being 
arbitrary for applying only on a tailpipe basis).
    For Phase 2, the agencies have reevaluated the potential use of 
natural gas in the heavy-duty sector and the impacts of such use. As 
discussed below, based on our review of the literature and external 
projections we believe that the use of natural gas is unlikely to 
become a major fuel source for medium and heavy-duty vehicles during 
the Phase 2 time frame. Thus, since we project natural gas vehicles to 
have little impact on both overall GHG emissions and fuel consumption 
during the Phase 2 time frame, the agencies see no need to propose 
fundamental changes to the Phase 1 approach for natural gas engines and 
vehicles.
    In the following sections, we present a lifecycle analysis of 
natural gas used by the heavy-duty truck sector. We also present the 
results of an analysis by the Energy Information Administration 
projecting the future use of natural gas by heavy-duty trucks. Finally, 
we list a number of potential technologies and discuss the approaches 
that could be pursued help to reduce the methane emissions from natural 
gas trucks. A more detailed discussion of these analyses and issues can 
be found in the draft RIA.

A. Natural Gas Engine and Vehicle Technology

    Several engine parameters and characteristics come into play in 
comparing engines powered by natural gas with engines powered by 
conventional fuels.
    Gasoline-fueled engines are typically spark-ignition engines that 
rely on stoichiometric combustion, which means that essentially all the 
oxygen from the engine's intake air is consumed in the combustion 
process. Converting a gasoline-fueled engine to run on natural gas 
involves changing the hardware used to store and deliver fuel to the 
engine, but the combustion strategy remains largely unchanged. The 
engine must be recalibrated for the different fuel properties, but 
combustion remains stoichiometric. In addition, the catalysts may 
require significant changes to enable the heavy-duty engine to comply 
with the emission standards.
    Diesel-fueled engines are compression-ignition engines that rely on 
lean-burn combustion, which means that the engine takes in a 
substantial quantity of excess air (oxygen) that is not consumed in the 
combustion process. Engines usually have turbochargers to compress the 
intake air, which allows for greater power output and thermodynamic 
efficiency. Converting a diesel-fueled engine to run on natural gas may 
involve a minimal set of changes to engine calibrations to maintain 
lean-burn operation and the overall operating characteristics of a 
compression-ignition engine, although there would be substantial 
changes to the fuel storage and delivery systems. This could require 
the use of a pilot injection of a small amount of diesel fuel to 
initiate the combustion event, or more commonly, a mixture (never more 
than 50 percent natural gas) of natural gas and diesel fuel is 
combusted. It is also possible to convert a diesel-fueled engine to run 
on natural gas by adding a spark plug and changing the calibration 
strategy to rely on stoichiometric combustion. This allows for simpler 
engine design and operation, but comes at a cost of higher fuel 
consumption and CO2 emissions.
    Engines running on natural gas are capable of meeting the same 
criteria and GHG emission standards that apply for gasoline and diesel 
engines. In the case of reducing PM and CO2 emissions, there 
is an inherent advantage for natural gas. In contrast, engines must be 
properly calibrated and maintained to avoid high emission rates for 
NOX, HC, and CO.
    On-vehicle fuel storage for natural gas is also an important design 
parameter. The most common method today is compressed natural gas 
(CNG), which involves storing the fuel as a gas at very high pressure 
(up to ~3500 psi) to increase the density of the fuel. This increases 
vehicle weight and generally reduces the range relative to gasoline or 
diesel vehicles, but the technology is readily available and does not 
involve big changes for operators. The alternative is to cool the fuel 
so that it can be stored as liquefied natural gas (LNG), which involves 
more extensive hardware changes for managing the fuel as a cryogenic 
liquid. LNG fuel storage also involves a substantial weight increase, 
but LNG has a higher density than CNG so LNG vehicles can store much 
more fuel than CNG vehicles in the same volume. LNG technology is 
available for a limited number of truck models, mostly for line-haul 
service where range is a paramount consideration. The cryogenic fuel 
requires substantial changes in hardware and procedures for refueling 
stations and operators. An additional factor in considering LNG 
technology is that a parked vehicle could vent the fuel as it takes on 
heat from the surrounding environment over a period of several days.

B. GHG Lifecycle Analysis for Natural Gas Vehicles

    This section is organized into three sections. The first section 
summarizes the upstream emissions. The second section summarizes the 
downstream emissions. The last section summarizes the results of the 
lifecycle emissions and provides a comparison between natural gas 
lifecycle and diesel fuel lifecycle emissions. Only the overall results 
of the lifecycle emissions comparison between natural gas and diesel 
fuel are presented here, much more detail is provided in Chapter 13 of 
the DRIA.
(1) Upstream Emissions
    Upstream methane emissions, occurring in the natural gas 
production, natural gas processing, transmission, storage and 
distribution stages of natural gas production, are estimated and 
summarized in the annual EPA report Inventory of U.S. Greenhouse Gas 
Emissions and Sinks (GHG Inventory) for the United Nations Framework 
Convention on Climate Change (UNFCCC). As a basis for estimating the 
life-cycle impact of natural gas use by heavy-duty trucks, we used the 
year 2012 methane emission estimates in the most recent GHG Inventory, 
published

[[Page 40504]]

in 2014. The GHG Inventory also includes the quantity of carbon dioxide 
which is coproduced with methane throughout the natural gas system and 
emitted to the atmosphere through venting, flaring, and as fugitive 
emissions.
    The GHG Inventory is updated annually to account for new emission 
sources (e.g., new natural gas wells), updated data, emission factors 
and/or methodologies, and to account for changes in emissions due to 
policy changes, regulatory changes and changes in industry practices. 
The GHG Inventory reflects emission reductions due to existing state 
regulations, National Emission Standards for Hazardous Air Pollutants 
(NESHAP) promulgated by EPA in 1999, the New Source Performance 
Standards (NSPS) promulgated by EPA in 2012,\793\ and Natural Gas Star 
(a flexible, voluntary partnership that encourages oil and natural gas 
companies to adopt proven, cost-effective technologies and practices 
that improve operational efficiency and reduce methane emissions).\794\
---------------------------------------------------------------------------

    \793\ Oil and Natural Gas Sector: New Source Performance 
Standards and National Emission Standards for Hazardous Air 
Pollutants Reviews; Final Rule, 40 CFR parts 60 and 63, 
Environmental Protection Agency, August 16, 2012.
    \794\ www.epa.gov/gasstar/.
---------------------------------------------------------------------------

    Emission estimates in the GHG Inventory are generally bottom-up 
estimates which are per-unit (compressor, pneumatic valve, etc.) 
emission estimates based on measured or calculated emission rates from 
such emission sources.
    In addition to the national-level data available through the GHG 
Inventory, facility-level petroleum and natural gas systems data are 
also available through EPA's Greenhouse Gas Reporting Program (GHGRP). 
This data represents a significant step forward in understanding GHG 
emissions from this sector and EPA expects that this data will be an 
important tool for the agency and the public to analyze emissions, and 
understand emission trends. For some sources, EPA has already used 
GHGRP data to update emission estimates in the GHG inventory, and EPA 
plans to continue to leverage GHGRP data to update future GHG 
Inventories.
    The EPA-promulgated 2012 New Source Performance Standards (NSPS) 
will reduce emissions of ozone precursors from natural gas facilities 
and have methane and hazardous air pollutant reduction co-benefits. The 
NSPS standards require that natural gas wells which are hydraulically 
fractured control emissions using flaring or reduced emission 
completion (REC) technology from completions and workovers starting in 
2012. RECs used by natural gas well drillers capture the natural gas 
emissions that occur during well completion, instead of venting or 
flaring the emissions. Starting January 2015, RECs are required for 
natural gas well completions and workovers. The NSPS also regulates the 
emissions from certain new natural gas production equipment, including 
dehydrator vents and condensate tanks. In the 2013 Climate Action Plan, 
EPA projects future emissions of methane to increase modestly, by about 
4 percent between now and 2025. As estimated for the recent power plant 
proposed rulemaking, natural gas production is expected to increase by 
about 20 percent during this timeframe, thus, methane emissions in 2025 
are expected to be 14 percent lower than in 2012 based on an equivalent 
volume of natural gas being produced. As announced by the White House, 
EPA will further regulate methane emissions from new natural gas 
production facilities.795 796
---------------------------------------------------------------------------

    \795\ FACT SHEET: Administration Takes Steps Forward on Climate 
Action Plan Announcing Actions to Cut Methane Emissions, The White 
House, January 14, 2015.
    \796\ FACT SHEET; EPA's Strategy for Reducing Methane and Ozone-
Forming Pollution from the Oil and Natural Gas Industry; 
Environmental Protection Agency, January 14, 2015.
---------------------------------------------------------------------------

    In the GHG Inventory, emissions associated with powering the units 
or equipment (i.e., compressors, pumps) used in natural gas production, 
processing, transmission and distribution are aggregated with all the 
other fossil fuel combustion activities. Rather than attempt to 
disaggregate those specific GHG emissions from the rest of the process 
emissions in the GHG Inventory, we instead used the estimated emissions 
for these sources provided by GREET.
(2) Downstream Emissions
    Natural gas can be used by vehicles either as a compressed gas 
(CNG) or as liquefied natural gas (LNG). We discuss the emissions of 
both below.
(a) Compressed Natural Gas (CNG)
    The natural gas that comprises CNG is typically off-loaded from the 
natural gas system where the vehicles using CNG are refueled. This is 
because the natural gas used as CNG is compressed at the retail 
stations that sell the CNG and the fleet facilities which fuel the CNG 
fleet vehicles. To get the natural gas to the CNG retail facilities 
which are mostly located in or near urban areas, the natural gas is 
expected to be shipped through the distribution system downstream of 
the natural gas transmission system. CNG trucks are then refueled at 
the retail stations providing CNG. Each time a CNG refueling event 
occurs, a small amount of natural gas is released to the environment. 
Because of a lack of data or an estimate by GREET or CARB, this small 
amount of natural gas has not been estimated and therefore are not 
included in the lifecycle analysis presented here. Since these systems 
are designed to have no leaks, the CNG could remain stored in the CNG 
tanks indefinitely. However, the very high pressure at which CNG is 
stored dramatically increases fugitive emissions if a fitting were to 
develop a leak. The level of fugitive emissions for a certain sized 
hole is directly proportional to the pressure. We do not have any data 
on the fugitive emissions from CNG trucks. In our lifecycle analysis, 
we assume that CNG fugitive emissions are zero, which likely 
underestimates the methane emissions.
    When CNG is stored at high pressure (i.e., 3600 psi) it contains 
only about 25 percent the energy density of diesel fuel. This low fuel 
storage density is a disincentive for using CNG in long haul trucks. An 
adsorbent for natural gas (ANG),\797\ called metal organic framework 
(MOF) for storing CNG, has been invented and is being tested for large 
scale use. The technology involves filling the CNG tank with a 
specially designed substance that looks similar to a pelletized 
catalyst. The substance establishes a matrix which causes the methane 
molecules to become better organized and store the same quantity of 
natural gas in a smaller volume at the same pressure (about 60 percent 
of the energy density of diesel fuel), or store the same density of 
natural gas at a lower pressure. This MOF could improve the energy 
density of CNG which would make it a better candidate for natural gas 
storage for long range combination trucks. Or, if used to store CNG at 
the same density, could reduce the compression energy required to 
compress the CNG since it could be stored at a lower pressure.
---------------------------------------------------------------------------

    \797\ Menon, V.C., Komarneni, S. 1998 ``Porous Adsorbents for 
Vehicular Natural Gas Storage: A Review'', Journal of Porous 
Materials 5, 43-58 (1998); Burchell, T ``Carbon Fiber Composite 
Adsorbent Media for Low Pressure Natural Gas Storage'' Oak Ridge 
National Laboratory.
---------------------------------------------------------------------------

(b) Liquified Natural Gas (LNG)
    A primary reason for liquefying natural gas is that it allows 
storing the natural gas at about 60 percent of the density of diesel 
fuel. For this reason, LNG is a primary fuel being considered by long 
haul trucks.

[[Page 40505]]

    The first step downstream of the natural gas production, processing 
and distribution system for making LNG available to trucks is the 
liquefaction step. This step involves the removal of heat from the 
natural gas until it undergoes a phase change from a gas to a liquid at 
a low pressure. LNG plants are configured depending on their ultimate 
capacity. World class LNG plants produce 5 million metric tons, or 
more, per year of LNG and the economy of scale of these large plants 
supports the significant addition of capital to reduce their operating 
costs and energy use. An LNG plant solely producing LNG for truck fuel 
is expected to be significantly smaller than the world class LNG export 
plants with a poorer economy of scale. Their energy efficiency would be 
expected to be much lower on a percentage basis. The California Air 
Resources Board estimates the liquefaction plants used for producing 
truck LNG fuel are 80 percent efficient, compared to 90 percent 
efficient for world class LNG plants.\798\ In our lifecycle analysis of 
LNG as a truck fuel, we also assumed that LNG plants are 80 percent 
efficient. The LNG producer is not only responsible for the LNG 
fugitive emissions at the plant, but it is also responsible for the GHG 
and other process emissions emitted when liquefying the natural gas. 
Because LNG plants are located separate from the retail facilities, 
they can be located to access the lowest cost feedstock. This means the 
natural gas for LNG can be sourced from the larger natural gas 
transmission pipelines which are upstream of the distribution 
pipelines. Once the natural gas is liquefied at the liquefaction plant, 
it is stored in an insulated storage tank to keep the LNG liquefied.
---------------------------------------------------------------------------

    \798\ Detailed California-Modified GREET Pathway for Liquid 
Natural Gas (LNG) from North American and Remote Natural Gas 
Sources, Version 1.0, California Air Resources Board, July 20, 2009.
---------------------------------------------------------------------------

    To transport the LNG to the retail station, the LNG is loaded into 
an insulated horizontal trailer designed specifically for transporting 
LNG. If the LNG in the truck trailer were to warm sufficiently to cause 
the LNG to reach the pressure relief valve venting pressure, there 
would be boil-off emissions from the truck trailer. However, since the 
LNG is super cooled, boil off events are likely to be rare. We did not 
have access to any specific data to estimate these emissions so we used 
a CARB estimate of boil-off emissions for LNG transportation by the 
tanker truck between the LNG plant and retail outlets.\799\
---------------------------------------------------------------------------

    \799\ Ibid.
---------------------------------------------------------------------------

    LNG is stored in an insulated storage tank at the retail facility. 
Heat gain in the storage tank could eventually lead to boil-off 
emissions. Service stations with little LNG demand are at a higher risk 
of boil-off emissions compared to service stations which have a 
significant throughput volume. LNG stations could be configured to 
avoid boil-off events to the atmosphere, such as venting to a co-
located CNG facility, or venting to a nearby natural gas pipeline. We 
did not have access to any specific data to estimate these emissions so 
we used a CARB emission estimates for the boil-off emissions from LNG 
retail facilities.\800\
---------------------------------------------------------------------------

    \800\ Ibid.
---------------------------------------------------------------------------

    Vehicles requiring LNG fuel drive up to an LNG retail outlet or 
fleet refueling facility and fill up with LNG fuel. When the refueling 
nozzle is disconnected from the LNG tank nozzle, a small amount of 
methane is released to the environment. In addition, it may be 
necessary prior to refueling, due to high pressure in the truck's LNG 
tank, to reduce the pressure in the truck's LNG tank to speed up the 
refueling process. In some cases the retail station is equipped with 
another hose and associated piping to vent the excess gas to the retail 
stations' storage tank where it would usually condense back to a liquid 
due to the lower temperature of that tank, or perhaps be vented to a 
natural gas pipeline. However, for those retail outlets without such 
vent lines to the storage tank, the truck driver may simply vent the 
truck's storage tank to the atmosphere. As part of a sensitivity 
analysis for our lifecycle analysis, we estimate the emissions for 
venting an LNG tank prior to refueling.
(c) Comparing CNG to LNG
    There is an important difference in providing CNG and LNG which is 
important to highlight. For making CNG available to trucks, only a 
single facility, the retail outlet, is required for distributing CNG, 
while LNG requires both a liquefaction plant and a retail outlet and a 
means for transporting the LNG from the liquefaction plant to retail. 
Relying on a single facility simplifies the logistics of providing CNG 
and reduces the opportunity for methane leakage to the environment. 
However, this emissions disadvantage of LNG compared to CNG is offset 
somewhat because LNG is expected to access the lower priced natural gas 
from the upstream transmission system, therefore, the methane emissions 
associated with the downstream natural gas distribution system are 
avoided.
(d) Vehicle Emissions
    There are several different ways that diesel heavy duty engines can 
be configured to use natural gas as a fuel. The first is a spark 
ignition natural gas (SING), Otto cycle SING heavy duty engine burns 
the fuel stoichiometrically and uses a three-way catalyst, and some 
also add an oxidation catalyst to provide the greatest emissions 
reduction. In this case the engine compression ratio is reduced similar 
to that of a gasoline engine and thus its thermal efficiency is lower 
than a diesel-like engine by about 10-15 percent.
    The second is a direct injection natural gas (DING), diesel cycle. 
The DING engine uses a small quantity of diesel fuel (pilot injection) 
or a glow plug as ignition sources. As the injection system for the 
diesel fuel does not have the capability of greater injection 
quantities, this option has no dual-fuel properties. On the other hand, 
an optimization of the pilot injection can be made to achieve lower 
emissions. An advanced high pressure direct injection (HPDI) fuel 
system combining the injection of both diesel fuel and natural gas can 
be used for lean burn combustion. This enables the engine to maintain 
the efficiency advantage of a compression ignition engine while running 
mainly CNG/LNG.
    The third is a mixed-fuel natural gas (MFNG), diesel cycle. In a 
mixed-fuel engine, natural gas is mixed with intake air before 
induction to the cylinder and diesel fuel is used as ignition source. 
Mixed-fuel vehicle/engine means any vehicle/engine engineered and 
designed to be operated on the original fuel(s), or a mixture of two or 
more fuels that are combusted together. Engine results showed that the 
efficiency of the engine could decrease by about 2-5 percent in mixed-
fuel mode compared to diesel mode and that the diesel replacement was 
approximately 40-60 percent.
    Each of these natural gas engine types has its merits. The SING 
engine is less costly, but is less fuel efficient and because of the 
lower compression ratio it has less torque than the two diesel cycle 
engines. The DING engine is likely the most expensive because of the 
special natural gas/diesel fuel injection system and large required 
amount of natural gas (LNG or CNG) storage since the truck must run on 
natural gas. However, because the truck can run almost completely on 
natural gas, the DING engine has the potential to more quickly pay down 
the higher investment cost of the natural gas truck. The MFNG engine 
provides the truck owner the

[[Page 40506]]

flexibility to operate on natural gas or diesel fuel, but at the 
expense of a slower natural gas investment pay down rate because it can 
operate at most 50 percent of the time on natural gas.
    When assessing the methane emissions from both CNG and LNG trucks, 
it is important to separate those trucks built or converted before 2014 
to those built or converted in 2014 and later. The trucks built before 
2014 only needed to meet a nonmethane hydrocarbon (NMHC) standard, 
which means that the methane emissions from these trucks are 
unregulated. Our certification data show that the methane tailpipe 
emissions from these trucks/buses ranges from 2-5 g/bhp-hr for both 
spark ignition (gasoline type) and compression ignition (diesel type) 
engines.
    For 2014 and later OEM compression ignition natural gas trucks or 
natural gas conversions of 2014 and later diesel trucks, the trucks 
must meet a 0.1 g/bhp-hr methane emission standard in the case of a 
larger truck engine tested with an engine dynamometer, and a 0.05 g/
mile methane emission standard in the case of smaller trucks tested on 
a chassis dynamometer. For spark ignition (gasoline style) engines, the 
standards take effect in 2016.\801\ Natural gas truck manufacturers are 
allowed to offset methane emissions exceeding the methane emission 
standard by converting the methane emission exceedances into 
CO2 equivalent emissions and using CO2 credits. 
For the initial natural gas engine certifications that EPA received for 
2014, the truck manufactures chose to continue to emit high levels of 
methane (around 2 g/bhp-hr) and use carbon dioxide credits to offset 
those emissions. We don't know if this practice of will continue in the 
future, however, for evaluating the lifecycle impacts of natural gas 
heavy-duty trucks, the 2014 and later natural gas heavy-duty trucks may 
in fact have an emissions profile more like the pre-2014 trucks and not 
like the 2014 and later trucks as depicted below in the figures. It is 
worth noting that the potential exists for deterioration or malfunction 
of the engines, fuel supplies, or associated emission control devices 
on these trucks to occur in such a manner to result in higher methane 
emissions in actual use. We have not specifically accounted for the 
potential for increased methane emissions caused from high emitter 
natural gas trucks. See generally Section II above.
---------------------------------------------------------------------------

    \801\ See 76 FR 57192, 40 CFR 1036.108(a)(2) and 1037.104(c) 
(which is proposed to be redesignated as 40 CFR 86.189-14(k)(5)).
---------------------------------------------------------------------------

    The crankcase of these engines receives leakage from across the 
piston rings, which can contain methane. The crankcase of the spark 
ignition engines is normally vented into the intake of the engines, 
thus, any methane emissions from the crankcase which is not combusted 
in the engine would be accounted for in the tailpipe emissions. For 
compression ignition engines, however, the crankcase emissions are 
allowed to be vented into the exhaust pipe downstream of the 
aftertreatment devices, and therefore the crankcase emissions are 
released to the atmosphere even though they are included in the 
emissions test for the Methane standard that was introduced in Phase 1 
on the rule. Another potential source of methane emissions from CNG and 
LNG trucks is fugitive emissions from the engine and the piping which 
routes the fuel to the engine. Thus, either while parked or operated, 
this part of the vehicle fuel and engine systems could leak methane to 
the environment (which is different from boil-off emissions from LNG 
trucks discussed below). We do not have data nor did we develop an 
estimate for these potential fugitive emissions from these types of in-
use leaks. If the natural gas vehicles are well maintained, these 
emissions are likely to be very low.
    The thermal efficiency (the ratio of energy converted to work 
versus energy consumed) of the natural gas engine also plays a role in 
the lifecycle emissions of the truck. Natural gas engines are generally 
less efficient than their gasoline and diesel counterparts. 
Furthermore, manufacturers choose to produce spark-ignition 
stoichiometric natural gas engines for use in diesel applications. 
Spark-ignition natural gas engines can be as much as 15 percent less 
efficient than compressed ignition engines which operate on diesel 
fuel. In our lifecycle analysis, we provide two different sensitivities 
for natural gas vehicles assuming that they may be 5 percent and 15 
percent less efficient.
    An important difference between CNG and LNG is way in which the 
fuels are stored on the vehicle. The CNG is contained in a sealed 
system while the LNG system is ultimately open to the environment. 
Providing that there are no leaks in the storage system, the CNG truck 
is inherently low (zero) emitting and a parked truck would contain the 
CNG indefinitely. An LNG truck is inherently high emitting since if the 
truck were to be parked long enough its entire contents would be 
emitted to the environment.
    Thus, a major GHG issue for LNG trucks is boil-off emissions from 
the truck's fuel storage systems. When the liquefied natural gas is 
pumped into the truck LNG tanks, it is ``supercooled,'' meaning that 
the pressure of the LNG is well below the pressure at which the natural 
gas vent valve would relieve the LNG pressure. If the truck is driven 
extensively, the drawdown of liquid level will cause a vacuum which 
will cause some of the fuel to boil off and the heat of vaporization 
would thus cool the rest of the liquid in the LNG storage tank. It is 
possible that the fuel would maintain its supercooled temperature, or 
possibly even cool further below its supercooled temperature, the 
entire time until the LNG is completely consumed.
    If the truck is not driven at all or is driven very little, the 
very low temperature and low pressure LNG warms due to the ambient 
temperature gradient through the tank wall, and vaporizes, causing the 
temperature and pressure of the LNG to rise. When the pressure reaches 
a maximum of 230 psi a safety release valve releases the methane gas to 
vent excess pressure. There are two industry standards used to design 
tanks to reduce the temperature increase, one for a 3 day hold time 
\802\ and one for a 5 day hold time.\803\ Hold time is the time elapsed 
between the LNG refueling and venting.
---------------------------------------------------------------------------

    \802\ National Fire Protection Association 52, Compressed 
Natural Gas (CNG) Vehicular Fuel System Code, 2002 Edition.
    \803\ SAE International (2008) SAE J2343: Recommended Practice 
for LNG Medium and Heavy-Duty Powered Vehicles. Warrendale, 
Pennsylvania.
---------------------------------------------------------------------------

    If there is a boil-off event, a large amount of methane would be 
released. If aware of the impending boil-off, such as when the truck is 
being maintained, the truck driver could hook up the LNG tank to a hose 
which would vent the natural gas emissions to a CNG system which could 
reuse the boil-off natural gas as CNG, or vent the natural gas emission 
to a natural gas pipeline. Otherwise the boil-off emission would simply 
vent to the atmosphere. If the truck had 200 gallons of LNG storage 
capacity, the estimated quantity of boil-off emissions would range from 
3 to 9 gallons of LNG for each boil off event depending on the fill 
level of the LNG tank. Each boil off event has the potential to release 
on the order of 5,300-15,800 grams of CH4 which equates to 
132-400K grams of CO2 equivalent emissions, assuming that 
methane has a global warming potential (GWP) of 25 (assessed over 100 
years). If the vehicle continues to sit for five more days and boil-off 
events occur each day to several times per day as the tank vents and 
rebuilds in pressure, the sum total of the boil-off events can

[[Page 40507]]

result in over a million grams of CO2-equivalent emissions.
(3) Results of Life Cycle Analysis
    To estimate the lifecycle impact of natural gas used by heavy-duty 
trucks, we totaled the carbon dioxide, methane (CH4) and the 
nitrous oxide (N2O) emissions for the upstream and 
downstream portions of the natural gas system. The methane and nitrous 
oxide emissions are converted to carbon dioxide-equivalent emissions 
using the appropriate GWP conversion factors. The GWP conversion 
factors EPA currently uses are for a 100-year timeframe, are 25 and 298 
for methane and nitrous oxide, respectively.\804\
---------------------------------------------------------------------------

    \804\ These global warming potential values are based on the 
Fourth Assessment Report authored by the Intergovernmental Panel on 
Climate Change.
---------------------------------------------------------------------------

    To establish the impacts of natural gas use in the heavy-duty 
fleet, it was necessary to compare the lifecycle impacts of natural gas 
against the base fuel it is replacing, which is diesel fuel. The 
lifecycle impact of diesel fuel was estimated by the National Energy 
Technology Laboratory (NETL) for the production and use of diesel fuel 
in 2005. EPA used this lifecycle assessment for the 2010 Renewable Fuel 
Standard Rulemaking and we are using this NETL diesel fuel lifecycle 
estimate as the reference for comparison with the natural gas lifecycle 
assessment. NETL is in the process of revising its lifecycle analysis 
of diesel fuel to 2009, which should be available sometime in 2015. 
According to the lead analyst, the 2009 lifecycle analysis appears to 
be similar in magnitude to the 2005 analysis.\805\ However, the 2009 
analysis will not capture the lifecycle effects of the large increase 
in hydraulically fractured crude oil (i.e., Bakken, Eagle Ford) which 
has occurred in the U.S. during the first part of this decade.
---------------------------------------------------------------------------

    \805\ Conversation with Timothy J. Skone P.E., National Energy 
Technology Laboratory, Department of Energy, June 2014.
---------------------------------------------------------------------------

    To illustrate the relative full lifecycle impact of natural gas-
fueled heavy-duty vehicles compared to diesel fueled heavy-duty 
vehicles, we assessed several different scenarios. The first is a 
conversion of a diesel engine to use compressed natural gas. Of the 
tens of thousands of heavy-duty natural gas trucks currently in use, 
over 90 percent are of this type. These are conversions of older trucks 
so they are not regulated by the 2014 methane standard. For future year 
heavy-duty trucks, we also estimated the lifecycle emissions if the 
trucks were meeting a 0.1 g/bhp-hr or a 0.05 g/mile methane tailpipe 
standard. We provide two sensitivities to capture the lower thermal 
efficiencies of natural gas trucks: 5 percent less thermally efficient 
(thermal low) and 15 percent less energy efficient (thermal high, which 
is 10 percent worse thermal efficiency than the 5 percent less 
thermally efficient case). The relative life cycle assessment is shown 
in Figure XI-1.
[GRAPHIC] [TIFF OMITTED] TP13JY15.019

    The first two bars of Figure XI-1 show that based solely on 
CO2 tailpipe emissions (with and without thermal efficiency 
adjustments and assuming no increased methane emissions at the truck), 
CNG trucks are estimated to emit about 20 percent less GHG emissions 
than diesel engines. But this advantage decreases if the natural gas 
engine is less thermally efficient. The three full lifecycle analyses 
represented by the right three bars in the figure show that pre-2014 
CNG trucks are estimated to emit less GHG emissions as diesel trucks, 
although if their thermal efficiency is much lower (15 percent less 
than the diesel fueled engine) they could emit about the same GHG 
emissions. When such trucks are complying with the 2014 and later 
methane emission standards, their methane emissions are much lower and 
these trucks are expected to be lower emitting than diesels, even if 
they are less thermally efficient.
    The second scenario presented in Figure X1-2 is a combination LNG 
truck

[[Page 40508]]

which in one case is assumed to be emitting methane at pre-2014 
emission standards and in another case is assumed to comply with the 
2014 methane standard. It is an OEM natural gas truck with a high 
pressure direct injection engine, and because of the extensive mileage, 
the truck most realistically would use LNG as a fuel to provide the 
necessary range for the dedicated natural gas engine. We make two 
different assumptions with respect to refueling and boil off emissions. 
In the LNG average case, we assume a modest quantity of refueling and 
boil-off methane emissions which is estimated by GREET. The second 
boil-off emission estimate (assumed to be complying with the 2014 
methane emission standard) is based on venting the LNG storage tank to 
the atmosphere each time the driver refills his tank, and one LNG boil-
off event between each time the driver must refuel his tank. As 
discussed above, we do not expect such high refueling and boil-off 
emissions to be common practices for newer trucks that are operated 
regularly. However, as the use of these trucks decreases as they age 
and are sold into the secondary market, the risk for refueling and 
boil-off emission events increases--this estimate provides a simple 
sensitivity emission estimate. The lifecycle assessment is shown in 
Figure XI-2.
[GRAPHIC] [TIFF OMITTED] TP13JY15.020

    Figure XI-2 shows that LNG trucks have about the same greenhouse 
gas footprint as diesel trucks providing that they are complying with 
the methane emission standard and providing we assume a low quantity of 
refueling and boil-off emissions. In comparing CNG to LNG, the LNG 
trucks appear higher emitting than CNG trucks because of the low 
thermal efficiency of the small liquefaction facilities. If these LNG 
trucks emit high levels of methane when refueling and by experiencing 
boil-off events or if they emit methane at pre-2014 emission standard 
levels, their GHG emissions can potentially be much greater than that 
from diesel trucks.
    It is important to point out the uncertainties associated with the 
lifecycle estimates provided in the above figures. As discussed above, 
there is uncertainty in both the upstream and downstream methane 
emission estimates for natural gas facilities and equipment, and the 
trucks that consume natural gas. There is also uncertainty in the 
diesel fuel lifecycle analysis conducted by NETL. As new information 
becomes available, we can update our lifecycle emission estimates which 
would reduce the uncertainty of this analysis. A number of studies are 
being conducted to quantify the methane emissions (upstream and 
downstream) and life cycle impacts of natural gas by the Environmental 
Defense Fund (EDF). The final reports for these studies have not yet 
been released but we will review them once they are available. Finally, 
the lifecycle analysis is sensitive to the GWP factor used to assess 
methane and nitrous oxide, and if a different GWP value were to be 
used, it would affect the relative lifecycle impact of natural gas 
relative to diesel in heavy-duty trucks (see Chapter 13 of the draft 
RIA for sensitivity analyses regarding upstream methane emissions and 
the use of different GWP factors).
    We compared our lifecycle emission estimates for natural gas, 
relative to diesel fuel, with the estimates provided by the California 
Air Resources Board (CARB) for its Low Carbon Fuel Standard (LCFS). For 
our emissions estimate used in the comparison we used the carbon 
dioxide-equivalent (CO2 eq) emissions estimated for 2014 and 
later engines, which must comply with a methane tailpipe emissions 
standard, and assumed that the engine was 5 percent less thermally 
efficient than a

[[Page 40509]]

comparable diesel engine. For the CARB emissions estimates, we used the 
estimates made for illustrative purposes using the 2013 version of the 
CARB GREET model as published in August, 2014.806 807 CARB 
estimates that CNG engines emit 76 percent of the CO2 eq 
emissions as a diesel truck, while our analysis estimates that CNG 
engines emit 81 percent of the CO2 eq emissions as a diesel 
truck. The most likely explanation for CARB's lower estimated 
CO2 eq emissions for CNG engines is that a much larger 
portion of the electricity used to compress natural gas is renewable in 
California than the rest of the country. CARB estimates LNG engines 
emit 94.5 percent of the CO2 eq emissions as a diesel truck 
while our analysis estimates LNG trucks emit 96 percent of the 
CO2 eq emissions as a diesel truck. CARB assumes no boil-off 
or venting emissions for LNG trucks and for this comparison, we used 
our more modest boil-off and venting assumption, as described above, 
which is close to CARB's. Overall, our estimates are very similar to 
those estimated by CARB and when there are differences, the differences 
are as expected.
---------------------------------------------------------------------------

    \806\ Low Carbon Fuel Standard Reconsideration: CA-GREET Model 
Update, California Air Resources Board, August 22, 2014.
    \807\ Per Anthy Alexiades of CARB: CARB is planning to propose a 
new draft lifecycle analysis for CNG and LNG trucks at an April 2015 
public meeting. While the CNG lifecycle GHG emissions are expected 
to be about the same, the LNG lifecycle emissions are expected to be 
lower based on using a 90% efficiency for liquefaction plants 
instead of the 80% efficiency that CARB was using previously. 
Lifecycle emissions for both CNG and LNG trucks will be adjusted to 
be 10% higher if using a spark ignition engine to account for their 
lower thermal efficiency. These estimates are solely for 
hypothetical analyses. LCFS credits are awarded based on GHG 
emissions for each specific application.
---------------------------------------------------------------------------

    A UC Davis report recently released estimated that CNG and LNG 
trucks using spark ignition engines (SING) emit about the same amount 
of CO2 -equivalent emissions, and these emissions are 
slightly higher than that of diesel engines.\808\ The HPDI engines 
(DING) fueled by LNG are estimated to be the lowest emitting of the 
several scenarios analyzed by the study. Because the study did not 
discuss vehicle boil-off emissions, it is likely that the study either 
assumed that these emissions are zero or assumed the default vehicle 
boil-off emission estimates made by GREET. It is likely that the study 
assumed that the liquefaction plants are 90 percent efficient as this 
is the default assumption in GREET, which leads to lower GHG emissions 
by LNG trucks.
---------------------------------------------------------------------------

    \808\ Jaffe, Amy Myers, Exploring the role of Natural Gas in 
U.S. Trucking, NextSTEPS Program, UC Davis Institute of 
Transportation Studies, February 18, 2015.
---------------------------------------------------------------------------

C. Projected Use of LNG and CNG

    We reviewed several sources to estimate how much natural gas is 
currently being used and is projected to be used by heavy-duty trucks. 
Projections for this emerging technology range from 7 percent of new 
heavy-duty vehicle sales to over 40 percent by 2040. Large 
uncertainties exist even since the 2014 NAS First Report was 
written.\809\ Among the range of projections we assessed, that produced 
by the Energy Information Administration (EIA) seemed the most credible 
for capturing recent trends, and for projecting future natural gas use 
by heavy-duty trucks. There are several factors that support this 
assessment.
---------------------------------------------------------------------------

    \809\ B. Tita, Slow Going for Natural-Gas Powered Trucks; Wall 
Street Journal, 8/26/2014.
---------------------------------------------------------------------------

    First, in its 2014 Annual Energy Outlook, EIA estimates that 
natural gas fueled 0.4 percent of the energy use of heavy-duty trucks 
in 2014. This estimate is consistent with the fraction of the heavy-
duty fleet which is fueled by natural gas as estimated by the 
industry.\810\ Conversely, other studies referenced by the NAS report 
assume that current use is already about 2 percent (the DRIA contains 
more discussion about these other projections).
---------------------------------------------------------------------------

    \810\ NGV America estimates that there are 62,000 natural gas 
fueled heavy-duty trucks and buses operating in the U.S. out of a 
total of 12.3 million heavy-duty trucks and buses operating in the 
U.S., which equates to 0.5%.
---------------------------------------------------------------------------

    Second, the EIA projection is based on an economic analysis which 
considers the increased cost of manufacturing a natural gas truck over 
a diesel truck, the fuel savings for using natural gas instead of 
diesel fuel, and whether the payback time of the fuel savings against 
the increased truck cost would result in purchases of natural gas 
trucks. As part of this analysis, EIA assumes that lighter heavy-duty 
trucks would use CNG, which is a lower cost technology suited for the 
shorter driving distances for these trucks. The long haul trucks, 
however, require larger on-board stores of fuel to extend the driving 
range which is satisfied by storing the natural gas as a liquid. LNG 
has about 60 percent of the energy density of diesel fuel, compared to 
CNG which has only 25 percent of the energy density of diesel fuel. To 
satisfy the long driving range of the long haul trucks, EIA assumed 
that they would use LNG as a fuel. The assumptions used by EIA for 
conducting its economic analysis all seem reasonable.
    Third, EIA is one of the several organizations in the world which 
collects fuel pricing data and projects future fuel prices using a 
sophisticated modeling platform. One of the most important assumptions 
in projecting the future use of natural gas in the transportation 
sector is the relative price of natural gas to the price of diesel 
fuel. In 2014, the natural gas price purchased by industrial users was 
about $6 per million BTU. The price of crude oil has been volatile 
during 2014 as the Brent crude oil price started at about $110 per 
barrel, but decreased to under $50 per barrel. From EIA's Web site, the 
average retail diesel fuel price in the first part of 2014 was about 
$3.80 cents per gallon. When comparing the natural gas spot market 
price on a diesel equivalent basis to the diesel fuel price, it appears 
that natural gas is priced about one quarter of the diesel fuel price. 
However, if used as compressed natural gas, the natural gas must be 
distributed through smaller distribution pipeline system that exists in 
cities, which increases the price of the natural gas. Then the natural 
gas must be compressed and stored at a retail outlet, and then 
dispensed to CNG trucks. The estimated retail price of CNG is $2.35 on 
a diesel gallon equivalent (DGE) basis, or about $1.45 DGE less than 
diesel fuel. LNG plants are assumed to be located close to large 
transmission pipelines away from cities, thus, it is sourced from lower 
cost natural gas. However, for producing LNG, the natural gas must be 
liquefied, shipped to retail outlets, stored and then dispensed to LNG 
trucks. These steps add substantially to the price of the LNG and the 
estimated retail price of LNG is $2.65 DGE, or $1.15 DGE less than 
diesel fuel.
    In its 2014 AEO projections, EIA estimates that crude oil prices in 
the upcoming years will decline modestly until after 2020 when they 
start increasing until they reach $140/bbl in 2040. Natural gas prices 
are expected to only slightly increase over this period.
    Fifth, the assumptions regarding payback used by EIA seemed 
reasonable. EIA projects that natural gas trucks begin to be purchased 
when the payback times are 4 years or less based on a survey conducted 
by the American Trucking Association. This is consistent with 
conversations the agencies have had with some fleet owners. Since EIA 
does not report the payback times as an output of its projections, it 
is useful to understand payback times. The 2014 NAS Phase 2 First 
Report cites the payback for the extra cost of natural gas trucks as 2 
years, but other sources

[[Page 40510]]

report a longer return closer to 4 years.\811\
---------------------------------------------------------------------------

    \811\ Early LNG Adopters Experience Mixed Results; Truck News, 
October 1, 2013.
---------------------------------------------------------------------------

    EPA assessed the time required for the lower fuel cost of CNG and 
LNG to payback the incremental truck cost of using LNG and CNG. The CNG 
tank plus fuel weighs on the order of four times as much as the diesel 
counterpart, and typically adds $40,000-$50,000 to the cost of a heavy-
duty truck. In 2014, we estimated the payback time to be over 5 years 
when we assessed the payback at the higher crude oil prices at the 
beginning of the year. The payback rates would be even higher if we 
would have assessed the payback rates at the end of the year when the 
crude oil prices were much lower. However, for many fleets, even the 
payback rates at the higher crude oil prices would not be sufficiently 
attractive, and generally explains the low penetration of natural gas 
in the heavy-duty sector today. It appears that when the payoff time is 
longer than 4 years, few fleets are interested in purchasing natural 
gas trucks without subsidies to compensate for the higher purchase 
price of natural gas trucks. According to EIA, half the natural gas 
consumption by cars and trucks is in California, a state that 
subsidizes the purchase price of natural gas vehicles, and also 
subsidizes the cost of natural gas dispensing stations. The Low Carbon 
Fuel Standard in place in California also incentivizes natural gas use 
because natural gas is considered to cause less of an impact on the 
climate than petroleum-based gasoline and diesel fuel.\812\ The 
majority of the other half of the NG fleet resides in states which 
subsidize the cost of using natural gas by motor vehicles.
---------------------------------------------------------------------------

    \812\ CARB currently estimates for the LCFS that CNG and LNG 
trucks reduce GHG-equivalent emissions by 32% and 17%, respectively, 
compared to gasoline and diesel fuel. In August 2014, CARB proposed 
reducing the GHG-equivalent benefit of CNG and LNG trucks to 22% and 
3%, respectively, compared to gasoline and diesel fuel.
---------------------------------------------------------------------------

    Based on the EIA projections for crude oil and natural gas prices, 
the payoff time of LNG trucks is expected to remain long (more than 5 
years) until sometime after 2020 when crude oil prices are projected to 
begin increasing. Thus, natural gas use by heavy-duty trucks is not 
projected by EIA to increase above 1 percent of the heavy-duty fuel 
demand until after 2025.
    If the apparent payback time for CNG and LNG trucks use is 
favorable to fleet owners, fuel availability could still slow the 
transition to CNG and LNG. This is because CNG and LNG availability at 
service stations is currently 1 percent or less of the availability of 
gasoline and diesel fuel and therefore not available for most fleets. 
LNG availability is particularly challenging because in addition to an 
LNG service station, a LNG liquefaction plant would be needed as well.
    To the extent that natural gas displaces diesel fuel and impacts 
truck greenhouse gas emissions, either positive or negative, there 
would be little impact on overall greenhouse gas emissions because of 
the low natural gas truck sales that are expected to occur over the 
next decade. The low natural gas use by the heavy-duty sector during 
the Phase 2 timeframe will give us time to learn more about both 
upstream and downstream methane emissions to gain a better 
understanding of the lifecycle impacts of natural gas use by heavy-duty 
trucks. It will allow us more time to consider the best additional 
steps to take to further reduce upstream and downstream methane 
emissions to improve the lifecycle impacts of natural gas use by heavy-
duty trucks should the heavy duty truck fleet begin consuming natural 
gas in much larger quantities.

D. Natural Gas Emission Control Measures

    As interest in the potential use of natural gas as a heavy-duty 
fuel has increased, industry has begun to investigate how to improve 
the overall emission performance of natural gas vehicles, especially 
with respect to reducing methane leaks. EPA is proposing two control 
measures which are discussed in Section XI. There are additional items 
discussed in Section XI. D. (2) on which we request comment. Included 
in this list are several control options.
(1) Proposed Control Measures
    As is discussed earlier in this preamble in Sections II and XIII. 
EPA is proposing some control measures to reduce potential methane 
emissions from natural gas vehicles. These are summarized here. Note 
that since these controls are being proposed to address GHG emissions 
rather than fuel consumption, NHTSA is not proposing equivalent 
requirements.
(a) Proposed Closed Crankcase Requirement for NG Fueled Engines and 
Vehicles
    EPA is proposing to require that all natural gas engines have 
closed crankcases, rather than continuing the provision that allows 
compression-ignition engines to separately measure and account for 
crankcase emissions that are vented to the atmosphere. This allowance 
has historically been in place to account for the technical limitations 
related to recirculating crankcase gases with high PM emissions back 
into the engine's air intake. Natural gas engines have inherently low 
PM emissions, so there is no technological limitation that would 
prevent manufacturers from closing the crankcase and recirculating all 
crankcase gases into the engine's air intake. The methane standard that 
was introduced in Phase 1 of this rule accounts for crankcase 
emissions, but when the system is sealed and emissions are routed to 
the engine intake, those emissions will be considered in determining 
the deterioration factor. See the Preamble Section II. D. for a 
description of the proposed closed crankcase requirement for natural 
gas fueled engines. This requirement would apply to the manufacturer 
responsible for criteria emission compliance: The vehicle manufacturer 
for complete pickups and vans, and the engine manufacturers for all 
other vehicles.
(b) Proposal To Require 5 Day Hold Time for LNG Vehicles
    Boil-off emissions from LNG vehicles were not addressed in the 
Phase 1 rulemaking. As more testing has been done in this area since 
that time for this rising issue, as described in the Preamble Section 
XII, EPA is proposing to require manufacturers to follow current 
industry recommended practice, SAE J2343 for five day hold time to 
limit boil-off emissions from LNG vehicles. The specifications of this 
safety related standard has an effect which helps new LNG vehicles 
prevent boil-off. This SAE standard will only affect new LNG vehicles. 
It will not address aging vehicles as their insulating properties 
diminish such as loosing vacuum over time and may eventually result in 
much shorter hold times.\813\
---------------------------------------------------------------------------

    \813\ The LNG storage tanks achieve some of their insulating 
properties due to a vacuum created between the two walls of the 
double-walled LNG storage tank.
---------------------------------------------------------------------------

    EPA proposes to require the certificate holder for the chassis to 
also comply with the proposed requirements for LNG fuel systems, but to 
apply the delegated assembly and secondary manufacturer allowances for 
these requirements. We request comment on this approach generally, as 
well as on:
     The need for additional requirements for manufacturers not 
holding certificates, such as requiring that fuel system manufacturers 
participate in recalls for defects in their components.
     The appropriateness of requiring or allowing separate 
certification of fuel

[[Page 40511]]

systems (or similar provisions) where they are installed by 
manufacturers not holding the certificate for the chassis with respect 
to CO2 and fuel consumption.
(2) Additional Natural Gas Topics for Comment
    In this section we request comment on several additional areas 
related to potential regulatory requirements for natural gas fueled 
vehicles. See Chapter 13 of the Draft RIA for additional details on 
these topics.
(a) Request for Comment on Changing Global Warming Potential Values in 
the Credit Program for CH4 (See Also Preamble Section 
II.(D)(5)(b))
    The phase 1 heavy-duty vehicle rulemaking establishing greenhouse 
gas emission standards included a compliance alternative allowing 
heavy-duty manufacturers and conversion companies to comply with the 
respective methane or nitrous oxide standards by means of over-
complying with CO2 standards (40 CFR 85.525). The heavy-duty 
rules allow averaging only between vehicles or engines of the same 
designated type (referred to as an ``averaging set'' in the rules). 
Specifically, the phase 1 heavy-duty rulemaking added a CO2 
credits program which allowed heavy-duty manufacturers to average and 
bank pollutant emissions to comply with the methane and nitrous oxide 
requirements after adjusting the CO2 emission credits 
(generated from the same averaging set) based on the relative GHG 
equivalents. To establish the GHG equivalents used by the 
CO2 credits program, the phase 1 heavy-duty vehicle 
rulemaking incorporated the IPCC Fourth Assessment Report global 
warming potential (GWP) values of 25 for CH4 and 298 for 
N2O, which are assessed over a 100 year lifetime.
    Since the Phase 1 rule was finalized, a new IPCC report has been 
released (the Fifth Assessment Report), with new GWP estimates. This is 
prompting us to look again at the relative CO2 equivalency 
of methane and to seek comment on whether the methane GWP used to 
establish the GHG equivalency value for the CO2 Credit 
program should be updated to those established by IPCC in its Fifth 
Assessment Report. The Fifth Assessment Report provides four 100 year 
GWPs for methane ranging from 28 to 36. Therefore, we not only request 
comment on whether to update the GWP for methane to that of the Fifth 
Assessment Report, but also on which value to use from this report.
(b) Request for Comment on Appropriate Deterioration Factors for NG 
Tailpipe Emissions
    The current assigned deterioration factors for CO2, 
N2O, and CH4 are based on diesel technology. 
While EPA still believes this is likely appropriate, we would welcome 
data to support this policy or other comments on how appropriate these 
factors are applied to NG engines and vehicles.
(c) Request for Comment on LNG Vehicle Boil-Off Warning System
    A simple means to help limit boil-off emissions would be to require 
that natural gas truck drivers be alerted to expected near-future boil-
off events. Such an alert could be in the form of a warning light and 
associated audible alarm that would indicate that the LNG storage tank 
is approaching a pressure which would require the tank to vent. Knowing 
this, the truck driver could take action to prevent such a release, 
such as starting to drive the vehicle, which likely would reduce the 
pressure in the tank, or connecting the vent line to either a LNG 
storage tank or natural gas pipeline for venting. EPA requests comment 
on the feasibility and appropriateness of a regulatory requirement that 
LNG fueled vehicles include a warning system that would notify the 
driver of a pending boil-off event as one means reduce the frequency of 
such events and thus limit the release of methane.
(d) Request for Comment on Extending the 5 Day Hold Time for LNG 
Vehicles
    The specifications of the proposed 5 Day Hold Time SAE 2343 safety 
related standard will only affect new LNG vehicles to prevent boil-off 
initially and does not address aging vehicles as their insulating 
properties diminish such as loosing vacuum over time that may 
eventually result in much shorter hold times. LNG tank manufacturers 
are further developing their technologies for improvement of hold times 
and reducing boil-off from LNG storage tanks on trucks. These 
improvements can be incorporated by requiring longer hold times. EPA is 
soliciting comment on the ability of these emerging technologies to 
address an extension of 5 days to a longer period of time such as 10 
days and the ability to achieve the hold times for the duration of the 
vehicle's useful life.
(e) Capturing and/or Converting Methane Refueling or Boil-Off Emissions
    We would like input on how effective and feasible the following 
potential emissions control technologies are for achieving longer hold 
times in LNG vehicles.
    A methane canister using adsorbents such as ANG (adsorbed natural 
gas) could be added to capture the methane which otherwise would be 
released to the environment during a refueling or boil-off event. Once 
captured, steps could be taken to route the methane to the engine 
intake once the vehicle is operating again, or to take steps to 
converting the methane to less GHG-potent CO2.
    Instead of discharging methane to the environment, the methane 
potentially could be burned to CO2 using a burner. Another 
potential option would be to convert the methane capture in a canister 
to CO2 over a catalyst.
(f) Request for Comment on Reducing Refueling Emissions
    When refueling a natural gas vehicle, methane is vented to the 
atmosphere. As of Tier 3 it is required by EPA to use the ANSI-NGV1-206 
standard practice to meet the evaporative emissions refueling 
requirement. Small puffs of up to 200 cc/hr (which equates to 72 grams 
of methane per hour) of leakage are allowed with these tests. Often 
there is a vent line which carries these puffs away from the nozzle 
interface for safety reasons but is then vented to the atmosphere. EPA 
is requesting comment on ways to eliminate or reduce these losses. If 
there must be allowances for losses, then how can this methane gas be 
captured during refueling using systems that route methane emissions 
back to the fuel storage tank, whether it is a CNG tank, a CNG pipeline 
or re-liquefying system for LNG. For LNG, in addition to the boil-off 
issue is the recurrence of manual venting at refueling by truck 
operators. Under high pressure circumstances, such as when the vehicle 
has been sitting for some time period in warmer temperatures, it is 
necessary to decrease the pressure in the fuel tank before new fuel can 
enter the tank. The recommended practice is to transfer the extra 
vaporized fuel to the gas station or natural gas pipeline, but this can 
take extra time. In some areas it has turned into common practice to 
just vent to the atmosphere to keep the down time at the refueling 
station to a minimum. In other areas there is an incentive to reroute 
the gas into the station storage tank or natural gas pipeline with 
credit towards the fuel purchase. EPA is requesting comment on 
approaches to reduce refueling emissions for LNG vehicles.

[[Page 40512]]

(g) On-Board Monitoring Requirements for Boil-Off Events and Venting at 
Refueling
    Onboard diagnostics for engines used in vehicle applications 
greater than 14,000 lbs GVWR are already required to detect and provide 
a warning for when methane leaks occur due to wear of connections and 
components of the CNG or LNG fuel system (74 FR 8310, February 24, 
2009). We are requesting comments on requiring on-board monitoring to 
track boil-off events as well as whether the excess vapors were 
properly vented to the station storage tanks or NG pipeline, or whether 
the gaseous methane emissions were vented to atmosphere during 
refueling events. Each boil off event has the potential to release on 
the order of 5,300-15,800 grams of CH4 which translates to 
132K-400K grams CO2 equivalent with a GWP of 25 for 100 
years.
(h) Separate Standards for Natural Gas Vehicles
    As described above, the climate impact of leaks and other methane 
emissions that occur upstream of the vehicle can potentially be large 
enough to more than offset the CO2 benefit of natural gas 
vehicles as measured at the vehicle tailpipe. EPA is considering 
separate action to control these upstream emissions. Nevertheless, we 
have some concern that the impact of upstream emissions for natural gas 
much higher than for gasoline or diesel fuel because of the high Global 
Warming Potential (GWP) for methane that makes even small leaks of 
natural gas of concern. In this way, natural gas is very different than 
other alternative fuels.
    While we are not proposing any provisions to address this, we may 
consider adopting such provisions in the final rule and are asking for 
comments on this topic. Would it be appropriate to adjust the tailpipe 
GHG emission standard for natural gas vehicles by a factor to reflect 
the life cycle emissions of natural gas vehicles relative to diesel 
vehicles? For example, if we were to determine that the life-cycle 
climate impacts of natural gas vehicles were 150 percent of the 
tailpipe GHG emissions, while the life-cycle climate impacts of diesel 
vehicles were 135 percent of the tailpipe GHG emissions, we could 
approximate the relative climate impacts by setting the natural gas 
tailpipe emission standard 10 percent lower than the diesel tailpipe 
standard. We recognize that there is significant uncertainty is 
assessing these relative climate impacts, and that they could change as 
new production methods and/or regulations go into effect. Thus 
commenters supporting making such an adjustment are encouraged to 
address this uncertainty. Commenters are also encouraged to address how 
such an adjustment for GHG emissions would impact the closely 
coordinated EPA and NHTSA heavy-duty Phase 2 program including how a 
potential adjustment for upstream methane emissions for natural gas 
fueled vehicles would impact the coordination of EPA GHG regulations 
with the NHTSA fuel consumption regulations.

E. Dimethyl Ether

    Although NAS (2014) focused its recommendations on natural gas, it 
also discussed dimethyl ether (DME), which is a potential heavy-duty 
truck fuel sourced from natural gas. Dimethyl ether has a high cetane 
number (more than 55), although its energy density is about 60 percent 
of that of diesel fuel. Dimethyl ether is a volatile fuel, like liquid 
petroleum gas, that can be stored as a liquid at normal ambient 
temperatures under moderate pressure. Typical DME fuel tanks would be 
designed to prevent any significant evaporative emissions.
    A DME fueled truck is only modestly more expensive than a diesel 
fuel truck. The fuel tank is more expensive than a diesel fuel tank, 
but much less expensive than an LNG tank since it does not need to be 
heavily insulated. The engine modifications to enable using DME are 
also modest. Because DME does not have carbon-carbon bonds that form 
particulate matter particles during combustion, the particulate filter, 
which is standard equipment on new diesel trucks, can be eliminated. 
This offsets some of the engine and fuel tank costs.
    Although DME is sourced from cheap natural gas, the conversion of 
natural gas to DME and moving the fuel to retail outlets greatly 
increases the cost of the fuel. DME is more expensive than LNG, but 
still lower in cost than diesel fuel based on the fuel prices in early 
2014. DME is estimated to cost $3.50/DGE, or $0.30 DGE less than diesel 
fuel.
    Because there is very little DME use in the U.S. (there is only a 
very small fleet of trucks in California), we did not conduct a 
lifecycle assessment of DME, but note here a few aspects of a lifecycle 
analysis for DME. First, since DME is sourced from natural gas, the 
upstream methane emissions from the natural gas industry would still be 
allocated to DME. Second, there are not venting issues associated with 
DME as with LNG or CNG refueling. Third, DME itself has a much lower 
global warming potential than methane. DME's global warming potential 
is estimated to be 0.3 when assessed over a 100 year lifetime, which is 
about 1 percent of methane's GWP.

XII. Agencies' Response to Recommendations From the National Academy of 
Sciences

A. Overview

    As part of the Phase 1 standards, the agencies were informed by a 
report generated by the National Academy of Sciences (NAS), as required 
by Congress in EISA.\814\ In addition to that initial report, Section 
107 of EISA requires that the report be updated in five year intervals 
through 2025.\815\ On September 24, 2016, NAS will release its updated 
report under Congress' quinquennial update requirement. However, 
because the Phase 2 rules will be completed prior to the issuance of 
the first update, NAS issued an interim report in the form of a First 
Report (NAS HD Phase 2 First Report) published on April 3, 2014.\816\ 
The agencies have consulted the report and considered its findings in 
creating this proposal. The National Research Council formed the 
Committee on Technologies and Approaches for Reducing the Fuel 
Consumption of Medium- and Heavy-Duty Vehicles, Phase Two (the 
Committee or NAS Committee) in order to prepare the NAS HD Phase 2 
First Report. In its Phase 2 First Report, the Committee seeks to 
advise NHTSA on the HD Phase 2 rules while meeting the agencies' 
objectives of:
---------------------------------------------------------------------------

    \814\ Energy Independence and Security Act of 2007, Public Law 
110-140, section 108(a).
    \815\ EISA further states that the NAS must submit the report to 
DOT, the Senate Committee on Commerce, Science, and Transportation, 
and the House Committee on Energy and Commerce not later than one 
year after the date on which the Secretary executed the agreement 
with the NAS.
    \816\ Transportation Research Board 2014. ``Reducing the Fuel 
Consumption and Greenhouse Gas Emissions of Medium- and Heavy-Duty 
Vehicles, Phase Two.'' (``Phase 2 First Report'') Washington, DC, 
The National Academies Press. Cooperative Agreement DTNH22-12-00389. 
Available electronically from the National Academy Press Web site at 
http://www.nap.edu/catalog.php?record_id=12845 (last accessed 
December 2, 2014).

 Reducing in-use emissions of carbon dioxide from medium- and 
heavy-duty vehicles
 Reducing in-use emissions of other GHGs from medium- and 
heavy-duty vehicles
 Improving the in-use efficiency of fuel use in medium- and 
heavy-duty vehicles--by driving innovation, advancement, adoption, and 
in-use balance of technology through regulation

[[Page 40513]]

    In providing the First Report recommendations, the committee 
acknowledged the following constraints:

 Holding life-cycle cost of technology change or technology 
addition to an acceptable level
 Holding capital cost of acquiring required new technology to 
an acceptable level
 Acknowledging the importance of employing a balance of energy 
resources that offers national security
 Avoiding near-term, precipitous regulatory changes that are 
disruptive to commercial planning
 Ensuring that the vehicles offered for sale remain suited to 
their intended purposes and meet user requirements
 Ensuring that the process used to demonstrate compliance is 
accurate, efficient, and not excessively burdensome
 Not eroding control of criteria pollutants or unregulated 
species that may have health effects

    Although the Phase 2 First Report was developed and written in 
terms of reducing fuel consumption, its findings and recommendations in 
general apply equally to a program that reduces GHG emissions, given 
the close relationship between the two.

B. Major Findings and Recommendations of the NAS Phase 2 First Report

    While the agencies have addressed many NAS recommendations as they 
pertain to individual areas of the Phase 2 standards, this section 
consolidates all of the recommendations from the NAS HD Phase 2 First 
Report and discusses the extent to which the agencies' proposed program 
is consistent with them. The NAS HD Phase 2 First Report contains more 
than 40 recommendations to the agencies. All of the Committee's 
recommendations have been considered, and many of them have been 
incorporated in the Phase 2 standards. In some instances, the agencies 
have chosen a different course from the one charted by the NAS 
Committee's recommendations.
    Instead of discussing the NAS report findings and recommendations 
in the order presented in the Phase 2 First Report itself, this section 
divides the NAS findings and recommendations in three categories: 
Findings and recommendations with which (1) the Phase 2 standards are 
consistent; (2) the Phase 2 Standards are significantly inconsistent; 
and (3) the Phase 2 standards are less-significantly inconsistent.
(1) NAS Findings and Recommendations With Which Phase 2 Standards Are 
Consistent
(a) How should the agencies address standards for trailers in the phase 
2 rulemaking?
    Given the exclusion of trailers from the Phase 1 standards, the 
Committee focused on a wide array of opportunities by which the 
agencies could reduce fuel consumption and GHG emissions. The Committee 
evaluated potential fuel consumption- and GHG-reducing technologies 
that can be incorporated on a trailer as well as components of a 
trailer, such as tire-related technologies.
    The Committee found that many opportunities exist for trailers to 
reduce fuel consumption and GHG emissions of the pulling tractor. More 
specifically, the Committee evaluated trailer aerodynamics, tire 
rolling resistance, and tire pressure monitoring systems.
    Despite the fuel consumption- and GHG-reducing possibilities of the 
trailer technologies the Committee evaluated, a survey it conducted 
found that only 40 percent of new van trailers came equipped with fuel-
saving aerodynamic devices.\817\ Further, the Committee found that most 
trailer devices on average, within one year, saved enough in fuel cost 
to pay for the added cost of the device. The Committee observed that 
when a trailer is not owned by the tractor operator, there is no 
incentive for the trailer owner to purchase fuel-saving devices. 
Moreover, the Committee stated that in absence of regulation, many 
trailer owners do not choose to employ fuel saving devices.
---------------------------------------------------------------------------

    \817\ See Note [3] at 78.
---------------------------------------------------------------------------

    The Committee recommended that NHTSA, in coordination with EPA, 
adopt a regulation requiring that all 53 foot and longer dry van and 
refrigerated van trailers meet performance standards that reduce fuel 
consumption and GHG emissions.\818\ It also recommended that NHTSA 
assess the benefit of using GEM to address all tractors in combination 
with trailers.\819\ The Committee also recommended the agencies collect 
real-world data on fleet use of aerodynamic trailers to help inform 
standards.\820\
---------------------------------------------------------------------------

    \818\ Id., Recommendation 6.1.
    \819\ Id., Recommendation 3.12.
    \820\ Id., Recommendation 6.1.
---------------------------------------------------------------------------

    As discussed in more detail in Section IV, the agencies are 
proposing to adopt Phase 2 standards for all new dry van and 
refrigerated van trailers, including both those above and below 53 feet 
in length. The agencies have carefully evaluated the lead time for 
implementation of this potential program to take into consideration 
factors such as existing market conditions and the fact that a 
regulation of new trailers will include companies that have not 
previously been regulated for fuel consumption and GHG emissions. To 
the degree that it is available, the agencies are gathering data on 
real world fleet use of aerodynamic devices, both to understand the 
overall context of the rules and for specific analytical purposes such 
as the appropriate role of aerodynamic devices on the reference trailer 
used for tractor aerodynamic assessment. The agencies have also 
assessed the benefit of using GEM to address all tractors in 
combination with trailers and are proposing that, for the long-term 
program, GEM be used to demonstrate compliance with both the tractor 
and the trailer requirements of the Phase 2 program.
    In addition to the Committee's recommendation that NHTSA and EPA 
regulate 53 foot and longer box trailers, the Committee recommended 
that NHTSA and EPA assess the practicability and cost-effectiveness of 
including pups, flat-beds, and container chassis.\821\ The Committee 
found that pups, flat-beds, and container chassis demonstrated fuel 
savings, however, factors such as average speed, mileage, and practical 
concerns such as access to equipment underneath the trailer needed to 
be assessed.\822\
---------------------------------------------------------------------------

    \821\ Id., 6.2.
    \822\ Id. at 83.
---------------------------------------------------------------------------

    The agencies have evaluated whether it would be practical and cost 
effective to include pups (in tandem or separately), other box trailers 
of lengths between that of pups and standard 53-foot trailers, 
flatbeds, container chassis (with and without containers attached), 
tankers, and other trailer types in the Phase 2 regulation. As a result 
of this analysis, the agencies are proposing to include pups as well as 
box vans between 28 feet and 53 feet long in Phase 2. With regard to 
other types of trailers, such as tankers, flatbeds, and container 
chassis, the agencies have evaluated issues such as trailer plumbing, 
flat bed ground clearance, chassis stacking, trailer duty cycles, cost 
of technologies, and other issues. The agencies are proposing that 
these and other non-box trailers be included in Phase 2 requirements. 
However the agencies are assuming compliance with the Phase 2 program 
for these non-box trailers will be limited to tire technologies.
    Finally, the Committee examined the use of GEM for tractor and 
trailer compliance. It asserted that tractors and trailers are 
fundamentally inseparable

[[Page 40514]]

when addressing aerodynamic drag and design. As applied to GEM 
simulation, the Committee opined that considering tractors and trailers 
separately for simulation purposes might prove counterproductive, 
because components on a tractor and trailer might compromise 
aerodynamic optimization. The Committee recommended that NHTSA assess 
the benefit of using GEM to address all tractors in combination with 
trailers.\823\
---------------------------------------------------------------------------

    \823\ Id. at 38, Recommendation 3.12.
---------------------------------------------------------------------------

    As stated above, the agencies have assessed the benefit of using 
GEM to address all tractors in combination with trailers and are 
proposing to use GEM for both tractors and trailers for the Phase 2 
program for tractors and trailers, similar to what was done in Phase 1. 
In Phase 1, which did not regulate trailers, this meant simulating each 
tractor being certified as being used in combination with a standard 
reference trailer. For these rules, we are proposing to simulate each 
trailer being certified as being used in combination with a standard 
reference tractor.
(b) Have the agencies revisited dieselization of Class 2b through 7 
vehicles?
    The Committee reiterated a recommendation from its Phase 1 report 
regarding the study of dieselization of Class 2b through 7 
vehicles.\824\ The Committee stated that diesel engines present an 
opportunity for incremental fuel efficiency gains. The NAS Committee 
recommended that NHTSA conduct a study of Class 2b to 7 vehicles to 
consider the incremental fuel consumption reduction of diesels, the 
price of diesel versus gasoline, and the diesel advantage in 
durability.\825\
---------------------------------------------------------------------------

    \824\ Id. at 14-15.
    \825\ Id.
---------------------------------------------------------------------------

    As part of the Phase 2 proposed rule analysis, the agencies 
evaluated many potential fuel efficiency and greenhouse gas reduction 
(FE/GHG) technologies for both gasoline and diesel fueled vehicles. As 
will be discussed in detail in later responses, NHTSA sponsored 
research at Southwest Research Institute (SwRI) included simulations of 
baseline and projected Phase 2 FE/GHG technologies for Class 2b through 
7 vehicles over a range of appropriate duty cycles.\826\ A HD pickup 
truck (Class 2b), the Dodge Ram 2500, was modeled using a 385-hp 6.7-
liter diesel engine as the baseline. The vehicle's baseline performance 
and the effectiveness of FE/GHG technologies with the diesel engine 
were compared over identical duty cycles to two gasoline engines, a 
6.2-liter naturally aspirated gasoline V-8 and 3.5-liter turbocharged 
direct injection V-6, with their corresponding engine technologies. 
Similarly, two medium-duty trucks (Class 6), the Ford F-650 and 
Kenworth T-270, were modeled using a 300-hp 6.7-liter diesel engine as 
the baseline and compared to the two aforementioned medium-duty V-8 and 
V-6 gasoline engines.
---------------------------------------------------------------------------

    \826\ See the 2015 NHTSA Technology Study, Note 289 above.
---------------------------------------------------------------------------

    Many of the diesel engine technologies evaluated in supporting 
Phase 2 research are currently available, proven, and on the path to 
increased penetration across the fleet. Other technologies are still in 
development and looking for the opportunity to enter the mainstream 
production lifecycle. For the latter, the agencies believe, as informed 
through the proposed rule development research, that costs, 
reliability, durability, and clear user benefits are important when 
determining potential future technology applications to achieve 
attainable standards resulting in real-world reductions. As identified 
in the proposal, the agencies considered these important factors when 
developing the proposed standards and, included in the analysis, are 
technologies that recognize the value of the current and future fleet 
dieselization.
    However, the agencies recognize that there are valid reasons for 
why medium and heavy-duty vehicle purchasers sometimes choose gasoline 
engines over diesels. Gasoline engines are generally lighter and less 
expensive than diesels, although they typically do not last as long in 
heavy-service. For applications in which the vehicle is not expected to 
travel many miles each year, gasoline engines may be the best choice. 
On the other hand, for applications in which the vehicle is expected to 
travel many miles each year, diesels can be a more appropriate choice.
(c) What kind of analyses are the agencies doing on upstream emissions 
related to natural gas?
    The NAS Committee discussed the potential natural gas presents for 
reducing fuel consumption and GHG emissions in medium- and heavy-duty 
vehicles. The Committee stated that while tailpipe emissions are often 
the most observable instance of fuel consumption and tailpipe 
emissions, the fuel production, distribution, and processing components 
of obtaining natural gas for use in vehicles also factors into any 
calculation of overall benefits derived from natural gas vehicles.\827\ 
The Committee recommended that NHTSA, in coordination with EPA, begin 
to consider the well-to-wheel, life-cycle energy consumption and 
greenhouse emissions associated with different vehicle and energy 
technologies to ensure future rulemakings best accomplish their overall 
goals.\828\
---------------------------------------------------------------------------

    \827\ Id. at 19-20.
    \828\ Id. at 20, Recommendation 1.10.
---------------------------------------------------------------------------

    The agencies recognize that understanding the life-cycle 
implications of vehicle and energy technologies is important to ensure 
that the rulemaking accomplishes its overall goals. In the Draft and 
Final Environmental Impact Statement (EIS) prepared for the 2017 and 
Later Model Year Light-Duty Vehicle GHG Emissions and CAFE Standards 
rulemaking, NHTSA introduced a literature synthesis of life-cycle 
environmental impacts of certain vehicle materials and technologies. 
Consistent with that approach, in the Draft EIS for Phase 2, NHTSA has 
again provided a literature synthesis of life-cycle environmental 
impacts, focusing on the unique vehicle technologies for the HD sector 
and incorporating by reference the literature synthesis prepared for 
the MY 2017 and beyond CAFE Final EIS. The Draft EIS also uses the 
GREET fuel-cycle model to assess upstream emissions from extraction, 
refining, and transportation of medium- and heavy-duty vehicle fuels. 
This information in the Draft EIS informs both the agency and the 
public about the potential life-cycle implications of the various 
technologies under consideration in this rulemaking. NHTSA invites 
comments on the Draft EIS and its literature synthesis of life-cycle 
environmental impacts.
    EPA has also evaluated the lifecycle impact of heavy-duty trucks 
being fueled with natural gas in comparison to other heavy-duty trucks. 
This analysis is presented in Section XI along with a discussion of 
projections for future use of natural gas by heavy-duty trucks.
(d) How have the agencies evaluated aerodynamic testing methods for the 
Phase 2 program?
    With regard to aerodynamic devices, the NAS Committee reviewed 
aerodynamic test procedures related to evaluating aerodynamic 
effectiveness. The Committee found that industry testing procedures can 
vary widely because of the precision of the standards themselves.\829\ 
Further, the Committee found that fidelity of test results from 
coastdown procedures versus results from a powered on-track test is not 
known. The Committee recommended that NHTSA and EPA evaluate the

[[Page 40515]]

relative fidelities of the coast-down procedure and candidate powered 
procedures to define and optimum prescribed full-vehicle test procedure 
and process and validate the improved procedure against real world 
vehicle testing.\830\ It also recommended that NHTSA and EPA assess 
whether adding yaw loads provides significantly increased value to the 
Cd result. The Committee recommended providing updated test data to 
manufacturers to increase consumer confidence in the accuracy (and 
real-world applicability) of the testing measures as related to 
aerodynamic devices.831 832
---------------------------------------------------------------------------

    \829\ Id. at 83-84.
    \830\ Id. at 84, Recommendation 6.3.
    \831\ Id. at 36, Recommendation 3.5.
    \832\ Id. at 84, Recommendation 6.3.
---------------------------------------------------------------------------

    The agencies have undertaken a coordinated research program to 
inform the Phase 2 certification test procedure for aerodynamic drag 
and tire rolling resistance. The U.S. EPA and its contractors have 
evaluated coastdown, constant speed, CFD, and scale wind tunnel testing 
for tractors and trailers. The goals of this research effort were to: 
Assess variability between test methods; assess how yaw impacts 
aerodynamic performance; evaluate correlation of different test methods 
one to another; assess the impact of different tractor/trailer design 
attributes on the test results; examine how differences between 
manufacturers' products impact aerodynamics; and measure Cd 
improvements from a variety of aerodynamic devices in combination and 
alone. NHTSA and its contractors conducted simulation modeling to: 
Evaluate aerodynamic drag and tire rolling resistance improvements in 
combination with other vehicle and engine technologies, and determine 
the impact of different duty cycles on aerodynamic drag performance. 
Finally, EPA has conducted an analysis to determine whether or not 
adding yaw adjustments to the certification process improves the Cd 
result. As a result, the agencies are proposing to add yaw adjustments 
to the certification process for tractors. The agencies are 
disseminating the results of these test programs and conclusions at 
association meetings and public meetings such as SAE COMVEC.
    Through the research programs described above, the agencies have 
evaluated aerodynamic data that better reflects real-world experience. 
And, to the extent available, the agencies have collected aerodynamic 
performance data that reflect real-world experience. This information 
has informed the Phase 2 proposal. For example, in addition to the 
agencies are proposing to account for yaw in the aerodynamic assessment 
for Cd, we are also proposing changes to vehicle speeds used in the 
aerodynamic reference test procedure to facilitate improved estimation 
of Cd.
(e) What kind of new modeling research has been conducted to inform 
Phase 2?
    With a wide range of potential fuel consumption- and GHG emissions 
reducing technologies, the NAS Committee found that it is proper to 
assess the various combinations of technologies in real-world testing 
and in modeling. The Committee recommended that NHTSA conduct detailed 
simulation modeling in addition to physical testing.\833\
---------------------------------------------------------------------------

    \833\ Id. at 24, Recommendation 2.1.
---------------------------------------------------------------------------

    In September 2012, NHTSA contracted with the Southwest Research 
Institute (SwRI) to conduct research in support of the next phase of 
Federal fuel efficiency (FE) and GHG standards.\834\ Tasks included 
determining the baseline fuel efficiency and emissions levels and 
technologies of current model year commercial medium- and heavy-duty 
on-highway vehicles and work trucks, as well as projections of Phase 2 
fuel efficiency and emission reduction technologies for diesel and 
gasoline powered vehicles. The scope encompassed technologies for 
chassis and final-stage manufacturer vehicles and trailers, maintenance 
cost, material application, future design, capital investment, retail 
cost/payback and any other applicable advanced technologies. Estimates 
of the costs, fuel savings effectiveness, availability, and 
applicability of technologies were done for each individual vehicle 
class category (e.g., segment).
---------------------------------------------------------------------------

    \834\ Id.
---------------------------------------------------------------------------

    Selection of FE/GHG technologies, engines, vehicles, drive-cycles, 
etc. for the simulation modeling at SwRI was done in coordination with 
EPA, which had complimentary HD research programs involving vehicle 
road testing and engine dynamometer testing that informed the 
simulation efforts. The SwRI analysis relied on a technology list that 
was developed from recent NAS HD vehicle fuel consumption reports as 
well as an extensive literature review. Four base engines and four 
vehicles spanning the class 2b to class 8 vehicle segments were 
selected for simulation. Experimental data was available from other 
projects for all of the vehicles and engines simulated, and full use of 
experimental data was made to calibrate the models before additional 
technologies were evaluated.
    SwRI used a vehicle simulation tool developed in-house to model 
vehicle performance over a range of drive cycles. The commercial 
software GT-POWER (Gamma Technologies, Inc.) was used to model engine 
performance, fuel consumption, and CO2 emissions over the 
full speed-load range. Results of the agency-sponsored simulation 
modeling at SwRI will be issued in peer-reviewed research reports.
(f) How has GEM been modified by EPA?
    In its report, the NAS Committee focused many of its 
recommendations on EPA's GEM. The Committee concentrated on what 
features could be incorporated into GEM in order to improve the model's 
ability to provide outputs representative of real-world use.
    More specifically, the Committee found that GEM output was 
unaffected by the actual use of a smaller or larger engine in the same 
subcategory because the engine map used by GEM is predefined.\835\ The 
NAS Committee recommended that the agencies should assess whether a 
single steady-state speed-torque map is sufficient for GEM accuracy in 
engine efficiency prediction.\836\ EPA has evaluated this question and 
is modifying GEM to allow for different maps as an input.
---------------------------------------------------------------------------

    \835\ Id. at 37.
    \836\ Id., Recommendation 3.8.
---------------------------------------------------------------------------

    Additionally, the Committee emphasized that a certification test 
must be highly accurate and repeatable. It stated that the need to 
account for the close interaction of the engine with other components, 
including the aftertreatment subsystem and transmission.\837\ NAS 
recommended that the agencies allow powertrain testing for 
certification.\838\ As described in Section II, the agencies are doing 
so in conjunction with GEM. See the proposed provisions in 40 CFR 
1037.550, which further discusses powertrain testing and certification.
---------------------------------------------------------------------------

    \837\ Id. at 14.
    \838\ Id, Recommendation 1.6.
---------------------------------------------------------------------------

    More generally, the NAS Committee recommended revising GEM to 
reflect the benefit of integrating an engines, aftertreatment, and 
transmissions and to cover as large a fraction of over-the-road tractor 
operation as possible without becoming overly cumbersome.\839\ As 
described in Section II and in Chapter 4 of the draft RIA, the agencies 
believe the proposed revisions to GEM reflect this.
---------------------------------------------------------------------------

    \839\ Id. at 37, Recommendations 3.10, 3.11.
---------------------------------------------------------------------------

(g) What have the agencies done to validate GEM testing?
    The NAS Committee expressed concern over GEM's ability to translate

[[Page 40516]]

to real world reductions in fuel consumption and GHG emissions. In 
particular, the Committee found that GEM's current certification 
procedures have limited unbound variables that can be user-specified 
and do not allow for synergy between components.\840\ Moreover, the NAS 
Committee found that GEM does not allow for the operation of components 
in the most efficient way or efficiency that could be gained by the 
operation of a component at a higher relative load, concluding that 
vehicle designs that are optimized for the conditions of the simulation 
might not be optimized in real world operation.\841\ The Committee 
recommended that NHTSA conduct a real world evaluation to validate GEM 
inputs with the fuel consumption outputs.\842\ Additionally, it 
recommended that EPA and NHTSA should assess whether a steady-state 
torque map is sufficient for GEM accuracy in engine efficiency 
prediction.\843\
---------------------------------------------------------------------------

    \840\ Id. at 11.
    \841\ Id.
    \842\ Id., Recommendation 1.2.
    \843\ Id. at 37, Recommendation 3.8.
---------------------------------------------------------------------------

    Recently, EPA and NHTSA sponsored a technical workshop at the 
Southwest Research Institute (SwRI). At this workshop, SwRI presented a 
multi-year research effort sponsored by EPA to validate GEM. The 
development version of GEM incorporates several engine, transmission, 
driveline, and vehicle technologies being considered to meet FE and GHG 
standards for MD/HD vehicles. GEM (including the steady-state fuel map 
approach) was validated by the agencies against over 130 test cases 
(multiple runs) of different size vehicles. See Section II of this 
notice and Chapter 4 of the draft RIA for further information about 
this validation work.
(h) Has NHTSA considered non-vehicular strategies to reduce fuel 
consumption?
    In examining the broader picture of reducing fuel consumption, the 
NAS Committee found that there are opportunities to reduce fuel 
consumption in ways that that exceed NHTSA's statutory authority.\844\ 
The Committee recommended that NHTSA work with and encourage EPA, DOE, 
and FHWA to reduce fuel consumption and GHG emissions by exploring non-
vehicle approaches.\845\
---------------------------------------------------------------------------

    \844\ Id. at 15.
    \845\ Id., Recommendation 1.9.
---------------------------------------------------------------------------

    NHTSA is jointly releasing this rulemaking with EPA, and has 
involved EPA as a co-drafter throughout the development of these rules. 
NHTSA has also worked with DOE, and has been in touch with FHWA about 
medium- and heavy duty fuel efficiency. While the majority of NHTSA's 
work with these agencies has been vehicle-related, NHTSA supports 
research and development on nonvehicle methods to reduce fuel 
consumption.
(2) NAS Findings and Recommendations With Which the Phase 2 Standards 
Are Significantly Inconsistent and Why the Agencies Chose a Different 
Course
(a) Should the agencies propose separate standards for natural gas 
vehicles?
    The NAS Committee found that natural gas is a viable option to 
reduce fuel consumption and can also contribute to a reduction in GHG 
emissions, ``unless additional findings of methane leakage alter this 
vision.'' \846\ It noted that natural gas engines are well-developed 
and are ready for use for medium- and heavy-duty vehicles, including 
Class 8 trucks. The Committee stated that while the load-specific 
CO2 emissions from natural gas engines are less than a 
comparable diesel engine, that benefit is partially negated by lower 
engine efficiency and methane emissions.\847\ The NAS Committee 
recommended that NHTSA and EPA develop a separate standard for natural 
gas vehicles, similar to that in diesel- and gasoline-fueled 
engines.\848\ We interpret this to mean standards that require natural 
gas-fueled engines to achieve similar thermal efficiency to diesel- and 
gasoline-fueled engines; in other words more stringent standards than 
would apply under a continuation of the Phase 1 approach. Further, the 
Committee recommended the agencies do this without disrupting 
commercial transportation business models, though the Committee did not 
provide specific recommendations for how to achieve this goal.\849\ It 
recommended that GEM certification tools need to include natural gas 
engine maps to accurately quantify the emissions and fuel economy of 
natural gas vehicles. The Committee also requested that EPA and NHTSA 
assemble a best estimate of well-to-tank GHG emissions to be used for 
developing future rulemakings.\850\
---------------------------------------------------------------------------

    \846\ Id. at 65.
    \847\ Id.
    \848\ Id. at 65, Recommendation 5.2.
    \849\ Id. at 65, Recommendation 5.3.
    \850\ Id. at 65, Recommendation 5.1.
---------------------------------------------------------------------------

    The agencies closely evaluated the recommendation for NHTSA and EPA 
to develop a separate natural gas standard for HD vehicles. The 
agencies are not proposing a separate standard for natural gas engines 
or for natural gas powered vehicles for the Phase 2 program primarily, 
because the current market share is still at or below one percent of 
the total heavy-duty fleet and we do not project a significant increase 
in natural gas use during the Phase 2 timeframe. Given its current 
status, we do not want to inhibit the adoption of this potentially 
promising alternative fuel through more stringent standards. Other 
reasons to hold back on potentially establishing separate natural gas 
fuel standards at this time include the fact that there is uncertainty 
in the quantification of methane emissions, both upstream emissions as 
well as potential leakage on a vehicle, particularly the LNG vehicle 
boil-off emissions, which makes it very difficult to perform a rigorous 
analysis regarding the potential impacts of a separate natural gas 
standard; the industry itself is in the process of developing its 
technology and as it matures there is potential for self-correction to 
address methane leaks in recognition of environmental concerns that 
might affect its status as a potential green alternative fuel.
    With regard to well-to-tank or upstream emissions, the medium- and 
heavy-duty fuel efficiency program focuses on the tailpipe emissions of 
these vehicles for multiple reasons, including test measurement 
capabilities and the use of simulated output tools calibrated to test 
lab measurements. The agencies continue to evaluate the potential 
impacts and the benefits of a holistic approach for incorporating well-
to-tank emissions into future rulemakings.
    As data comes available a better estimate can be made on the 
emissions impact from any potential regulations. The agencies will 
closely monitor developments in natural gas adoption over the course of 
the rulemaking timeframe and determine if additional action may be 
necessary to prevent methane emissions increases. See Section XI of 
this preamble for additional discussion regarding the treatment of 
natural gas fuel, engines and vehicles in this proposal, as well as for 
a detailed discussion of lifecycle emissions.
(b) How are the agencies handling uniformity and accuracy regarding 
tire rolling resistance characteristics?
    The NAS Committee expressed concern about the process by which 
rolling resistance values are established.\851\ Specifically, the 
Committee noted that the process for

[[Page 40517]]

determining tire rolling resistance is new and variability is not as 
well known. The Committee recommended that the agencies implement a 
mechanism for obtaining accurate tire rolling resistance factors, 
including establishing a tire alignment laboratory.852 853 
Additionally, the Committee recommended that this data be available in 
the through the Uniform Tire Quality Grading system.\854\
---------------------------------------------------------------------------

    \851\ Id. at 35-36.
    \852\ Id. at 36, Recommendation 3.4, 6.6 p 84.
    \853\ Id. at 84, Recommendation 6.6.
    \854\ Id. at 36, Recommendation 3.4.
---------------------------------------------------------------------------

    In Phase 1, the agencies received comments from stakeholders 
highlighting a need to develop a reference lab and alignment tires for 
the HD sector. The agencies noted the lab-to-lab comparison conducted 
in the Phase 1 EPA tire test program. The agencies reviewed the rolling 
resistance data from the tires that were tested at both the STL and 
Smithers laboratories to assess inter-laboratory and test machine 
variability. The agencies conducted statistical analysis of the data to 
gain better understanding of lab-to-lab correlation and developed an 
adjustment factor for data measured at each of the test labs. Based on 
these results, the agencies believe the lab-to-lab variation for the 
STL and Smithers laboratories would have very small effect on measured 
rolling resistance values. Based on the test data, the agencies judge 
that it is reasonable to continue the HD Phase 2 program with current 
levels of variability, and consider the use of either Smithers or STL 
laboratories to be acceptable for determining the tire rolling 
resistance value in Phase 2. Note that the agencies have not made 
similar findings for other laboratories. However, we welcome comment on 
the need to establish a reference machine for the HD sector and 
interest from tire testing facilities to commit to developing a 
reference machine.
    In the final rule for the Phase 1 program, the agencies stated that 
compliance values submitted to the agencies should be derived using the 
ISO 28580 test method for drive tires and steer tires planned for 
fitment to the vehicle being certified.\855\ The agencies believe that 
following a defined, standardized test procedure will provide levels of 
consistency in submitted compliance values. The agencies conducted 
substantive testing to develop the final tire Crr standards in the 
Phase 1 rule at two different testing laboratories for comparison to 
test for variability. The agencies concluded that although laboratory-
to-laboratory and test machine-to-test machine measurement variability 
exists, the level observed is not excessive relative to the 
distribution of absolute measured Crr performance values and relative 
to the proposed standards. Based on this, the agencies concluded that 
the test protocol and the proposed standards are reasonable for this 
program.
---------------------------------------------------------------------------

    \855\ 76 FR 57182-57185.
---------------------------------------------------------------------------

    The agencies are considering publishing the tire Crr levels from 
fuel efficiency and GHG emission program compliance data. Because 
compliance data are submitted by vehicle manufacturers rather than 
directly from the tire manufacturers or agency directed testing they 
could vary for a given tire model among vehicle manufacturer 
submissions, or lag when tires are redesigned. Based on considerations 
such as this, the agencies are not proposing to establish a public 
database for heavy-duty vehicle tire rolling resistance information at 
this time.
(c) Have the agencies considered industry standards for medium- and 
heavy-duty Tire Pressure Systems (TPS)?
    The NAS Committee found that tire pressure monitoring systems and 
automatic tire inflation systems are being adopted by fleets at an 
increasing rate.\856\ However, the Committee noted that there are no 
standards for performance, display, and system validation. The 
Committee recommended that NHTSA issue a white paper to clarify the 
minimum performance needed from these systems from a safety 
perspective.\857\ This recommendation addresses the effects of tire 
pressure systems on vehicle safety. Because the recommendation for a 
white paper relates to safety, and is not directed at fuel efficiency 
or GHG emissions effects, the agencies are not responding to the NAS 
recommendation in this proposal.
---------------------------------------------------------------------------

    \856\ Phase 2 First Report at 84.
    \857\ Id., Recommendation 6.4.
---------------------------------------------------------------------------

    Nevertheless, the agencies note that automatic tire inflation 
systems can improve fuel efficiency and greenhouse gas emissions (see 
Preamble Section III/draft RIA Chapter 2) by maintaining tire pressure 
close to the tire pressure specification. The agencies are proposing to 
recognize automatic tire inflation systems as a technology that 
improves fuel efficiency for tractors, trailers and vocational vehicles 
in the GEM vehicle compliance model.
(d) Will NHTSA survey private fleets or leverage government fleets to 
gather information for the Phase 2 rulemaking?
    In its report, the NAS Committee found that there are many 
additional methods by which NHTSA could gather fleet information to 
inform the Phase 2 rulemaking. The Committee recommended that NHTSA 
gather data from private fleets, and work with the General Services 
Administration or United States Postal Service to evaluate the fleet of 
vehicles they possess.858 859
---------------------------------------------------------------------------

    \858\ Id. at 43, Recommendation 4.2, 4.3, and 4.4.
    \859\ Id. at 11, Recommendation 1.3.
---------------------------------------------------------------------------

    NHTSA understands that additional fleet information could be 
helpful for purposes of formulating medium- and heavy-duty fuel 
efficiency standards. Due to the length of time necessary to capture 
useful, relevant data from fleets, NHTSA was unable to conduct public 
or private fleet studies to inform this rulemaking. NHTSA will take 
these recommendations under advisement to inform the agency in the 
future. For the time being, the agencies have utilized data from FHWA, 
EPA's SmartWay program, Polk, and other sources of fleet information.
(e) GEM Inputs and Outputs
    The NAS Committee found that GEM Version 2.0.1 is not compatible 
with automated order entry systems of OEMs.\860\ It recommended that 
the GEM programmers configure GEM to be compatible with existing OEM 
order entry systems \861\ and provide a more useful output that 
includes graphs and other presentation methods.\862\ However, EPA 
believes these recommendations are beyond the scope of this rulemaking.
---------------------------------------------------------------------------

    \860\ Id. at 35.
    \861\ Id., Recommendation 3.2.
    \862\ Id., Recommendation 3.3.
---------------------------------------------------------------------------

(f) OEM-Specific Code
    The NAS committee stated models should be capable of simulating 
real-world component behavior, and should not be oversimplified.\863\ 
It recommended allowing OEMs to substitute OEM-specific models or code 
for the fixed models in the current GEM, including substituting a power 
pack (the engine, aftertreatment, transmission).\864\ However, as 
described in Section II, we are not proposing to allow this for a 
number of reasons. NAS explained that its goal was to reflect real-
world operation accurately. We believe the powertrain test option could 
be used to achieve this goal.
---------------------------------------------------------------------------

    \863\ Id. at 37.
    \864\ Id., Recommendation 3.7.

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

[[Page 40518]]

(3) NAS Findings and Recommendations With Which the Phase 2 Standards 
Are Less-Significantly Inconsistent
(a) What are the agencies doing with respect to fuel specifications for 
natural gas?
    The Committee found that natural gas provides a potential long-term 
price advantage backed by an abundant supply.\865\ In addition to its 
other natural gas (NG)-specific recommendations, the Committee 
recommended government and the private sector should support further 
technical improvements in engine efficiency and operating costs, 
reduction of storage costs, and emission controls (as is done for 
diesel engines).\866\ Further, it recommended that NHTSA and EPA should 
also evaluate the need for and benefits and costs of an in-use NG fuel 
specification for motor vehicle use.
---------------------------------------------------------------------------

    \865\ Id. at 65.
    \866\ Id., Recommendation 5.4.
---------------------------------------------------------------------------

    The agencies recognize the value in evaluating an in-use NG fuel 
specification for motor vehicle use. EPA has developed and promulgated 
fuel specifications for other motor vehicle fuel types, both for test 
fuels and for in-use fuels. Such fuel specifications established by EPA 
usually complement fuel specifications established by third party 
organizations such as ASTM.
    EPA has established fuel specifications for natural gas used as 
test fuels for emissions testing,\867\ but has not adopted 
specifications for in-use natural gas used as a motor vehicle or off-
highway fuel. However, states have set natural gas quality limits on 
the natural gas sold within the state, and natural gas pipelines have 
established specifications for the natural gas either for their own 
purposes or to ensure that the natural gas being transported by its 
pipeline will be usable within the states to which the pipeline 
transports the natural gas. These specifications would apply to natural 
gas used as a motor vehicle fuel.
---------------------------------------------------------------------------

    \867\ EPA set natural gas test fuel quality for light-duty and 
heavy-duty engines in 1994 (40 CFR 86.113-94 and 86.1313-94, 
respectively), and for nonroad engines in 2002 (40 CFR 1065.715).
---------------------------------------------------------------------------

    EPA may consider establishing in-use specifications for natural gas 
used as a motor vehicle or off-highway fuel in the future. However, 
because natural gas use within the transportation sector is currently 
so small (less than 1 percent of total natural gas demand and less than 
1 percent of heavy-duty fuel demand), its use for transportation would 
not have a separate fuel supply system, and it would not make sense 
that such a small user segment should dictate fuel quality for the 
overall fuel supply. Like other potential regulations that EPA might 
consider, EPA will consider establishing fuel quality regulations on 
natural gas if and when its use increases as a fuel for the 
transportation sector.
(b) Have the agencies considered low rolling resistance standards for 
all new tires?
    With regard to low rolling resistance tires, the NAS Committee 
found that 70 percent of new tires sold in 2012 were for replacement of 
existing tires.\868\ It found that although most new tractors and 
trailers come equipped with SmartWay verified tires, only 42 percent of 
replacement tires are SmartWay verified.\869\ The Committee recommended 
that NHTSA and EPA evaluate rolling resistance of new tires, especially 
those sold as replacements.\870\ It recommended that NHTSA adopt a 
regulation establishing a low rolling resistance standard for all new 
tires designed for tractor and trailer use.\871\
---------------------------------------------------------------------------

    \868\ Id. at 84.
    \869\ Id.
    \870\ Id., Recommendation 6.5.
    \871\ Id.
---------------------------------------------------------------------------

    The agencies are proposing to include low rolling resistance tires 
as a technology that may be used for compliance for fuel efficiency and 
GHG standards. The agencies conducted tire rolling resistance testing 
and considered confidential business information data provided by 
several tire manufacturers, which is discussed in Preamble Sections 
III, IV, and V and draft RIA Chapter 2. The agencies have focused our 
resources and attention to develop standards for new vehicles and 
engines. NHTSA has not conducted work to consider a rolling resistance 
performance standard for replacement tires at this time and will take 
the Committee's recommendation under advisement.
(c) Have the agencies considered a protocol for measuring and reporting 
the coefficient of rolling resistance to aid in consumer selection?
    The Committee recommended that the agencies consider establishing a 
protocol for measuring and reporting the coefficient of rolling 
resistance to aid in consumer selection, similar to passenger car 
tires.\872\ At this time, the agencies are taking the Committee's 
recommendation under advisement.
---------------------------------------------------------------------------

    \872\ Id. at 14, Recommendation 1.8.
---------------------------------------------------------------------------

(d) What other revisions are the agencies making to GEM?
    Consistent with the NAS Committee's recommendations, the agencies 
are proposing to make the following revisions to GEM, as also detailed 
Preamble Section II:
    Allowing manufacturers to input parameters related to engines, 
transmissions, and axles

 Basing GEM on a steady-state fuel map
 Allowing separate fuel maps for alternative fuels
 Including real-world road grade to highway cycles
 Use of wind-average drag coefficients for aerodynamic inputs

However, the agencies are not making other changes recommended by NAS. 
We are not making the user interface changes recommended by the 
Committee on behalf of manufacturers. Our recent discussions with 
manufacturers indicate that they have adopted ordering systems that are 
consistent with the current interface. We are also not revising GEM to 
allow manufacturers to input their own shift strategies. Instead, we 
are proposing a powertrain test option that would serve the same 
purpose.
    The NAS Committee also recommended that we broaden GEM to allow for 
additional duty-cycles and actual vehicle weights. We believe that such 
changes would not significantly improve the overall program, but would 
add significant complexity.
(e) Vehicle Weight and Payload in GEM
    The NAS Committee recommended that NHTSA evaluate the load specific 
fuel consumption (LSFC) at more than one payload to ensure there is not 
an undesirable acute sensitivity to payload by a particular truck power 
train and to reflect the fact that some states allow vehicles to 
operate with gross combination vehicle weight ratings well in excess of 
the values adopted for the simulation. NAS also recommended that GEM 
allow manufacturers to input actual vehicle weights.\873\
---------------------------------------------------------------------------

    \873\ Id. at 9, Recommendation 1.1.
---------------------------------------------------------------------------

    As described in Section III, the agencies are proposing to modify 
GEM to allow heavy-haul vehicles to be certified separately, to reflect 
their unique weight and payload attributes. However, are not proposing 
to allow for other payloads or weights to minimize complexity during 
the compliance process.

[[Page 40519]]

(f) Is NHTSA conducting any campaigns related to fuel efficient driving 
behaviors?
    In the NAS Committee's Phase 1 report,\874\ the Committee concluded 
that fuel saving opportunities exist if drivers are educated about fuel 
efficient driving techniques.\875\ The Phase 2 reiterated this finding, 
and recommended NHTSA encourage and incentivize the dissemination of 
information related to the relationship between driver behavior and 
fuel savings.\876\
---------------------------------------------------------------------------

    \874\ Committee to Assess Fuel Economy Technologies for Medium- 
and Heavy-Duty Vehicles; National Research Council; Transportation 
Research Board (2010). ``Technologies and Approaches to Reducing the 
Fuel Consumption of Medium- and Heavy-Duty Vehicles,'' (``NAS 
Report''), at page 9. Washington, DC, The National Academies Press. 
Contract DTNH22-08-H-00222. Available electronically from the 
National Academy Press Web site at http://www.nap.edu/catalog.php?record.id=12845 (last accessed September 10, 2014.)
    \875\ Id. at 177.
    \876\ Phase 2 First Report at 14, Recommendation 1.8.
---------------------------------------------------------------------------

    Based on NHTSA's understanding of the medium- and heavy-duty 
segments, a large portion of the vehicles are driven professionally. 
Professional drivers operate these vehicles as independent drivers and 
in trucking fleets. In some instances, particularly larger fleet 
operations, management will track and encourage driver fuel efficiency. 
It is not uncommon for professional drivers across all types of 
trucking operations to undergo private fuel efficiency training. For 
these reasons, NHTSA has not yet undertaken dissemination of 
information related to the relationship between driver behavior and 
fuel savings.

XIII. Amendments to Phase 1 Standards

    The agencies are proposing revisions to the regulatory text 
specifying test procedures and compliance provisions used for Phase 1. 
For the most part, these amendments would apply exclusively to the 
Phase 2 rules. In a few limited instances, the agencies are proposing 
to apply some of these changes to Phase 1. These limited changes to the 
Phase 1 program are largely conforming amendments, and are described 
below, along with other proposed minor changes to the Phase 1 
compliance program. We note, however, that we are not reopening the 
Phase 1 rules in a general sense, nor are we requesting comment on the 
stringency of the Phase 1 standards or other fundamental aspects of the 
Phase 1 program.

A. EPA Amendments

(1) Pickups and Vans
    EPA is proposing to relocate the GHG standards and other regulatory 
provisions for chassis-certified HD pickups and vans in the Code of 
Federal Regulations from 40 CFR 1037.104 to 40 CFR 86.1819-14. 
Accordingly, NHTSA will modify any of EPA's references in 49 CFR parts 
523 and 535 to accommodate the migration. EPA is making this change 
largely to address ambiguities regarding the application of additional 
provisions from 40 CFR part 86, subpart S, for these vehicles. The 
approach in 40 CFR 1037.104 was to state that all of 40 CFR part 86, 
subpart S, applies except as specified in 40 CFR 1037.104; however, the 
recent standards adopted for light-duty vehicles and light-duty trucks 
included several changes to 40 CFR part 86, subpart S, that should not 
apply for chassis-certified HD pickups and vans. Based on our 
experience implementing the Phase 1 program, we believe it is 
appropriate to include the GHG standards for chassis-certified HD 
pickups and vans in the same part as light-duty vehicles (40 CFR part 
86, subpart S). All other certification requirements for these heavy-
duty vehicles--criteria exhaust standards, evaporative and refueling 
standards, provisions for onboard diagnostics, and the range of 
certification and compliance provisions--are in that subpart. We note 
that we have not experienced the same challenges for other heavy-duty 
vehicles, and are therefore not proposing to relocate the other 
provisions of 40 CFR part 1037.
    This migration has highlighted a few areas where we need to clarify 
how the regulations apply for chassis-certified HD pickups and vans. In 
particular, EPA is proposing to make the following changes:

 Clarify that the GHG standards apply at high-altitude 
conditions
 State that fleet-average calculation of carbon-related exhaust 
emissions (CREE) is not required for chassis-certified HD pickups and 
vans
 Clarify that requirements related to model types and 
production-weighted average calculation apply on any passenger 
automobiles and light trucks
 State that the credit and debit provisions of 40 CFR 86.1865-
12(k)(5) do not apply for chassis-certified HD pickups and vans
Clarify that the Temporary Lead Time Allowance Alternative Standards in 
40 CFR 86.1865-12(k)(7) do not apply for chassis-certified HD pickups 
and vans
 State that the early credit provisions of 40 CFR 86.1866-12, 
86.1867-12, 86.1868-12, 86.1869-12, 86.1870-12, and 86.1871-12 do not 
apply for chassis-certified HD pickups and vans
(2) Heavy-Duty Engines
    As described in Section II, EPA is proposing to revise the approach 
to classifying gaseous-fuel engines with respect to both GHG and 
criteria emission standards. This does not affect the vehicle-based 
standards that apply under 40 CFR part 1037. The general approach would 
be to continue to divide these engines into spark-ignition and 
compression-ignition categories, but we propose to always apply the 
compression-ignition standards to gaseous-fuel engines that qualify as 
medium heavy-duty or heavy heavy-duty engines. Currently, any gaseous-
fuel engine derived from a gasoline engine would be subject to the 
spark-ignition standards no matter the weight class of the vehicle. As 
described in Section II, EPA now believes this approach does not 
reflect the reality that gaseous-fuel engines used in Class 6, 7, or 8 
vehicles compete with diesel engines rather than gasoline engines. Such 
engines compete directly with diesel engines, and we believe they 
should be required to meet the same emission standards. Because all 
current gaseous-fuel engines for these large vehicles are already being 
certified to the compression-ignition engine standards we can propose 
to also apply this approach to engines subject to the HD GHG Phase 1 
standards without adverse impacts on any manufacturers.
    EPA is also proposing to revise the regulation to spell out how to 
apply enforcement liability for a situation in which the engine 
manufacturer uses deficit credits for one or more model years. Simply 
put, any time an engine manufacturer is allowed to carry a deficit to 
the next year, all enforcement liability for the engines that generated 
the deficit are extended for another year. These provisions are the 
same as what we have already adopted for heavy-duty vehicles subject to 
GHG standards under 40 CFR part 1037.
(3) Evaporative Emission Testing for LNG Vehicles
    Heavy-duty vehicles fueled by natural gas have for many years been 
subject to evaporative emission standards and test procedures. While 
fuel systems containing gasoline require extensive design features to 
handle vented fuel, fuel systems containing natural gas generally 
prevent evaporative losses by remaining sealed. In the case of 
compressed natural gas, there is a

[[Page 40520]]

voluntary consensus standard, ANSI NGV1-2006, that is designed to 
ensure that there are no leaks or losses during a refueling event. 
Since compressed natural gas systems remain sealed indefinitely once 
the refueling event is complete, we understand that complying with the 
ANSI refueling standard is sufficient to demonstrate that the vehicle 
also complies with all applicable evaporative emission standards. The 
Light-Duty Tier 3 final rule included provisions to clarify that 
compressed natural gas systems meeting the applicable ANSI standard are 
deemed to comply with EPA's evaporative emission standards.
    Systems using liquefied natural gas (LNG) behave similarly, except 
that the cryogenically stored fuel needs to be vented to prevent an 
over-pressure situation if the vehicle is not used for an extended 
time, as described in Section XI. Such vehicles are currently subject 
to evaporative emission standards and test procedures, though there are 
some substantial questions about how one can best apply the procedures 
to these systems; not all of the instructions about preconditioning the 
vehicle are straightforward for cryogenic fuel systems with no 
evaporative canister. EPA is interested in pursuing an approach that is 
similar to what applies for compressed natural gas systems, which would 
need some additional attention to address boil-off emissions. There are 
two voluntary consensus standards that specify recommended practices to 
lengthen the time before boil-off starts to occur for LNG systems. SAE 
J2343 specifies a minimum five-day hold time and NFPA 52 specifies a 
minimum three-day hold time. EPA is proposing to require that 
manufacturers of LNG vehicles meet the SAE J2343 standard as a means of 
demonstrating compliance with the evaporative emission standards.
    While the hold-time requirements of SAE J2343 and NFPA 52 are 
clear, there appears to be very little description of the procedure to 
determine how much time passes between a refueling event and initial 
venting. To ensure that all manufacturers are subject to the same set 
of requirements, we are proposing to include a minimal set of 
specifications corresponding to the demonstration under SAE J2343. In 
particular, EPA proposes to specify that the vehicle must remain parked 
throughout the measurement procedure, ambient temperatures must remain 
between 20 and 30 [deg]C, the refueling event must follow conventional 
procedures corresponding to the vehicle's hardware, and no 
stabilization step is allowed after the refueling event.
    The proposed rules provides for relying on compliance with SAE 
J2343 as a means of demonstrating compliance with evaporative emission 
standards immediately upon completion of the final rule. EPA is 
proposing to make this mandatory for vehicles produced on or after 
January 1, 2020.
    EPA requests comment on all aspects of the proposed provisions for 
LNG vehicles.
(4) Compliance and Other General Provisions
    EPA proposes the following changes that apply broadly for different 
types of vehicles or engines:
     Add a requirement for vehicle manufacturers that sell 
incomplete vehicles to secondary vehicle manufacturers to provide 
emission-related assembly instructions to ensure that the completed 
vehicle will be in a certified configuration.
     Specify parameters for determining a vehicle's curb 
weight, consistent with current practice for vehicles certified under 
40 CFR part 86, subpart S.
     Revise the recordkeeping requirement to specify a uniform 
eight-year retention period for all data supporting an application for 
certification. The provision allowing for one-year retention for 
``routine data'' is no longer necessary now that data collection is all 
recorded in electronic format. EPA is also clarifying that the eight-
year retention period is calculated relative to the latest associated 
application for certification, not from the date the data were 
generated.
     Change the rounding for analytically derived 
CO2 emission rates and target values from the nearest 0.1 g/
mile to the nearest 1 g/mile.
     Clarify that manufacturers may not amend an application 
for certification after the end of the model year, other than to revise 
maintenance instructions or family emission limits, as allowed under 
the regulations. Remove the general recordkeeping provisions from 40 
CFR 1037.735 that are already described in 40 CFR 1037.825.
     Require a different equation with a ratio of 0.8330 in 40 
CFR 1037.521(f) when full yaw sweep measurements are used to determine 
wind averaged drag correction to establish an equivalent method to the 
equation using 6 degree measurements (note that this cite 
is proposed to be redesignated as 40 CFR 1037.525(d)). This proposed 
change would not impact stringency because manufacturers are already 
subject to compliance using both methods--full yaw sweep and 6 degree measurements. In addition, this Phase 1 flexibility was 
not used in setting the level of the Phase 1 standards.
     Clarify how EPA would conduct selective enforcement audits 
(SEAs) for engines (in 40 CFR 1036.301) and vehicles (in 40 CFR 
1037.301) with respect to GHG emissions.

B. Other Compliance Provisions for NHTSA

(1) Standards and Credit Alignment
    In Phase 1, the agencies intended GHG and fuel consumption 
standards for segments of the National Program to be in alignment so 
that manufacturers would not be required to build vehicles to meet in 
equivalent standards. Despite the intent, NHTSA and EPA have identified 
several scenarios where credits and compliance to both sets of 
standards are not aligned. This misalignment can have various impacts 
on compliance with the National Program.
    For example, a manufacturer of tractors could have two vehicle 
families that with same number of vehicles but with opposite and equal 
compliance margins with standards. In this scenario, the first family 
would over-comply with the GHG standard while the second family would 
under-comply with the GHG standard by the same amount of grams 
CO2/ton-mile. In calculating credits, the manufacturer would 
have a net of zero GHG credits and exactly meet compliance; however, 
based on conversions and rounding of the standard and performance 
results that manufacturer could end up earning credits or having a 
credit deficit under NHTSA's fuel efficiency program.
    In order to correct this misalignment, NHTSA is proposing to amend 
the existing fuel consumption standards and the method for calculating 
performance values for all compliance categories by increasing the 
significant digits in these conversion values. Increasing the 
significant digits in these values will result in more precise 
alignment when converting from GHG consumption standards to fuel 
consumption standards.
    The rounding approach differs for heavy-duty pickup trucks and vans 
set apart from other vehicle and engine compliance categories. Heavy 
Duty Pickup Trucks and Vans (HD PUV) use the same approach for 
calculating standards and performance values as the LD CAFE and GHG 
programs. As such, NHTSA proposes to increase the required significant 
values for each components used in these calculations. More 
specifically, NHTSA proposes to increase the number of decimal places 
for sub-configuration target standards,

[[Page 40521]]

the sub-configuration fuel consumptions, the fleet average target 
standard and the fleet average fuel consumption values from two fixed 
values and increases them by one additional significant digit. The 
regulation currently specifies rounding to these values nearest 0.01 
and under the proposed approach the values would be rounded to the 
nearest 0.001.
    NHTSA is also proposing to modify the c and d target coefficients 
used for deriving HD PUV target standards. These values are directly 
convertible from the EPA a and b target coefficients, respectively. 
Currently, the c target coefficient contains six decimal places and the 
d target coefficient contains two decimal places. Each coefficient 
would be increased by one decimal--meaning the c target coefficient 
would have seven decimal places, with the last four being significant 
digits--and the d target coefficient would be increased to three 
decimal places, with there being a total of four significant digits. 
The modifications to the rounding and level of precision of these six 
values will not entirely eliminate the misalignment of the credits 
being calculated for EPA and NHTSA but will reduce it to an 
insignificant variance.
    For other compliance categories, a similar approach can be used to 
address the misalignment of calculated credits as it pertains to 
vocational vehicles, tractors, and heavy duty engines. NHTSA proposes 
to increase the number of significant digits by increasing the decimal 
places contained in the standards and the FEL for the vocational 
vehicle and tractor segments and the FCL for the engine segments to 
four decimal places. Currently, the vocational vehicle and tractor 
standards and FELs contain one decimal place while engines standards 
and FELs contain two decimal places. The standards will be identified 
directly in the regulation while the FEL and FCL will be a calculated 
value rounded to the nearest 0.0001.
    The modifications to the rounding and level of precision of these 
values should eliminate the misalignment of the credits being 
calculated.
    These changes are planned for implementation retroactively starting 
for the model year 2013 standard. However, because the stringency of 
the Phase 1 fuel consumption standards may be adversely impacted for 
certain manufacturers who have already developed engineering plans 
considering previous credit balance, we propose to seek comments on 
whether optional compliance should be allowed.
(2) Off-Road Exclusion Petition Process for Tractors and Vocational 
Vehicles
    In the Phase 1 final rule, the agencies added provisions for 
certain types of vocational tractors and vocational vehicles that 
operate off-road to be exempt from standards, although standards would 
still apply to the engines installed in these vehicles. An exemption 
was warranted because these vehicles operate in a manner essentially 
making them incompatible with fuel saving and emission reduction 
technologies, such as performing work in an off-road environment, being 
speed restricted, or having off-road components or other features 
making them incompatible for roadways. For the Phase 1 program, off-
road vehicle manufacturers meeting the exemption provisions are 
required to provide EPA and NHTSA, through the EPA database, a report 
within 90 days after the end of each model year identifying its off-
road vehicles. The report must provide a description of each excluded 
vehicle configuration, including an explanation of why it qualifies for 
the exclusion and the production volume. A manufacturer having an off-
road vehicle failing to meet the criteria under the agencies' off-road 
exemptions explained in 40 CFR 1037.631 and 49 CFR 523.6 is allowed to 
submit a petition as required in 49 CFR 535.8 describing how and why 
its vehicles should qualify for exclusion.
    Under Phase 1 compliance processes, manufacturers have not been 
using the petitioning process when seeking clarification on off-road 
vehicles not meeting the strict interpretation of the provision. 
Instead, manufacturers are submitting information to EPA in advance of 
the end of the model year to determine whether or not these vehicles 
are exempted and to determine whether it is necessary to submit any 
applications for certificates of conformity as required by 40 CFR 
1037.201. EPA and NHTSA collaboratively determine whether manufacturers 
are exempted and EPA shares the decision with the manufacturer. The 
current process followed by the agencies makes it unnecessary to use 
the petitioning process and has the added advantage of providing a 
joint determine early enough in the model year whereas disapproved 
manufacturer have adequate enough time to submit applications for 
certificates of conformity.
    For the Phase 1 standards, the agencies are proposing to delete the 
petitioning process and add provisions for manufacturers seeking 
clarification on the qualifications of an off-road vehicle exemption to 
send information to the agencies through EPA in advance of the model 
year in order for us to make an appropriate determination. EPA plans to 
add these provisions into its regulations as a part of 40 CFR 
1037.150(h). Removal of the formal petition process is intended to 
minimize the impact on manufacturers that are seeking an off-road 
exemption while allowing the agencies to be proactive in making a 
determination based on the criteria and individual merits of the 
vehicles being requested for an exemption. Collaboration between the 
agencies in making a decision about exemptions outside a formal 
petition process should streamline the timing for a response and reduce 
the burden upon the agencies and manufacturers.
(3) Innovative Technology Request Documentation Specifications
    For vehicle and engine technologies that can reduce GHG and fuel 
consumption, but for which there is not yet an established method for 
quantifying reductions, the agencies encourage the development of such 
technologies through providing ``innovative technology'' credits. 
Manufacturers seeking innovative technology credits must quantify the 
reductions in fuel consumption and GHG emissions that the technology is 
expected to achieve, above and beyond those achieved on the existing 
test procedures.
    Manufacturers submitting innovative technology requests must send a 
detailed description of the technology and a recommended test plan to 
EPA as detailed in 40 CFR 1036.610 and 40 CFR 1037.610. The test plan 
must include whether the manufacturer is applying for credits using the 
improvement factor method or the separate-credit method. It is 
recommended that manufacturers not conduct testing until the agencies 
can collaboratively approve the test plan in which a determination is 
made on the qualification of the technology as innovative. EPA and 
NHTSA also make the decision at that time whether to seek public 
comments on the test plan if there are unknown factors in the test 
methodology.
    Under the current regulations, EPA and NHTSA have reviewed several 
test plans from manufacturers seeking innovative technology credits. 
The agencies have received feedback from manufacturers that the final 
approval process is not clearly defined, which has caused a substantial 
time commitment from manufacturers. To address this feedback, the 
agencies are proposing to add further clarification in 40 CFR 1036.610 
and 40 CFR 1037.610

[[Page 40522]]

defining the steps manufacturers must follow after an approval is 
granted for a test plan. This includes specifications for submitting 
the final documentation to the agencies for final approval and for 
determining credit amounts. The agencies are adding the same level of 
detail as required for the final documentation required in EPA's light 
duty off-cycle program in 40 CFR 86.1869-12(e)(2). These specifications 
should provide manufacturers with a clear understanding of the required 
documentation and approval process to reduce the time burden placed on 
manufacturers.
    NHTSA also proposes to add similar provisions from its light duty 
CAFE program specified in 49 CFR 531.6(b)(2) and 533(c)(2) for limiting 
the approval of innovative technologies under its program for those 
technologies related to crash-avoidance technologies, safety critical 
systems or systems affecting safety-critical functions, or technologies 
designed for the purpose of reducing the frequency of vehicle crashes. 
NHTSA prohibited credits for these technologies under any circumstances 
in its CAFE program (see 77 FR 62730). NHTSA believes a similar 
strategy is warranted for heavy-duty vehicle as well. Further, the 
evaluation of crash avoidance technologies is better addressed under 
NHTSA's vehicle safety authority than under a case-by-case innovative 
technology credit process.
(4) Credit Acquisition Plan Requirements
    The National Program was designed to provide manufacturers with 
averaging, banking and trading (ABT) flexibilities for meeting the GHG 
and fuel efficiency standards to optimize the effectiveness of the 
program. As a part of these flexibilities, manufacturers generating a 
shortfall in fuel consumption credits for a given model year must 
submit a credit plan to NHTSA describing how it plans to resolve its 
deficits within 3 models year. To assist manufacturers, NHTSA is 
proposing to modify 49 CFR 535.9(a)(6) of its regulation to clarify and 
provide guidance to manufacturers on the requirements for a credit 
allocation plan which contains provisions to acquire credits from 
another manufacturer which will be earned in future model years.
    The current regulations do not specify if future credit acquisition 
is permitted or not and the revision is intended to clarity that it is, 
with respect to the limitation a credit shortfall can only be carried 
forward three years. Providing this clarification is intended to 
increase transparency within the program and ensure all manufacturers 
are aware of its available flexibilities.
    In addition to providing this clarification, the regulation is also 
being amended to outline the requirement that in order for a credit 
allocation plan containing this provision to be reviewed for approval, 
NHTSA will require an agreement signed by both manufacturers. This 
requirement will assist NHTSA with its determination that the credits 
will become available to the acquiring manufacturer given they are 
earned.
(5) New Vehicle Field Inspections and Recordkeeping Requirements
    Previously, NHTSA decided not to include recordkeeping provisions 
in its regulations for the Phase 1 program. EPA regulations include 
recordkeeping requirements in 40 CFR 1036.250, 1036.735, 1036.835, 
1037.250, 1037.735, and 1037.835. For the Phase 2 program, NHTSA is 
proposing to add recordkeeping provisions to facilitate its compliance 
validation program. For the Phase 1 program, manufacturers test and 
conduct modeling to determine GHG emissions and fuel consumption 
performance, and EPA and NHTSA perform validation testing. EPA uses the 
results of the validation tests to create a finalized report that 
confirms the manufacturer's final model year GHG emissions and fuel 
consumption results. Each agency will use this report to enforce 
compliance with its standards.
    NHTSA assesses compliance with fuel consumption standards each 
year, based upon EPA final verified data submitted to NHTSA for its 
heavy-duty vehicle fuel efficiency program established pursuant to 49 
U.S.C. 32902(k). NHTSA may also conduct verification testing throughout 
a given model year in order to validate data received from 
manufacturers and will discuss any potential issues with EPA and the 
manufacturer. See 49 CFR 535.9. After the end of the model year, NHTSA 
may also decide to conduct field inspections in order to confirm 
whether or not a new vehicle was manufactured as originally certified. 
NHTSA may conduct field inspections separately or in coordination with 
EPA. To facilitate inspections, the agencies propose to add additional 
provisions to the EPA recordkeeping provisions to require manufacturers 
to keep build documents for each manufactured tractor or vocational 
vehicle. Each build document would be required to contain specific 
information on the design, manufacturing, equipment and certified 
components for a vehicle. NHTSA would request build documents through 
EPA and the agencies would collaborate on the finding of all field 
inspections. Manufacturers would be required to keep records of build 
documents for a period of 8 calendar years.

XIV. Other Proposed Regulatory Provisions

    In addition to the new GHG standards proposed in these rules, EPA 
and NHTSA are proposing to amend various aspects of the regulations as 
part of the HD GHG Phase 1 standards for heavy-duty highway engines and 
vehicles. EPA is also taking the opportunity to propose to amend 
regulatory provisions for other requirements that apply for heavy-duty 
highway engines, and for certain types of nonroad engines and 
equipment. NHTSA is also proposing to amend its regulations to require 
electronic submission of data for the CAFE program.

A. Proposed Amendments Related to Heavy-Duty Highway Engines and 
Vehicles

    This section describes a range of proposed regulatory amendments 
for heavy-duty highway engines and vehicles that are not directly 
related to GHG emission standards. Section XIV.D describes additional 
changes related to test procedures that affect heavy-duty highway 
engines.
(1) Alternate Emission Standards for Specialty Heavy-Duty Vehicles
    Motor vehicles conventionally comprise a familiar set of vehicles 
within a relatively narrow set of parameters--motorcycles, cars, light 
trucks, heavy trucks, buses, etc. The definition of ``motor vehicle;'' 
however, is written broadly to include a very wide range of vehicles. 
Almost any vehicle that can be safely operated on streets and highways 
is considered a motor vehicle. Development of EPA's emission control 
programs is generally focused on a consideration of the technology, 
characteristics, and operating parameters of conventional vehicles, and 
typically includes efforts to address concerns for special cases. For 
example, the driving schedule for light-duty vehicles includes a 
variation for vehicles that are not capable of reaching the maximum 
speeds specified in the Federal Test Procedure.
    Industry innovation in some cases leads to some configurations that 
make it particularly challenging to meet regulatory requirements. We 
are aware that plug-in hybrid-electric heavy-duty vehicles are an 
example of this. An engine for such a vehicle would be expected to have 
a much lower power rating and duty cycle of engine speeds and loads 
than a conventional heavy-

[[Page 40523]]

duty engine. The costs of regulatory compliance and the mismatch to the 
specified duty cycle can make it cost-prohibitive for engine 
manufacturers to certify such an engine under the heavy-duty highway 
engine program. EPA's nonroad emission standards have reached a point 
that involves near parity with the level of emission control 
represented by the emission standards for heavy-duty highway engines.
    To address concerns about certifying heavy-duty engines to highway 
standards for use in hybrid vehicles, we are therefore proposing to 
allow manufacturers of heavy-duty highway vehicles the option to 
install limited numbers of engines certified to alternate standards. 
Qualifying engines would be considered motor vehicle engines, but they 
would be certified to standards that are equivalent to those adopted 
for comparable nonroad engines. Vehicles with hybrid powertrains would 
be a focus of this allowance. EPA believes the same principles apply 
for amphibious vehicles and for vehicles with maximum speed at or below 
45 miles per hour and we are therefore proposing to apply the same 
provisions to these additional vehicles.
    Under this approach, compression-ignition engines could be 
certified to alternate standards that are equivalent to the emission 
standards under 40 CFR part 1039, and spark-ignition engines could be 
certified to alternate standards that are equivalent to the Blue Sky 
emission standards under 40 CFR part 1048. Engines meeting these 
alternate emission standards would generally be expected to use the 
same technologies to control emissions as engines certified to the 
applicable emission standards for heavy-duty highway engines. EPA would 
disallow this approach for compression-ignition engines below 56 kW 
since the nonroad standards for those engines are substantially less 
stringent than the standards that apply for heavy-duty highway engines. 
Also, since the nonroad duty cycles would generally better represent 
the in-use operating characteristics of these vehicles, we would expect 
the nonroad test procedures to be at least as effective in achieving 
effective in-use emission control. The regulations at 40 CFR part 1048 
include a simplified form of diagnostic controls, and we are proposing 
in these rules to include simplified diagnostic controls for 40 CFR 
part 1039. These engine-based diagnostic controls would substitute for 
the diagnostic requirements that would otherwise apply under 40 CFR 
86.010-18.
    It may also be appropriate to allow manufacturers of such heavy-
duty vehicles to use an engine from a smaller vehicle that is already 
covered by chassis-based certification under 40 CFR part 86, subpart S. 
Many of the heavy-duty vehicles described under this section would be 
adequately powered by lower-displacement automotive engines, and the 
level of emission control would clearly be expected to match or exceed 
that of engines certified to the heavy-duty standards that would 
otherwise apply. However, engines used in chassis-certified vehicles 
involve some degree of calibration that relates engine operation to 
vehicle parameters. Adapting these engines to heavy-duty vehicles would 
therefore require some recalibration, which could involve changing the 
effectiveness of emission controls. It is also unclear how the heavy-
duty vehicle would be designed for onboard diagnostic controls. EPA 
requests comment on the technical and regulatory issues surrounding the 
use of engines from chassis-certified vehicles in certain heavy-duty 
vehicles.
    These alternate standards relate only to the engine certification-
based emission standards and certification requirements. All vehicle-
based requirements for evaporative and greenhouse gas emissions would 
continue to apply as specified in the regulation.
    This allowance is intended to lower the barrier to introducing 
innovative technology for motor vehicles. It is not intended to provide 
a full alternative compliance path to avoid certifying to the emission 
standards and control requirements for highway engines and vehicles. To 
accomplish this, EPA is proposing to allow a manufacturer to produce no 
more than 1,000 hybrid vehicles in a single model year under this 
program, and no more than 200 amphibious vehicles or speed-limited 
vehicles.
    California ARB is in the process of developing similar provisions 
for a reduced compliance burden for a limited number of highway 
vehicles toward the goal of incentivizing hybrid vehicles and other 
advanced technology. EPA expects to be involved in that policy 
development and would be interested in aligning programs as much as 
possible. It may be necessary or appropriate for the final rule to 
include a reference to any new policy that has been adopted by 
California ARB in the meantime.
    EPA requests comment on all aspects of this program to create 
alternate motor-vehicle emission standards that allow certified nonroad 
engines to be used in the identified types of heavy-duty highway 
vehicles.
(2) Chassis Certification of Class 4 Heavy-Duty Vehicles
    In the HD Phase 1 rule, the agencies included a provision allowing 
manufacturers to certify Class 4 and larger heavy-duty vehicles to the 
chassis-based emission standards in 40 CFR part 86, subpart S. This 
applied for greenhouse gas emission standards, but not criteria 
emission standards. EPA revisited this issue in the recent Tier 3 final 
rule, where we revised the regulation to allow this same flexibility 
relative to exhaust emission standards for criteria pollutants. 
However, this change to the regulation conflicted with our response to 
a comment in that rulemaking that EPA should not change the 
certification arrangement for criteria pollutants.
    Manufacturers have taken opposing views of the proper approach for 
vehicles above 14,000 lbs GVWR. EPA requests comment on how best to 
address this issue in a way that resolves the various and competing 
concerns. In particular, EPA requests comment on the following specific 
areas of interest:
     Should EPA treat 14,000 lbs as a bright line to disallow 
any certification of larger vehicles to the chassis-based exhaust 
emission standards?
     Should EPA allow for certifying the larger vehicles to the 
chassis-based standards, but identify certain criteria to narrow the 
scope of this allowance? For example, EPA could limit this to 
compression-ignition or spark-ignition engines, we could identify a 
maximum GVWR value above which chassis-based certification is not 
allowed, or EPA could limit this allowance to vehicles that share 
design characteristics with chassis-certified vehicles below 14,000 lbs 
GVWR (as California ARB has done).
     If EPA allows for certifying the larger vehicles to the 
chassis-based standards, what additional amendments are needed to 
clarify how to apply the requirements of 40 CFR part 86, subpart S? For 
example, some further specification may be needed to identify how to 
apply requirements related to emission standards, driving schedule, and 
emission credits?
(3) On-Board Diagnostics for Heavy-Duty Vehicles
    EPA defines the onboard diagnostic requirements for heavy-duty 
vehicles above 14,000 lbs GVWR in 40 CFR 86.010-18, but we allow 
manufacturers to meet OBD requirements based on the requirements 
adopted by the California Air Resources Board. Manufacturers in almost 
all cases certify based on the California procedures instead of EPA 
procedures. Certification based on EPA

[[Page 40524]]

procedures is limited to certain spark-ignition engine families whose 
certification is limited to states other than California. EPA requests 
comment on a change to EPA regulation that simply requires that 
manufacturers meet the California requirements. EPA has taken a similar 
approach for vehicles at or below 14,000 lbs GVWR, as described in 40 
CFR 86.1806-17. Under this approach, EPA would recognize California 
ARB's approval as valid for EPA certification. EPA requests comment on 
this approach. In particular, EPA requests comment on the need to 
preserve EPA specifications for on-board diagnostics for any special 
situations, and on the need to make any adjustments or allowances from 
the California ARB regulations to work for EPA implementation.
(4) Nonconformance Penalties (NCPs)
    The Clean Air Act requires that heavy-duty standards for criteria 
pollutants such as NOX must reflect the greatest degree of 
emission reduction achievable through the application of technology 
that EPA determines will be available. Such ``technology-forcing'' 
standards create the risk that one or more manufacturers may lag behind 
in the development of their technology to meet the standard and, thus, 
be forced out of the marketplace. Recognizing this risk, Congress 
enacted CAA section 206(g) (42 U.S.C. 7525(g)), which requires EPA to 
establish ``nonconformance penalties'' to protect these technological 
laggards by allowing them to pay a penalty for engines that temporarily 
are unable to meet the applicable emission standard, while removing any 
competitive advantage those technological laggards may have.
    On September 5, 2012, EPA adopted final NCPs for heavy heavy-duty 
diesel engines that could be used by manufacturers of heavy-duty diesel 
engines unable to meet the current oxides of nitrogen (NOX) 
emission standard. On December 11, 2013, the U.S. Court of Appeals for 
the District of Columbia Circuit issued an opinion vacating that Final 
Rule. It issued its mandate for this decision on April 16, 2014, ending 
the availability of the NCPs for the current NOX standard, 
as well as vacating certain amendments to the NCP regulations due to 
concerns about inadequate notice. In particular, the amendments revise 
the text explaining how EPA determines when NCP should be made 
available. EPA is proposing to remove the vacated regulatory text 
specifying penalties, and re-proposing most of the other vacated 
amendments to provide fuller notice. Finally, EPA is proposing a new 40 
CFR 86.1103-2016 to replace the existing 40 CFR 86.1103-87.
(a) Vacated Penalties
    In EPA's regulations, NCP penalties are calculated from inputs 
specific to the standards for which NCPs are available. The input 
values are specified in 40 CFR 86.1105-87. EPA is proposing to remove 
paragraph (j) of this section which specifies the vacated inputs for 
the 2010 NOX emission standard. EPA does not request comment 
on this change because this text has already been vacated by the Court. 
Since all manufacturers are currently complying with these standards, 
the text also no longer has any purpose.
(b) Re-Proposed Text
    The 2012 rule made amendments to four different sections in 40 CFR 
part 86. The amendments to 40 CFR 86.1104-91 and 86.1113-87 were 
supported during the rulemaking and were not questioned in the Court's 
decision. Nevertheless, these revisions were vacated along with the 
rest of the rule. EPA is re-proposing these changes. Since we are 
proposing to vacate and restore the regulatory text, the proposal 
consists of leaving these sections of the regulations unchanged.
(i) Upper Limits
    The changes to 40 CFR 86.1104-91 affected the upper limit. The 
upper limit (UL) is the emission level established by regulation above 
which NCPs are not available. A heavy duty engine cannot use NCPs to be 
certified for a level above the upper limit. CAA section 206(g)(2) 
refers to the upper limit as a percentage above the emission standard, 
set by regulation, that corresponds to an emission level EPA determines 
to be ``practicable.'' The upper limit is an important aspect of the 
NCP regulations not only because it establishes an emission level above 
which no engine may be certified using NCPs, but it is also a critical 
component of the cost analysis used to develop the penalty rates. The 
regulations specify that the relevant costs for determining the COC50 
and the COC90 factors are the difference between an engine at the upper 
limit and one that meets the applicable standards (see 40 CFR 86.1113-
87).
    The regulatory approach adopted under the prior NCP rules sets the 
upper limit at the prior emission standard when a prior emission 
standard exists and is then changed to become more stringent. EPA 
concluded that this upper limit should be reasonably achievable by all 
manufacturers with engines or vehicles in the relevant class. It should 
be within reach of all manufacturers of HD engines or HD vehicles that 
are currently allowed so that they can continue to sell their engines 
and vehicles while finishing their development of fully complying 
engines. A manufacturer of a previously certified engine or vehicle 
should not be forced to immediately remove a HD engine or vehicle from 
the market when an emission standard becomes more stringent. The prior 
emission standard generally meets these goals because manufactures have 
already certified their vehicles to that standard.
    EPA proposes to revise the regulations in 40 CFR 86.1104-91 to 
clarify that EPA may set the upper limit at a level below the previous 
standard if we determine that the lower level is achievable by all 
engines or vehicles in the relevant subclass. This was the case for the 
vacated NCP rule. EPA also proposes that we may set the upper limit at 
a level above the previous standard in unusual circumstances, such as 
where a new standard for a different pollutant or other requirement 
effectively increases the stringency of the standard for which NCPs 
would apply. This occurred for heavy heavy-duty engines with the 2004 
standards.
(ii) Payment of Penalties
    The proposed changes to 40 CFR 86.1113-87 correct EPA 
organizational units and mail codes to which manufacturers must send 
information. The previous information is no longer valid.
(c) Criteria for the Availability of NCPs
    Since the promulgation of the first NCP rule in 1985, subsequent 
NCP rules generally have been described as continuing ``phases'' of the 
initial NCP rule. The first NCP rule (Phase I), sometimes referred to 
as the ``generic'' NCP rule, established three basic criteria for 
determining the eligibility of emission standards for nonconformance 
penalties in any given model year (50 FR 35374, August 30, 1985). (For 
regulatory language, see 40 CFR 86.1103-87). The first criterion is 
that the emission standard in question must become more difficult to 
meet. This can occur in two ways, either by the emission standard 
itself becoming more stringent, or due to its interaction with another 
emission standard that has become more stringent. Second, substantial 
work must be required in order to meet the emission standard. EPA 
considers ``substantial work'' to mean the application of technology 
not previously used in that vehicle or engine class/subclass, or a 
significant modification of existing technology, in

[[Page 40525]]

order to bring that vehicle/engine into compliance. EPA does not 
consider minor modifications or calibration changes to be classified as 
substantial work. Third, EPA must find that a manufacturer is likely to 
be noncomplying for technological reasons (referred to in earlier rules 
as a ``technological laggard''). Prior NCP rules have considered such a 
technological laggard to be a manufacturer who cannot meet a particular 
emission standard due to technological (not economic) difficulties and 
who, in the absence of NCPs, might be forced from the marketplace. 
During the 2012 rulemaking, some commenters raised issues relating to 
EPA's interpretation of these criteria:

 The extent to which the criteria are intended to constrain 
EPA's ability to set NCPs
 The timing for evaluating the criteria
 The meaning of technological laggard
(i) Constraints on EPA
    Several commenters argued (implicitly or explicitly) that EPA 
cannot establish NCPs unless all of the regulatory criteria for NCPs 
(in 40 CFR 86.1103-87) are met. Some went further to argue that EPA 
must demonstrate that the criteria are met. However, the actual 
regulatory text has never stated that EPA may establish NCPs only if 
all criteria are met, but rather that EPA shall establish NCPs 
``provided that EPA finds'' the criteria are met. These criteria were 
included in the regulations to clarify that manufacturers should not 
expect EPA to initiate a rulemaking to establish NCPs where these 
criteria were not met. Moreover, the regulations clearly defer to EPA's 
judgment for finding that the criteria are met. While EPA must explain 
the basis of our finding, the regulatory language does not require us 
to prove or demonstrate that the criteria are met.
    This interpretation is consistent with the text of the Clean Air 
Act, which places no explicit restrictions on when EPA can set NCPs. In 
fact, it seems to create a presumption that NCPs will be available. The 
Act actually requires EPA to allow certification of engines that do not 
meet the standard unless EPA determines the practicable upper limit to 
be equal to the new emission standard.
    To address this confusion, the new proposed regulatory text would 
explicitly state that where EPA cannot determine if all of the criteria 
have been met, we may presume that they have. In other words, EPA does 
not have the burden to prove they have been met.
(ii) Timing for Evaluating Criteria
    In order to properly understand the appropriate timing for 
evaluating each of the NCP criteria, it is necessary to understand the 
purpose of each. When considered together, these criteria evaluate the 
likelihood that a manufacturer will be technologically unable to meet a 
standard on time. However, when EPA initially proposed the NCP 
criteria, we noted that the first two criteria addressed whether there 
was a possibility for a technological laggard to develop. When the 
first criterion is met, it creates the possibility for a technological 
laggard to exist. When manufacturers must perform substantial work, it 
is possible that at least one will be unsuccessful and will become a 
laggard. Thus, when evaluating these first two criteria, the purpose is 
to determine whether the standard created the possibility for a laggard 
to exist. The third criterion is different because it asks whether that 
possibility has turned into a likelihood that a technological laggard 
has developed. For example, a standard may become significantly more 
stringent and substantial effort might be required for compliance, but 
all manufacturers may be meeting the applicable standard. In that 
situation, a technological laggard is not likely and penalties would be 
unnecessary.
    In this context, it becomes clear that since the first two of these 
criteria are intended to address the question of whether a given 
standard creates the possibility for this to occur, they are evaluated 
before the third criterion that addresses the likelihood that the 
possibility will actually happen. In most cases, it is possible to 
evaluate these criteria at the point a new standard is adopted. This is 
the value of these criteria, that they can usually be evaluated long 
before there is enough information to know whether a technological 
laggard is actually likely. For example, where EPA adopts a new 
standard that is not technology-forcing, but rather merely an anti-
backsliding standard, EPA could determine at the time it is adopted 
that the second criterion is not met so that manufacturers would know 
in advance that no NCPs will be made available for that standard.
    One question that arose in the 2012 rule involved how to evaluate 
the second criterion if significant time has passed and some work 
toward meeting the standard has already been completed. To address this 
question, the proposed regulations would clarify that this criterion is 
to be evaluated based on actual work needed to go from meeting the 
previous standard to meeting the current standard, regardless of the 
timing of such changes. EPA looks at whether ``substantial work'' is or 
was required to meet the revised standard at any time after the 
standard was issued--the important question is whether manufacturers 
who were using technology that met the previous standard would need to 
build upon that technology to meet the revised standard. Other 
interpretations would seem to be directly contrary to the purpose of 
the statute, which is designed to allow technological laggards to be 
able to certify engines even if other manufacturers have met the 
standard.
(iii) Technological Laggards
    Questions also arose in 2012 about the meaning of the term 
``technological laggard''. While the regulations do not define 
``technological laggard'', EPA has previously interpreted this as 
meaning a manufacturer who cannot meet the emission standard due to 
technological difficulties, not merely economic difficulties (67 FR 
51464-51465, August 8, 2002). Some have interpreted this to mean that 
NCPs cannot be made available where a manufacturer tries and fails to 
meet a standard with one technology but knew that another technology 
would have allowed them to meet the standard. In other words, that it 
made a bad business decision. However, EPA's reference to ``economic 
difficulties'' applies where a technological path exists--at the time 
EPA is evaluating the third criterion--that would allow the 
manufacturer to meet the standard on time, but the manufacturer chooses 
not to use it for economic reasons. The key question is whether or not 
the technological path exists at the time of the evaluation. To address 
this confusion, the proposed regulations would clarify that where there 
is uncertainty about whether a failure to meet the standards is a 
technological failure, EPA may presume that it was. Note that this does 
not mean that EPA might declare any failure to meet standards as a 
technological failure. It would only apply where it is not clear.
(5) In-Use Testing
    EPA and manufacturers have gained substantial experience with in-
use testing over the last four or five years. This has led to important 
insights in ways that the test protocol can be adjusted to be more 
effective. EPA is accordingly proposing to make the following changes 
to the regulations in 40 CFR part 86, subparts N and T:
     Revise the NTE exclusion based on aftertreatment 
temperature to associate

[[Page 40526]]

the exclusion with the specific aftertreatment device that does not 
meet the temperature criterion. For example, there should be no 
NOX exclusion if a diesel oxidation catalyst is below the 
temperature threshold. EPA is also proposing to revise the exclusion to 
include accommodation of CO emissions when there is a problem with low 
temperatures in the exhaust.
     Clarify that exhaust temperatures should be measured 
continuously to evaluate whether those temperatures stay above the 250 
[deg]C threshold.
     Add specifications to describe where to measure 
temperatures for exhaust systems with multiple aftertreatment devices.
     Include a provision to add 0.00042 g/hp-hr to the PM 
measurement to account for PM emissions vented to the atmosphere 
through the crankcase vent.
     Increase the time allowed for submitting quarterly reports 
from 30 to 45 days after the end of the quarter.
(6) Miscellaneous Amendments to 40 CFR Part 86
    As described elsewhere, EPA is proposing to make several changes to 
40 CFR part 86. This includes primarily the GHG standards for Class 2b 
and 3 heavy-duty vehicles in subpart S. EPA is also proposing changes 
related to hearing procedures, adjustment factors for infrequent 
regeneration of aftertreatment devices, and the testing program for 
heavy-duty in-use vehicles.
    EPA is proposing to make several minor amendments to 40 CFR part 
86, subpart A, including the following:
     Revise 40 CFR 86.1823 to extend the default catalyst 
thermal reactivity coefficient for Tier 2 vehicles to also apply for 
Tier 3 vehicles. This change was inadvertently omitted from the recent 
Tier 3 rulemaking. EPA is also interested in a broader review of the 
appropriate default value for the catalyst thermal reactivity 
coefficient. EPA would be interested in reviewing any available data 
related to this issue. In any case, EPA would plan to revisit this 
question in the future.
     Establish a minimum maintenance interval of 1500 hours for 
DEF filters for heavy-duty engines. This reflects the technical 
capabilities for filter durability and the expected maintenance in the 
field.
     Remove the idle CO standard from 40 CFR 86.007-11 and 40 
CFR 86.008-10. This standard no longer applies, since all engines are 
now subject to diagnostic requirements instead of the idle CO standard.
    EPA is also proposing several amendments to remove obsolete text, 
update cross references, and streamline redundant regulatory text. For 
example, paragraph (f)(3) of Appendix I includes a duty cycle for 
heavy-duty spark-ignition engines that is no longer specified as part 
of the certification process.
(7) Applying 40 CFR Part 1068 to Heavy-Duty Highway Engines and 
Vehicles
    As part of the Phase 1 standards, EPA applied the exemption and 
importation provisions from 40 CFR part 1068, subparts C and D, to 
heavy-duty highway engines and vehicles. EPA also specified that the 
defect reporting provisions of 40 CFR 1068.501 were optional. In an 
earlier rulemaking, EPA applied the selective enforcement auditing 
under 40 CFR part 1068, subpart E (75 FR 22896, April 30, 2010). EPA is 
proposing in this rule to adopt the rest of 40 CFR part 1068 for heavy-
duty highway engines and vehicles, with certain exceptions and special 
provisions.
    40 CFR part 1068 captures a range of compliance provisions that are 
common across our engine and vehicle programs. These regulatory 
provisions generally provide the legal framework for implementing a 
certification-based program. 40 CFR part 1068 works in tandem with the 
standard-setting part for each type of engine/equipment. This allows 
EPA to adopt program-specific provisions for emission standards and 
certification requirements for each type of engine/equipment while 
taking a uniform approach to the compliance provisions that apply 
generally.
    Many of the provisions in 40 CFR part 1068 were originally written 
to align with the procedures established in 40 CFR part 85 and part 86. 
EPA expects the following provisions from 40 CFR part 1068 to not 
involve a substantive change for heavy-duty highway engines and 
vehicles:
     Part 1068, subpart A, describes how EPA handles 
confidential information, how the Administrator may delegate decision-
making within the agency, how EPA may enter manufacturers' facilities 
for inspections, what information manufacturers must submit to EPA, and 
how EPA may require testing or perform testing. There is also a 
description of labeling requirements that apply uniformly for different 
types of engines/equipment.
     The prohibited acts, penalties, injunction provisions, and 
related requirements of 40 CFR 1068.101 and 1068.125 correspond to what 
is specified in Clean Air Act sections 203 through 207 (also see 
section 213(d)).
     40 CFR 1068.103 describes how a certificate of conformity 
applies on a model-year basis. With the exception of the stockpiling 
provisions in paragraph (f), as described below, these provisions 
generally mirror what already applies for heavy-duty highway engines.
     40 CFR 1068.115 describes manufacturers' warranty 
obligations. EPA is proposing to amend this section to more carefully 
conform to the warranty provisions in Clean Air Act section 207, as 
described below. Note that EPA also includes a provision identifying 
the warranty requirements from Clean Air Act section 203(a)(4), which 
are specific to motor vehicles.
     40 CFR 1068.120 describes requirements that apply for 
rebuilding engines. This includes more detailed provisions describing 
how the rebuild requirements apply for cases involving a used engine to 
replace a certified engine.
     40 CFR part 1068, subpart F, describes procedural 
requirements for voluntary and mandatory recalls. As noted below, EPA 
is proposing to modify these regulations to eliminate a few instances 
where the part 1068 provisions differ from what is specified in 40 CFR 
part 86, subpart S.
     40 CFR part 1068, subpart G, describes how EPA would hold 
a hearing to consider a manufacturer's appeal of an adverse compliance 
decision from EPA. These procedures apply for penalties associated with 
violations of the prohibited acts, recall, nonconformance penalties, 
and generally for decisions related to certification. As noted below, 
EPA is proposing to migrate these procedures from 40 CFR part 86, 
including an effort to align with EPA-wide regulations that apply in 
the case of a formal hearing.
    Manufacturers are already required to use good engineering judgment 
in many cases related to certifying engines under 40 CFR part 86 (see 
40 CFR 1068.5).
    As noted above, the exemption provisions of 40 CFR part 1068, 
subpart C, already apply for heavy-duty highway engines. EPA is 
proposing to add a clarification that the exemption from the tampering 
prohibition for competition purposes does not apply to heavy-duty 
highway vehicles. This aligns with the statutory provisions for the 
racing exemption.
    EPA is proposing to require that manufacturers comply with the 
defect-reporting provisions in 40 CFR 1068.501. Defect reporting under 
40 CFR 1068.501 involves a more detailed approach for manufacturers to 
track possible defects and establishes thresholds to define when 
manufacturers must perform an investigation to determine an actual rate 
of emission-related defects. These

[[Page 40527]]

thresholds are scaled according to production volumes, which allows us 
to adopt a uniform protocol for everything from locomotives to lawn and 
garden equipment. Manufacturers that also produce nonroad engines have 
already been following this protocol for several years. These defect-
reporting requirements are also similar to the rules that apply in 
California.
    40 CFR part 1068 includes a definition of ``engine'' to clarify 
that an engine becomes subject to certification requirements when a 
crankshaft is installed in an engine block. At that point, a 
manufacturer may not ship the engine unless it is covered by a 
certificate of conformity or an exemption. Most manufacturers have 
opted into this definition of ``engine'' as part of the replacement 
engine exemption as specified in 40 CFR 85.1714. We are proposing to 
make this mandatory for all manufacturers. A related provision is the 
definition of ``date of manufacture'', which we use to establish that 
an engine's model year is also based on the date of crankshaft 
installation. To address the concern that engine manufacturers would 
install a large number of crankshafts before new emission standards 
start to apply as a means of circumventing those standards, we state in 
40 CFR 1068.103(f) that manufacturers must follow their normal 
production plans and schedules for building engines in anticipation of 
new emission standards. In addition to that broad principle, we state 
that we will consider engines to be subject to the standards for the 
new model year if engine assembly is not complete within 30 days after 
the end of the model year with the less stringent standards (a longer 
time frame applies for engines with per-cylinder displacement above 2.5 
liters).
    40 CFR part 1068 also includes provisions related to vehicle 
manufacturers that install certified engines. EPA states in 40 CFR 
1068.105(b) that vehicle manufacturers are in violation of the 
tampering prohibition if they do not follow the engine manufacturers' 
emission-related installation instructions, we approve as part of the 
certification process.
    40 CFR part 1068 also establishes that vehicles have a model year 
and that installing certified engines includes a requirement that the 
engine be certified to emission standards corresponding to the 
vehicle's model year. An exception to allow for normal production and 
build schedules is described in 40 CFR 1068.105(a). This ``normal-
inventory'' allowance is intended to allow for installation of 
previous-tier engines that are produced under a valid certificate by 
the engine manufacturer shortly before the new emission standards start 
to apply. Stockpiling such engines would be considered an unlawful 
circumvention of the new emission standards. The range of companies and 
production practices is much narrower for heavy-duty highway engines 
and vehicles than for nonroad engines and equipment. EPA is therefore 
proposing a further set of specifications to define or constrain 
engine-installation schedules that would be considered to fall within 
normal-inventory practices. In particular, vehicle manufacturers are 
limited to three months of production, once new emission standards 
start to apply, to install previous-tier engines without EPA approval. 
For any subsequent installation of previous-tier engines, EPA is 
proposing to require that vehicle manufacturers get EPA approval based 
on a demonstration that the excess inventory was a result of 
unforeseeable circumstances rather than circumvention of emission 
standards. EPA is proposing that approval in those circumstances would 
be limited to a maximum of 50 engines to be installed for up to three 
additional months for a single vehicle manufacturer.
    The existing prohibitions and exemptions in 40 CFR part 1068 
related to competition engines and vehicles need to be amended to 
account for differing policies for nonroad and motor vehicle 
applications. In particular, we generally consider nonroad engines and 
vehicles to be ``used solely for competition'' based on usage 
characteristics. This allows EPA to set up an administrative process to 
approve competition exemptions, and to create an exemption from the 
tampering prohibition for products that are modified for competition 
purposes. There is no comparable allowance for motor vehicles. A motor 
vehicle qualifies for a competition exclusion based on the physical 
characteristics of the vehicle, not on its use. Also, if a motor 
vehicle is covered by a certificate of conformity at any point, there 
is no exemption from the tampering and defeat-device prohibitions that 
would allow for converting the engine or vehicle for competition use. 
There is no prohibition against actual use of certified motor vehicles 
or motor vehicle engines for competition purposes; however, it is not 
permissible to remove a motor vehicle or motor vehicle engine from its 
certified configuration regardless of the purpose for doing so.
    It is relatively straightforward to apply the provisions of 40 CFR 
part 1068 to all engines subject to the criteria emission standards in 
40 CFR part 86, subpart A, and the associated vehicles. Manufacturers 
of comparable nonroad engines are already subject to all these 
provisions. Class 2b and 3 heavy-duty vehicles subject to criteria 
emission standards under 40 CFR part 86, subpart S, are covered by a 
somewhat different compliance program. EPA is therefore proposing to 
apply the provisions of 40 CFR part 1068 only as described in the next 
section for light-duty vehicles, light-duty trucks, medium-duty 
passenger vehicles, and chassis-certified Class 2b and 3 heavy-duty 
vehicles.

B. Amendments Affecting Gliders and Glider Kits

    As noted in Sections III, and V the agencies are proposing not to 
exempt glider kits from the Phase 2 GHG emission and fuel consumption 
standards.\877\ Gliders and glider kits are exempt from NHTSA's Phase 1 
fuel consumption standards. The EPA Phase 1 rules exempted gliders and 
glider kits produced by small businesses from CO2 standards 
(see 40 CFR 1037.150(c)) but did not include such a blanket exemption 
for other gliders and glider kits. EPA is proposing to amend its rules 
applicable to engines installed in glider kits, a proposal which would 
affect emission standards not only for GHGs but for criteria pollutants 
as well. NHTSA is also considering including gliders under its Phase 2 
standards. Finally, EPA believes glider manufacturers may not 
understand how existing EPA regulations apply to them or otherwise are 
not complying with existing requirements, resulting in a number of 
uncertified vehicles. Therefore, EPA is also proposing to clarify its 
requirements for certification and to revise its definitions for glider 
manufacturers as described below.
---------------------------------------------------------------------------

    \877\ Glider vehicles are motor vehicles produced to accept 
rebuilt engines (or other used engines) along with used axles and/or 
transmissions. The common commercial term ``glider kit'' is used 
here primarily to refer to a chassis into which the used/rebuilt 
engine is installed.
---------------------------------------------------------------------------

    It is important to emphasize that EPA is not proposing to ban 
gliders. Rather, as is described below, EPA proposing to restrict the 
number of gliders that may be produced using engines not meeting 
current standards.
    EPA requests comment on its proposed amendments and clarifications 
regarding gliders. Commenters are encouraged to include technological 
information and production data for the current glider market, as well 
as for past practices. Commenters opposing the proposed provisions are 
also encouraged to suggest alternate approaches that would prevent 
glider kits from being used to

[[Page 40528]]

circumvent the current emission standards.
(1) Background Under the Clean Air Act
    EPA notes that under the anti-tampering provisions of the Clean Air 
Act, and under EPA's regulatory requirements applicable to rebuilding 
engines (see 40 CFR 86.004-40), rebuilt engines must continue to comply 
with emission standards applicable to the model year for which they 
were originally certified. These regulations specifically apply to 
rebuilt engines independent of the vehicle into which they are 
installed or reinstalled. As a general matter, EPA has considered the 
question of whether the vehicle into which the rebuilt engine is 
installed is a ``new motor vehicle'' separately from the status of the 
engine. The use of a rebuilt or other previously used engine in an 
otherwise newly manufactured vehicle (such as a glider kit) does not 
keep the vehicle from being ``new'' under the Clean Air Act. (Or, 
phrased positively, a newly manufactured vehicle remains ``new'' even 
if a rebuilt engine is installed in it.) This issue became of increased 
practical import with the advent of separate vehicle (i.e. non-engine) 
standards for GHGs in the Phase 1 rule. Thus, before MY 2014, EPA did 
not have separate standards for vehicles over 14,000 lbs GVWR. However, 
EPA Phase 1 GHG vehicle standards apply for new MY 2014 and later 
vehicles over 14,000 lbs. Thus, EPA generally considers glider kits to 
be subject to the Phase 1 vehicle standards, and to have been subject 
to them from the advent of the Phase 1 program.
    However, with respect to engines installed in glider kits, an EPA 
Phase 1 provision in 40 CFR 1037.150(j) provided an exception allowing 
the use of used or rebuilt engines \878\ that were certified to model 
year 2013 or earlier (or model year 2015 or earlier for spark ignition 
engines). The effect of this transition provision during Phase 1 was to 
allow glider kits to use engines not certified to meet the engine GHG 
or fuel consumption standards, although the glider kits were still 
required to have an EPA vehicle certificate with respect to GHG 
emissions. In addition, another provision of Phase 1 in 40 CFR 
1037.150(c) exempted gliders and glider kits produced by small 
businesses from the need to obtain a vehicle certificate, but did not 
include such a blanket exemption for non-small business gliders and 
glider kits. Thus, depending on the size of the business producing the 
glider kit, gliders and glider kits may currently be subject to the 
requirement to obtain a vehicle certificate prior to introduction into 
commerce as a new vehicle.
---------------------------------------------------------------------------

    \878\ Most glider vehicles being produced today are assembled 
with rebuilt engines. However, it is also possible to use previously 
used engines that are not rebuilt.
---------------------------------------------------------------------------

(2) Proposed Amendment to EPA Vehicle Standards
    EPA is proposing to end both 40 CFR 1037.150 provisions. EPA's 
proposed program would generally treat glider vehicles the same as 
other new vehicles. As a result, glider vehicles would have to be 
certified to the Phase 2 vehicle standards, which (among other things) 
would require a fuel map for the actual engine in order to run GEM. In 
other words, manufacturers producing glider kits would need to meet the 
applicable GHG vehicle standards and, as part of its compliance 
demonstration, would need to have a fuel map for each engine that would 
be used.
    EPA is proposing this provision because we believe there has been 
adequate time for glider manufacturers to transition to a compliance 
regime. Moreover, as noted more fully below, with increased numbers of 
glider kits being produced, perpetuation of the interim exemption from 
Phase 1 would turn a transition provision into an on-going loophole. 
Nevertheless, EPA is proposing to replace this provision with a limited 
allowance for small business manufacturers as described in the proposed 
40 CFR 1037.635. EPA is also proposing new definitions of ``glider 
vehicle'' and ``glider kit'' in 40 CFR 1037.801 that are generally 
consistent with the common understanding of these terms as meaning new 
chassis with a used engine or designed to accept a used engine.
(3) Proposed Change to EPA Engine Standards
    EPA is also proposing to amend its rules to require that engines 
used in glider vehicles must be certified to the standards applicable 
to the calendar year in which assembly of the glider vehicle is 
completed. This requirement would apply to all pollutants, and thus 
would encompass criteria pollutant standards as well as GHG standards. 
Used or rebuilt engines could be used, as long as they had been 
certified to the same standards as apply for the calendar year of 
glider vehicle assembly. For example, if assembly of a glider vehicle 
was completed in calendar year 2020, the engine standards applicable to 
MY 2020 engines would have to be satisfied. (If the engine standards 
for model year 2020 were the same as for model years 2017 through 2019, 
then any model year 2017 or later engine could be used.)
    EPA is proposing to amend these rules because, with the advent in 
MY 2007 of more stringent HD diesel engine criteria pollutant 
standards, continuation of provisions allowing rebuilt and reused 
engines to meet earlier MY criteria pollutant standards results in 
unnecessarily high in-use emissions. GHG emissions from these engines 
also are controllable. As more glider kits are produced, EPA believes 
that these emissions should be controlled to the same levels as other 
new engines.
    Since EPA has already justified the criteria pollutant emission 
standards for heavy duty diesel engines pursuant to CAA section 202 
(a)(3)(C), it is not clear that any further justification for applying 
those standards to engines used in glider kits is needed. The GHG 
engine standards for Phase 1 have likewise already been justified, and 
the proposed Phase 2 engine standards' justification is set out in 
Section II above. If any further justification is required, EPA notes 
that the emission benefits of applying current criteria pollutant 
standards would be substantial, and at low cost. Glider vehicle 
production is not being reported to EPA, and we cannot determine 
precisely how much of an emission impact these vehicles are having. 
Nevertheless, since the current standards for NOX and PM are 
at least 90 percent lower than the most stringent previously applicable 
standards, we can be certain that the NOX and PM emissions 
of any glider vehicles using pre-2007 engines are at least ten times as 
high as emissions from equivalent vehicles being produced with brand 
new engines.\879\ Thus, each glider vehicle that is purchased instead 
of a new vehicle with a current MY engine results in significantly 
higher in-use emissions. EPA recognizes that the environmental impacts 
of gliders using 2010 and later engines would be much smaller, and 
requests comment on whether we should treat such gliders differently 
than gliders using older engines.
---------------------------------------------------------------------------

    \879\ The NOX and PM standards for MY 2007 and later 
engines are 0.20 g/hp-hr and 0.01 g/hp-hr, respectively. The 
standards for MY 2004 through 2006 engines were ten times these 
levels, and earlier standards were even higher.
---------------------------------------------------------------------------

    These emission impacts are being compounded by the increasing sales 
of these vehicles. Estimates provided to EPA indicate that production 
of glider vehicles has increased by an order of magnitude from what it 
was in the 2004-2006 time frame--from a few

[[Page 40529]]

hundred each year to thousands.\880\ While the few hundred glider 
vehicles produced annually in the 2004-2006 timeframe may have been 
produced for arguably legitimate purposes such as salvaging powertrains 
from vehicles otherwise destroyed in accidents, EPA believes the 
tenfold increase in glider kit production since the MY 2007 criteria 
pollutant emission standards took effect reflects an attempt to 
circumvent these more stringent standards and (ultimately) the Clean 
Air Act.
---------------------------------------------------------------------------

    \880\ ``Industry Characterization of Heavy Duty Glider Kits'', 
MacKay & Company, September 30, 2013.
---------------------------------------------------------------------------

    The cost for manufacturers to comply with the vehicle-based GHG 
standards is similar for gliders as for other new vehicles. Similar to 
EPA's analysis of emissions above, although we cannot precisely 
quantify the cost of complying with the proposed engine requirements 
for criteria pollutant standards because it is dependent on which 
engines would be used and which would have otherwise been used, EPA 
nevertheless believes that cost-effectiveness (dollars per ton) of the 
proposed requirement relative to any pre-2007 engine would be similar 
to the cost-effectiveness of the NOX and PM standards for 
current model year engines, which EPA has already found to be cost 
effective.
    The agencies (as well as the broader SBAR Panel) are, however, 
concerned about adverse economic impacts on small businesses that 
assemble gliders and build glider kits, and we recognize that 
production of a smaller number of gliders by these small manufacturers 
may be appropriate for salvaged engines or other non-circumvention 
purposes. Therefore, EPA is proposing a new provision that would 
preserve its regulatory status quo for existing small businesses, but 
cap annual production based on recent sales. Thus, a limited number of 
glider kits produced by small businesses would not have to meet the GHG 
vehicle standards, and could use rebuilt or used engines provided those 
engines were certified to the year of the engine's manufacture. For 
example, an existing small business that produced between 100 and 200 
glider vehicles per year would be allowed to produce up to 200 glider 
vehicles per year under without having to certify them to the GHG 
standards, or re-certifying the engines to the now-applicable EPA 
standards for criteria pollutants and GHGs (so long as the engine is 
certified to criteria pollutant standards for the year of its 
manufacture). To be eligible for this provision, EPA is also proposing 
that no small entity could produce more than 300 glider vehicles in any 
given model year without certifying (or recertifying) to any EPA 
standards. EPA believes that this level reflects the upper end of the 
range of production that occurred before significant circumvention of 
the 2007 criteria pollutant standards began. We request comment on the 
appropriate caps (including the appropriate magnitude of the caps) and 
on whether any other special provisions would be needed to accommodate 
glider kits. EPA also requests comment on whether we should allow 
larger manufacturers to produce some limited number of glider kits.
(4) Lead Time for Amended Standards
    EPA is proposing that this requirement for gliders to meet engine 
and vehicle standards applicable to other new vehicles and engines take 
effect on January 1, 2018. EPA believes this provides sufficient time 
to ``permit the development and application of the requisite control 
measures'' (CAA section 202 (a)(3)(D)) because compliant engines are 
available today, although manufacturers would need several months to 
change business practices to comply. EPA also solicits comment on 
whether an earlier or later compliance date would be appropriate. We 
also request comment on whether we should include a production limit if 
we provide additional lead time in the Final Rule.
(5) Legal Authority and Definitions Under the Clean Air Act
    With respect to statutory authority under the Clean Air Act, EPA 
notes first that it has broad authority to control all pollutant 
emissions from ``any'' rebuilt heavy duty engines (including engines 
beyond their statutory useful life). See CAA section 202(a)(3)(D). EPA 
is to give ``appropriate'' consideration to issues of cost, energy, and 
safety in developing such standards, and to provide necessary lead time 
to implement those standards. As noted above, if a used engine is 
placed in a glider kit, the engine would be considered a ``new motor 
vehicle engine'' because it is being used in a new motor vehicle (as 
explained in the following paragraph). See CAA section 216(3). With 
respect to the vehicle-based GHG standards, there is no question that 
the completed glider is a ``motor vehicle'' under the Clean Air Act (as 
well as under NHTSA's safety provisions). Some in the trucking industry 
have questioned whether a glider kit (without an engine) is a motor 
vehicle. However, EPA considers glider kits to be incomplete motor 
vehicles, and EPA has the authority to regulate incomplete motor 
vehicles, including unmotorized chassis.
    Under the CAA, it is also important that ``new'' is determined 
based on legal title and does not consider prior use. Thus, glider kits 
that have a new vehicle identification number (VIN) and new title are 
considered to be ``new motor vehicles'' even if they incorporate 
previously used components. Note that under the Clean Air Act, EPA 
would not consider the fact that a vehicle retained the VIN of the 
donor vehicle from which the engine was obtained determinative of 
whether or not the vehicle is new.
    The CAA also defines ``manufacturer'' to include any person who 
assembles new motor vehicles. EPA is proposing to revise its regulatory 
definitions of these terms in 40 CFR 1036.801 and 1037.801 to more 
clearly reflect these aspects of the CAA definitions--that glider kits 
are ``new motor vehicles'', previously used engines (whether rebuilt or 
not) installed into glider kits are ``new motor vehicle engines'', and 
any person who completes assembly of a glider is a ``manufacturer''. 
EPA also notes that under the existing 40 CFR 1037.620, glider kit 
assemblers would generally be considered to be secondary vehicle 
manufacturers. That section, which EPA is proposing to redesignate as 
40 CFR 1037.622, allows secondary vehicle manufacturers that have a 
valid certificate or exemption to receive incomplete vehicles (such as 
glider kits) from OEMs.
    To further clarify that EPA considers both glider kits and 
completed glider vehicles to be motor vehicles, EPA is proposing to add 
a clarification to our definition of ``motor vehicle'' in 40 CFR 
85.1703 regarding vehicles such as gliders that clearly are intended 
for use on highways, consistent with the CAA definition of ``motor 
vehicle'' in CAA section 216 (2). The regulatory definition presently 
contains a provision stating that vehicles lacking certain safety 
features required by state or federal law are not ``motor vehicles''. 
This caveat needs a proper context: Is the safety feature one that 
would prevent operation on highways. If not, absence of that feature 
does not result in the vehicle being other than a motor vehicle. The 
proposed amendment would consequently make clear that vehicles that are 
clearly intended for operation on highways are motor vehicles, even if 
they do not have every safety feature. (EPA is also considering whether 
to simply eliminate the clause ``or safety features required by state 
and/or federal law'' from the regulatory definition.) This clarifying 
provision would take effect upon promulgation.

[[Page 40530]]

    We note that NHTSA and EPA have separate definitions for motor 
vehicles under their separate statutory authorities. As such, EPA's 
determination of how its statute and regulations apply to glider kits 
and glider vehicles has no bearing on how NHTSA may apply its safety 
authority with regard to them. See Section XIV. B. (6) for additional 
discussion of NHTSA's consideration of glider vehicles.
(6) Relation to NHTSA Fuel Efficiency Program and Safety Regulations
    NHTSA does not consider glider kits to be motor vehicles, but it 
does consider assembled glider vehicles to be motor vehicles. As stated 
above, NHTSA is considering including glider vehicles under its Phase 2 
standards. NHTSA seeks comments from glider manufacturers on this 
consideration.
    We believe that the agencies potentially having different policies 
for glider kits and glider vehicles under the Phase 2 program would not 
result in problematic disharmony between the NHTSA and EPA programs, 
because of the small number of vehicles that would be involved. EPA 
believes that its proposed changes would result in the glider market 
returning to the pre-2007 levels, in which fewer than 1,000 glider 
vehicles would be produced in most years. Given that a large fraction 
of these vehicles would be exempted from EPA regulations because they 
would be produced by qualifying small businesses, they would thus, in 
practice, be treated the same under EPA and NHTSA regulations. Only 
non-exempt glider vehicles would be subject to different requirements 
under the NHTSA and EPA regulations. However, we believe that this is 
unlikely to exceed a few hundred vehicles in any year, which would be 
few enough not to result in any meaningful disharmony between the two 
agencies.
    With regard to NHTSA's safety authority over gliders, the agency 
notes that it has become increasingly aware of potential noncompliances 
with its regulations applicable to gliders. NHTSA has learned of 
manufacturers who are creating glider vehicles that are new vehicles 
under 49 CFR 571.7(e), however, the manufacturers are not certifying 
them and obtaining a new VIN as required. NHTSA plans to pursue 
enforcement actions as applicable against noncompliant manufacturers. 
In addition to enforcement actions, NHTSA may consider amending 49 CFR 
571.7(e) and related regulations as necessary. NHTSA believes 
manufacturers may not be using this regulation as originally intended.
C. Applying the General Compliance Provisions of 40 CFR Part 1068 to 
Light-Duty Vehicles, Light-Duty Trucks, Chassis-Certified Class 2B and 
3 Heavy-Duty Vehicles and Highway Motorcycles
    As described above, EPA is proposing to apply all the general 
compliance provisions of 40 CFR part 1068 to heavy-duty engines and 
vehicles. EPA proposes to also apply the recall provisions and the 
hearing procedures from 40 CFR part 1068 for highway motorcycles and 
for all vehicles subject to standards under 40 CFR part 86, subpart S. 
See the preceding section for a description of how the provisions from 
40 CFR part 1068 compare to those in 40 CFR part 85 and part 86.
    EPA also requests comment on applying the rest of the provisions 
from 40 CFR part 1068 to highway motorcycles and to all vehicles 
subject to standards under 40 CFR part 86, subpart S. EPA particularly 
requests comment on applying the defect-reporting provisions in 40 CFR 
1068.501 to these vehicles. The general approach is to replace a fixed 
threshold of 25 defects as the basis for defect reporting with a scaled 
approach that would require defect reporting only after the 
manufacturer finds some larger number of actual emission-related 
defects. The regulation calls for manufacturers to monitor possible 
emission-related defects as evidenced by warranty claims, in-use 
testing, and other indicators, and to start investigating for actual 
defects once possible defects exceed an established threshold. The 
existing regulation in 40 CFR 1068.501 generally calls for 
investigating once possible defects exceed 5 to 10 percent of 
production, with a requirement to report defects if confirmed defects 
exceed a rate of 1 to 2 percent of production. The percentage 
thresholds that apply for a given engine/vehicle model decrease with 
increasing production volumes. This approach is similar to defect-
reporting requirements that already apply in California. Manufacturers 
may be interested in complying with a single set of defect-reporting 
provisions nationwide; EPA therefore also requests comment on simply 
requiring manufacturers to follow the California defect-reporting 
scheme for their EPA-certified vehicles.
    Note that EPA is proposing to amend 40 CFR 85.1701 to specify that 
the exemption provisions apply to heavy-duty engines subject to 
regulation under 40 CFR part 86, subpart A. This is intended to limit 
the scope of this provision so that it does not apply for Class 2b and 
3 heavy-duty vehicles subject to standards under 40 CFR part 86, 
subpart S. This change corrects and inadvertently broad reference to 
heavy-duty vehicles in 40 CFR 85.1701.

D. Amendments to General Compliance Provisions in 40 CFR Part 1068

    The general compliance provisions in 40 CFR part 1068 apply broadly 
too many different types of engines and equipment. This section 
describes how EPA is proposing to amend these procedures to make 
various corrections and adjustments.
(1) Hearing Procedures
    EPA is proposing to update and consolidate its regulations related 
to formal and informal hearings in 40 CFR part 1068, subpart G. This 
will allow us to rely on a single set of regulations for all the 
different categories of vehicles, engines, and equipment that are 
subject to emission standards. EPA also made an effort to write these 
regulations for improved readability.
    The hearing procedures specified in 40 CFR part 1068 apply to the 
various categories of nonroad engines and equipment (along with the 
other provisions of part 1068). EPA is proposing in these rules to 
apply these hearing procedures also to heavy-duty highway engines, 
light-duty motor vehicles, and highway motorcycles. EPA believes there 
is no reason to treat any of these sectors differently regarding 
hearing procedures.
    EPA is proposing an introductory section that provides an overview 
of requesting a hearing for all cases where a person or a company 
objects to an adverse decision by the agency. In certain circumstances, 
as spelled out in the regulations, a person or a company can request a 
hearing before a Presiding Officer. Statutory provisions require formal 
hearing procedures for administrative enforcement actions seeking civil 
penalties. The Clean Air Act does not require a formal hearing for 
other agency decisions; EPA is therefore proposing to specify that 
informal hearing procedures apply for all such decisions.
    The introductory section also adds detailed provisions describing 
the requirements for submitting information to the agency in a timely 
manner. These provisions accommodate current practices for electronic 
submission, distinguish between postal and courier delivery and provide 
separate requirements for shipments made from inside and outside the 
United States. The specified deadlines are generally based on the 
traditional approach of a

[[Page 40531]]

postmark determining whether a submission is timely or not. Fax, email 
and courier shipments are similarly specified as needing to be sent by 
close of business on the day of the deadline. A different approach 
applies for shipments originating from outside the United States. 
Because time in transit can vary dramatically, we are proposing to 
specify that foreign shipments need to be received in our office by the 
specified deadline to be considered timely. Given the option to send 
documents by email or by fax, EPA expects this approach would not pose 
any disadvantage to anyone making an appeal from outside the United 
States.
    EPA is proposing to replace the current reference to 40 CFR 
86.1853-01 for informal hearings with a full-text approach that 
captures this same material. EPA attempted to write these proposed 
regulations in a way that would not change the underlying hearing 
protocol.
    The regulations currently reference the formal hearing procedures 
in 40 CFR 85.1807, which were originally drafted to apply to light-duty 
motor vehicles. After we adopted the hearing procedures in 40 CFR 
85.1807, EPA's Office of Administrative Law Judges finalized a set of 
regulations defining formal hearing procedures that were intended to 
apply broadly across the agency for appeals under every applicable 
statute. See 40 CFR part 22, ``Consolidated Rules of Practice Governing 
the Administrative Assessment of Civil Penalties and the Revocation/
Termination or Suspension of Permits.'' EPA is therefore revising the 
regulations in 40 CFR part 1068 to simply refer to these formal hearing 
procedures in 40 CFR part 22.
(2) Additional Changes to General Compliance Provisions
    EPA is also proposing to make numerous changes across 40 CFR part 
1068 to correct errors, to add clarification, and to make adjustments 
based on lessons learned from implementing these regulatory provisions. 
This includes the following proposed changes:
     Sec.  1068.1: Clarify applicability of part 1068 with 
respect to legacy parts (such as 40 CFR parts 89 through 94).
     Sec.  1068.20: Clarify that EPA's inspection activities do 
not depend on having a warrant or a court order. As noted in the 
standard-setting parts, EPA may deny certification or suspend or revoke 
certificates if a manufacturer denies EPA entry for an attempted 
inspection or other entry.
     Sec.  1068.27: Clarify that EPA confirmatory testing may 
properly be performed before issuance of a certificate of conformity. 
We are also making an addition to state that we may require 
manufacturers to give us any special components that are needed for EPA 
testing.
     Sec.  1068.30: Add definitions of ``affiliated 
companies'', ``parent company'', and ``subsidiaries'' to clarify how 
small-business provisions apply for a range of business relationships.
     Sec.  1068.30: Clarify that a manufacturer can be 
considered a certificate holder based on the current or previous model 
year (to avoid problems from having a gap between model years).
     Sec.  1068.30: Spell out contact information for the 
``Designated Compliance Officer'' to clarify how manufacturers should 
submit information to the agency. This includes email addresses for the 
various sectors.
     Sec.  1068.32: Add discussion to establish the meaning of 
various terms and phrases for EPA regulations; for example, we 
distinguish between standards, requirements, allowances, prohibitions, 
and provisions. EPA is also clarifying terminology with respect to 
singular/plural, inclusive lists, notes and examples in the regulatory 
text, and references to ``general'' or ``typical'' circumstances. EPA 
also describes some of the approach to determining when ``unusual 
circumstances'' apply.
     Sec.  1068.45: Allow manufacturers to use coded dates on 
engine labels; allow EPA to require the manufacturer to share 
information to read the coded information.
     Sec.  1068.45: Clarify that engine labels are information 
submissions to EPA.
     Sec. Sec.  1068.101 and 1068.125: Update penalty amounts 
to reflect changes to 40 CFR part 19.
     Sec.  1068.101: Revise the penalty associated with the 
tampering prohibition to be an engine-based penalty, as opposed to 
assessing penalties per day of engine operation. This correction aligns 
with Clean Air Act section 205.
     Sec.  1068.103: Clarify the process for reinstating 
certificates after suspending, revoking, or voiding.
     Sec.  1068.103: Clarify that the prohibition against 
``offering for sale'' uncertified engines applies only for engines 
already produced. It is not a violation to invite customers to buy 
engines as part of an effort to establish the economic viability of 
producing engines, as would be expected for market research.
     Sec.  1068.105: Require documentation related to ``normal 
inventory'' for stockpiling provision. EPA is also clarifying that 
there is no specific deadline associated with producing ``normal-
inventory'' engines under this section, but emphasizing that vehicle/
equipment manufacturers may not delay engine installation beyond their 
normal production schedules. EPA is also clarifying that the allowance 
related to building vehicles/equipment in the early part of a model 
year, before the start of a new calendar year corresponding to new 
emission standards, applies only in cases where vehicle/equipment 
assembly is complete before the start of the new calendar year. This is 
intended to prevent manufacturers from circumventing new standards by 
initiating production of large numbers of vehicles/equipment for 
eventual completion after new standards have started to apply.
     Sec.  1068.115: Clarify warranty provisions to align with 
statute.
     Sec.  1068.120: Describe how the rebuilding provisions 
apply in the case of engine replacements where the new and old engines 
are subject to standards under different standard-setting parts (such 
as switching from spark-ignition to compression-ignition nonroad 
engines).
     Sec.  1068.201: Describe how someone may sell an engine 
under a different exemption than was originally intended or used.
     Sec.  1068.210: Remove the requirement for companies 
getting approval for a testing exemption to send us written 
confirmation that they meet the terms and conditions of the exemption. 
We do not believe this submission is necessary for implementing the 
testing exemption.
     Sec.  1068.220: Add description of how we might approve 
engine operation under the display exemption. This is intended to more 
carefully address circumstances in which engine operation is part of 
the display function in question. We would want to consider a wide 
range of factors in considering such a request; for example, we could 
be more inclined to approve a request for a display exemption if the 
extent of operation is very limited, or if the engine/equipment has 
emission rates that are comparable to what would apply absent the 
exemption. EPA is also removing the specific prohibition against 
generating revenue with exempted engines/equipment, since this has an 
unclear meaning and we can take any possible revenue generation into 
account in considering whether to approve the exemption on its merits.
     Sec.  1068.230: Add provision allowing for engine 
operation under the export exemption only as needed to prepare it for 
export (this has already been in

[[Page 40532]]

place in part 85, and in part 1068 for engines/equipment imported for 
export).
     Sec.  1068.235: Clarify that the standard-setting part may 
set conditions on an exemption for competition engines/equipment.
     Sec.  1068.240: Describe the logistics for identifying the 
disposition of engines being replaced under the replacement engine 
exemption. In particular, manufacturers would need to identify the 
disposition of each engine by the due date for the report under Sec.  
1068.240(c) to avoid counting them toward the production limit for 
untracked replacement engines. We are proposing to delay the due date 
for the report until September 30 following the production year to 
allow more time for manufacturers to make these determinations.
     Sec.  1068.240: Clarify the relationship between 
paragraphs (d) and (e).
     Sec.  1068.250: Simplify the deadline for requesting 
small-volume hardship.
     Sec.  1068.255: Clarify that hardship provisions for 
equipment manufacturers are not limited to small businesses, and that a 
hardship approval is generally limited to a single instance of 
producing exempt equipment for up to 12 months.
     Sec.  1068.260: State that manufacturers shipping engines 
without certain emission-related components need to identify the 
unshipped components either with a performance specification (where 
applicable) or with specific part numbers. We are also listing exhaust 
piping before and after aftertreatment devices as not being emission-
related components for purposes of shipping engines in a certified 
configuration.
     Sec. Sec.  1068.260 and 1068.262: Revise the text to 
clarify that provisions related to partially complete engines have 
limited applicability in the case of equipment subject to equipment-
based exhaust emission standards (such as recreational vehicles). These 
provisions are not intended to prevent the sale of partially complete 
equipment with respect to evaporative emission standards. We intend to 
address this in the future by changing the regulation in 40 CFR part 
1060 to address this more carefully.
     Sec.  1068.262: Revise text to align with the terminology 
and description adopted for similar circumstances related to shipment 
of incomplete heavy-duty vehicles under 40 CFR part 1037.
     Sec.  1068.301: Revise text to more broadly describe 
importers' responsibility to submit information and store records and 
explicitly allow electronic submission of EPA declaration forms and 
other importation documents.
     Sec.  1068.305: Remove the provision specifying that 
individuals may need to submit taxpayer identification numbers as part 
of a request for an exemption or exclusion for imported engines/
equipment. We do not believe this information is necessary for 
implementing the exemption and exclusion provisions.
     Sec.  1068.315: Allow for destroying engines/equipment 
instead of exporting them under the exemption for importing engines/
equipment for repairs or alterations.
     Sec.  1068.315: Remove the time constraints on approving 
extensions to a display exemption for imported engines/equipment. EPA 
would continue to expect the default time frame of one year to be 
appropriate, and extension of one to three years is sufficient for most 
cases; however, we are aware that there are occasional circumstances 
calling for a longer-term exemption. For example, an engine on display 
in a museum might appropriately be exempted indefinitely once its place 
in a standing exhibition is well established.
     Sec.  1068.315: Specify that engines under the ancient 
engine exemption must be substantially in the original configuration.
     Sec.  1068.360: Clarify the provisions related to model 
year for imported products by removing a circularity regarding ``new'' 
engines and ``new'' equipment.
     Sec.  1068.401: Add explicit statement that SEA testing is 
at manufacturer's expense. This is consistent with current practice and 
the rest of the regulatory text.
     Sec.  1068.401: Allow for requiring manufacturers other 
than the certificate holder to perform selective enforcement audits in 
cases where multiple manufacturers are cooperatively producing 
certified engines.
     Sec.  1068.401: State that SEA non-cooperation may lead to 
suspended or revoked certificate (like production-line testing).
     Sec.  1068.415: Set up new criteria for lower SEA testing 
rate based on engine power to allow for a reduced testing rate of one 
engine per day only for engines with maximum engine power above 560 kW, 
but keep the allowance to approve a lower testing rate; that may be 
needed, for example, if engine break-in (stabilization) and testing are 
performed on the same dynamometer. EPA believes it is more appropriate 
to base reduced testing rates on engine characteristics rather than 
sales volumes, as has been done in the past.
     Sec.  1068.415: Revise the service accumulation 
requirement to specify a maximum of eight days for stabilizing a test 
engine. This is necessary to address a situation where an engine 
operates only six hours per day to achieve stabilization after well 
over 50 hours. For such cases, we would expect manufacturers to be able 
to run engines much more than six hours per day. As with testing rates, 
manufacturers may ask for our approval to use a longer stabilization 
period if circumstances don't allow them to meet the specified service 
accumulation targets.
     Sec.  1068.501, and Appendix I: Clarify that ``emission-
related components'' include components whose failure would commonly 
increase emissions (not might increase), and whose primary purpose is 
to reduce emissions (not sole purpose); current regulations are not 
consistent.
     Sec.  1068.501: Add ``in-use testing'' to list of things 
to consider for investigating potential defects.
     Sec.  1068.505: Clarify that manufacturers subject to a 
mandatory recall must remedy noncompliant target vehicles without 
regard to their age or mileage at the time of repair, consistent with 
provisions that already apply under 40 CFR part 85.
     Sec.  1068.505: Revise the requirement for submitting a 
remedial report from a 60-day maximum to a 45-day minimum (or 30-day 
minimum in the event of a hearing). This adjusted approach already 
applies to motor vehicles under 40 CFR part 85.
     Sec.  1068.515: Clarify an ambiguity to require that 
manufacturers identify the facility where repairs or inspections are 
performed.
     Sec.  1068.530: Specify that recall records must be kept 
for five years, rather than three years. This is consistent with 
longstanding recall policy for motor vehicles and motor vehicle engines 
under 40 CFR part 85.
    Manufacturers and equipment operators have raised an additional 
question about how the regulations apply for replacement engines where 
the replacement engine is of a different type than the engine being 
replaced. For example, someone operating a piece of industrial 
equipment may want to replace an old spark-ignition engine with a 
compression-ignition engine (or vice versa). The replacement engine 
could be freshly manufactured, or it may have already been placed into 
service. The tampering prohibition would generally disallow ``disabling 
emission controls,'' but regulations do not directly address how this 
applies relative to the multiple emission standards that apply. It is 
important to

[[Page 40533]]

note that the standard-setting part often specifies that a used 
replacement engine becomes new (and subject to certification 
requirements) if it is installed in a piece of equipment from a 
different category. For example, installing a used heavy-duty highway 
engine in land-based nonroad equipment would make the engine ``new'' 
and subject to certification requirements as a nonroad engine. This 
does not apply for spark-ignition engines and compression-ignition 
engines installed in heavy-duty highway vehicles, or for spark-ignition 
engines and compression-ignition engines installed in land-based 
nonroad equipment. We request comment on the best approach to 
delineating how the tampering prohibition should apply for these 
scenarios.

E. Amendments to Light-Duty Greenhouse Gas Program Requirements

    EPA is proposing to make minor changes to correct errors and 
clarify regulations in 40 CFR part 86, subpart S, and 40 CFR part 600 
relating to EPA's light-duty greenhouse gas emission standards. This 
includes the following proposed changes:
     Sec.  86.1818-12: Correct a reference in paragraph (c)(4) 
and clarify that CO2-equivalent debits for N2O 
and CH4 are calculated in Megagrams and rounded to the 
nearest whole Megagram.
     Sec.  86.1838-01: Correct references in paragraph 
(d)(3)(iii).
     Sec.  86.1866-12: Correct a reference in paragraph (b).
     Sec.  86.1868-12: Clarify language in the introductory 
paragraph explaining the model years of applicability of different 
provisions for air conditioning efficiency credits. In paragraph (e)(5) 
clarify that the engine-off specification of 2 minutes is intended to 
be cumulative time. In paragraphs (f)(1), (g)(1), and (g)(3), clarify 
language by pointing to the definitions in Sec.  86.1803-01.
     Sec.  86.1869-12: Make corrections to the language for 
readability in paragraph (b)(2). In paragraph (b)(4)(ii) delete the 
phrase ``backup/reverse lights'' because these lights were not intended 
to be part of the stated eligibility criteria for high-efficiency 
lighting credits. Correct references in paragraph (f).
     Sec.  86.1870-12: Add language that clarifies that a 
manufacturer that meets the minimum production volume thresholds with a 
combination of mild and strong hybrid electric pickup trucks is 
eligible for credits.
     Sec.  86.1871-12: Clarify that credits from model years 
2010-2015 are not limited to a life of 5 model years. A recent rule 
extended the life of 2010-2015 credits to model year 2021; thus, 
language referring to a 5-year life for emission credits generated in 
these model years is being removed or revised.
     Sec.  600.113-12: Correct language in paragraph (m)(1), 
which relates to vehicles operating on LPG, that erroneously refers to 
methanol and methanol-fueled.
     Sec.  600.113-12: Correct references in paragraph (n) and 
add a new paragraph (m) that reinstates language mistakenly dropped by 
a previous regulation.
     Sec.  600.116-12: Correct description of physical quantity 
to refer to ``energy'' rather than ``current'', and correct various 
paragraph references.
     Sec.  600.208-12: Correct a reference in paragraph 
(a)(2)(iii).
     Sec.  600.210-12: Correct a reference and text in 
paragraph (c)(2)(iv)(C).

F. Amendments to Highway and Nonroad Test Procedures and Certification 
Requirements

(1) Testing With Aftertreatment Devices Involving Infrequent 
Regeneration
    Manufacturers generally rely on selective catalytic reaction and 
diesel particulate filters to meet EPA's emission standards for highway 
and nonroad compression-ignition engines. These emission control 
devices typically involve infrequent regeneration, which can have a 
significant effect on emission rates. EPA has addressed that for each 
engine type by provisions for infrequent regeneration factors; this is 
a calculation methodology that allows manufacturers to incorporate the 
effect of infrequent regeneration into reported emission values whether 
or not that regeneration occurs during an emission test. EPA adopted 
separate provisions for highway, locomotive, marine, and land-based 
nonroad compression-ignition engines. EPA is proposing to harmonize the 
common elements of these procedures in 40 CFR part 1065, and to add 
clarifying specifications in each of the standard-setting parts for 
sector-specific provisions.
(2) Mapping for Constant-Speed Engines Under 40 CFR Part 1065
    EPA is proposing to revise this section as it applies to the two-
point mapping method for certain constant-speed engines. The 
regulations currently cite a performance parameter in ISO 8528-5 that 
does not apply for the design of these engines.
    Common practice for engines that produce electric power is to use 
an isochronous governor for stand-alone generator sets. In some 
parallel operations of multiple generator sets, droop is added as a 
method for load sharing. The amount of droop can be tuned by the 
generator set manufacturer or the site system integrator. Such engines 
are commonly tested on an engine dynamometer with the isochronous 
governor.
    Mapping with just two points works well for the case of 0 percent 
droop (i.e. isochronous governor). For this case, a persistent speed 
error is forced on the engine governor on the second point and this 
will cause the governor to wind up to its maximum command. The second 
point is effectively operating on the torque curve instead of the 
isochronous governor. So, the second point captures the full fueling 
torque (plus a small amount due to any rising torque curve). This 
measured torque is used as the maximum test torque for computing the 
emission test points. Since there is no designed-in droop, some target 
amount of speed error is needed for the second point. The regulation at 
40 CFR 1065.510(d)(5)(iii) currently has a default target speed on the 
second point of 97.5 percent of the no-load speed measured on the first 
point. This results in a persistent speed error of 2.5 percent of the 
no-load speed. For an 1800 rpm no-load speed, this would give a target 
speed of 1755 rpm and a 45 rpm speed error on an isochronous governor. 
If the engine has a torque rise of 20 percent from 1800 to 1200 rpm 
(0.0333 percent torque rise per rpm), this 45 rpm error will cause a 
1.5 percent of point error in the determination of the intended maximum 
test torque. This error is larger than desired for this type of 
testing. Fortunately, engines and test cells have sufficient speed 
resolution to select a lower speed error, which reduces this error in 
maximum test torque. In practice, testing with a speed error at or 
below 0.5 percent is more than adequate to cause the isochronous 
governor to wind up to maximum fueling. Using a target speed of 99.5 
percent on the second point gives a target speed of 1791 rpm for an 
1800 rpm no-load speed and will reduce the error on the maximum test 
torque to a reasonable 0.3 percent of point for the 20 percent torque 
rise case described above.
    For governors with droop, if we attempt the two-point method, we 
would have to calculate a target speed for the second point based on a 
designed amount of droop. Unfortunately, the actual governor may not 
have the same amount of droop as the design droop, which may cause 
error in the measured torque versus the maximum test torque associated 
with a

[[Page 40534]]

complete torque map. Also, the design droop may be based on a torque 
value that is different from the intended maximum test torque. Thus, 
the two-point method is not sufficient to yield a maximum test torque 
equivalent to the value that would be obtained using a multi-point map. 
Also the allowed speed error on the second point is 20 percent of the 
speed droop, which allows an unacceptably large error in the maximum 
test torque.
    Thus, for the reasons listed, we are proposing to limit the two-
point mapping method to any isochronous governed engines, not just 
engines used to generate electric power.
(3) Calculating Maximum and Intermediate Test Speeds Under 40 CFR Part 
1065
    EPA is proposing to improve the method for calculating maximum and 
intermediate test speeds by applying a more robust calculation method. 
The new calculation method would be consistent with the methodology 
used for the maximum test torque determination, which we revised in our 
light-duty Tier 3 rulemaking. Under the current regulations, the result 
is a measured maximum test torque at one of the map points. The 
proposed calculation method involves interpolation to determine the 
measured maximum test torque, yielding a more representative maximum 
test torque lbs.
(4) Additional Test Procedure Amendments
    EPA is proposing the following additional changes to test 
procedures in 40 CFR part 1065 and part 1066:
     Sec.  1065.15: Allow manufacturers to use NMOG 
measurements to demonstrate compliance with NMHC standards. We also 
request comment on whether other forms of hydrocarbon standards (such 
as VOC) should be allowed for alternative fuels.
     Sec.  1066.210: Revise the dynamometer force equation to 
incorporate grade, consistent with the coastdown procedures being 
proposed for heavy-duty vehicles. For operation at a level grade, the 
additional parameters cancel out of the calculation.
     Sec.  1066.605: Adding an equation to the regulations to 
spell out how to calculate emission rates in grams per mile. This 
calculation is generally assumed, but we want to include the equation 
to remove any uncertainty about calculating emission rates from mass 
emission measurements and driving distance.
     Sec.  1066.815: Create an exception to the maximum value 
for overall residence time for PM sampling methods that involve PM 
samples collected for combined bags over a duty cycle. This is needed 
to accommodate the reduced sample flow rates associated with these 
procedures.

G. Amendments Related to Nonroad Diesel Engines in 40 CFR Part 1039

    EPA is proposing two changes to 40 CFR 1039.5 to clarify the scope 
and applicability of standards under 40 CFR part 1039. First, EPA is 
stating that engines using the provisions of 40 CFR 1033.625 for non-
locomotive-specific engines remain subject to certification 
requirements as nonroad diesel engines under 40 CFR part 1039. Such 
engines would need to be certified as both locomotive engines and as 
nonroad diesel engines. Second, EPA is proposing to revise the 
statement about how manufacturers may certify under 40 CFR part 1051 
for engines installed in recreational vehicles (such as all-terrain 
vehicles or snowmobiles). EPA is proposing to remove text that might be 
interpreted to mean that there are circumstances in which certification 
under neither part is required. The proper understanding of EPA's 
policy in that regard is that certification under one part is a 
necessary condition for being exempted from the other part.
    In 2008, EPA adopted a requirement in 40 CFR part 1042 for 
manufacturers to design marine diesel engines using selective catalytic 
reduction with basic diagnostic functions to ensure that these systems 
were working as intended (73 FR 37096, June 30, 2008). EPA is proposing 
to apply those same diagnostic control requirements to nonroad diesel 
engines regulated under 40 CFR part 1039. This addresses the same 
fundamental concern that engines would not be controlling emissions 
consistent with the certified configuration if the engine is lacking 
the appropriate quantity and quality of reductant. While some lead time 
would be needed to make the necessary modifications, we believe it will 
be straightforward to apply the same designs from marine diesel engines 
to land-based nonroad diesel engines. EPA is accordingly proposing that 
manufacturers meet the proposed diagnostic specifications starting with 
model year 2018. These diagnostic controls would not affect the current 
policy related to adjustable parameters and inducements related to 
selective catalytic reduction. EPA requests comment on adding these 
diagnostic requirements for nonroad diesel engines.
    EPA is proposing to make numerous changes across 40 CFR part 1039 
to correct errors, to add clarification, and to make adjustments based 
on lessons learned from implementing these regulatory provisions. This 
includes the following proposed changes:
     Sec.  1039.2: Add a clarifying note to say that something 
other than a conventional ``manufacturer'' may need to certify engines 
that become new after being placed into service (such as engines 
converted from highway or stationary use). This is intended to address 
a possible assumption that only conventional manufacturers can certify 
engines.
     Sec. Sec.  1039.30, 1039.730, and 1039.825: Consolidate 
information-collection provisions into a single section.
     Sec.  1039.107: Remove the reference to deterioration 
factors for evaporative emissions, since there are no deterioration 
factors for demonstrating compliance with evaporative emission 
standards.
     Sec.  1039.104(g): Correct the specified FEL cap for an 
example scenario illustrating how alternate FEL caps work.
     Sec.  1039.120: Reduce extended-warranty requirements to 
warranties that are actually provided to the consumer, rather than to 
any published warranties that are offered. The principle is that the 
emission-related warranty should not be less effective for emission-
related items than for items that are not emission-related.
     Sec.  1039.125: Allow for special maintenance procedures 
that address low-use engines. For example, owners of recreational 
marine vessels may need to perform engine maintenance after a smaller 
number of hours than would otherwise apply based on the limited engine 
operation over time.
     Sec.  1039.125: Establish a minimum maintenance interval 
of 1500 hours for DEF filters. This reflects the technical capabilities 
for filter durability and the expected maintenance in the field.
     Sec.  1039.125: Add fuel-water separator cartridges as an 
example of a maintenance item that is not emission-related.
     Sec.  1039.135: Allow for including optional label content 
only if the manufacturer does not opt to omit other information based 
on limited availability of space on the label, and identify counterfeit 
protection as an additional item that manufacturers may include on the 
label.
     Sec.  1039.201: Clarify that manufacturers may amend their 
application for certification after the end of the model year in 
certain circumstances, but they may not produce engines for a given 
model year after December 31 of the named year.

[[Page 40535]]

     Sec.  1039.201: Establish that manufacturers may deliver 
to EPA for testing an engine that is identical to the test engine used 
for certification. This may be necessary if the test engine has 
accumulated too many hours, or if it is unavailable for any reason.
     Sec.  1039.205: Replace the requirement to submit data 
from invalid tests with a requirement to simply notify EPA in the 
application for certification if test was invalidated.
     Sec.  1039.205: Add a requirement for manufacturers to 
include in their application for certification a description of their 
practice for importing engines, if applicable. Note that where a 
manufacturers' engines are imported through a wide variety of means, 
EPA would not require this description to be comprehensive. In such 
cases, a short description of the predominant practices would generally 
be sufficient. We are also proposing to require manufacturers of 
engines below 560 kW to name a test lab in the United States for the 
possibility of us requiring tests under a selective enforcement audit. 
We have adopted these same requirements in many of our other nonroad 
programs.
     Sec.  1039.225: Clarify that manufacturers may amend the 
application for certification after the end of the model year only in 
certain circumstances, and not to add a new or modified engine 
configuration.
     Sec.  1039.235: Add an explicit allowance for carryover 
engine families to include the same kind of within-family running 
changes that are currently allowed over the course of a model year. The 
original text may have been understood to require that such running 
changes be made separate from certifying the engine family for the new 
model year.
     Sec. Sec.  1039.235, 1039.240, and 1039.601: Describe how 
to demonstrate compliance with dual-fuel and flexible-fuel engines. 
This generally involves testing with each separate fuel, or with a 
worst-case fuel blend.
     Sec.  1039.240: Add instructions for calculating 
deterioration factors for sawtooth deterioration patterns, such as 
might be expected for periodic maintenance, such as cleaning or 
replacing diesel particulate filters.
     Sec.  1039.240: Remove the instruction related to 
calculating NMHC emissions from measured THC results, since this is 
addressed in 40 CFR part 1065.
     Sec.  1039.250: Remove references to routine and standard 
tests, and remove the shorter recordkeeping requirement for routine 
data (or data from routine tests). All test records must be kept for 
eight years. With electronic recording of test data, there should be no 
advantage to keeping the shorter recordkeeping requirement for a subset 
of test data. EPA also notes that the eight-year period restarts with 
certification for a new model year if the manufacturer uses carryover 
data.
     Sec.  1039.255: Clarify that rendering information false 
or incomplete after submitting it is the same as submitting false or 
incomplete information. For example, if there is a change to any 
corporate information or engine parameters described in the 
manufacturer's application for certification, the manufacturer must 
amend the application to include the new information.
     Sec.  1039.255: Clarify that voiding certificates for a 
recordkeeping or reporting violation would be limited to certificates 
that relate to the particular recordkeeping or reporting failure.
     Sec.  1039.505: Correct the reference to the ISO C1 duty 
cycle for engines below 19 kW.
     Sec.  1039.515: Correct the cite to 40 CFR 86.1370.
     Sec. Sec.  1039.605 and 1039.610: Revise the reporting 
requirement to require detailed information about the previous year, 
rather than requiring a detailed projection for the year ahead. The 
information required in advance would be limited to a notification of 
plans to use the provisions of these sections.
     Sec.  1039.640: Migrate engine branding to Sec.  1068.45.
     Sec.  1039.701 1039.730: Describe the process for retiring 
emission credits. This may be referred to as donating credits to the 
environment.
     Sec.  1039.705: Change terminology for counting engines 
from ``point of first retail sale'' to ``U.S.-direction production 
volume.'' This conforms to the usual approach for calculating emission 
credits for nonroad engines.
     Sec.  1039.710: Clarify that it is not permissible to show 
a proper balance of credits for a given model by using emission credits 
from a future model year.
     Sec.  1039.730: Clarify terminology for ABT reports.
     Sec.  1039.740: Clarify that the averaging-set provisions 
apply for credits generated by Tier 4 engines, not for credits 
generated from engines subject to earlier standards that are used with 
Tier 4 engines.
     Sec.  1039.801: Update the contact information for the 
Designated Compliance Officer.
     Sec.  1039.801: Revise the definition of ``model year'' to 
clarify that the calendar year relates to the time that engines are 
produced under a certificate of conformity.
     Sec.  1039.815: Migrate provisions related to confidential 
information to 40 CFR part 1068.
    EPA requests comment on removing regulatory provisions for 
Independent Commercial Importers in 40 CFR part 1039. These provisions, 
copied from highway regulations many years ago, generally allow for 
small businesses to modify small numbers of uncertified products to be 
in a certified configuration using alternative demonstration 
procedures. We are not aware of anyone using these provisions for 
nonroad engines in the last 15 years or more. We are therefore 
interested in considering these provisions to be obsolete, in which 
case they can be removed without consequence.

H. Amendments Related to Marine Diesel Engines in 40 CFR Parts 1042 and 
1043

    EPA's emission standards and certification requirements for marine 
diesel engines under the Clean Air Act are identified in 40 CFR part 
1042.
(1) Continuous NOX Monitoring and On-Off Controls
    Manufacturers may produce certain marine diesel engines with on-off 
features that disable NOX controls when the ship is 
operating outside of a designated Emission Control Area (ECA) as long 
as certain conditions are met (Sec.  1042.115(g)). This provision, 
which applies to Category 3 engines meeting EPA Tier 3 standards, is 
intended to address the special operating conditions posed by an ECA 
and allows a ship that operates in and out of designated ECAs to 
downgrade engine NOX emission controls while the ship is 
operating outside of a designated ECA. This provision also applies for 
Tier 4 NOX standards for those Category 1 and Category 2 
auxiliary engines on Category 3 vessels covered by Sec.  1042.650(d); 
this provision does not apply to any other auxiliary engines or to any 
non-Category 3 propulsion engines. Engines with allowable on-off 
controls must be certified to meet the previous tier of NOX 
standards when the advanced NOX control strategies are 
disabled (note that this would be Tier 2 for auxiliary engines as well 
as Category 3 engines, pursuant to Sec.  1042.650(d)).
    Engines with on-off NOX controls are required to be 
equipped to continuously monitor NOX concentrations in the 
exhaust (Sec.  1042.110(d)). EPA has been asked to clarify what 
``continuous'' means in the context of this requirement. Because the 
purpose of this requirement is to show that the engine complies with 
the NOX emission limits on a continuous basis, continuous

[[Page 40536]]

monitoring must be frequent enough to demonstrate that the 
NOX controls are on and are properly functioning from the 
time the ship enters the ECA until it leaves, which, depending on the 
ECA and the ship's itinerary, could be a matter of hours or days. Since 
many manufacturers equip their emission control systems with 
NOX sensors to monitoring and log the performance of the 
combined engine and emission control system, we are proposing that 
continuous monitoring means measuring NOX emissions at least 
every 60 seconds. EPA is also proposing that a manufacturer may request 
approval of an alternative measurement period if that is necessary for 
sufficiently accurate measurements. With regard to the functioning of 
continuous NOX monitoring, the continuous emission 
measurement device would be required to be included as part of the 
engine system for EPA certification. Continuous NOX 
monitoring would be required to be engaged before the ship enters an 
ECA and continue until after it exits the ECA. Verification of 
operation of the system would be included in required periodic vessel 
surveys and certification that cover nearly all commercial U.S. 
vessels. Enforcement is expected to be performed on a periodic basis by 
appropriate authorities when a ship is in port.
    It should be noted that the above provisions with respect to on-off 
controls and continuous emission monitoring do not apply for the 40 CFR 
part 1042 PM standards. Engines certified to standards under 40 CFR 
part 1042 must meet the PM limits at all times, except when the 
operator has applied for and received permission to disable Tier 4 PM 
controls while operating outside the United States pursuant to any of 
the provisions of 40 CFR 1042.650(a) through (c).
(2) Category 1 and Category 2 Auxiliary Engines on Category 3 Vessels
    The regulation at 40 CFR 1042.650(d) exempts auxiliary Category 1 
and Category 2 engines installed on U.S.-flag Category 3 vessels from 
the part 1042 standards if those auxiliary engines meet certain 
conditions. This provision is intended to facilitate compliance with 
MARPOL Annex VI by certain qualified Category 3 vessels engaged in 
international trade and to simplify compliance demonstrations while 
those vessels are operating in foreign ports and foreign waters. EPA is 
proposing two revisions to make clear that the engines on the Category 
3 vessel must remain in compliance with Annex VI, and EPA is providing 
clarifying language relating to engines with a power output of 130 kW 
or less.
    First, EPA is proposing to revise the regulations to clarify that 
the urea reporting requirements in Sec.  1042.660(b) (which requires an 
owner or operator of any vessel equipped with SCR to report to EPA 
within 30 days of any operation of such vessel without the appropriate 
reductant) also apply to Category 1 and Category 2 auxiliary engines on 
Category 3 vessels that are covered by Sec.  1042.650(d). This will 
extend the urea reporting requirements to engines between 130 and 600 
kW if they rely on SCR to meet the Annex VI Tier III NOX 
limits. Engines covered by Sec.  1043.650(d) would be subject to 
emission standards and testing requirements under MARPOL Annex VI and 
the NOX Technical Code.
    Second, EPA is proposing to revise 40 CFR 1042.650(d) to clarify 
that, while these Category 1 and Category 2 auxiliary engines may be 
designed with on-off NOX controls, Annex VI requires that 
the engines be certified to meet IMO Tier II NOX standards 
anytime the IMO Tier III NOX configuration is disabled.
    EPA has become aware that there is some uncertainty about how the 
scope of EPA's implementation of Annex VI through 40 CFR part 1043 
relates to engines with a power output of 130 kW or less. The existing 
regulations at Sec.  1043.30 state that an EIAPP certificate is 
required for engines with a power output above 130 kW, but the 
standards described in Sec.  1043.60 might be interpreted to apply to 
engines of all sizes. EPA did not intend to appear to create additional 
requirements or authority under part 1043 that is not contained in 
Annex VI or its implementing legislation (the Act to Prevent Pollution 
from Ships). EPA is therefore proposing to add clarifying language to 
Sec.  1043.60, consistent with Regulation 13 of Annex VI and APPS, to 
indicate that the international NOX limits do not apply to 
engines with a power output of 130 kW or less. Note that EPA therefore 
may not issue EIAPP certificates for engines with a power output of 130 
kW or less even if manufacturers request it; this also means that such 
auxiliary engines are not eligible for an exemption under Sec.  
1042.650(d).
(3) Natural Gas Marine Engines
    EPA is also proposing to expand provisions that apply for marine 
engines designed to operate on both diesel fuel and natural gas. Test 
requirements apply separately for each ``fuel type''. EPA generally 
considers an engine with a single calibration strategy that combines an 
initial pilot injection of diesel fuel to burn natural gas to be a 
single fuel type. This applies even if the natural gas portion must be 
substantially reduced or eliminated to maintain proper engine operation 
at light-load conditions. If the engine has a different calibration 
allowing it to run only on diesel fuel, or on continuous mixtures of 
diesel fuel and natural gas, we would consider it to be a dual-fuel 
engine or a flexible-fuel engine, respectively. These terms are used 
consistently across EPA programs for highway and nonroad applications. 
There is an effort underway to revise the definition of ``dual-fuel'' 
in MARPOL Annex VI, which may be different than EPA's definition. It 
should be noted that the 40 CFR part 1042 certification testing 
requirement differs from that specified in MARPOL Annex VI and the 
NOX Technical Code. While the international protocol 
involves testing only on the engine calibration with the greatest 
degree of diesel fuel, EPA certification requires manufacturers to 
perform testing on each separate fuel type. This would involve one set 
of tests with natural gas (with or without a diesel pilot fuel, as 
appropriate), and an additional set of tests with diesel fuel alone. 
This has been required since we first adopted standards, and this is 
the same policy that applies across all our emission control programs. 
EPA also proposes to include amended regulatory language to more 
carefully describe these testing requirements, and to specify how this 
applies differently for dual-fuel and flexible-fuel engines.
(4) Additional Marine Diesel Amendments
    EPA is proposing to make numerous changes across 40 CFR part 1042 
to correct errors, to add clarification, and to make adjustments based 
on lessons learned from implementing these regulatory provisions. This 
includes the following proposed changes:
     Sec.  1042.1: Correct the tabulated applicability date for 
engines with per-cylinder displacement between 7 and 15 liters; this 
should refer to engines ``at or above'' 7 liters, rather than ``above 7 
liters''.
     Sec.  1042.1: Replace an incorrect reference to 40 CFR 
part 89 with a reference to 40 CFR part 94 for marine engines above 37 
kW.
     Sec.  1042.2: Add a clarifying note to say that something 
other than a conventional ``manufacturer'' may need to certify engines 
that become new after being placed into service (such as engines 
converted from highway or stationary use). This is intended to address 
a possible assumption that only

[[Page 40537]]

conventional manufacturers can certify engines.
     Sec. Sec.  1042.30, 1042.730, and 1042.825: Consolidate 
information-collection provisions into a single section.
     Sec.  1042.101: Revise the text to more carefully identify 
engine subcategories and better describe the transition between Tier 3 
and Tier 4 standards. These changes are intended to clarify which 
standards apply and are not intended to change the emission standards 
for any particular size or type of engine.
     Sec.  1042.101 and Appendix III: More precisely define 
applicability of specific NTE standards for different types of engines 
and pollutants; correct formulas defining NTE zones and subzones; and 
add clarifying information to identify subzone points that could 
otherwise be derived from existing formulas. None of these changes are 
intended to change the standards, test procedures, or other policies 
for implementing the NTE standards.
     Sec.  1042.101: Clarify the FEL caps for certain engines 
above 3700 kW.
     Sec.  1042.101: Add a specification to define ``continuous 
monitor'' for parameters requiring repeated discrete measurements, as 
described above. The proposal also includes further clarification on 
the relationship between on-off NOX controls and engine 
diagnostic systems.
     Sec.  1042.110: Remove the requirement to notify operators 
regarding an unsafe operating condition, since we can more generally 
rely on the broader provision in Sec.  1042.115 that prohibits 
manufacturers from incorporating design strategies that introduce an 
unreasonable safety risk during engine operation.
     Sec.  1042.120: Reduce extended-warranty requirements to 
warranties that are actually provided to the consumer, rather than to 
any published warranties that are offered. The principle is that the 
emission-related warranty should not be less effective for emission-
related items than for items that are not emission-related.
     Sec.  1042.125: Allow for special maintenance procedures 
that address low-use engines. For example, owners of recreational 
marine vessels may need to perform engine maintenance after a smaller 
number of hours than would otherwise apply based on the limited engine 
operation over time.
     Sec.  1042.125: Establish a minimum maintenance interval 
of 1500 hours for DEF filters. This reflects the technical capabilities 
for filter durability and the expected maintenance in the field.
     Sec.  1042.135: Clarify that ULSD labeling is required 
only for engines that use sulfur-sensitive technology. If an engine can 
meet applicable emission standards without depending on the use of 
ULSD, the manufacturer should not be required to state on the engine 
that ULSD is required.
     Sec.  1042.135: Allow for including optional label content 
only if the manufacturer does not opt to omit other information based 
on limited availability of space on the label.
     Sec.  1042.201: Clarify that manufacturers may amend their 
application for certification after the end of the model year in 
certain circumstances, but they may not produce engines for a given 
model year after December 31 of the named year.
     Sec.  1042.201: Establish that manufacturers may deliver 
to EPA for testing an engine that is identical to the test engine used 
for certification. This may be necessary if the test engine has 
accumulated too many hours, or if it is unavailable for any reason.
     Sec. Sec.  1042.205 and 1042.840: Replace the requirement 
to submit data from invalid tests with a requirement to simply notify 
EPA in the application for certification if test was invalidated.
     Sec.  1042.225: Clarify that manufacturers may amend the 
application for certification after the end of the model year only in 
certain circumstances, and not to add a new or modified engine 
configuration.
     Sec.  1042.235: Add an explicit allowance for carryover 
engine families to include the same kind of within-family running 
changes that are currently allowed over the course of a model year. The 
original text may have been understood to require that such running 
changes be made separate from certifying the engine family for the new 
model year.
     Sec. Sec.  1042.235, 1042.240, and 1042.601: Describe how 
to demonstrate compliance with dual-fuel and flexible-fuel engines. 
This generally involves testing with each separate fuel, or with a 
worst-case fuel blend.
     Sec.  1042.240: Add instructions for calculating 
deterioration factors for sawtooth deterioration patterns, such as 
might be expected for periodic maintenance, such as cleaning or 
replacing diesel particulate filters.
     Sec.  1042.250: Remove references to routine and standard 
tests, and remove the shorter recordkeeping requirement for routine 
data (or data from routine tests). All test records must be kept for 
eight years. With electronic recording of test data, there should be no 
advantage to keeping the shorter recordkeeping requirement for a subset 
of test data. EPA also notes that the eight-year period restarts with 
certification for a new model year if the manufacturer uses carryover 
data.
     Sec.  1042.255: Clarify that rendering information false 
or incomplete after submitting it is the same as submitting false or 
incomplete information. For example, if there is a change to any 
corporate information or engine parameters described in the 
manufacturer's application for certification, the manufacturer must 
amend the application to include the new information.
     Sec.  1042.255: Clarify that voiding certificates for a 
recordkeeping or reporting violation would be limited to certificates 
that relate to the particular recordkeeping or reporting failure.
     Sec.  1042.302: Clarify that manufacturers may fulfill the 
requirement to test each Category 3 production engine by performing the 
test before or after the engine is installed in the vessel. The largest 
Category 3 engines are assembled in the vessel, but some smaller 
Category 3 engines are assembled at a manufacturing facility where they 
can be more easily tested. Manufacturers must perform such testing on 
fully assembled production engines rather than relying on test results 
from test bed engines.
     Sec.  1042.501: Remove test procedure specifications that 
are already covered in 40 CFR part 1065.
     Sec.  1042.505: Correct the reference to the ISO C1 duty 
cycle in 40 CFR part 1039.
     Sec.  1042.515: Remove an incorrect cite.
     Sec. Sec.  1042.605 and 1042.610: Revise the reporting 
requirement to require detailed information about the previous year, 
rather than requiring a detailed projection for the year ahead. The 
information required in advance would be limited to a notification of 
plans to use the provisions of these sections.
     Sec.  1042.630: Clarify that dockside examinations are not 
inspections. Vessels subject to Coast Guard inspection are identified 
in 46 U.S.C. 3301.
     Sec.  1042.640: Migrate engine branding to Sec.  1068.45.
     Sec.  1042.650: Clarify that vessel operators may modify 
certified engines if they will be operated for an extended period 
outside the United States where ULSD will be unavailable. This does not 
preclude the possibility of vessel operators restoring engines to a 
certified configuration in anticipation of bring the vessel back to the 
United States.
     Sec.  1042.660: Identify the contact information for 
submitting reports related to operation without SCR reductant.

[[Page 40538]]

     Sec.  1042.670: Specify that gas turbine engines are 
presumed to have an equivalent power density below 35 kW per liter of 
engine displacement; this is needed to identify which Tier 3 standards 
apply.
     Sec.  1042.701: Clarify that emission credits generated 
under 40 CFR part 94 may be used for demonstrating compliance with the 
Tier 3 and Tier 4 standards in 40 CFR part 1042.
     Sec. Sec.  1042.701 and 1042.730: Describe the process for 
retiring emission credits. This may be referred to as donating credits 
to the environment.
     Sec.  1042.705: Change terminology for counting engines 
from ``point of first retail sale'' to ``U.S.-direction production 
volume.'' This conforms to the usual approach for calculating emission 
credits for nonroad engines.
     Sec.  1042.710: Clarify that it is not permissible to show 
a proper balance of credits for a given model by using emission credits 
from a future model year.
     Sec.  1042.730: Clarify terminology for ABT reports.
     Sec.  1042.810: Clarify that it is only the 
remanufacturing standards of subpart I, not the certification standards 
that are the subject of the applicability determination in Sec.  
1042.810.
     Sec.  1042.830: Add a provision to specifically allow 
voluntary labeling for engines that are not subject to remanufacturing 
standards, and to clarify that the label is required for engines that 
are subject to remanufacturing standards.
     Sec.  1042.901: Update the contact information for the 
Designated Compliance Officer.
     Sec.  1042.901: Revise the definition of ``model year'' to 
correct cites and clarify that the calendar year relates to the time 
that engines are produced under a certificate of conformity.
     Sec. Sec.  1042.901 and 1042.910: Update the reference 
documents for Annex VI and NOX Technical Code to include 
recent changes from the International Maritime Organization.
     Sec.  1042.915: Migrate provisions related to confidential 
information to 40 CFR part 1068.

I. Amendments Related to Locomotives in 40 CFR Part 1033

    EPA's emission standards and certification requirements for 
locomotives and locomotive engines under the Clean Air Act are 
identified in 40 CFR part 1033.
    EPA is proposing to revise the engine mapping provisions in 40 CFR 
part 1033 for locomotive testing to denote that manufacturers do not 
have to meet the cycle limit values in 40 CFR 1065.514 when testing 
complete locomotives. Also, for engine testing with a dynamometer, 
while the validation criteria of CFR 1065.514 apply, EPA proposes to 
allow manufacturers the option to check validation using manufacturer-
declared values for maximum torque, power, and speed. This option would 
allow them to omit engine mapping under 40 CFR 1065.510, which is 
already not required. These provisions would reduce test burden and 
cost for the manufacturer, while preserving the integrity of the 
certification requirements.
    EPA is also proposing text that describes the alternate ramped-
model cycle provisions in 40 CFR part 1033 as some of the notch setting 
and durations are inconsistent with the description of the duty cycle 
in Table 1 of 40 CFR 1033.520. EPA has determined that the table is 
correct as published and the error lies in the text describing how to 
carry out the ramped-modal test.
    We are also proposing to clarify that locomotives operating on a 
combination of diesel fuel and gaseous fuel are subject to NMHC 
standards, which is the same as if the locomotives operated only on 
gaseous fuel. With respect to in-use fuels, we are proposing a 
clarification in 40 CFR 1033.815 regarding allowable fuels for certain 
Tier 4 and later locomotives. Specifically, we would note that 
locomotives certified on ultra-low sulfur diesel fuel, but that do not 
include sulfur sensitive emission controls, could use low sulfur diesel 
fuel instead of ultra-low sulfur diesel fuel, consistent with good 
engineering judgment. For example, an obvious case where this would be 
appropriate (but not the only possible case), would be if a railroad 
had emission data showing the locomotive still met the applicable 
standards/FELs while operating on the higher sulfur fuel.
    EPA is requesting comment on four additional locomotive provisions. 
The first is the allowance in 40 CFR 1033.101(g)(3) for shorter useful 
lives for non-locomotive-specific engines--that is, engines not 
specifically designed for use in locomotives. For normal locomotive 
engines, the minimum useful life is specified in terms of MW-hrs as the 
product of the rated horsepower multiplied by 7.50. However, the 
regulations allow manufacturers/remanufacturers of locomotives with 
non-locomotive-specific engines to ask for a shorter useful life if the 
locomotives will rarely operate longer than the shorter useful life. 
Second, we request comment regarding the need for additional guidance 
on applying this provision. For example, would it be helpful if we 
specified that the default alternative minimum useful life under this 
provision would be 6.00 (instead of 7.50) times the rated horsepower? 
Third, we request comment on whether EPA should consider notch-specific 
engine/alternator efficiencies to be confidential business information, 
and whether we need to update the URL listed in 40 CFR 1033.150(a)(4). 
Fourth, we request comment on extending the provisions of 40 CFR 
1033.101(i) to Tier 4 locomotives. This generally involves a less 
stringent CO standard in tandem with over-complying with the PM 
standard. Specifically, this option, which currently applies for Tier 2 
and earlier locomotives, requires PM emissions be at least 50 percent 
below the normally applicable PM standard. The existing provisions were 
developed to provide a compliance path for natural gas locomotives that 
reflected both the technological capabilities of natural gas 
locomotives and the relative environmental significance of CO and PM 
emissions. This provision was not applied to Tier 4 locomotives, 
because the applicable Tier 4 p.m. standard is already very low (0.03 
g/hp-hr). If we were to apply a similar provision corresponding to Tier 
4 standards, we would need to select PM and CO levels that are properly 
paired to manage this tradeoff. We request comment on whether it is 
appropriate to pursue such alternate standards, and on the specific 
numerical standards for PM and CO that would represent an equivalent 
level of stringency relative to the published standards.
    EPA is proposing to make numerous additional changes across 40 CFR 
part 1033 to correct errors, to add clarification, and to make 
adjustments based on lessons learned from implementing these regulatory 
provisions. This includes the following proposed changes:
     Sec. Sec.  1033.30, 1033.730, and 1033.925: Consolidate 
information-collection provisions into a single section.
     Sec.  1033.101: Allow manufacturers to certify Tier 4 and 
later locomotives using Low Sulfur Diesel fuel instead of Ultra-Low 
Sulfur Diesel fuel. Manufacturers may wish to do this to show that 
their locomotives do not include sulfur sensitive technology. Sec.  
1033.120: Reduce extended-warranty requirements to warranties that are 
actually provided to customers, rather than to any published warranties 
that are offered. The principle is that the emission-related warranty 
should not be less effective for emission-related items than for items 
that are not emission-related.

[[Page 40539]]

     Sec.  1033.201: Clarify that manufacturers may amend their 
application for certification after the end of the model year in 
certain circumstances, but they may not produce locomotives for a given 
model year after December 31 of the named year.
     Sec.  1033.201: Establish that manufacturers may deliver 
to EPA for testing a locomotive/engine that is identical to the test 
locomotive/engine used for certification. This may be necessary if the 
test locomotive/engine has accumulated too many hours, or if it is 
unavailable for any reason.
     Sec.  1033.225: Clarify that manufacturers may amend the 
application for certification after the end of the model year only in 
certain circumstances, and not to add a new or modified locomotive 
configuration.
     Sec.  1033.235: Add an explicit allowance for carryover 
engine families to include the same kind of within-family running 
changes that are currently allowed over the course of a model year. The 
original text may have been understood to require that such running 
changes be made separate from certifying the engine family for the new 
model year.
     Sec. Sec.  1033.235, 1033.245, and 1033.601: Describe how 
to demonstrate compliance with dual-fuel and flexible-fuel locomotives. 
This generally involves testing with each separate fuel, or with a 
worst-case fuel blend.
     Sec.  1033.245: Add instructions for calculating 
deterioration factors for sawtooth deterioration patterns, such as 
might be expected for periodic maintenance, such as cleaning or 
replacing diesel particulate filters.
     Sec.  1033.250: Remove references to routine and standard 
tests, and remove the shorter recordkeeping requirement for routine 
data (or data from routine tests). All test records must be kept for 
eight years. With electronic recording of test data, there should be no 
advantage to keeping the shorter recordkeeping requirement for a subset 
of test data. EPA also notes that the eight-year period restarts with 
certification for a new model year if the manufacturer uses carryover 
data.
     Sec.  1033.255: Clarify that rendering information false 
or incomplete after submitting it is the same as submitting false or 
incomplete information. For example, if there is a change to any 
corporate information or engine parameters described in the 
manufacturer's application for certification, the manufacturer must 
amend the application to include the new information.
     Sec.  1033.255: Clarify that voiding certificates for a 
recordkeeping or reporting violation would be limited to certificates 
that relate to the particular recordkeeping or reporting failure.
     Sec.  1033.501: Clarify how testing requirements apply 
differently for locomotive engines and for complete locomotives.
     Sec.  1033.501: Add paragraph (a)(4) to remove 
proportionality verification for discrete-mode tests if a single batch 
fuel measurement is used to determine raw exhaust flow rate. This 
verification involves statistical assessment that is not valid for the 
single data point. Requiring manufacturers instead to simply ensure 
constant sample flow should adequately address the concern,
     Sec. Sec.  1033.515 and 1033.520: Update terminology by 
referring to ``test intervals'' instead of ``phases''. This allows us 
to be consistent with terminology used in 40 CFR part 1065.
     Sec.  1033.520: Correct the example given to describe the 
testing transition after the second test interval.
     Sec. Sec.  1033.701 and 1033.730: Describe the process for 
retiring emission credits. This may be referred to as donating credits 
to the environment.
     Sec.  1033.710: Clarify that it is not permissible to show 
a proper balance of credits for a given model by using emission credits 
from a future model year.
     Sec.  1033.730: Clarify terminology for ABT reports.
     Sec.  1033.815: Add consideration of periodic locomotive 
inspections in 184-day intervals.
     Sec.  1033.901: Update the contact information for the 
Designated Compliance Officer.
     Sec.  1033.915: Migrate provisions related to confidential 
information to 40 CFR part 1068.

J. Miscellaneous EPA Amendments

    EPA is proposing to clarify that the cold NMHC standards specified 
in 40 CFR 86.1811-17 do not apply at high altitude. We intended in 
recent amendments to state that the cold CO standards apply at both low 
and high altitude, but inadvertently placed that statement where it 
also covered cold NMHC standards, which contradicts existing regulatory 
provisions that clearly describe the cold NMHC standards as applying 
only for low-altitude testing. The proposed change would simply move 
the new clarifying language to apply only to cold CO standards. We are 
also proposing to restore the cold NMHC standards in paragraph (g)(2), 
which were inadvertently removed as part of the earlier amendments.
    EPA is proposing to revise the specifications for Class 2b and 
Class 3 vehicles certifying early to the Tier 3 exhaust emission 
standards under 40 CFR 86.1816-18 to clarify that carryover values for 
PM and formaldehyde apply. The preamble to the earlier final rule 
described these standards properly, but the regulations inadvertently 
pointed to the Tier 3 values for PM and formaldehyde for these 
vehicles.
    EPA is proposing to make a minor correction to the In-Use 
Compliance Program under 40 CFR 86.1846-01. A recent amendment 
describing how to use SFTP test results in the compliance determination 
inadvertently removed a reference to low-mileage SFTP testing. We are 
proposing to restore the removed text.
    EPA is proposing to revise the instruction for creating road-load 
coefficients for cold temperature testing in 40 CFR 1066.710 to simply 
refer back to 40 CFR 1066.305 where this is described more generally. 
The text originally adopted in 40 CFR 1066.710 incorrectly describes 
the calculation for determining those coefficients.
    EPA is also proposing two minor amendments related to highway 
motorcycles. First, we are proposing to correct an error related to the 
small-volume provisions for highway motorcycles. The regulation 
includes an inadvertent reference to a small-volume threshold based on 
an annual volume of 3,000 motorcycles produced in the United States. As 
written, this would not consider any foreign motorcycle production for 
importation into the United States. This error is corrected by simply 
revising the text to refer to an annual production volume of 
motorcycles produced ``for'' the United States. This would properly 
reflect small-volume production as it relates to compliance with EPA 
standards. Second, we are proposing to clarify the language describing 
how to manage the precision of emission results, both for measured 
values and for calculating values when applying a deterioration factor. 
This involves a new reference to the rounding procedures in 40 CFR part 
1065 to replace the references to outdated ASTM procedures. EPA is 
proposing in 40 CFR 1037.601(a)(3) to clarify that the Clean Air Act 
does not allow any person to disable, remove, or render inoperative 
(i.e., tamper with) emission controls on a certified motor vehicle for 
purposes of competition. An existing provision in 40 CFR 1068.235 
provides an exemption for nonroad engines converted for competition 
use. This provision reflects the explicit exclusion of engines used 
solely for competition from the CAA definition of

[[Page 40540]]

``nonroad engine''. The proposed amendment clarifies that this part 
1068 exemption does not apply for motor vehicles.

K. Amending 49 CFR Parts 512 and 537 To Allow Electronic Submissions 
and Defining Data Formats for Light-Duty Vehicle Corporate Average Fuel 
Economy (CAFE) Reports

    To improve efficiency and reduce the burden to manufacturers and 
the agencies, NHTSA is proposing to modify 49 CFR part 537 eliminating 
the option for manufacturers to submit pre-model, mid-model and 
supplemental reports on CD-ROMS and require only one electronic 
submission (for each report) electronically via a method proscribed by 
NHTSA. NHTSA is introducing a new electronic format to standardize the 
method for collecting manufacturer's information. NHTSA also proposes 
to modify 49 CFR part 512 to include and protect submitted CAFE data 
elements that need to be treated as confidential business information.
    49 CFR part 537 currently requires manufacturers to provide reports 
to NHTSA containing projected estimates of how manufacturers plan to 
comply with NHTSA standards. In the CAFE final rule for vehicles 
manufactured for model years 2017-2025, NHTSA modified its reporting 
requirements at 49 CFR 537.5(c)(4) to eliminate the option for 
manufacturers to mail hardcopy submissions of CAFE reports to NHTSA and 
required all reports to be submitted electronically by CD-ROM (CBI and 
non-CBI versions) or by email (non-CBI version).\881\ Currently, any 
data provided in the manufacturer's report is required in MS-Excel 
spreadsheet format. Supporting documentation such as cover letters or 
requests for confidentiality is required to be provided in a pdf 
format.
---------------------------------------------------------------------------

    \881\ 77 FR 62624, October 15, 2012.
---------------------------------------------------------------------------

    NHTSA is proposing to change the required format for CAFE data 
required under 49 CFR 537.7(b) and (c) in order to standardize 
submissions and better align with data provided to EPA. For model year 
2013 through 2015 most manufacturer reports received by NHTSA lacked 
the required format adopted in the 2017-2025 final rule. NHTSA is 
therefore adopting a standardized template for manufacturers to report 
model type level data. The template organizes the required data in a 
consistent manner, adopts formats for values consistent with those 
provided to EPA for similar values and calculates manufacturer's target 
standard. Calculating target standards is preferred because it reduces 
errors in manufacturer's determinations. However, NHTSA's long-term 
goal is to standardize the required data for incorporation into an 
electronic database system and this first step facilities a structure 
for coding the electronic data which will ultimately reduce 
manufacturer's and the government's burden for reporting.
    NHTSA rationalizes that establishing a required format is necessary 
because manufacturers may not understand how to provide the required 
CAFE data. In the 2017 to 2025 final rule, NHTSA modified its base tire 
definition to better align with the approach manufacturers use to 
determine model type target standards. CAFE standards are attribute 
based, and thus each manufacturer has its own ``standard,'' or 
compliance obligation, defined by the vehicles it produces for sale in 
each fleet in a given model year. A manufacturer calculates its fleet 
standard from the attribute based target curve standards derived from 
the unique footprint values, which are the products of the average 
front and rear vehicle track width and wheelbase dimensions, of the 
vehicles in each model type. Vehicle track width dimensions are 
determined with a vehicle equipped with ``base tires,'' which NHTSA 
currently defines in 49 CFR part 523 as (for passenger automobiles, 
light trucks, and medium duty passenger vehicles) the tire size 
specified as standard equipment by the manufacturer on each unique 
combination of a vehicle's footprint and model type. Standard equipment 
is defined in 40 CFR 86.1803-01. NHTSA made these changes to provide a 
clear definition for footprint calculations and, thus, fleet compliance 
projections, calculations, finalizations and enforcement efforts. 
Beginning in model year 2013, as modified in 49 CFR 537.7(b), 
manufacturers were to provide attribute characteristics and standards 
in consideration of the change in the base tire definition for each 
unique model type and footprint combination of the manufacturer's 
automobiles. Manufacturers were required to provide the data listed by 
model types in order of increasing average inertia weight from top to 
bottom down the left side of the table and list the information 
categories in the order specified in 49 CFR 537.7(b)(3)(i) and (ii) 
from left to right across the top of the table. Manufacturers could 
also provide the data using any format required by EPA, which contains 
all of the required information in a readily identifiable format.
    In the 2017-2025 final rule, additional changes to NHTSA's 
reporting requirements also included a modification to 49 CFR 537.7(b) 
to restructure and clarify how manufacturers report information used to 
make the determination that an automobile can be classified as a light 
truck for CAFE purposes. The agency felt that this proposed change was 
necessary because the previous requirements in 49 CFR part 537 
specified that manufacturers must provide information on some, but not 
all, of the functions and features used to classify an automobile as a 
light truck, and it is important for compliance reasons to understand 
and be able to readily verify the methods used to ensure manufacturers 
are classifying vehicles correctly. Furthermore, the previous 
regulation required that the information be distributed in different 
locations throughout a manufacturer's report, making it difficult for 
the agency to clearly determine exactly what functions or features a 
manufacturer is using to classify a vehicle as a light truck. 
Therefore, NHTSA streamlined the location of all its provisions for 
defining vehicle classifications into one consolidate section. With 
these changes, manufacturers can provide the agency with all the 
necessary data in a simpler format that allows the agency, and perhaps 
also the manufacturer, to understand quickly and easily how light truck 
vehicle classification determination decisions are made.
    In reviewing manufacturers current reporting, most manufacturers 
are still failing to provide the required information for classifying 
light trucks. For the model year 2015 pre-model year reports, only a 
few manufacturers provided the required information and many provided 
the information incorrectly. Therefore, NHTSA is also proposing to 
incorporate an additional template for collecting vehicle configuration 
level data which includes vehicle classification information. 
Similarly, the template will standardize the format of the data with 
values required by EPA and structures the data for future incorporation 
into a database system. Finally, the template also simplifies reporting 
by not having manufacturers report all vehicle classification 
characteristics but only those used by the manufacturer in qualifying a 
vehicle as a light truck. NHTSA is adopting this provision to better 
align with EPA current database structure which uses a similar approach 
in accepting light truck level data.

[[Page 40541]]

XV. Statutory and Executive Order Reviews

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

    This action is an economically significant regulatory action that 
was submitted to the Office of Management and Budget (OMB) for review. 
Any changes made in response to OMB recommendations have been 
documented in the docket. The agencies prepared an analysis of the 
potential costs and benefits associated with this action. This 
analysis, the draft ``Regulatory Impact Analysis--Heavy-Duty GHG and 
Fuel Efficiency Standards NPRM,'' is available in the docket. The 
analyses contained in this document are also summarized in Sections 
VII, VIII, and IX of this preamble.

B. National Environmental Policy Act

    NHTSA has initiated the Environmental Impact Statement (EIS) 
process under the National Environmental Policy Act (NEPA), 42 U.S.C. 
4321-4347, and implementing regulations issued by the Council on 
Environmental Quality (CEQ), 40 CFR part 1500, and NHTSA, 49 CFR part 
520. On July 9, 2014, NHTSA published a notice of intent to prepare an 
EIS for this rulemaking and requested scoping comments (79 FR 38842). 
The notice invited Federal, State, and local agencies, Indian tribes, 
stakeholders, and the public to participate in the scoping process and 
to help identify the environmental issues and reasonable alternatives 
to be examined in the EIS.
    Concurrently with this proposed rule, NHTSA is releasing a Draft 
Environmental Impact Statement (DEIS). NHTSA prepared the DEIS to 
analyze and disclose the potential environmental impacts of the 
proposed HD fuel consumption standards and reasonable alternatives. 
Environmental impacts analyzed in the DEIS include those related to 
fuel and energy use, air quality, and climate change. The DEIS also 
describes potential environmental impacts to a variety of resource 
areas, including water resources, biological resources, land use and 
development, safety, hazardous materials and regulated wastes, noise, 
socioeconomics, and environmental justice. These resource areas are 
assessed qualitatively in the DEIS.
    The DEIS analyzes five alternative approaches to regulating HD 
vehicle fuel consumption, including a ``preferred alternative'' and a 
``no action alternative.'' The DEIS evaluates a reasonable range of 
alternatives under NEPA, and analyzes the direct, indirect, and 
cumulative impacts of those alternatives in proportion to their 
significance.
    Because of the link between the transportation sector and GHG 
emissions, NHTSA recognizes the need to consider the possible impacts 
on climate and global climate change in the analysis of the effects of 
these fuel consumption standards. NHTSA also recognizes the 
difficulties and uncertainties involved in such an impact analysis. 
Accordingly, consistent with CEQ regulations on addressing incomplete 
or unavailable information in environmental impact analyses, NHTSA has 
reviewed existing credible scientific evidence that is relevant to this 
analysis and summarized it in the DEIS. NHTSA has also employed and 
summarized the results of research models generally accepted in the 
scientific community.
    Although the alternatives have the potential to decrease GHG 
emissions substantially, they do not prevent climate change, but only 
result in reductions in the anticipated increases in CO2 
concentrations, temperature, precipitation, and sea level. They would 
also, to a small degree, delay the point at which certain temperature 
increases and other physical effects stemming from increased GHG 
emissions would occur. As discussed in the EIS, NHTSA presumes that 
these reductions in climate effects will be reflected in reduced 
impacts on affected resources.
    The DEIS has informed NHTSA decision makers in their preparation of 
this proposed rule and in the ongoing rulemaking process. NHTSA invites 
comments on the DEIS from Federal, State, and local agencies, Indian 
tribes, stakeholders, and the public. Instructions for submission of 
such comments are included in the DEIS.
    For additional information on NHTSA's NEPA analysis, please see the 
DEIS. The DEIS is available on NHTSA's Web site and on http://www.regulations.gov in Docket No. NHTSA-2014-0074.

C. Paperwork Reduction Act

    The information collection activities in these proposed rules have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the PRA. The Information Collection Request (ICR) document 
that EPA prepared has been assigned EPA ICR number 2394.04. You can 
find a copy of the ICR in the docket for these proposed rules, and it 
is briefly summarized here.
    The agencies propose to collect information to ensure compliance 
with the provisions in this proposal. This includes a variety of 
testing, reporting and recordkeeping requirements for vehicle and 
engine manufacturers. Section 208(a) of the CAA requires that 
manufacturers provide information the Administrator may reasonably 
require to determine compliance with the regulations; submission of the 
information is therefore mandatory. We will consider confidential all 
information meeting the requirements of Section 208(c) of the CAA.
    Respondents/affected entities: Respondents are manufacturers of 
engines and vehicles within the North American Industry Classification 
System (NAICS) and use the coding structure as defined by NAICS. 
336111, 336112, 333618, 336120, 541514, 811112, 811198, 336111, 336112, 
422720, 454312, 541514, 541690, 811198, 333618, 336510, for Motor 
Vehicle Manufacturers, Engine and Truck Manufacturers, Truck Trailer 
Manufacturers, Commercial Importers of Vehicles and Vehicle Components, 
and Alternative Fuel Vehicle Converters and Manufacturers.
    Respondent's obligation to respond: The information that is subject 
to this collection is collected whenever a manufacturer applies for a 
certificate of conformity. Under section 206 of the CAA (42 U.S.C. 
7521), a manufacturer must have a certificate of conformity before a 
vehicle or engine can be introduced into commerce.
    Estimated number of respondents: It is estimated that this 
collection affects approximately 155 engine and vehicle manufacturers.
    Frequency of response: Annually.
    Total estimated burden: The burden to the manufacturers affected by 
these rules has a range based on the number of engines and vehicles a 
manufacturer produces. The estimated average annual respondent burden 
associated with the first three implementation years of the Phase 2 
program is 62,400 hours (see Table XV-1). This estimated burden for 
engine and vehicle manufacturers is an average estimate for both new 
and existing reporting requirements for calendar years 2017, 2018 and 
2019, in which trailer manufacturers will prepare for and begin 
certifying for Phase 2 while Phase 1 will continue for the other 
affected manufacturers. Burden is defined at 5 CFR 1320.3(b). Burden 
means the total time, effort, or financial resources expended by 
persons to generate, maintain, retain, or disclose or provide 
information to or for a Federal agency. This includes the time needed 
to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of

[[Page 40542]]

collecting, validating, and verifying information, processing and 
maintaining information, and disclosing and providing information; 
adjust the existing ways to comply with any previously applicable 
instructions and requirements; train personnel to be able to respond to 
a collection of information; search data sources; complete and review 
the collection of information; and transmit or otherwise disclose the 
information.

     Table XV-1--Burden for Reporting and Recordkeeping Requirements
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Number of Affected Vehicle Manufacturers.  155.
Annual Labor Hours for Each Manufacturer   Varies.
 to Prepare and Submit Required
 Information.
Total Annual Information Collection        62,400 Hours.
 Burden.
------------------------------------------------------------------------

    Total estimated cost: The estimated average annual cost associated 
with the first three implementation years of the Phase 2 program is 
approximately $8 million. This includes approximately $3.3 million in 
capital and operation & maintenance costs. This estimated cost for 
engine and vehicle manufacturers is an average estimate for both new 
and existing testing, recordkeeping, and reporting requirements for 
calendar years 2017, 2018 and 2019, in which trailer manufacturers will 
prepare for and begin certifying for Phase 2 while Phase 1 will 
continue for the other affected manufacturers.
    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 title 40 are listed in 40 CFR part 9.
    Submit your comments on the agencies' need for this information, 
the accuracy of the provided burden estimates and any suggested methods 
for minimizing respondent burden to EPA and NHTSA using the docket 
identified at the beginning of these proposed rules. You may also send 
your ICR-related comments to OMB's Office of Information and Regulatory 
Affairs via email to oira_submissions@omb.eop.gov, Attention: Desk 
Officer for EPA. 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 August 12, 2015. The agencies will respond to any ICR-
related comments in the final rules.
    NHTSA also separately submitted a request to OMB for approval of a 
change to an information collection activity that is proposed in this 
rulemaking. The information collection request was previously assigned 
ICR No. 2127-0019 for 49 CFR part 537, ``Automotive Fuel Economy 
Reports.''
    The existing collection involves vehicle manufacturers submitting 
reports to the Secretary of Transportation with preliminary estimates 
demonstrating their ability to comply with corporate average fuel 
economy standards (CAFE) established by 49 U.S.C. 32902 for each model 
year. To improve efficiency and reduce manufacturers' and the 
government's burden, NHTSA is proposing to modify 49 CFR part 537 to 
require CAFE reports to be submitted electronically via an electronic 
database using a standardized data format. The total estimated amount 
of paperwork burden resulting from this action that the federal 
government is imposing on private businesses and citizens is summarized 
below.
    Respondents: Automobile manufacturers.
    Estimated Number of Respondents: 30.
    Estimated Number of Responses: 54. Some manufacturers have multiple 
fleets (domestic passenger car, import passenger car, light truck) and 
49 CFR part 537 requires a separate report for each fleet.
    Estimated Total Annual Burden: Thirty automotive manufacturers must 
comply with 49 CFR 537. For each current model year, each manufacturer 
is required to submit semi-annual reports: A pre-model year report and 
a mid-model year report. The pre-model year report must be submitted 
during the month of December, and the mid-model year report must be 
submitted during the month of July. The total number of responses 
submitted by automotive manufacturers is 54. We currently have a 
clearance based on reports being received from 22 manufacturers with an 
estimated total annual burden of 2,339 hours. Including 8 additional 
manufacturers, results in an additional reporting burden of 850 hours. 
Adding that burden to the existing burden of 2,339 hours, results in a 
total of 3,189 hours.
    Estimated Frequency: A pre-model report and a mid-model report are 
required to be submitted by manufacturers once per model year for each 
applicable fleet (domestic passenger car, imported passenger car and 
light trucks).
    A copy of the 60 day notice for this ICR containing the proposed 
changes is included in the docket for this rule. NHTSA seeks public 
comments on all aspects of this information collection, including (a) 
whether the proposed collection of information is necessary for the 
Department's performance, (b) the accuracy of the estimated burden, (c) 
ways for the Department to enhance the quality, utility and clarity of 
the information collection and (d) ways that the burden could be 
minimized without reducing the quality of the collected information.

D. Regulatory Flexibility Act

    Pursuant to section 603 of the RFA, the agencies prepared an 
initial regulatory flexibility analysis (IRFA) that examines the impact 
of the proposed rules on small entities along with regulatory 
alternatives that could minimize that impact. The complete IRFA is 
available for review in the docket and is summarized here. As required 
by section 609(b) of the RFA, EPA convened a Small Business Advocacy 
Review (SBAR) Panel to obtain advice and recommendations from small 
entity representatives that potentially would be subject to the rule's 
requirements. The SBAR Panel evaluated the assembled materials and 
small-entity comments on issues related to elements of an IRFA. A copy 
of the full SBAR Panel Report is available in the rulemaking docket.
(1) Overview
    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rules on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201 (see table below); (2) a small governmental jurisdiction that 
is a government of a city, county, town, school district or special 
district with a population of less than 50,000; and (3) a small 
organization that is any not-for profit enterprise which is 
independently owned and operated and is not dominant in its field.
    Table XV-2 provides an overview of the primary SBA small business 
categories potentially affected by this regulation.

[[Page 40543]]

              Table XV-2--Primary Small Business Categories Potentially Affected by This Regulation
----------------------------------------------------------------------------------------------------------------
                                           Industry                                     Defined as small entity
    Industry expected in rulemaking       NAICS \a\          NAICS description           by SBA if less than or
                                             code                                              equal to:
----------------------------------------------------------------------------------------------------------------
Alternative Fuel Engine Converters.....       333999  Misc. General Purpose Machinery  500 employees.
                                              811198  All Other Automotive Repair &    $7.0 million (annual
                                                       Maintenance.                     receipts).
Voc. Vehicle Chassis Manufacturers.....       336120  Heavy-Duty Truck Manufacturing.  1,000 employees.
HD Trailer Manufacturers...............       336212  Truck Trailer Manufacturing....  500 employees.
                                              333924  Industrial Truck, Trailer &      750 employees.
                                                       Stacker Machinery.
----------------------------------------------------------------------------------------------------------------
Note:
\a\ North American Industrial Classification System.

(2) Legal Basis for Agency Action
    Heavy-duty vehicles are classified as those with gross vehicle 
weight ratings (GVWR) of greater than 8,500 lb. Section 202(a) of the 
Clean Air Act (CAA) allows EPA to regulate new vehicles and new engines 
by prescribing emission standards for pollutants which the 
Administrator finds ``may reasonably be anticipated to endanger public 
health or welfare.'' In 2009, EPA found that six greenhouse gases 
(GHGs) were anticipated to endanger public health or welfare, and new 
motor vehicles and new motor vehicle engines contribute to that 
pollution. This finding was upheld by the unanimous court in Coalition 
for Responsible Regulation v. EPA, 684 F. 3d 102 (D.C. Cir. 2012). 
Acting under the authority of the CAA, EPA set the first phase of 
heavy-duty vehicle GHG standards (Phase 1) and specified certification 
requirements for emissions of four GHGs emitted by mobile sources: 
Carbon dioxide (CO2), nitrous oxide (N2O), 
methane (CH4), and hydrofluorocarbons (HFC).
(3) Summary of Potentially Affected Small Entities
    Table XV-2 above lists industries/sectors potentially affected by 
the proposed rules. EPA is not aware of any small businesses who 
manufacture complete heavy-duty pickup trucks and vans, heavy-duty 
engines, or Class 7 and 8 tractors.
    EPA used the criteria for small entities developed by the Small 
Business Administration under the North American Industry 
Classification System (NAICS) as a guide. Information about these 
entities comes from sources including EPA's certification data, trade 
association databases, and previous rulemakings that have affected 
these industries. EPA then found employment information for these 
companies using the business information database Hoover's Online (a 
subsidiary of Dan and Bradstreet). These entities fall under the 
categories listed in the table.
(4) Potential Reporting, Recordkeeping and Compliance Burdens
    For any emission control program, EPA must have assurances that the 
regulated products will meet the standards. The program that EPA is 
considering for manufacturers subject to this proposal will include 
testing, reporting, and recordkeeping requirements. Testing 
requirements for these manufacturers could include use of EPA's 
Greenhouse gas Emissions Model (GEM) vehicle simulation tool to obtain 
the overall CO2 emissions rate for certification of 
vocational chassis and trailers, aerodynamic testing to obtain 
aerodynamic inputs to GEM for some trailer manufacturers and engine 
dynamometer testing for alternative fuel engine converters to ensure 
their conversions meet the proposed CO2, CH4 and 
N2O engine standards. Reporting requirements would likely 
include emissions test data or model inputs and results, technical data 
related to the vehicles, and end-of-year sales information. 
Manufacturers would have to keep records of this information.
(5) Related Federal Rules
    The primary federal rule that is related to the proposed Phase 2 
rules under consideration is the 2011 Greenhouse Gas Emissions and Fuel 
Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles 
(76 FR 57106). This Phase 1 rulemaking would continue to be in effect 
in the absence of these proposed rules. Several Federal rules relate to 
heavy-duty vehicles and to the proposed Phase 2 rules under 
consideration. The Department of Transportation, through NHTSA, has 
several safety requirements for these vehicles. California adopted its 
own greenhouse gas initiative, which places aerodynamic requirements on 
trailers used in long-haul applications. None of these existing 
regulations were found to conflict with the proposed rulemaking.
(6) Summary of SBREFA Panel Process and Panel Outreach
(a) Significant Panel Findings
    The Small Business Advocacy Review Panel (SBAR Panel, or the Panel) 
considered regulatory options and flexibilities to help mitigate 
potential adverse effects on small businesses as a result of these 
rules. During the SBREFA Panel process, the Panel sought out and 
received comments on the regulatory options and flexibilities that were 
presented to SERs and Panel members. The recommendations of the Panel 
are described below and are also located in Section XX of the SBREFA 
Final Panel Report, which is available in the public docket.
(b) Panel Process
    As required by Section 609(b) of the RFA, as amended by SBREFA, we 
also conducted outreach to small entities and convened an SBAR Panel to 
obtain advice and recommendations of representatives of the small 
entities that potentially would be subject to the rule's requirements. 
On October 22, 2014, EPA's Small Business Advocacy Chairperson convened 
a Panel under Section 609(b) of the RFA. In addition to the Chair, the 
Panel consisted of the Division Director of the Assessment and 
Standards Division of EPA's Office of Transportation and Air Quality, 
the Chief Counsel for Advocacy of the Small Business Administration, 
and the Administrator of the Office of Information and Regulatory 
Affairs within the Office of Management and Budget.
    As part of the SBAR Panel process, we conducted outreach with 
representatives of small businesses that would potentially be affected 
by the proposed rulemaking. We met with these Small Entity 
Representatives (SERs) to discuss the potential rulemaking approaches 
and potential options to decrease the impact of the rulemaking on their 
industries. We distributed outreach materials to the SERs; these 
materials included background on the rulemaking, possible

[[Page 40544]]

regulatory approaches, and possible rulemaking alternatives. The Panel 
met with SERs from the industries that would be directly affected by 
the Phase 2 rules on November 5, 2014 (trailer manufacturers) and 
November 6, 2014 (engine converters and vocational vehicle chassis 
manufacturers) to discuss the outreach materials and receive feedback 
on the approaches and alternatives detailed in the outreach packet. The 
Panel also met with SERs on July 19, 2014 for an initial, introductory 
outreach meeting, and held a supplementary outreach meeting with the 
trailer manufacturer SERs on October 28, 2014. The Panel received 
written comments from the SERs following each meeting in response to 
discussions had at the meeting and the questions posed to the SERs by 
the agency. The SERs were specifically asked to provide comment on 
regulatory alternatives that could help to minimize the rule's impact 
on small businesses.
    The Panel's findings and discussions were based on the information 
that was available during the term of the Panel and issues that were 
raised by the SERs during the outreach meetings and in their comments. 
It was agreed that EPA should consider the issues raised by the SERs 
and discussions had by the Panel itself, and that EPA should consider 
comments on flexibility alternatives that would help to mitigate 
negative impacts on small businesses to the extent legally allowable by 
the Clean Air Act.
    Alternatives discussed throughout the Panel process included those 
offered in previous or current EPA rulemakings, as well as alternatives 
suggested by SERs and Panel members. A summary of these recommendations 
is detailed below, and a full discussion of the regulatory alternatives 
and hardship provisions discussed and recommended by the Panel can be 
found in the SBREFA Final Panel Report. A complete discussion of the 
provisions for which we are requesting comment and/or proposing in this 
action can be found in Sections IV.E and V.D of this preamble. Also, 
the Panel Report includes all comments received from SERs (Appendix B 
of the Report) and summaries of the two outreach meetings that were 
held with the SERs. In accordance with the RFA/SBREFA requirements, the 
Panel evaluated the aforementioned materials and SER comments on issues 
related to the IRFA. The Panel's recommendations from the Final Panel 
Report are discussed below.
(c) Panel Recommendations
(i) Small Business Trailer Manufacturers
    Comments from trailer manufacturer SERs indicated that these 
companies are familiar with most of the technologies described in the 
materials, but have no experience with EPA certification and do not 
anticipate they could manage the accounting and reporting requirements 
without additional staff and extensive training. Performance testing, 
which is a common requirement for many of EPA's regulatory programs, is 
largely unfamiliar to these small business manufacturers and the SERs 
believed the cost of testing would be a significant burden on their 
companies. In light of this feedback, the Panel recommended a 
combination of streamlined compliance and targeted exemptions for these 
small businesses based on the specific trailer types that they 
manufacture. The Panel believed these strategies would achieve many of 
the benefits for the environment by driving adoption of CO2-
reducing technologies, while significantly reducing the burden that 
these new regulations would introduce on small businesses.
(ii) Box Trailer Manufacturers
    Box trailer manufacturers have the benefit of relying on the 
aerodynamic technology development initiated through EPA's voluntary 
SmartWay program. The Panel was aware that EPA was planning to propose 
a simplified compliance program for all manufacturers, in which 
aerodynamic device manufacturers have the opportunity to test and 
certify their devices with EPA as technologies that can be used by 
trailer manufacturers in their trailer certification. This pre-approved 
technology strategy was intended to provide all trailer manufactures a 
means of complying with the standards without the burden of testing. In 
the event that this strategy is limited to the early years of the 
trailer program for all manufactures, the Panel recommended that small 
manufacturers continue to be given the option to use pre-approved 
devices in lieu of testing.
    In the event that small trailer manufacturers adopt pre-approved 
aerodynamic technologies and the appropriate tire technologies for 
compliance, the Panel recommended an alternative compliance pathway in 
which small business trailer manufacturers could simply report to EPA 
that all of their trailers include approved technologies in lieu of 
collecting all of the required inputs for the GEM vehicle simulation.
(iii) Non-Box Trailer Manufacturers
    The Panel recommended no aerodynamic requirements for non-box 
trailers. The non-box trailer SERs indicated that they had no 
experience installing aerodynamic devices and had only seen them in 
prototype-level demonstrations. In terms of the aerodynamic devices in 
use today, most non-box trailer SERs identified unique operations in 
which their trailers are used that preclude the use of those 
technologies.
    Some non-box trailer manufacturers had experience with LRR tires 
and ATI systems. However, the non-box trailer manufacturer SERs 
indicated that LRR tires are not currently available for some of their 
trailer types. The SERs noted that tire manufacturers are currently 
focused on box trailer applications and there are only a few LRR tire 
models that meet the needs of their customers. The Panel recommended 
EPA ensure appropriate availability of these tires in order for it to 
be deemed a feasible means of achieving these standards and recommended 
a streamlined compliance process based on the availability of 
technologies. The Panel suggested the best compliance option from a 
small business perspective would be for EPA to pre-approve tires, 
similar to the approach being proposed for aerodynamic technologies, 
and to maintain a list that could be used to exempt small businesses 
when no suitable tires are available. However, the Panel recognized the 
difficulties of maintaining an up-to-date list of certified 
technologies. The Panel recommended that, if EPA did not adopt the 
list-based approach, the agency consider a simplified letter-based 
compliance option that allows manufacturers to petition EPA for an 
exemption if they are unable to identify tires that meet the LRR 
performance requirements on a trailer family basis.
(iv) Non-Highway Trailer Manufacturers
    The Panel recommended excluding all trailers that spend a 
significant amount of time in off-road applications. These trailers may 
not spend much time at highway speeds and aerodynamic devices may 
interfere with the vehicle's intended purpose. Additionally, tires with 
lower rolling resistance may not provide the type of traction needed in 
off-road applications.
(v) Compliance Provisions for All Small Trailer Manufacturers
    Due to the potential for reducing a small business's 
competitiveness compared to the larger manufacturers, as well as the 
ABT record-keeping

[[Page 40545]]

burden, the Panel recommended that EPA consider small business 
flexibilities to allow small entities to opt out of ABT without placing 
themselves at a competitive disadvantage to larger firms that adopt 
ABT, such as a low volume exemption or requiring only LRR where 
appropriate. EPA was asked to consider flexibilities for small 
businesses that would ease and incentivize their participation in ABT, 
such as streamlined the tracking requirements for small businesses. In 
addition, the Panel recommended that EPA request comment on the 
feasibility and consequences of ABT for the trailer program and 
additional flexibilities that will promote small business 
participation.
(vi) Lead Time Provisions for All Small Trailer Manufacturers
    For all trailer types that will be included in the proposal, the 
Panel recommended a 1-year delay in implementation for small trailer 
manufacturers at the start of the proposed rulemaking to allow them 
additional lead time to make the proper staffing adjustments and 
process changes and possibly add new infrastructure to meet these 
requirements. In the event that EPA is unable to provide pre-approved 
technologies for manufacturers to choose for compliance, the Panel 
recommended that EPA provide small business trailer manufacturers an 
additional 1-year delay for each subsequent increase in stringency. 
This additional lead time will allow these small businesses to research 
and market the technologies required by the new standards.
(vii) Small Business Alternative Fuel Engine Converters
    To reduce the compliance burden of small business engine converters 
who convert engines in previously-certified complete vehicles, the 
Panel recommended allowing engine compliance to be sufficient for 
certification. This would mean the converted vehicle would not need to 
be recertified as a vehicle. This flexibility would eliminate the need 
for these small manufacturers to gather all of the additional 
component-level information in addition to the engine CO2 
performance necessary to properly certify a vehicle with GEM (e.g., 
transmission data, aerodynamic performance, tire rolling resistance, 
etc.). In addition, the Panel recommended that small engine converters 
be able to submit an engineering analysis, in lieu of measurement, to 
show that their converted engines do not increase N2O 
emissions. Many of the small engine converters are converting SI-
engines, and the catalysts in these engines are not expected to 
substantially impact N2O production. Small engine converters 
that convert CI-engines could likely certify by ensuring that their 
controls require changes to the SCR dosing strategies.
    The Panel did not recommend separate standards for small business 
natural gas engine manufacturers. The Panel believes this would 
discourage entrance for small manufactures into this emerging market by 
adding unnecessary costs to a technology that has the potential to 
reduce CO2 tailpipe emissions. In addition, the Panel noted 
that additional leakage requirements beyond a sealed crankcase for 
small business natural gas-fueled CI engines and requirements to follow 
industry standards for leakage could be waived for small businesses 
with minimal impact on overall GHG emissions.
    Finally, the Panel recommended that small engine converters receive 
a one-year delay in implementation for each increase in stringency 
throughout the proposed rules. This flexibility will provide small 
converters additional lead time to obtain the necessary equipment and 
perform calibration testing if needed.
(viii) Emergency Vehicle Chassis Manufacturers
    Fire trucks, and many other emergency vehicles, are built for high 
level of performance and reliability in severe-duty applications. Some 
of the CO2-reducing technologies listed in the materials 
could compromise the fire truck's ability to perform its duties and 
many of the other technologies simply provide no benefit in real-world 
emergency applications. The Panel recommended proposing less stringent 
standards for emergency vehicle chassis manufactured by small 
businesses. The Panel suggested that feasible standards could include 
adoption of LRR tires at the baseline Phase 2 level and installation of 
a Phase 2-compliant engine. In addition, the Panel recommended a 
simplified certification approach for small manufacturers who make 
chassis for emergency vehicles that reduces the number of inputs these 
manufacturers must obtain for GEM.
(ix) Off-Road Vocational Vehicle Chassis Manufacturers
    EPA is planning to propose to continue the exemptions in Phase 1 
for off-road and low-speed vocational vehicles (see generally 76 FR 
57175). These provisions currently apply for vehicles that are defined 
as ``motor vehicles'' per 40 CFR 85.1703, but may conduct most of their 
operations off-road. Vehicles qualifying under these provisions must 
comply with the applicable engine standard, but need not comply with a 
vehicle-level GHG standard. The Panel concluded this exemption is 
sufficient to cover the small business chassis manufacturers who design 
chassis for off-road vocational vehicles.
(x) Custom Chassis Manufacturers
    The Panel concluded that chassis designed for specialty operations 
often have limited ability to adopt CO2- and fuel 
consumption-reducing technologies due to their unique use patterns. In 
addition, the manufacturers of these chassis have very small annual 
sales volumes. The Panel recommended that EPA propose a low volume 
exemption for these custom chassis manufacturers. The Panel did not 
receive sufficient information to recommend a specific sales volume, 
but recommended that EPA request comment on how to design a small 
business exemption by means of a volume exemption, and an appropriate 
annual sales volume threshold.
(xi) Glider Manufacturers
    The Panel was aware that EPA would like to reduce the use of glider 
kits, which have higher emissions of criteria pollutants like 
NOX than current engines, and which could have higher GHG 
emissions than Phase 2 engines. However, the Panel estimates that the 
number of vehicles produced by the small businesses who manufacturer 
glider kits is too small to have a substantial impact on the total 
heavy-duty inventory and recommended that existing small businesses be 
allowed to continue assembling glider vehicles without having to comply 
with the GHG requirements. The Panel recommended that EPA establish an 
allowance for existing small business glider manufacturers to produce 
some number of glider kits for legitimate purposes, such as for newer 
vehicles badly damaged in crashes. The Panel recommended that any other 
limitations on small business glider production be flexible enough to 
allow sales levels as high as the peak levels in the 2010-2012 
timeframe.
(7) Summary of Projected Impact on Small Businesses
    EPA has chosen to propose the Panel's recommended regulatory 
flexibility provisions for small business alternative fuel converters 
and vocational vehicle chassis manufacturers and we believe that all of

[[Page 40546]]

the small businesses in these industries will be impacted by less than 
one percent of their annual sales. EPA is also proposing many of the 
Panel's recommendations for small business trailer manufacturers, 
including seeking comment on the possibility of a small volume 
exemption. A majority of the small trailer manufacturers produce non-
box trailers, and are not required to adopt aerodynamic devices in this 
proposal. Additionally, many of the smallest trailer manufacturers 
produce specialty trailers that are candidates for exemption under the 
proposed off-highway or heavy-haul provisions described in Section 
IVC.(5). At this time, EPA believes the additional flexibilities 
offered for small business trailer manufacturers will reduce their 
burden below three percent of their annual sales. A more detailed 
description of the analysis to quantify the impact on small businesses 
in each affected industry sector is included in the IRFA as presented 
in Chapter 12 of the draft RIA for this rulemaking. EPA invites comment 
on all aspects of the proposal and its impacts on small entities.

E. Unfunded Mandates Reform Act

    This action contains a federal mandate under UMRA, 2 U.S.C. 1531-
1538, that may result in expenditures of $100 million or more for 
state, local and tribal governments, in the aggregate, or the private 
sector in any one year. Accordingly, the agencies have prepared a 
statement required under section 202 of UMRA. The statement is included 
in the docket for this action and briefly summarized here.
    The agencies have prepared a statement of the cost-benefit analysis 
as required by Section 202 of the UMRA; this discussion can be found in 
this preamble, and in the draft RIA. The agencies believe that the 
proposal represents the least costly, most cost-effective approach to 
achieve the statutory requirements of the rules. Section IX explains 
why the agencies believe that the fuel savings that would result from 
this proposal would lead to lower prices economy wide, improving U.S. 
international competitiveness. The costs and benefits associated with 
the proposal are discussed in more detail above in Section IX and in 
the Draft Regulatory Impact Analysis, as required by the UMRA.
    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.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.
    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 rules 
from State and local officials.
    NHTSA notes that EPCA contains a provision (49 U.S.C. 32919(a)) 
that expressly preempts any State or local government from adopting or 
enforcing a law or regulation related to fuel economy standards or 
average fuel economy standards for automobiles covered by an average 
fuel economy standard under 49 U.S.C. Chapter 329. However, commercial 
medium- and heavy-duty on-highway vehicles and work trucks are not 
``automobiles,'' as defined in 49 U.S.C. 32901(a)(3). In Phase 1 NHTSA 
concluded that EPCA's express preemption provision would not reach the 
fuel efficiency standards to be established in this rulemaking. NHTSA 
is reiterating that conclusion here for the proposed Phase 2 standards.
    NHTSA also considered the issue of implied or conflict preemption. 
The possibility of such preemption is dependent upon there being an 
actual conflict between a standard established by NHTSA in this 
rulemaking and a State or local law or regulation. See Spriestma v. 
Mercury Marine, 537 U.S. 51, 64-65 (2002). At present, NHTSA has no 
knowledge of any State or local law or regulation that would actually 
conflict with one of the fuel efficiency standards to be established in 
this rulemaking.
    NHTSA seeks public comment on this issue.

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

    This action does not have tribal implications as specified in 
Executive Order 13175. This proposal will be implemented at the Federal 
level and impose compliance costs only on vehicle and engine 
manufacturers. Tribal governments would be affected only to the extent 
they purchase and use regulated vehicles. Thus, Executive Order 13175 
does not apply to this action.
    The agencies specifically solicit comment on this proposal from 
Tribal officials.

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

    This action is subject to Executive Order 13045 because it is an 
economically significant regulatory action as defined by Executive 
Order 12866, and the agencies believe that the environmental health or 
safety risk addressed by this action may have a disproportionate effect 
on children. Accordingly, we have evaluated the environmental health or 
safety effects of these risks on children. The results of this 
evaluation are discussed below.
    A synthesis of the science and research regarding how climate 
change may affect children and other vulnerable subpopulations is 
contained in the Technical Support Document for Endangerment or Cause 
or Contribute Findings for Greenhouse Gases under Section 202(a) of the 
Clean Air Act, which can be found in the public docket for this 
proposal. In making those findings, EPA Administrator placed weight on 
the fact that certain groups, including children, are particularly 
vulnerable to climate-related health effects. In those findings, EPA 
Administrator also determined that the health effects of climate change 
linked to observed and projected elevated concentrations of GHGs 
include the increased likelihood of more frequent and intense heat 
waves, increases in ozone concentrations over broad areas of the 
country, an increase of the severity of extreme weather events such as 
hurricanes and floods, and increasing severity of coastal storms due to 
rising sea levels. These effects can all increase mortality and 
morbidity, especially in vulnerable populations such as children, the 
elderly, and the poor. In addition, the occurrence of wildfires in 
North America have increased and are likely to intensify in a warmer 
future. PM emissions from these wildfires can contribute to acute and 
chronic illnesses of the respiratory system, including pneumonia, upper 
respiratory diseases, asthma, and chronic obstructive pulmonary 
disease, especially in children.
    The agencies have estimated reductions in projected global mean 
surface temperature and sea level rise as a result of reductions in GHG 
emissions associated with the standards finalized in this action 
(Section VII and NHTSA's DEIS). Due to their vulnerability, children 
may receive disproportionate benefits from these reductions in 
temperature and the subsequent reduction of increased ozone and 
severity of weather events.

[[Page 40547]]

    As discussed in Section VIII.D.2, based on the magnitude of the 
non-GHG co-pollutant emissions changes predicted to result from the 
proposed standards, the agencies expect that there will be improvements 
in ambient air quality, pending a more comprehensive analysis for the 
final rulemaking. Due to their vulnerability, children may receive 
disproportionate benefits from these reductions, as well.
    Children are also more susceptible than adults to many air 
pollutants because of differences in physiology, higher per body weight 
breathing rates and consumption, rapid development of the brain and 
bodily systems, and 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.
    Infants and children breathe at much higher rates per body weight 
than adults, with infants under one year of age having a breathing rate 
up to five times that of adults.\882\ In addition, children breathe 
through their mouths more than adults and their nasal passages are less 
effective at removing pollutants, which leads to a higher deposition 
fraction in their lungs.\883\
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    \882\ U.S. Environmental Protection Agency. (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.
    \883\ 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.
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    Certain motor vehicle emissions present greater risks to children 
as well. 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.\884\ Exposure at a young age to these carcinogens could lead to 
a higher risk of developing cancer later in life.
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    \884\ 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. http://www.epa.gov/raf/publications/pdfs/childrens_supplement_final.pdf.
---------------------------------------------------------------------------

    The adverse effects of individual air pollutants may be more severe 
for children, particularly the youngest age groups, than adults. The 
Integrated Science Assessments and Criteria Documents for a number of 
pollutants affected by these rules, including those for NO2, 
SO2, PM, ozone and CO, describe children as a group with 
greater susceptibility. Section VIII.B.7 discusses 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. In general, these studies do not 
identify the specific contaminants associated with adverse effects, 
instead addressing the near-roadway environment as one containing 
numerous exposures potentially associated with adverse health effects.
    There is substantial evidence that people who live or attend school 
near major roadways are more likely to be of a minority race, Hispanic 
ethnicity, and/or low SES. 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.
    Section VIII.D.2 describes the expected ambient air quality changes 
for non-GHG co-pollutants resulting from the proposed standards, which 
represent levels to which the general population is exposed. 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 and their increased time spent 
outdoors, it is likely that the proposed standards would have 
particular benefits for children's health.

I. 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. In fact, this proposal has a positive 
effect on energy supply and use. Because the combination of the 
proposed fuel economy standards and the proposed GHG emission standards 
would result in significant fuel savings, this proposal encourages more 
efficient use of fuels. Therefore, we have concluded that this proposal 
is not likely to have any adverse energy effects. Our energy effects 
analysis is described above in Section IX.

J. National Technology Transfer and Advancement Act and 1 CFR Part 51

    This action involves technical standards.
    The agencies propose to use the following voluntary consensus 
standards from SAE International:
     SAE J1263 (March 2010) and SAE J2263 (December 2008) are 
voluntary consensus standards that together establish a test protocol 
to determine road-load coefficients for properly testing vehicles on a 
chassis dynamometer to simulate in-use operating conditions. Heavy-duty 
vehicle testing already relies on these reference standards under 40 
CFR part 1066.
     SAE J2343 (July 2008). This voluntary consensus standard 
establishes a minimum hold time for LNG-fueled vehicles following a 
refueling event before the tank vents to relieve pressure. This is 
described further in Section XIII.A.3.
    We are also aware that updated standards are pending for three SAE 
standards that are already incorporated by reference in the 
regulations--SAE J2263, SAE J1526, and SAE J2071. We will consider 
referencing these updated standards if they are adopted before 
completion of the final rule. All SAE documents are available from the 
publisher's Web site at www.sae.org.
    We are proposing to adopt updated versions of two ASTM standards 
that already apply under 40 CFR part 1036. This applies for ASTM D240-
14 and ASTM D4809-13, both of which specify test methods for 
determining the heat of combustion of liquid hydrocarbon fuels.
    This action also involves technical standards for which there is no 
available voluntary consensus standard. First, the agencies are 
proposing greenhouse gas emission standards for heavy-duty vehicles 
that depend on computer modeling to predict and emission rate based on 
various engine and vehicle characteristics. Such a model is not 
available from other sources, so EPA has developed the Greenhouse Gas 
Emission Model as a simulation tool for demonstrating compliance with 
emission standards. See Section II for a detailed description of the 
model. A working version of this software is available for download at 
http://www.epa.gov/otaq/climate/gem.htm.
    Second, we need to define a benchmark gear oil for establishing a 
reference point for establishing improvements in axle efficiency. There 
is no voluntary consensus standard for this purpose. As described in 
Section II.C.1.c, we are instead proposing to identify the technical 
specifications for a commonly used commercial product from BASF 
Corporation. These technical specifications have been placed in the 
docket for this rulemaking.
    Third, 40 CFR part 1037 includes several test procedures involving 
calculation with numerous physical quantities. We are incorporating by 
reference NIST Special Publication 811 to allow for standardization and 
consistency of units and nomenclature. This standard, which already 
applies for

[[Page 40548]]

40 CFR parts 1065 and 1066, is published by the National Institute of 
Standards and Technology (Department of Commerce) and is available at 
no charge at www.nist.gov.
    Fourth, the amendments for marine diesel engines involve technical 
standards related to the requirements that apply internationally. There 
are no voluntary consensus documents that address these technical 
standards. In earlier rulemakings, EPA has adopted an incorporation by 
reference for MARPOL Annex VI and the NOX Technical code in 
40 CFR parts 1042 and 1043. The International Maritime Organization 
adopted changes to these documents in 2013 and 2014, which need to be 
reflected in 40 CFR parts 1042 and 1043. EPA recently adopted the 
updated reference documents in 40 CFR part 1043. As noted in Section 
XIV.H.4, this proposal includes the remaining step of incorporating the 
updated IMO documents by reference in 40 CFR part 1042. All these 
documents are available at www.imo.org.

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

    The agencies believe the human health or environmental risk 
addressed by this action will not have potential disproportionately 
high and adverse human health or environmental effects on minority, 
low-income or indigenous populations. The results of this evaluation 
are discussed below.
    With respect to GHG emissions, the agencies have determined that 
these proposed rules would not have disproportionately high and adverse 
human health or environmental effects on minority, low-income or 
indigenous populations because they increase the level of environmental 
protection for all affected populations without having any 
disproportionately high and adverse human health or environmental 
effects on any population, including any minority, low-income or 
indigenous population. The reductions in CO2 and other GHGs 
associated with the standards would affect climate change projections, 
and the agencies have estimated reductions in projected global mean 
surface temperatures (Section VII). Within communities experiencing 
adverse impacts related to climate change, certain parts of the 
population may be especially vulnerable; these include the poor, the 
elderly, those already in poor health, the disabled, those living 
alone, and/or indigenous populations dependent on one or a few 
resources.\885\
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    \885\ EPA 2009. Technical Support Document for Endangerment and 
Cause of Contribute Findings for Greenhouse Gases under Section 
202(a) of the Clean Air Act. Available at: http://www.epa.gov/climatechange/Downloads/endangerment/Endangerment_TSD.pdf.
---------------------------------------------------------------------------

    For non-GHG co-pollutants such as ozone, PM2.5, and 
toxics, the agencies have concluded that it is not practicable to 
determine whether there would be disproportionately high and adverse 
human health or environmental effects on minority, low income and/or 
indigenous populations from these rules. As discussed in Section 
VIII.D.2, however, based on the magnitude of the non-GHG co-pollutant 
emissions changes predicted to result from the proposed standards, EPA 
and NHTSA expect that there will be improvements in ambient air quality 
that would likely help in mitigating the disparity in racial, ethnic, 
and economically-based exposures, pending a more comprehensive analysis 
for the final rulemaking.

L. Endangered Species Act

    Section 7(a)(2) of the ESA requires federal agencies, in 
consultation with one or both of the Services (depending on the species 
at issue), to ensure that actions they authorize, fund, or carry out 
are not likely to jeopardize the continued existence of federally 
listed endangered or threatened species or result in the destruction or 
adverse modification of designated critical habitat of such species. 16 
U.S.C. 1536(a)(2). Under relevant implementing regulations, section 
7(a)(2) applies only to actions where there is discretionary federal 
involvement or control. 50 CFR 402.03. Further, under the regulations 
consultation is required only for actions that ``may affect'' listed 
species or designated critical habitat. 50 CFR 402.14. Consultation is 
not required where the action has no effect on such species or habitat. 
Under this standard, it is the federal agency taking the action that 
evaluates the action and determines whether consultation is required. 
See 51 FR 19926, 19949 (June 3, 1986). Effects of an action include 
both the direct and indirect effects that will be added to the 
environmental baseline. 50 CFR 402.02. Indirect effects are those that 
are caused by the action, later in time, and that are reasonably 
certain to occur. Id. To trigger a consultation requirement, there must 
thus be a causal connection between the federal action, the effect in 
question, and the listed species, and the effect must be reasonably 
certain to occur.
    The agencies note that the projected environmental effects of this 
rule are positive. See proposed preamble section VII.C and VIII. 
However, the fact that the rule will have overall positive effects on 
the environment does not mean that the rule may affect any listed 
species or designated critical habitat within the meaning of ESA 
section 7(a)(2) or the implementing regulations or require ESA 
consultation. We have carefully considered various types of potential 
effects in reaching the conclusion that ESA consultation is not 
required for this rule.
    With respect to the projected GHG emission reductions, we are 
mindful of significant legal and technical analysis undertaken by FWS 
and the U.S. Department of the Interior in the context of listing the 
polar bear as a threatened species under the ESA. In that context, in 
2008, FWS and DOI expressed the view that the best scientific data 
available were insufficient to draw a causal connection between GHG 
emissions and effects on the species in its habitat.\886\ The DOI 
Solicitor concluded that where the effect at issue is climate change, 
proposed actions involving GHG emissions cannot pass the ``may affect'' 
test of the section 7 regulations and thus are not subject to ESA 
consultation.
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    \886\ See, e.g., 73 FR 28212, 28300 (May 15, 2008); Memorandum 
from David Longly Bernhardt, Solicitor, U.S. Department of the 
Interior re: ``Guidance on the Applicability of the Endangered 
Species Act's Consultation Requirements to Proposed Actions 
Involving the Emission of Greenhouse Gases'' (Oct. 3, 2008).
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    The agencies have also previously considered issues relating to GHG 
emissions in connection with the requirements of ESA section 7(a)(2). 
Although the GHG emission reductions projected for this proposal are 
large, EPA evaluated comparable or larger reductions in assessing this 
same issue in the context of the light duty vehicle GHG emission 
standards for model years 2012-2016 and 2017-2025. There the agency 
projected emission reductions comparable to, or greater than those 
projected here over the lifetimes of the model years in question \887\ 
and, based on air quality modeling of potential environmental effects, 
concluded that ``EPA knows of no modeling tool which can link these 
small, time-attenuated changes in global metrics to particular effects 
on listed species in particular areas. Extrapolating from global metric 
to local effect with

[[Page 40549]]

such small numbers, and accounting for further links in a causative 
chain, remain beyond current modeling capabilities.'' EPA, Light Duty 
Vehicle Greenhouse Gas Standards and Corporate Average Fuel Economy 
Standards, Response to Comment Document for Joint Rulemaking at 4-102 
(Docket EPA-OAR-HQ-2009-4782). EPA reached this conclusion after 
evaluating issues relating to potential improvements relevant to both 
temperature and oceanographic pH outputs. EPA's ultimate finding was 
that ``any potential for a specific impact on listed species in their 
habitats associated with these very small changes in average global 
temperature and ocean pH is too remote to trigger the threshold for ESA 
section 7(a)(2).''Id. EPA believes that the same conclusion would apply 
to the present proposed rule (should it be adopted), given that the 
projected CO2 emission reductions are comparable to or less 
than those projected for either of the light duty vehicle rules. See 
section VII.D.2 and Table VII-41 to the preamble to the proposed rule; 
See also, e.g., Ground Zero Center for Non-Violent Action v. U.S. Dept. 
of Navy, 383 F. 3d 1082, 1091-92 (9th Cir. 2004) (where the likelihood 
of jeopardy to a species from a federal action is extremely remote, ESA 
does not require consultation).
---------------------------------------------------------------------------

    \887\ See 75 FR at 25347 Table I.C 2-4 (May 7, 2010); 77 FR at 
62894 Table III-68 (Oct. 15, 2012); compare with Table VII-41 to the 
preamble to the proposed rule here. Projected emission reductions of 
criteria pollutants and air toxics are also on the same order as the 
two light duty vehicle rules.
---------------------------------------------------------------------------

XVI. EPA and NHTSA Statutory Authorities

    As described below, the proposed regulations are authorized 
separately for EPA and NHTSA under the agencies' respective statutory 
authorities. See Section I for a discussion of these authorities.

A. EPA

    Statutory authority for the vehicle controls proposed today is 
found in CAA section 202(a) (which authorizes standards for emissions 
of pollutants from new motor vehicles that emissions cause or 
contribute to air pollution which may reasonably be anticipated to 
endanger public health or welfare), and CAA sections 202(d), 203-209, 
216, and 301 (42 U.S.C. 7521(a), 7521(d), 7522-7543, 7550, and 7601).
    Pursuant to 42 U.S.C. 4365, EPA must make certain proposed rules 
available to the Science Advisory Board (SAB) for review. EPA may also 
voluntarily choose to make other rules available to the SAB. EPA 
notified the SAB of its plans for this rulemaking and on June 11, 2014, 
the chartered SAB discussed the recommendations of its work group on 
the planned action and agreed that no further SAB consideration of the 
supporting science was merited.

B. NHTSA

    Statutory authority for the fuel consumption standards proposed 
today is found in section 103 of the Energy Independence and Security 
Act of 2007, 49 U.S.C. 32902(k). EISA authorizes a fuel efficiency 
improvement program, designed to achieve the maximum feasible 
improvement to be created for commercial medium- and heavy-duty on-
highway vehicles and work trucks, to implement appropriate test 
methods, measurement metrics, fuel economy standards, and compliance 
and enforcement protocols that are appropriate, cost-effective and 
technologically feasible. To the extent motor vehicle safety is 
implicated, NHTSA's authority to regulate it is also derived from the 
National Traffic and Motor Vehicle Safety Act, 49 U.S.C. 30101 et seq.

List of Subjects

40 CFR Part 9

    Reporting and recordkeeping requirements.

40 CFR Part 22

    Administrative practice and procedure, Air pollution control, 
Hazardous substances, Hazardous waste, Penalties, Pesticides and pests, 
Poison prevention, Water pollution control.

40 CFR Part 85

    Confidential business information, Imports, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements, Research, 
Warranties.

40 CFR Part 86

    Administrative practice and procedure, Confidential business 
information, Incorporation by reference, Labeling, Motor vehicle 
pollution, Reporting and recordkeeping requirements.

40 CFR Part 600

    Administrative practice and procedure, Electric power, Fuel 
economy, Incorporation by reference, Labeling, Reporting and 
recordkeeping requirements.

40 CFR Part 1033

    Administrative practice and procedure, Air pollution control.

40 CFR Parts 1036 and 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 1039

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Labeling, Penalties, Reporting and recordkeeping requirements, 
Warranties.

40 CFR Part 1042

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Confidential business information, Imports, 
Labeling, Penalties, Reporting and recordkeeping requirements, Vessels, 
Warranties.

40 CFR Part 1043

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Imports, Incorporation by reference, Vessels, 
Reporting and recordkeeping requirements.

40 CFR Parts 1065 and 1066

    Administrative practice and procedure, Air pollution control, 
Incorporation by reference, Reporting and recordkeeping requirements, 
Research.

40 CFR Part 1068

    Administrative practice and procedure, Confidential business 
information, Imports, Incorporation by reference, Motor vehicle 
pollution, Penalties, Reporting and recordkeeping requirements, 
Warranties.

49 CFR Part 512

    Administrative practice and procedure, Confidential business 
information, Freedom of information, Motor vehicle safety, Reporting 
and recordkeeping requirements.

49 CFR Parts 523, 534, 535, and 537

    Fuel economy, Reporting and recordkeeping requirements.

49 CFR Part 538

    Administrative practice and procedure, Fuel economy, Motor 
vehicles, Reporting and recordkeeping requirements.

    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is proposed to be amended as set forth 
below.

PART 9--OMB Approvals Under the Paperwork Reduction Act

0
1. The authority citation for part 9 continues to read as follows:

    Authority: 7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003, 
2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 31 U.S.C. 9701; 33 
U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318,

[[Page 40550]]

1321, 1326, 1330, 1342, 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 
FR 21243, 3 CFR, 1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 
246, 300f, 300g, 300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 
300j-1, 300j-2, 300j-3, 300j-4, 300j-9, 1857 et seq., 6901-6992k, 
7401-7671q, 7542, 9601-9657, 11023, 11048.

0
2. In Sec.  9.1 the table is amended by:
0
a. Adding in numerical order by CFR designation a new undesignated 
center heading ``Control of Emissions from New and In-Use Heavy-Duty 
Highway Engines'' and its entry in numerical order for ``1036.825''.;
0
b. Adding in numerical order by CFR designation a new undesignated 
center heading ``Control of Emissions from New Heavy-Duty Motor 
Vehicles'' and its entry in numerical order for ``1037.825''.; and
0
c. Adding in numerical order by CFR designation a new undesignated 
center heading ``Control of NOX SOX, and PM 
Emissions from Marine Engines and Vessels Subject to the Marpol 
Protocol'' and its entryies in numerical order for ``1043.40--through 
1043.95''.
    The additions read as follows:

Sec.  9.1  OMB approvals under the Paperwork Reduction Act.

* * * * *

------------------------------------------------------------------------
                40 CFR citation                      OMB Control No.
------------------------------------------------------------------------
 
                                * * * * *
   Control of Emissions From New and In-Use Heavy-Duty Highway Engines
------------------------------------------------------------------------
1036.825.......................................                2060-0678
 
                                * * * * *
------------------------------------------------------------------------
         Control of Emissions From New Heavy-Duty Motor Vehicles
------------------------------------------------------------------------
1037.825.......................................                2060-0678
 
                                * * * * *
------------------------------------------------------------------------
  Control of NOX SOX, and PM Emissions From Marine Engines and Vessels
                     Subject to the Marpol Protocol
------------------------------------------------------------------------
1043.40-1043.95................................                2060-0641
 
                                * * * * *
------------------------------------------------------------------------

* * * * *

PART 22--CONSOLIDATED RULES OF PRACTICE GOVERNING THE 
ADMINISTRATIVE ASSESSMENT OF CIVIL PENALTIES AND THE REVOCATION/
TERMINATION OR SUSPENSION OF PERMITS

0
3. The authority citation for part 22 continues to read as follows:

    Authority: 7 U.S.C. 136(l); 15 U.S.C. 2615; 33 U.S.C. 1319, 
1342, 1361, 1415 and 1418; 42 U.S.C. 300g-3(g), 6912, 6925, 6928, 
6991e and 6992d; 42 U.S.C. 7413(d), 7524(c), 7545(d), 7547, 7601 and 
7607(a), 9609, and 11045.

0
4. Section 22.1 is amended by revising paragraph (a)(2) to read as 
follows:

Sec.  22.1  Scope of this part.

    (a) * * *
    (2) The assessment of any administrative civil penalty under 
sections 113(d), 205(c), 211(d) and 213(d) of the Clean Air Act, as 
amended (42 U.S.C. 7413(d), 7524(c), 7545(d) and 7547(d)), and a 
determination of nonconforming engines, vehicles or equipment under 
sections 207(c) and 213(d) of the Clean Air Act, as amended (42 U.S.C. 
7541(c) and 7547(d));
* * * * *
0
5. Section 22.34 is revised to read as follows:

Sec.  22.34  Supplemental rules governing the administrative assessment 
of civil penalties under the Clean Air Act.

    (a) Scope. This section shall apply, in conjunction with Sec. Sec.  
22.1 through 22.32, in administrative proceedings to assess a civil 
penalty conducted under sections 113(d), 205(c), 211(d), and 213(d) of 
the Clean Air Act, as amended (42 U.S.C. 7413(d), 7524(c), 7545(d), and 
7547(d)), and a determination of nonconforming engines, vehicles or 
equipment under sections 207(c) and 213(d) of the Clean Air Act, as 
amended (42 U.S.C. 7541(c) and 7547(d)). Where inconsistencies exist 
between this section and Sec. Sec.  22.1 through 22.32, this section 
shall apply.
    (b) Issuance of notice. Prior to the issuance of a final order 
assessing a civil penalty or a final determination of nonconforming 
engines, vehicles or equipment, the person to whom the order or 
determination is to be issued shall be given written notice of the 
proposed issuance of the order or determination. Service of a complaint 
or a consent agreement and final order pursuant to Sec.  22.13 
satisfies these notice requirements.

PART 85--CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

0
6. The authority citation for part 85 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart F--Exemption of Clean Alternative Fuel Conversions From 
Tampering Prohibition

0
7. Section 85.525 is revised to read as follows:

Sec.  85.525  Applicable standards.

    To qualify for an exemption from the tampering prohibition, 
vehicles/engines that have been converted to operate on a different 
fuel must meet emission standards and related requirements as described 
in this section. The modified vehicle/engine must meet the requirements 
that applied for the OEM vehicle/engine, or the most stringent OEM 
vehicle/engine standards in any allowable grouping. Fleet average 
standards do not apply unless clean alternative fuel conversions are 
specifically listed as subject to the standards.
    (a) If the vehicle/engine was certified with a Family Emission 
Limit for NOX, NOX + HC, NOX + NMOG, 
or particulate matter, as noted on the vehicle/engine emission control 
information label, the modified vehicle/engine may not exceed this 
Family Emission Limit.
    (b) Compliance with greenhouse gas emission standards is 
demonstrated as follows:
    (1) Subject to the following exceptions and special provisions, 
compliance with light-duty vehicle greenhouse gas

[[Page 40551]]

emission standards is demonstrated by complying with the N2O 
and CH4 standards and provisions set forth in 40 CFR 
86.1818-12(f)(1) and the in-use CO2 exhaust emission 
standard set forth in 40 CFR 86.1818-12(d) as determined by the OEM for 
the subconfiguration that is identical to the fuel conversion emission 
data vehicle (EDV):
    (i) If the OEM complied with the light-duty greenhouse gas 
standards using the fleet averaging option for N2O and 
CH4, as allowed under 40 CFR 86.1818-12(f)(2), the 
calculations of the carbon-related exhaust emissions require the input 
of grams/mile values for N2O and CH4, and you are 
not required to demonstrate compliance with the standalone 
CH4 and N2O standards.
    (ii) If the OEM complied with alternate standards for 
N2O and/or CH4, as allowed under 40 CFR 86.1818-
12(f)(3), you may demonstrate compliance with the same alternate 
standards.
    (iii) If the OEM complied with the nitrous oxide (N2O) 
and methane (CH4) standards and provisions set forth in 40 
CFR 86.1818-12(f)(1) or (f)(3), and the fuel conversion CO2 
measured value is lower than the in-use CO2 exhaust emission 
standard, you also have the option to convert the difference between 
the in-use CO2 exhaust emission standard and the fuel 
conversion CO2 measured value into GHG equivalents of 
CH4 and/or N2O, using 298 g CO2 to 
represent 1 g N2O and 25 g CO2 to represent 1 g 
CH4. You may then subtract the applicable converted values 
from the fuel conversion measured values of CH4 and/or 
N2O to demonstrate compliance with the CH4 and/or 
N2O standards.
    (iv) Optionally, compliance with greenhouse gas emission 
requirements may be demonstrated by comparing emissions from the 
vehicle prior to the fuel conversion to the emissions after the fuel 
conversion. This comparison must be based on FTP test results from the 
emission data vehicle (EDV) representing the pre-conversion test group. 
The sum of CO2, CH4, and N2O shall be 
calculated for pre- and post-conversion FTP test results, where 
CH4 and N2O are weighted by their global warming 
potentials of 25 and 298, respectively. The post-conversion sum of 
these emissions must be lower than the pre-conversion conversion 
greenhouse gas emission results. CO2 emissions are 
calculated as specified in 40 CFR 600.113-12. If statements of 
compliance are applicable and accepted in lieu of measuring 
N2O, as permitted by EPA regulation, the comparison of the 
greenhouse gas results also need not measure or include N2O 
in the before and after emission comparisons.
    (2) Compliance with heavy-duty engine greenhouse gas emission 
standards is demonstrated by complying with the CO2, 
N2O, and CH4 standards (or FELs, as applicable) 
and provisions set forth in 40 CFR 1036.108 for the engine family that 
is represented by the fuel conversion emission data engine (EDE). The 
following additional provisions apply:
    (i) If the fuel conversion CO2 measured value is lower 
than the CO2 standard (or FEL, as applicable), you have the 
option to convert the difference between the CO2 standard 
(or FEL, as applicable) and the fuel conversion CO2 measured 
value into GHG equivalents of CH4 and/or N2O, 
using 298 g/hp-hr CO2 to represent 1 g/hp-hr N2O 
and 25 g/hp-hr CO2 to represent 1 g/hp-hr CH4. 
You may then subtract the applicable converted values from the fuel 
conversion measured values of CH4 and/or N2O to 
demonstrate compliance with the CH4 and/or N2O 
standards (or FEL, as applicable).
    (ii) Small volume conversion manufacturers may demonstrate 
compliance with N2O standards based on an engineering 
analysis.
    (iii) For conversions of engines installed in vocational vehicles 
subject to Phase 2 standards under 40 CFR 1037.105 or in tractors 
subject to Phase 2 standards under 40 CFR 1037.106, conversion 
manufacturers may omit a demonstration related to the vehicle-based 
standards, as long as they have a reasonable technical basis for 
believing that the modified vehicle continues to meet those standards.
    (3) Subject to the following exceptions and special provisions, 
compliance with greenhouse gas emission standards for heavy-duty 
vehicles subject to 40 CFR 1037.104 is demonstrated by complying with 
the N2O and CH4 standards and provisions set 
forth in 40 CFR 1037.104 and the in-use CO2 exhaust emission 
standard set forth in 40 CFR 1037.104(b) as determined by the OEM for 
the subconfiguration that is identical to the fuel conversion emission 
data vehicle (EDV):
    (i) If the OEM complied with alternate standards for N2O 
and/or CH4, as allowed under 40 CFR 1037.104(c) you may 
demonstrate compliance with the same alternate standards.
    (ii) If you are unable to meet either the N2O or 
CH4 standards and your fuel conversion CO2 
measured value is lower than the in-use CO2 exhaust emission 
standard, you may also convert the difference between the in-use 
CO2 exhaust emission standard and the fuel conversion 
CO2 measured value into GHG equivalents of CH4 
and/or N2O, using 298 g CO2 to represent 1 g 
N2O, and 25 g CO2 to represent 1 g 
CH4. You may then subtract the applicable converted values 
from the fuel conversion measured values of CH4 and/or 
N2O to demonstrate compliance with the CH4 and/or 
N2O standards.
    (iii) You may alternatively comply with the greenhouse gas emission 
requirements by comparing emissions from the vehicle before and after 
the fuel conversion. This comparison must be based on FTP test result 
from the emission data vehicle (EDV) representing the pre-conversion 
test group. The sum of CO2, CH4, and 
N2O shall be calculated for pre- and post-conversion FTP 
test results, where CH4 and N2O are weighted by 
their global warming potentials of 25 and 298, respectively. The post-
conversion sum of these emissions must be lower than the pre-conversion 
greenhouse gas emission result. Calculate CO2 emissions as 
specified in 40 CFR 600.113. If we waive N2O measurement 
requirements based on a statement of compliance, disregard 
N2O for all measurements and calculations under this 
paragraph (b)(3)(iii).
    (c) Conversion systems for engines that would have qualified for 
chassis certification at the time of OEM certification may use those 
procedures, even if the OEM did not. Conversion manufacturers choosing 
this option must designate test groups using the appropriate criteria 
as described in this subpart and meet all vehicle chassis certification 
requirements set forth in 40 CFR part 86, subpart S.

Subpart O--Urban Bus Rebuild Requirements

0
8. Section 85.1406 is amended by revising paragraph (f)(2) to read as 
follows:

Sec.  85.1406  Certification.

* * * * *
    (f) * * *
    (2) If the equipment certifier disagrees with such determination of 
nonconformity and so advises the Agency, the Administrator shall afford 
the equipment certifier and other interested persons an opportunity to 
present their views and evidence in support thereof at a public hearing 
conducted in accordance with procedures found in 40 CFR part 1068, 
subpart G.

Subpart P--Importation of Motor Vehicles And Motor Vehicle Engines

0
9. Section 85.1508 is amended by revising paragraph (c) to read as 
follows:

[[Page 40552]]

Sec.  85.1508  ``In Use'' inspections and recall requirements.

* * * * *
    (c) A certificate holder will be notified whenever the 
Administrator has determined that a substantial number of a class or 
category of the certificate holder's vehicles or engines, although 
properly maintained and used, do not conform to the regulations 
prescribed under section 202 when in actual use throughout their useful 
lives (as determined under section 202(d)). After such notification, 
the Recall Regulations at 40 CFR part 1068, subpart G, shall govern the 
certificate holder's responsibilities and references to a manufacturer 
in the Recall Regulations shall apply to the certificate holder.
0
10. Section 85.1513 is amended by revising paragraph (e)(4) to read as 
follows:

Sec.  85.1513  Prohibited acts; penalties.

* * * * *
    (e) * * *
    (4) Hearings on suspensions and revocations of certificates of 
conformity or of eligibility to perform modification/testing under 
Sec.  85.1509 shall be held in accordance with 40 CFR part 1068, 
subpart G.
* * * * *

Subpart R--Exclusion and Exemption of Motor Vehicles and Motor 
Vehicle Engines

0
11. Section 85.1701 is amended by revising paragraph (a)(1) to read as 
follows:

Sec.  85.1701  General applicability.

    (a) * * *
    (1) Beginning January 1, 2014, the exemption provisions of 40 CFR 
part 1068, subpart C, apply instead of the provisions of this subpart 
for heavy-duty motor vehicle engines regulated under 40 CFR part 86, 
subpart A, except that the competition exemption of 40 CFR 1068.235 and 
the hardship exemption provisions of 40 CFR 1068.245, 1068.250, and 
1068.255 do not apply for motor vehicle engines.
* * * * *
0
12. Section 85.1703 is amended by adding paragraph (b) to read as 
follows:

Sec.  85.1703  Definition of motor vehicle.

* * * * *
    (b) Note that, in applying the criterion in paragraph (a)(2) of 
this section, vehicles that are clearly intended for operation on 
highways are motor vehicles. Absence of a particular safety feature is 
relevant only when absence of that feature would prevent operation on 
highways.
0
13. Section 85.1706 is amended by revising paragraph (b) to read as 
follows:

Sec.  85.1706  Pre-certification exemption.

* * * * *
    (b) Any manufacturer that desires a pre-certification exemption and 
is in the business of importing, modifying or testing uncertified 
vehicles for resale under the provisions of 40 CFR 85.1501, et seq., 
must send the request to the Designated Compliance Officer as specified 
in 40 CFR 1068.30. The Designated Compliance Officer may require such 
manufacturers to submit information regarding the general nature of the 
fleet activities, the number of vehicles involved, and a demonstration 
that adequate record-keeping procedures for control purposes will be 
employed.

Sec. Sec.  85.1713 and 85.1714  [Removed]

0
14. Remove Sec. Sec.  85.1713 and 85.1714.

Subpart S--Recall Regulations

0
15. Subpart S is revised to read as follows:

Subpart S--Recall Regulations

Sec.  85.1801  Recall regulations.

    Recall regulations apply for motor vehicles and motor vehicle 
engines as specified in 40 CFR part 1068, subpart G.

Subpart T--Emission Defect Reporting Requirements

0
16. Section 85.1901 is revised to read as follows:

Sec.  85.1901  Applicability.

    (a) The requirements of this subpart shall be applicable to all 
1972 and later model year motor vehicles and motor vehicle engines, 
except that the provisions of 40 CFR 1068.501 apply instead for heavy-
duty motor vehicle engines certified under 40 CFR part 86, subpart A, 
and for heavy-duty motor vehicles certified under 40 CFR part 1037 
starting January 1, 2018.
    (b) The requirement to report emission-related defects affecting a 
given class or category of vehicles or engines shall remain applicable 
for five years from the end of the model year in which such vehicles or 
engines were manufactured.
0
17. Section 85.1902 is revised to read as follows:

Sec.  85.1902  Definitions.

    For the purposes of this subpart and unless otherwise noted:
    (a) Act means the Clean Air Act, 42 U.S.C. 7401-7671q, as amended.
    (b) Emission-related defect means:
    (1) A defect in design, materials, or workmanship in a device, 
system, or assembly described in the approved Application for 
Certification that affects any parameter or specification enumerated in 
appendix VIII of this part; or
    (2) A defect in the design, materials, or workmanship in one or 
more emission-related parts, components, systems, software or elements 
of design which must function properly to ensure continued compliance 
with emission standards.
    (c) Useful life has the meaning given in section 202(d) of the Act 
(42 U.S.C. 7521(d)) and regulations promulgated thereunder.
    (d) Voluntary emissions recall means a repair, adjustment, or 
modification program voluntarily initiated and conducted by a 
manufacturer to remedy any emission-related defect for which direct 
notification of vehicle or engine owners has been provided, including 
programs to remedy defects related to emissions standards for 
CO2, CH4, N2O, and/or carbon-related 
exhaust emissions.
    (e) Ultimate purchaser has the meaning given in section 216 of the 
Act (42 U.S.C. 7550).
    (f) Manufacturer has the meaning given in section 216 of the Act 
(42 U.S.C. 7550).

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

0
18. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--General Provisions for Heavy-Duty Engines and Heavy-Duty 
Vehicles

0
19. Revise the heading of subpart A to read as set forth above.

Sec.  86.001-35  [Removed]

0
20. Remove Sec.  86.001-35.
0
21. Section 86.004-2 is amended by revising the definition of 
``Emergency vehicle'' to read as follows:

Sec.  86.004-2  Definitions.

* * * * *
    Emergency vehicle has the meaning given in 40 CFR 1037.801.
* * * * *
0
22. Section 86.004-25 is amended by revising paragraph (b)(4)(i) to 
read as follows:

Sec.  86.004-25  Maintenance.

* * * * *
    (b) * * *
    (4) * * *

[[Page 40553]]

    (i) For diesel-cycle heavy-duty engines, the adjustment, cleaning, 
repair, or replacement of the following items shall occur at 50,000 
miles (or 1,500 hours) of use and at 50,000-mile (or 1,500-hour) 
intervals thereafter:
    (A) Exhaust gas recirculation system related filters and coolers.
    (B) Positive crankcase ventilation valve.
    (C) Fuel injector tips (cleaning only).
    (D) DEF filters.
* * * * *
0
23. Section 86.004-28 is amended by revising paragraph (i) introductory 
text and adding paragraph (j) to read as follows:

Sec.  86.004-28  Compliance with emission standards.

* * * * *
    (i) This paragraph (i) describes how to adjust emission results 
from model year 2020 and earlier heavy-duty engines equipped with 
exhaust aftertreatment to account for regeneration events. This 
provision only applies for engines equipped with emission controls that 
are regenerated on an infrequent basis. For the purpose of this 
paragraph (i), the term ``regeneration'' means an event during which 
emission levels change while the aftertreatment performance is being 
restored by design. Examples of regenerations are increasing exhaust 
gas temperature to remove sulfur from an adsorber or increasing exhaust 
gas temperature to oxidize PM in a trap. For the purpose of this 
paragraph (i), the term ``infrequent'' means having an expected 
frequency of less than once per transient test cycle. Calculation and 
use of adjustment factors are described in paragraphs (i)(1) through 
(5) of this section. If your engine family includes engines with one or 
more AECDs for emergency vehicle applications approved under paragraph 
(4) of the definition of defeat device in Sec.  86.004-2, do not 
consider additional regenerations resulting from those AECDs when 
calculating emission factors or frequencies under this paragraph (i).
* * * * *
    (j) For model year 2021 and later engines using aftertreatment 
technology with infrequent regeneration events that may occur during 
testing, take one of the following approaches to account for the 
emission impact of regeneration:
    (1) You may use the calculation methodology described in 40 CFR 
1065.680 to adjust measured emission results. Do this by developing an 
upward adjustment factor and a downward adjustment factor for each 
pollutant based on measured emission data and observed regeneration 
frequency as follows:
    (i) Adjustment factors should generally apply to an entire engine 
family, but you may develop separate adjustment factors for different 
configurations within an engine family. Use the adjustment factors from 
this section for all testing for the engine family.
    (ii) You may use carryover or carry-across data to establish 
adjustment factors for an engine family as described in Sec.  86.001-
24(f), consistent with good engineering judgment.
    (iii) Identify the value of F in each application for the 
certification for which it applies.
    (2) You may ask us to approve an alternate methodology to account 
for regeneration events. We will generally limit approval to cases 
where your engines use aftertreatment technology with extremely 
infrequent regeneration and you are unable to apply the provisions of 
this section.
    (3) You may choose to make no adjustments to measured emission 
results if you determine that regeneration does not significantly 
affect emission levels for an engine family (or configuration) or if it 
is not practical to identify when regeneration occurs. If you choose 
not to make adjustments under paragraph (j)(1) or (2) of this section, 
your engines must meet emission standards for all testing, without 
regard to regeneration.

Sec.  86.004-30--[Removed]  

0
24. Remove Sec.  86.004-30.
0
25. Section 86.007-11 is amended by revising paragraphs (a)(1)(iii), 
(c), and (g) to read as follows:

Sec.  86.007-11  Emission standards and supplemental requirements for 
2007 and later model year diesel heavy-duty engines and vehicles.

* * * * *
    (a)(1) * * *
    (iii) Carbon monoxide. 15.5 grams per brake horsepower-hour (5.77 
grams per megajoule).
* * * * *
    (c) No crankcase emissions shall be discharged directly into the 
ambient atmosphere from any new 2007 or later model year diesel-cycle 
HDE, with the following exception: Diesel-fueled HDEs equipped with 
turbochargers, pumps, blowers, or superchargers for air induction may 
discharge crankcase emissions to the ambient atmosphere if the 
emissions are added to the exhaust emissions (either physically or 
mathematically) during all emission testing. Manufacturers taking 
advantage of this exception must manufacture the engines so that all 
crankcase emission can be routed into a dilution tunnel (or other 
sampling system approved in advance by the Administrator), and must 
account for deterioration in crankcase emissions when determining 
exhaust deterioration factors. For the purpose of this paragraph (c), 
crankcase emissions that are routed to the exhaust upstream of exhaust 
aftertreatment during all operation are not considered to be 
``discharged directly into the ambient atmosphere.''
* * * * *
    (g) Model year 2018 and later engines at or above 56 kW that will 
be installed in specialty vehicles as allowed by 40 CFR 1037.605 may 
meet alternate emission standards as follows:
    (1) The engines must be of a configuration that is identical to one 
that is certified under 40 CFR part 1039.
    (2) Except as specified in this paragraph (g), engines certified 
under this paragraph (g) must meet all the requirements that apply 
under 40 CFR part 1039 instead of the comparable provisions in this 
subpart A. In your annual production report, count these engines 
separately and identify the vehicle manufacturers that will be 
installing them. Treat these engines as part of the corresponding 
engine family under 40 CFR part 1039 for compliance purposes such as 
selective enforcement audits, in-use testing, defect reporting, and 
recall.
    (3) The engines must be labeled as described in Sec.  86.095-35. 
Engines certified under this paragraph (g) may not have the label 
specified for nonroad engines in 40 CFR part 1039.
    (4) In a separate application for a certificate of conformity, 
identify the corresponding nonroad engine family, describe the label 
required under this paragraph (g), state that you meet applicable 
diagnostic requirements under 40 CFR part 1039, and identify your 
projected U.S.-directed production volume.
    (5) No additional certification fee applies for engines certified 
under this paragraph (g).
    (6) Engines certified under this paragraph (g) may not generate or 
use emission credits under this part or under 40 CFR part 1039. The 
vehicles in which these engines are installed may generate or use 
emission credits as described in 40 CFR part 1037.
* * * * *

Sec.  86.007-30  [Amended]

0
26. Section 86.007-30 is amended by removing and reserving paragraph 
(d).

Sec.  86.007-35  [Removed]

0
27. Remove Sec.  86.007-35.

[[Page 40554]]

0
28. Section 86.008-10 is amended by:
0
a. Revising paragraph (a)(1)(iii);
0
b. Removing and reserving paragraph (f); and
0
c. Revising paragraph (g).
    The revisions read as follows:

Sec.  86.008-10  Emission standards for 2008 and later model year Otto-
cycle heavy-duty engines and vehicles.

    (a)(1) * * *
    (iii) Carbon monoxide. 14.4 grams per brake horsepower-hour (5.36 
grams per megajoule).
* * * * *
    (g) Model year 2018 and later engines that will be installed in 
specialty vehicles as allowed by 40 CFR 1037.605 may meet alternate 
emission standards as follows:
    (1) The engines must be of a configuration that is identical to one 
that is certified under 40 CFR part 1048 to the Blue Sky standards 
under 40 CFR 1048.140.
    (2) Except as specified in this paragraph (g), engines certified 
under this paragraph (g) must meet all the requirements that apply 
under 40 CFR part 1048 instead of the comparable provisions in this 
subpart A. In your annual production report, count these engines 
separately and identify the vehicle manufacturers that will be 
installing them. Treat these engines as part of the corresponding 
engine family under 40 CFR part 1048 for compliance purposes such as 
production-line testing, in-use testing, defect reporting, and recall.
    (3) The engines must be labeled as described in Sec.  86.095-35. 
Engines certified under this paragraph (g) may not have the label 
specified for nonroad engines in 40 CFR part 1048.
    (4) In a separate application for a certificate of conformity, 
identify the corresponding nonroad engine family, describe the label 
required under this paragraph (g), state that you meet applicable 
diagnostic requirements under 40 CFR part 1048, and identify your 
projected U.S.-directed production volume.
    (5) No additional certification fee applies for engines certified 
under this paragraph (g).
    (6) Engines certified under this paragraph (g) may not generate or 
use emission credits under this part. The vehicles in which these 
engines are installed may generate or use emission credits as described 
in 40 CFR part 1037.
0
29. Section 86.078-6 is revised to read as follows:

Sec.  86.078-6  Hearings on certification.

    If a manufacturer's request for a hearing is approved, EPA will 
follow the hearing procedures specified in 40 CFR part 1068, subpart G.
0
30. Section 86.084-4 is revised to read as follows:

Sec.  86.084-4  Section numbering; construction.

    (a) The model year of initial applicability is indicated by the 
last two digits of the 5-digit group. A section remains in effect for 
subsequent model years until it is superseded. The number following the 
hyphen designates what previous section is replaced by a future 
regulation. For example, Sec.  86.005-1 applies to model year 2005 and 
later vehicles and engines until it is superseded. Section 86.016-1 
takes effect with model year 2016 and continues to apply until it is 
superseded; Sec.  86.005-1 no longer applies starting with model year 
2016, except as specified by Sec.  86.016-1.
    (b) If the regulation references a section that has been superseded 
or no longer exists, this should be understood as a reference to the 
same section for the appropriate model year. For example, if the 
regulation refers to Sec.  86.001-30, it should be taken as a reference 
to Sec.  86.007-30 or any later version of that section that applies 
for the appropriate model year. However, this does not apply if the 
reference to a superseded section specifically states that the older 
provision applies instead of any updated provisions from the section in 
effect for the current model year; this occurs most often as part of 
the transition to new emission standards.
    (c) Except where indicated, the language in this subpart applies to 
both vehicles and engines. In many instances, language referring to 
engines is enclosed in parentheses and immediately follows the language 
discussing vehicles.

Sec.  86.085-37  [Amended]

0
31. Section 86.085-37 is amended by removing paragraph (d).

Sec.  86.094-30  [Removed]

0
32. Remove Sec.  86.094-30.
0
33. Section 86.095-35 is amended by:
0
a. Revising paragraphs (a) introductory text, (a)(3)(iii)(B), 
(a)(3)(iii)(H), (I), (J), and (K);
0
b. Adding paragraph (c); and
0
c. Revising paragraph, (i).
    The revisions and additions read as follows:

Sec.  86.095-35  Labeling.

    (a) The manufacturer of any motor vehicle (or motor vehicle engine) 
subject to the applicable emission standards (and family emission 
limits, as appropriate) of this subpart, shall, at the time of 
manufacture, affix a permanent legible label, of the type and in the 
manner described below, containing the information hereinafter 
provided, to all production models of such vehicles (or engines) 
available for sale to the public and covered by a Certificate of 
Conformity under Sec.  86.007-30(a).
* * * * *
    (3) * * *
    (iii) * * *
    (B) The full corporate name and trademark of the manufacturer; 
though the label may identify another company and use its trademark 
instead of the manufacturer's as long as the manufacturer complies with 
the branding provisions of 40 CFR 1068.45.
* * * * *
    (H) The prominent statement: ``This engine conforms to U.S. EPA 
regulations applicable to XXXX Model Year New Heavy-Duty Engines.'';
    (I) If the manufacturer has an alternate useful life period under 
the provisions of Sec.  86.094-21(f), the prominent statement: ``This 
engine has been certified to meet U.S. EPA standards for a useful-life 
period of XXX miles or XXX hours of operation, whichever occurs first. 
This engine's actual life may vary depending on its service 
application.'' The manufacturer may alter this statement only to 
express the assigned alternate useful life in terms other than miles or 
hours (e.g., years, or hours only);
    (J) For diesel engines, the prominent statement: ``This engine has 
a primary intended service application as a XXX heavy-duty engine.'' 
(The primary intended service applications are light, medium, and 
heavy, as defined in Sec.  86.090-2.);
    (K) For engines certified under the alternative standards specified 
in Sec.  86.007-11(g) or Sec.  86.008-10(g), the following statement: 
``This engine is certified for only in specialty vehicles as specified 
in [40 CFR 86.007-11 or 40 CFR 86.008-10]'';
* * * * *
    (c) Vehicles powered by model year 2007 through 2013 diesel-fueled 
engines must include permanent, readily visible labels on the dashboard 
(or instrument panel) and near all fuel inlets that state ``Use Ultra 
Low Sulfur Diesel Fuel Only''; or ``Ultra Low Sulfur Diesel Fuel 
Only''.
* * * * *
    (i) The Administrator may approve in advance other label content 
and formats, provided the alternative label contains information 
consistent with this section.

[[Page 40555]]

Subpart E--Emission Regulations for 1978 and Later New Motorcycles, 
General Provisions

0
34. Section 86.402-78 is amended by adding in alphabetical order a 
definition for ``Round'' to paragraph (a) to read as follows:

Sec.  86.402-78  Definitions.

    (a) * * *
    Round has the meaning given in 40 CFR 1065.1001, unless otherwise 
specified.
* * * * *
0
35. Section 86.410-2006 is amended by revising paragraph (e) 
introductory text to read as follows:

Sec.  86.410-2006  Emission standards for 2006 and later model year 
motorcycles.

* * * * *
    (e) Manufacturers with fewer than 500 employees worldwide and 
producing fewer than 3,000 motorcycles per year for the United States 
are considered small-volume manufacturers for the purposes of this 
section. The following provisions apply for these small-volume 
manufacturers:
* * * * *

Sec.  86.419-78  [Removed]

0
36. Section 86.419-78 is removed.
0
37. Section 86.419-2006 is amended by revising paragraph (a)(1) to read 
as follows:

Sec.  86.419-2006  Engine displacement, motorcycle classes.

    (a)(1) Engine displacement shall be calculated using nominal engine 
values and rounded to the nearest whole cubic centimeter.
* * * * *
0
38. Section 86.432-78 is amended by revising paragraph (d) to read as 
follows:

Sec.  86.432-78  Deterioration factor.

* * * * *
    (d) An exhaust emission deterioration factor will be calculated by 
dividing the predicted emissions at the useful life distance by the 
predicted emissions at the total test distance. Predicted emissions are 
obtained from the correlation developed in paragraph (c) of this 
section. Factor = Predicted total distance emissions / Predicted total 
test distance emissions. These interpolated and extrapolated values 
shall be carried out to four places to the right of the decimal point 
before dividing one by the other to determine the deterioration factor. 
The results shall be rounded to three places to the right of the 
decimal point.
* * * * *
0
39. Section 86.443-78 is revised to read as follows:

Sec.  86.443-78  Request for hearing.

    The manufacturer may request a hearing on the Administrator's 
determination as described in 40 CFR part 1068, subpart G.
0
40. Section 86.444-78 is revised to read as follows:

Sec.  86.444-78  Hearings on certification.

    If a manufacturer's request for a hearing is approved, EPA will 
follow the hearing procedures specified in 40 CFR part 1068, subpart G.

Subpart F--Emission Regulations for 1978 and Later New Motorcycles; 
Test Procedures

0
41. Section 86.544-90 is amended by revising the introductory text and 
paragraph (a) to read as follows:

Sec.  86.544-90  Calculations; exhaust emissions.

    This section describes how to calculate exhaust emissions. 
Determine emission results for each pollutant to at least one more 
decimal place than the applicable standard. Apply the deterioration 
factor, then round the adjusted figure to the same number of decimal 
places as the emission standard. Compare the rounded emission levels to 
the emission standard for each emission data vehicle. In the case of 
NOX + HC standards, apply the deterioration factor to each 
pollutant and then add the results before rounding.
    (a) Calculate a composite FTP emission result using the following 
equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.021

Where:
Ywm = Weighted mass emissions of each pollutant (i.e., 
CO2, HC, CO, or NOX) in grams per vehicle 
kilometer and if appropriate, the weighted carbon mass equivalent of 
total hydrocarbon equivalent, in grams per vehicle kilometer.
Yct = Mass emissions as calculated from the transient 
phase of the cold-start test, in grams per test phase.
Ys = Mass emissions as calculated from the stabilized 
phase of the cold-start test, in grams per test phase.
Dct = The measured driving distance from the transient 
phase of the cold-start test, in kilometers.
Ds = The measured driving distance from the stabilized 
phase of the cold-start test, in kilometers.
Yht = Mass emissions as calculated from the transient 
phase of the hot-start test, in grams per test phase.
Dht = The measured driving distance from the transient 
phase of the hot-start test, in kilometers.
* * * * *

Subpart G--Selective Enforcement Auditing of New Light-Duty 
Vehicles, Light-Duty Trucks, and Heavy-Duty Vehicles

0
42. Section 86.614-84 is revised to read as follows:

Sec.  86.614-84  Hearings on suspension, revocation, and voiding of 
certificates of conformity.

    The provisions of 40 CFR part 1068, subpart G, apply if a 
manufacturer requests a hearing regarding suspension, revocation or 
voiding of certificates of conformity.
0
43. Section 86.615-84 is revised to read as follows:

Sec.  86.615-84  Treatment of confidential information.

    The provisions of 40 CFR 1068.10 apply for information you consider 
confidential.

Subpart L--Nonconformance Penalties for Gasoline-Fueled and Diesel 
Heavy-Duty Engines and Heavy-Duty Vehicles, Including Light-Duty 
Trucks

Sec.  86.1103-87  [Removed]

0
44. Section 86.1103-87 is removed.

0
45. Section 86.1103-2016 is added to subpart L to read as follows:

Sec.  86.1103-2016  Criteria for availability of nonconformance 
penalties.

    (a) General. This section describes the three criteria EPA will use 
to use to evaluate whether NCPs are appropriate under the Clean Air Act 
for a given pollutant and a given subclass of heavy-duty engines and 
heavy-duty vehicles.

[[Page 40556]]

Together, these criteria evaluate the likelihood that a manufacturer 
will be technologically unable to meet a standard on time. Note that 
since the first two of these criteria are intended to address the 
question of whether a given standard creates the possibility for this 
to occur, they are evaluated before the third criterion that addresses 
the likelihood that the possibility will actually happen.
    (b) Criteria. We will establish NCPs for a given pollutant and 
subclass when we find that each of the following criteria is met:
    (1) There is a new or revised emission standard that is more 
stringent than the previous standard for the pollutant, or an existing 
standard for that pollutant has become more difficult to achieve 
because of a new or revised standard. When evaluating this criterion, 
EPA will consider a new or revised standard to be ``new'' or 
``revised'' until the point at which all manufacturers already 
producing U.S.-directed engines or vehicles within the subclass have 
achieved full compliance with the standard. For purposes of this 
criterion, EPA will generally not consider compliance using banked 
emission credits to be ``full compliance''.
    (2) Substantial work is required to meet the standard for which the 
NCP is offered, as evaluated from the point at which the standard was 
adopted or revised (or the point at which the standard became more 
difficult meet because another standard was adopted or revised). 
Substantial work, as used in this paragraph (b)(2), means the 
application of technology not previously used in an engine or vehicle 
class or subclass, or the significant modification of existing 
technology or design parameters, needed to bring the vehicle or engine 
into compliance with either the more stringent new or revised standard 
or an existing standard which becomes more difficult to achieve because 
of a new or revised standard. Note that where this criterion is 
evaluated after the work has been completed, the criterion would be 
interpreted as whether or not substantial work was required to meet the 
standard.
    (3) There is or is likely to be a technological laggard for the 
subclass. Note that a technological laggard is a manufacturer that is 
unable to meet the standard for one or more products within the 
subclass for technological reasons.
    (c) Evaluation. (1) We will generally evaluate these criteria in 
sequence. Where we find that the first criterion has not been met, we 
will not consider the other two criteria. Where we find that the first 
criterion has been met but not the second, we will not consider the 
third criterion. We may announce our findings separately or 
simultaneously.
    (2) We may consider any available information in making our 
findings.
    (3) Where we are uncertain whether the first and/or second criteria 
have been met, we may presume that they have been met and make our 
decision based solely on whether or not the third criterion has been 
met.
    (4) Where we find that a manufacturer will fail to meet a standard 
but are uncertain whether the failure is a technological failure, we 
may presume that the manufacturer is a technological laggard.

Sec.  86.1104-91  [Removed]

0
46. Section 86.1104-91 is removed.

0
47. Section 86.1104-2016 is added to subpart L to read as follows:

Sec.  86.1104-2016  Determination of upper limits.

    EPA shall set a separate upper limit for each phase of NCPs and for 
each service class.
    (a) Except as provided in paragraphs (b), (c) and (d) of this 
section, the upper limit shall be set as follows:
    (1) The upper limit applicable to a pollutant emission standard for 
a subclass of heavy-duty engines or heavy-duty vehicles for which an 
NCP is established in accordance with Sec.  86.1103-87, shall be the 
previous pollutant emission standard for that subclass.
    (2) If a manufacturer participates in any of the emissions 
averaging, trading, or banking programs, and carries over certification 
of an engine family from the prior model year, the upper limit for that 
engine family shall be the family emission limit of the prior model 
year, unless the family emission limit is less than the upper limit 
determined in paragraph (a)(1) of this section.
    (b) If no previous standard existed for the pollutant under 
paragraph (a) of this section, the upper limit will be developed by EPA 
during rulemaking.
    (c) EPA may set the upper limit during rulemaking at a level below 
the level specified in paragraph (a) of this section if we determine 
that a lower level is achievable by all engines or vehicles in that 
subclass.
    (d) EPA may set the upper limit at a level above the level 
specified in paragraph (a) of this section if we determine that such 
level will not be achievable by all engines or vehicles in that 
subclass.
0
48. Section 86.1105-87 is amended by revising paragraph (e) and 
removing paragraph (j).
    The revision reads as follows:

Sec.  86.1105-87  Emission standards for which nonconformance penalties 
are available.

* * * * *
    (e) The values of COC50, COC90, and MC50 in paragraphs (a) and (b) 
of this section are expressed in December 1984 dollars. The values of 
COC50, COC90, and MC50 in paragraphs (c) and (d) of this section are 
expressed in December 1989 dollars. The values of COC50, COC90, and 
MC50 in paragraph (f) of this section are expressed in December 1991 
dollars. The values of COC50, COC90, and MC50 in paragraphs (g) and (h) 
of this section are expressed in December 1994 dollars. The values of 
COC50, COC90, and MC50 in paragraph (i) of this section are expressed 
in December 2001 dollars. These values shall be adjusted for inflation 
to dollars as of January of the calendar year preceding the model year 
in which the NCP is first available by using the change in the overall 
Consumer Price Index, and rounded to the nearest whole dollar in 
accordance with 40 CFR 1065.20.
* * * * *
0
49. Section 86.1113-87 is amended by revising paragraphs (f) and (g)(3) 
introductory text to read as follows:

Sec.  86.1113-87  Calculation and payment of penalty.

* * * * *
    (f) A manufacturer may request a hearing under 40 CFR part 1068, 
subpart G, as to whether the compliance level (including a compliance 
level in excess of the upper limit) was determined properly.
    (g) * * *
    (3) A manufacturer making payment under paragraph (g)(1) or (2) of 
this section shall submit the following information by each quarterly 
due date to the Designated Compliance Officer (see 40 CFR 1036.801). 
This information shall be submitted even if a manufacturer has no NCP 
production in a given quarter.
* * * * *
0
50. Section 86.1115-87 is revised to read as follows:

Sec.  86.1115-87  Hearing procedures for nonconformance determinations 
and penalties.

    The provisions of 40 CFR part 1068, subpart G, apply if a 
manufacturer requests a hearing regarding penalties under this subpart.

Subpart N--Exhaust Test Procedures for Heavy-Duty Engines

0
51. Section 86.1362 is amended by revising paragraph (a) to read as 
follows:

[[Page 40557]]

Sec.  86.1362  Steady-state testing with a ramped-modal cycle.

* * * * *
    (a) Measure emissions by testing the engine on a dynamometer with 
the following ramped-modal duty cycle to determine whether it meets the 
applicable steady-state emission standards:

----------------------------------------------------------------------------------------------------------------
                                    Time in mode                                                 CO2 weighting
             RMC mode                 (seconds)      Engine speed 1 2    Torque (percent) 2 3     (percent)\4\
----------------------------------------------------------------------------------------------------------------
1a Steady-state..................             170  Warm Idle...........  0...................                  6
1b Transition....................              20  Linear Transition...  Linear Transition...
2a Steady-state..................             173  A...................  100.................                  9
2b Transition....................              20  Linear Transition...  Linear Transition...
3a Steady-state..................             219  B...................  50..................                 10
3b Transition....................              20  B...................  Linear Transition...
4a Steady-state..................             217  B...................  75..................                 10
4b Transition....................              20  Linear Transition...  Linear Transition...
5a Steady-state..................             103  A...................  50..................                 12
5b Transition....................              20  A...................  Linear Transition...
6a Steady-state..................             100  A...................  75..................                 12
6b Transition....................              20  A...................  Linear Transition...
7a Steady-state..................             103  A...................  25..................                 12
7b Transition....................              20  Linear Transition...  Linear Transition...
8a Steady-state..................             194  B...................  100.................                  9
8b Transition....................              20  B...................  Linear Transition...
9a Steady-state..................             218  B...................  25..................                  9
9b Transition....................              20  Linear Transition...  Linear Transition...
10a Steady-state.................             171  C...................  100.................                  2
10b Transition...................              20  C...................  Linear Transition...
11a Steady-state.................             102  C...................  25..................                  1
11b Transition...................              20  C...................  Linear Transition...
12a Steady-state.................             100  C...................  75..................                  1
12b Transition...................              20  C...................  Linear Transition...
13a Steady-state.................             102  C...................  50..................                  1
13b Transition...................              20  Linear Transition...  Linear Transition...
14 Steady-state..................             168  Warm Idle...........  0...................                  6
----------------------------------------------------------------------------------------------------------------
\1\ Speed terms are defined in 40 CFR part 1065.
\2\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  a linear progression from the speed or torque setting of the current mode to the speed or torque setting of
  the next mode.
\3\ The percent torque is relative to maximum torque at the commanded engine speed.
\4\ Use the specified weighting factors to calculate composite emission results for CO2 as specified in 40 CFR
  1036.501.
* * * * * * *

0
52. Section 86.1370 is amended by revising paragraphs (g) and (h) and 
adding paragraphs (i) and (j) to read as follows:

Sec.  86.1370  Not-To-Exceed test procedures.

* * * * *
    (g) You may exclude emission data based on catalytic aftertreatment 
temperatures as follows:
    (1) For an engine equipped with a catalytic NOX 
aftertreatment system, exclude NOX emission data that is 
collected when the exhaust temperature at any time during the NTE event 
is less than 250 [deg]C.
    (2) For an engine equipped with an oxidizing catalytic 
aftertreatment system, exclude NMHC and CO emission data that is 
collected if the exhaust temperature is less than 250 [deg]C at any 
time during the NTE event.
    (3) Using good engineering judgment, measure exhaust temperature 
within 30 cm downstream of the last applicable catalytic aftertreatment 
device. Where there are parallel paths, use good engineering judgment 
to measure the temperature within 30 cm downstream of the last 
applicable catalytic aftertreatment device in the path with the 
greatest exhaust flow.
    (h) Any emission measurements corresponding to engine operating 
conditions that do not qualify as a valid NTE sampling event may be 
excluded from the determination of the vehicle-pass ratio specified in 
Sec.  86.1912 for the specific pollutant.
    (i) Start emission sampling at the beginning of each valid NTE 
sampling event, except as needed to allow for zeroing or conditioning 
the PEMS. For gaseous emissions, PEMS preparation must be complete for 
all analyzers before starting emission sampling.
    (j) Emergency vehicle AECDs. If your engine family includes engines 
with one or more approved AECDs for emergency vehicle applications 
under paragraph (4) of the definition of ``defeat device'' in Sec.  
86.1803, the NTE emission limits do not apply when any of these AECDs 
are active.

Subpart S--General Compliance Provisions for Control of Air 
Pollution From New and In-Use Light-Duty Vehicles, Light-Duty 
Trucks, and Heavy-Duty Vehicles

Sec.  86.1801-12  [Amended]

0
53. Section 86.1801-12 is amended by removing and reserving paragraph 
(a)(2)(ii).
0
54. Section 86.1802-01 is revised to read as follows:

Sec.  86.1802-01  Section numbering; construction.

    (a) Section numbering. The model year of initial applicability is 
indicated by the section number. The two digits following the hyphen 
designate the first model year for which a section is applicable. The 
section continues to apply to subsequent model years unless a later 
model year section is adopted. Example: Section 86.18xx-10 applies to 
model year 2010 and later vehicles. If a Sec.  86.18xx-17 is 
promulgated, it would apply beginning with the 2017 model year; Sec.  
86.18xx-10 would apply only to model years 2010 through 2016, except as 
specified in Sec.  86.18xx-17.

[[Page 40558]]

    (b) A section reference without a model year suffix refers to the 
section applicable for the appropriate model year.
    (c) If the regulation references a section that has been superseded 
or no longer exists, this should be understood as a reference to the 
same section for the appropriate model year. For example, if the 
regulation refers to Sec.  86.1845-01, it should be taken as a 
reference to Sec.  86.1845-04 or any later version of Sec.  86.1845 
that applies for the appropriate model year. However, this does not 
apply if the reference to a superseded section specifically states that 
the older provision applies instead of any updated provisions from the 
section in effect for the current model year; this occurs most often as 
part of the transition to new emission standards.
0
55. Section 86.1803-01 is amended as follows:
0
a. By revising the definitions for ``Base level'', ``Base tire'', 
``Base vehicle'', and ``Basic engine''.
0
b. By adding a definition for ``Cab-complete vehicle''.
0
c. By revising the definitions for ``Carbon-related exhaust emissions 
(CREE)'', ``Configuration'', paragraph (1) of ``Emergency vehicle'', 
``Engine code'', ``Highway Fuel Economy Test Procedure (HFET)'', ``Mild 
hybrid electric vehicle'', ``Model type'', ``Production volume'', 
``Strong hybrid electric vehicle'', ``Subconfiguration'', 
``Transmission class'', and ``Transmission configuration''.
0
d. By adding a definitions for ``Transmission type''.
    The revisions and additions read as follows:

Sec.  86.1803-01  Definitions.

* * * * *
    Base level has the meaning given in 40 CFR 600.002.
    Base tire has the meaning given in 40 CFR 600.002.
    Base vehicle has the meaning given in 40 CFR 600.002.
    Basic engine has the meaning given in 40 CFR 600.002.
* * * * *
    Cab-complete vehicle means a heavy-duty vehicle that is first sold 
as an incomplete vehicle that substantially includes its cab. Vehicles 
known commercially as chassis-cabs, cab-chassis, box-deletes, bed-
deletes, cut-away vans are considered cab-complete vehicles. For 
purposes of this definition, a cab includes a steering column and 
passenger compartment. Note that a vehicle lacking some components of 
the cab is a cab-complete vehicle if it substantially includes the cab.
* * * * *
    Carbon-related exhaust emissions (CREE) has the meaning given in 40 
CFR 600.002.
* * * * *
    Configuration means one of the following:
    (1) For LDV, LDT, and MDPV, configuration means a subclassification 
within a test group which is based on engine code, inertia weight 
class, transmission type and gear ratios, final drive ratio, and other 
parameters which may be designated by the Administrator.
    (2) For HDV, configuration has the meaning given in Sec.  86.1819-
14(d)(12).
* * * * *
    Emergency vehicle * * *
    (1) For the greenhouse gas emission standards in Sec. Sec.  86.1818 
and 86.1819, emergency vehicle means a motor vehicle manufactured 
primarily for use as an ambulance or combination ambulance-hearse or 
for use by the United States Government or a State or local government 
for law enforcement.
* * * * *
    Engine code means one of the following:
    (1) For LDV, LDT, and MDPV, engine code means a unique combination 
within a test group of displacement, fuel injection (or carburetor) 
calibration, choke calibration, distributor calibration, auxiliary 
emission control devices, and other engine and emission control system 
components specified by the Administrator. For electric vehicles, 
engine code means a unique combination of manufacturer, electric 
traction motor, motor configuration, motor controller, and energy 
storage device.
    (2) For HDV, engine code has the meaning given in Sec.  86.1819-
14(d)(12).
* * * * *
    Highway Fuel Economy Test Procedure (HFET) has the meaning given in 
40 CFR 600.002.
* * * * *
    Mild hybrid electric vehicle means a hybrid electric vehicle that 
has start/stop capability and regenerative braking capability, where 
the recovered energy over the Federal Test Procedure is at least 15 
percent but less than 65 percent of the total braking energy, as 
measured and calculated according to Sec.  600.116-12(d).
    Model type has the meaning given in 40 CFR 600.002.
* * * * *
    Production volume has the meaning given in 40 CFR 600.002.
* * * * *
    Strong hybrid electric vehicle means a hybrid electric vehicle that 
has start/stop capability and regenerative braking capability, where 
the recovered energy over the Federal Test Procedure is at least 65 
percent of the total braking energy, as measured and calculated 
according to Sec.  600.116-12(d).
    Subconfiguration means one of the following:
    (1) For LDV, LDT, and MDPV, subconfiguration has the meaning given 
in 40 CFR 600.002.
    (2) For HDV, subconfiguration has the meaning given in Sec.  
86.1819-14(d)(12).
* * * * *
    Transmission class has the meaning given in 40 CFR 600.002.
    Transmission configuration has the meaning given in 40 CFR 600.002.
    Transmission type means the basic type of the transmission (e.g., 
automatic, manual, automated manual, semi-automatic, or continuously 
variable) and does not include the drive system of the vehicle (e.g., 
front-wheel drive, rear-wheel drive, or four-wheel drive).
* * * * *
0
56. Section 86.1805-17 is amended by revising paragraph (b) to read as 
follows:

Sec.  86.1805-17  Useful life.

* * * * *
    (b) Greenhouse gas pollutants. The emission standards in Sec.  
86.1818 apply for a useful life of 10 years or 120,000 miles for LDV 
and LLDT and 11 years or 120,000 miles for HLDT and MDPV. For non-MDPV 
heavy-duty vehicles, the emission standards in Sec.  86.1819 apply for 
a useful life of 11 years or 120,000 miles through model year 2020, and 
for a useful life of 15 years or 150,000 miles in model year 2021 and 
later. Manufacturers may certify based on the useful life as specified 
in paragraph (d) of this section if it is different than the useful 
life specified in this paragraph (b).
* * * * *
0
57. Section 86.1811-17 is amended by revising paragraph (g) to read as 
follows:

Sec.  86.1811-17  Exhaust emission standards for light-duty vehicles, 
light-duty trucks and medium-duty passenger vehicles.

* * * * *
    (g) Cold temperature exhaust emission standards. The standards in 
this paragraph (g) apply for certification and in-use vehicles tested 
over the test procedures specified in subpart C of this part. These 
standards apply only to gasoline-fueled vehicles. Multi-fuel, bi-fuel 
or dual-fuel vehicles must comply with requirements using gasoline 
only. Testing with other fuels such as a high-level ethanol-gasoline 
blend, or testing on diesel vehicles, is not required.

[[Page 40559]]

    (1) Cold temperature CO standards. Cold temperature CO exhaust 
emission standards apply for testing at both low-altitude conditions 
and high-altitude conditions as follows:
    (i) For LDV and LDT1, the standard is 10.0 g/mile CO.
    (ii) For LDT2, LDT3 and LDT4, the standard is 12.5 grams per mile 
CO.
    (2) Cold temperature NMHC standards. The following fleet average 
cold temperature NMHC standards apply as follows:
    (i) The standards are shown in the following table:

    Table 5 of Sec.   86.1811-17--Fleet Average Cold Temperature NMHC
                       Exhaust Emission Standards
------------------------------------------------------------------------
                                                       Cold  temperature
                                                           NMHC sales-
               Vehicle weight category                  weighted  fleet
                                                        average standard
                                                            (g/mile)
------------------------------------------------------------------------
LDV and LLDT.........................................                0.3
HLDT.................................................                0.5
------------------------------------------------------------------------

    (ii) The manufacturer must calculate its fleet average cold 
temperature NMHC emission level(s) as described in Sec.  86.1864-10(m).
    (iii) The standards specified in this paragraph (g)(2) apply only 
for testing at low-altitude conditions. However, manufacturers must 
submit an engineering evaluation indicating that common calibration 
approaches are utilized at high altitudes. Any deviation from low 
altitude emission control practices must be included in the auxiliary 
emission control device (AECD) descriptions submitted at certification. 
Any AECD specific to high altitude must require engineering emission 
data for EPA evaluation to quantify any emission impact and validity of 
the AECD.
* * * * *
0
58. Section 86.1816-18 is amended by revising paragraphs (a) 
introductory text, (b)(7)(i) introductory text, and (b)(9) to read as 
follows:

Sec.  86.1816-18  Emission standards for heavy-duty vehicles.

    (a) Applicability and general provisions. This section describes 
exhaust emission standards that apply for model year 2018 and later 
complete heavy-duty vehicles. These standards are optional for 
incomplete heavy-duty vehicles and for heavy duty vehicles above 14,000 
pounds GVWR as described in Sec.  86.1801. Greenhouse gas emission 
standards are specified in Sec.  86.1818 for MDPV and in Sec.  86.1819 
for other HDV. See Sec.  86.1813 for evaporative and refueling emission 
standards. This section may apply to vehicles before model year 2018 as 
specified in paragraph (b)(11) of this section. Separate requirements 
apply for MDPV as specified in Sec.  86.1811. See subpart A of this 
part for requirements that apply for incomplete heavy-duty vehicles and 
for heavy-duty engines certified independent of the chassis. The 
following general provisions apply:
* * * * *
    (b) * * *
    (7) * * *
    (i) The fleet-average FTP emission standard for NMOG+NOX 
phases in over several years as described in this paragraph (b)(7)(i). 
You must identify FELs as described in paragraph (b)(4) of this section 
and calculate a fleet-average emission level to show that you meet the 
FTP emission standard for NMOG+NOX that applies for each 
model year. You may certify using transitional bin standards specified 
in Table 5 of this section through model year 2021; these vehicles are 
subject to the FTP emission standard for formaldehyde as described in 
Sec.  86.1818-08. You may use the E0 test fuel specified in Sec.  
86.113 for gasoline-fueled vehicles certified to the transitional bins; 
the useful life period for these vehicles is 120,000 miles or 11 years. 
Fleet-average FTP emission standards decrease as shown in the following 
table:
* * * * *
    (9) Except as specified in paragraph (b)(8) of this section, you 
may not use credits generated from vehicles certified under Sec.  
86.1816-08 for demonstrating compliance with the Tier 3 standards.
* * * * *
0
59. Section 86.1818-12 is amended by revising paragraphs (a)(2), 
(c)(4), and (f)(4) to read as follows:

Sec.  86.1818-12  Greenhouse gas emission standards for light-duty 
vehicles, light-duty trucks, and medium-duty passenger vehicles.

    (a) * * *
    (2) The standards specified in this section apply for testing at 
both low-altitude conditions and high-altitude conditions. However, 
manufacturers must submit an engineering evaluation indicating that 
common calibration approaches are utilized at high altitude instead of 
performing testing for certification, consistent with Sec.  86.1829. 
Any deviation from low altitude emission control practices must be 
included in the auxiliary emission control device (AECD) descriptions 
submitted at certification. Any AECD specific to high altitude requires 
engineering emission data for EPA evaluation to quantify any emission 
impact and determine the validity of the AECD.
* * * * *
    (c) * * *
    (4) Emergency vehicles. Emergency vehicles may be excluded from the 
emission standards described in this section. The manufacturer must 
notify the Administrator that they are making such an election in the 
model year reports required under Sec.  600.512 of this chapter. Such 
vehicles should be excluded from both the calculation of the fleet 
average standard for a manufacturer under this paragraph (c) and from 
the calculation of the fleet average carbon-related exhaust emissions 
in Sec.  600.510-12.
* * * * *
    (f) * * *
    (4) CO2-equivalent debits. CO2-equivalent 
debits for test groups using an alternative N2O and/or 
CH4 standard as determined under paragraph (f)(3) of this 
section shall be calculated according to the following equation and 
rounded to the nearest whole megagram:

    Debits = [GWP x (Production) x (AltStd - Std) x VLM] / 1,000,000

Where:

Debits = CO2-equivalent debits for N2O or 
CH4, in Megagrams, for a test group using an alternative 
N2O or CH4 standard, rounded to the nearest 
whole Megagram;
GWP = 25 if calculating CH4 debits and 298 if calculating 
N2O debits;
Production = The number of vehicles of that test group domestically 
produced plus those imported as defined in Sec.  600.511 of this 
chapter;
AltStd = The alternative standard (N2O or CH4) 
selected by the manufacturer under paragraph (f)(3) of this section;
Std = The exhaust emission standard for N2O or 
CH4 specified in paragraph (f)(1) of this section; and
VLM = 195,264 for passenger automobiles and 225,865 for light 
trucks.
* * * * *
0
60. Section 86.1819-14 is added to subpart S to read as follows:

Sec.  86.1819-14  Greenhouse gas emission standards for heavy-duty 
vehicles.

    This section describes exhaust emission standards for 
CO2, CH4, and N2O for heavy-duty 
vehicles. The standards of this section apply for model year 2014 and 
later vehicles that are chassis-certified with respect to criteria 
pollutants under this subpart S. Additional heavy-duty vehicles may be 
optionally subject to the standards of this section as allowed under 
paragraph (j) of this section. Any heavy-duty vehicles not subject to 
standards under

[[Page 40560]]

this section are instead subject to greenhouse gas standards under 40 
CFR part 1037, and engines installed in these vehicles are subject to 
standards under 40 CFR part 1036. If you are not the engine 
manufacturer, you must notify the engine manufacturer that its engines 
are subject to 40 CFR part 1036 if you intend to use their engines in 
vehicles that are not subject to standards under this section. Vehicles 
produced by small businesses may be excluded from the standards of this 
section as described in paragraph (k)(5) of this section.
    (a) Fleet-average CO2 emission standards. Fleet-average 
CO2 emission standards apply for the full useful life for 
each manufacturer as follows:
    (1) Calculate a work factor, WF, for each vehicle subconfiguration 
(or group of subconfigurations as allowed under paragraph (a)(4) of 
this section), rounded to the nearest pound, using the following 
equation:

WF = 0.75 x (GVWR - Curb Weight + xwd) + 0.25 x (GCWR - GVWR)

Where:

xwd = 500 pounds if the vehicle has four-wheel drive or all-wheel 
drive; xwd = 0 pounds for all other vehicles.

    (2) Using the appropriate work factor, calculate a target value for 
each vehicle subconfiguration (or group of subconfigurations as allowed 
under paragraph (a)(4) of this section) you produce using one of the 
following equations, or the phase-in provisions in paragraph (k)(4) of 
this section, rounding to the nearest whole g/mile:
    (i) For model year 2027 and later vehicles with spark-ignition 
engines: CO2 Target (g/mile) = 0.0369 x WF + 284
    (ii) For model year 2027 and later vehicles with compression-
ignition engines or with no engines (such as electric vehicles and fuel 
cell vehicles): CO2 Target (g/mile) = 0.0348 x WF + 268
    (3) Calculate a production-weighted average of the target values 
and round it to the nearest whole g/mile. This is your fleet-average 
standard. All vehicles subject to the standards of this section form a 
single averaging set. Use the following equation to calculate your 
fleet-average standard from the target value for each vehicle 
subconfiguration (Targeti) and U.S.-directed production 
volume of each vehicle subconfiguration for the given model year 
(Volumei):
[GRAPHIC] [TIFF OMITTED] TP13JY15.022

    (4) You may group subconfigurations within a configuration together 
for purposes of calculating your fleet-average standard as follows:
    (i) You may group together subconfigurations that have the same 
equivalent test weight (ETW), GVWR, and GCWR. Calculate your work 
factor and target value assuming a curb weight equal to two times ETW 
minus GVWR.
    (ii) You may group together other subconfigurations if you use the 
lowest target value calculated for any of the subconfigurations.
    (5) The standards specified in this section apply for testing at 
both low-altitude conditions and high-altitude conditions. However, 
manufacturers must submit an engineering evaluation indicating that 
common calibration approaches are utilized at high altitude instead of 
performing testing for certification, consistent with Sec.  86.1829. 
Any deviation from low altitude emission control practices must be 
included in the auxiliary emission control device (AECD) descriptions 
submitted at certification. Any AECD specific to high altitude requires 
engineering emission data for EPA evaluation to quantify any emission 
impact and determine the validity of the AECD.
    (b) Production and in-use CO2 standards. Each vehicle 
you produce that is subject to the standards of this section has an 
``in-use'' CO2 standard that is calculated from your test 
result and that applies for selective enforcement audits and in-use 
testing. This in-use CO2 standard for each vehicle is equal 
to the applicable deteriorated emission level multiplied by 1.10 and 
rounded to the nearest whole g/mile.
    (c) N2O and CH4 standards. Except as allowed 
under this paragraph (c), all vehicles subject to the standards of this 
section must comply with an N2O standard of 0.05 g/mile and 
a CH4 standard of 0.05 g/mile when calculated according to 
the provisions of paragraph (d)(4) of this section. You may specify 
CH4 and/or N2O alternative standards using 
CO2 emission credits instead of these otherwise applicable 
emission standards for one or more test groups. To do this, calculate 
the CH4 and/or N2O emission credits needed 
(negative credits) using the equation in this paragraph (c) based on 
the FEL(s) you specify for your vehicles during certification. You must 
adjust the calculated emissions by the global warming potential (GWP): 
GWP equals 25 for CH4 and 298 for N2O. This means 
you must use 25 Mg of positive CO2 credits to offset 1 Mg of 
negative CH4 credits and 298 Mg of positive CO2 
credits to offset 1 Mg of negative N2O credits. Note that 
Sec.  86.1818-12(f) does not apply for vehicles subject to the 
standards of this section. Calculate credits using the following 
equation:

    CO2 Credits Needed (Mg) = [(FEL - Std) x (U.S.-directed 
production volume) x (Useful Life)] x (GWP) / 1,000,000

    (d) Compliance provisions. The following compliance provisions 
apply instead of other provisions described in this subpart S:
    (1) The CO2 standards of this section apply with respect 
to CO2 emissions, not with respect to carbon-related exhaust 
emissions (CREE).
    (2) The following general credit provisions apply:
    (i) Credits you generate under this section may be used only to 
offset credit deficits under this section. You may bank credits for use 
in a future model year in which your average CO2 level 
exceeds the standard. You may trade credits to another manufacturer 
according to Sec.  86.1865-12(k)(8). Before you bank or trade credits, 
you must apply any available credits to offset a deficit if the 
deadline to offset that credit deficit has not yet passed.
    (ii) Vehicles subject to the standards of this section are included 
in a single greenhouse gas averaging set separate from any averaging 
set otherwise included in this subpart S.
    (iii) Banked CO2 credits keep their full value for five 
model years after the year in which they were generated. Unused credits 
may not be used for more than five model years after the model year in 
which the credits are generated.
    (3) Special credit and incentive provisions related to air 
conditioning in Sec. Sec.  86.1867 and 86.1868 do not apply for 
vehicles subject to the standards of this section.
    (4) Measure emissions using the procedures of subpart B of this 
part and 40 CFR part 1066. Determine separate emission results for the 
Federal Test Procedure (FTP) described in 40 CFR 1066.801(c)(1) and the 
Highway Fuel Economy Test (HFET) described in 40 CFR 1066.801(c)(3). 
Calculate composite

[[Page 40561]]

emission results from these two test cycles for demonstrating 
compliance with the CO2, N2O, and CH4 
standards based on a weighted average of the FTP (55%) and HFET (45%) 
emission results. Note that this differs from the way the criteria 
pollutant standards apply.
    (5) Apply an additive deterioration factor of zero to measured 
CO2 emissions unless good engineering judgment indicates 
that emissions are likely to deteriorate in use. Use good engineering 
judgment to develop separate deterioration factors for N2O 
and CH4.
    (6) Credits are calculated using the useful life value (in miles) 
in place of ``vehicle lifetime miles'' as specified in Sec.  86.1865. 
Calculate a total credit or debit balance in a model year by adding 
credits and debits from Sec.  86.1865-12(k)(4), subtracting any 
CO2-equivalent debits for N2O or CH4 
calculated according to paragraph (c) of this section, and adding any 
of the following credits:
    (i) Off-cycle technology credits according to paragraph (d)(13) of 
this section.
    (ii) Early credits from vehicles certified under paragraph (k)(2) 
of this section.
    (iii) Advanced technology credits according to paragraph (k)(7) of 
this section.
    (7) [Reserved]
    (8) The provisions of Sec.  86.1818 do not apply.
    (9) Calculate your fleet-average emission rate consistent with good 
engineering judgment and the provisions of Sec.  86.1865. The following 
additional provisions apply:
    (i) Unless we approve a lower number, you must test at least ten 
subconfigurations. If you produce more than 100 subconfigurations in a 
given model year, you must test at least ten percent of your 
subconfigurations. For purposes of this paragraph (d)(9)(i), count 
carryover tests, but do not include analytically derived CO2 
emission rates, data substitutions, or other untested allowances. We 
may approve a lower number of tests for manufacturers that have limited 
product offerings, or low sales volumes. Note that good engineering 
judgment and other provisions of this part may require you to test more 
subconfigurations than these minimum values.
    (ii) The provisions of paragraph (g) of this section specify how 
you may use analytically derived CO2 emission rates.
    (iii) At least 90 percent of final production volume at the 
configuration level must be represented by test data (real, data 
substituted, or analytical).
    (iv) Perform fleet-average CO2 calculations as described 
in Sec.  86.1865 and 40 CFR part 600, with the following exceptions:
    (A) Use CO2 emissions values for all test results, 
intermediate calculations, and fleet average calculations instead of 
the carbon-related exhaust emission (CREE) values specified in this 
subpart S and 40 CFR part 600.
    (B) Perform intermediate CO2 calculations for 
subconfigurations within each configuration using the subconfiguration 
and configuration definitions in paragraph (d)(12) of this section.
    (C) Perform intermediate CO2 calculations for 
configurations within each test group and transmission type (instead of 
configurations within each base level and base levels within each model 
type). Use the configuration definition in paragraph (d)(12)(i) of this 
section.
    (D) Do not perform intermediate CO2 calculations for 
each base level or for each model type. Base level and model type 
CO2 calculations are not applicable to heavy-duty vehicles 
subject to standards in this section.
    (E) Determine fleet average CO2 emissions for heavy-duty 
vehicles subject to standards in this section as described in 40 CFR 
600.510-12(j), except that the calculations must be performed on the 
basis of test group and transmission type (instead of the model-type 
basis specified in the light-duty vehicle regulations), and the 
calculations for dual fuel, multi-fuel, and flexible fuel vehicles must 
be consistent with the provisions of paragraph (d)(10)(i) of this 
section.
    (10) For dual-fuel, multi-fuel, and flexible-fuel vehicles, perform 
exhaust testing on each fuel type (for example, gasoline and E85).
    (i) For your fleet-average calculations, use either the 
conventional-fueled CO2 emission rate or a weighted average 
of your emission results as specified in 40 CFR 600.510-12(k) for 
light-duty trucks.
    (ii) If you certify to an alternate standard for N2O or 
CH4 emissions, you may not exceed the alternate standard 
when tested on either fuel.
    (11) Test your vehicles with an equivalent test weight based on its 
Adjusted Loaded Vehicle Weight (ALVW). Determine equivalent test weight 
from the ALVW as specified in 40 CFR 1066.805; round ALVW values above 
14,000 pounds to the nearest 500 pound increment.
    (12) The following definitions apply for the purposes of this 
section:
    (i) Configuration means a subclassification within a test group 
based on engine code, transmission type and gear ratios, final drive 
ratio, and other parameters we designate. Engine code means the 
combination of both ``engine code'' and ``basic engine'' as defined in 
40 CFR 600.002.
    (ii) Subconfiguration means a unique combination within a vehicle 
configuration (as defined in this paragraph (d)(12)) of equivalent test 
weight, road-load horsepower, and any other operational characteristics 
or parameters that we determine may significantly affect CO2 
emissions within a vehicle configuration. Note that for vehicles 
subject to standards of this section, equivalent test weight (ETW) is 
based on the ALVW of the vehicle as outlined in paragraph (d)(11) of 
this section.
    (13) This paragraph (d)(13) applies for CO2 reductions 
resulting from technologies that were not in common use before 2010 
that are not reflected in the specified test procedures. These may be 
described as off-cycle or innovative technologies. We may allow you to 
generate emission credits consistent with the provisions of Sec.  
86.1869-12(c) and (d). You do not need to provide justification for not 
using the 5-cycle methodology.
    (14) You must submit pre-model year reports before you submit your 
applications for certification for a given model year. Unless we 
specify otherwise, include the information specified for pre-model year 
reports in 49 CFR 535.8.
    (15) You must submit a final report within 90 days after the end of 
the model year. Unless we specify otherwise, include applicable 
information identified in Sec.  86.1865-12(l), 40 CFR 600.512, and 49 
CFR 535.8(e). The final report must include at least the following 
information:
    (i) Model year.
    (ii) Applicable fleet-average CO2 standard.
    (iii) Calculated fleet-average CO2 value and all the 
values required to calculate the CO2 value.
    (iv) Number of credits or debits incurred and all values required 
to calculate those values.
    (v) Resulting balance of credits or debits.
    (vi) N2O emissions.
    (vii) CH4 emissions.
    (viii) Total and percent leakage rates under paragraph (h) of this 
section.
    (e) Useful life. The exhaust emission standards of this section 
apply for the full useful life, as described in Sec.  86.1805.
    (f) [Reserved]
    (g) Analytically derived CO2 emission rates (ADCs). This 
paragraph (g) describes an allowance to use estimated

[[Page 40562]]

(i.e., analytically derived) CO2 emission rates based on 
baseline test data instead of measured emission rates for calculating 
fleet-average emissions. Note that these ADCs are similar to ADFEs used 
for light-duty vehicles. Note also that F terms used in this paragraph 
(g) represent coefficients from the following road load equation:

Force = F0 + F1 [middot] (velocity) + 
F2 [middot] (velocity)\2\

    (1) Except as specified in paragraph (g)(2) of this section, use 
the following equation to calculate the ADC of a new vehicle from road 
load force coefficients (F0, F1, F2), axle ratio, and test weight:

ADC = CO2base + 2.18 [middot] [Delta]F0 + 37.4 [middot] 
[Delta]F1 + 2257 [middot] [Delta]F2 + 189 [middot] [Delta]AR + 0.0222 
[middot] [Delta]ETW

Where:

ADC = Analytically derived combined city/highway CO2 
emission rate (g/mile) for a new vehicle.
CO2base = Combined city/highway CO2 emission 
rate (g/mile) of a baseline vehicle.
[Delta]F0 = F0 of the new vehicle--F0 of the baseline vehicle.
[Delta]F1 = F1 of the new vehicle--F1 of the baseline vehicle.
[Delta]F2 = F2 of the new vehicle--F2 of the baseline vehicle.
[Delta]AR = Axle ratio of the new vehicle--axle ratio of the 
baseline vehicle.
[Delta]ETW = ETW of the new vehicle--ETW of the baseline vehicle.

    (2) The purpose of this section is to accurately estimate 
CO2 emission rates.
    (i) You must apply the provisions of this section consistent with 
good engineering judgment. For example, do not use the equation in 
paragraph (g)(1) of this section where good engineering judgment 
indicates that it will not accurately estimate emissions. You may ask 
us to approve alternate equations that allow you to estimate emissions 
more accurately.
    (ii) The analytically derived CO2 equation in paragraph 
(g)(1) of this section may be periodically updated through publication 
of an EPA guidance document to more accurately characterize 
CO2 emission levels for example, changes may be appropriate 
based on new test data, future technology changes, or to changes in 
future CO2 emission levels. Any EPA guidance document will 
determine the model year that the updated equation takes effect. We 
will issue guidance no later than eight months before the effective 
model year. For example, model year 2014 may start January 2, 2013, so 
guidance for model year 2014 would be issued by May 1, 2012.
    (3) You may select baseline test data without our advance approval 
if they meet all the following criteria:
    (i) Vehicles considered for the baseline test must comply with all 
applicable emission standards in the model year associated with the 
ADC.
    (ii) You must include in the pool of tests considered for baseline 
selection all official tests of the same or equivalent basic engine, 
transmission class, engine code, transmission code, engine horsepower, 
dynamometer drive wheels, and compression ratio as the ADC 
subconfiguration. Do not include tests in which emissions exceed any 
applicable standard.
    (iii) Where necessary to minimize the CO2 adjustment, 
you may supplement the pool with tests associated with worst-case 
engine or transmission codes and carryover or carry-across engine 
families. If you do, all the data that qualify for inclusion using the 
elected worst-case substitution (or carryover or carry-across) must be 
included in the pool as supplemental data (i.e., individual test 
vehicles may not be selected for inclusion). You must also include the 
supplemental data in all subsequent pools, where applicable.
    (iv) Tests previously used during the subject model year as 
baseline tests in ten other ADC subconfigurations must be eliminated 
from the pool.
    (v) Select the tested subconfiguration with the smallest absolute 
difference between the ADC and the test CO2 emission rate 
for combined emissions. Use this as the baseline test for the target 
ADC subconfiguration.
    (4) You may ask us to allow you to use baseline test data not fully 
meeting the provisions of paragraph (g)(3) of this section.
    (5) Calculate the ADC rounded to the nearest whole g/mile. Except 
with our advance approval, the downward adjustment of ADC from the 
baseline is limited to ADC values 20 percent below the baseline 
emission rate. The upward adjustment is not limited.
    (6) You may not submit an ADC if an actual test has been run on the 
target subconfiguration during the certification process or on a 
development vehicle that is eligible to be declared as an emission-data 
vehicle.
    (7) No more than 40 percent of the subconfigurations tested in your 
final CO2 submission may be represented by ADCs.
    (8) Keep the following records for at least five years, and show 
them to us if we ask to see them:
    (i) The pool of tests.
    (ii) The vehicle description and tests chosen as the baseline and 
the basis for the selection.
    (iii) The target ADC subconfiguration.
    (iv) The calculated emission rates.
    (9) We may perform or order a confirmatory test of any 
subconfiguration covered by an ADC.
    (10) Where we determine that you did not fully comply with the 
provisions of this paragraph (g), we may require that you comply based 
on actual test data and that you recalculate your fleet- average 
emission rate.
    (h) Air conditioning leakage. Loss of refrigerant from your air 
conditioning systems may not exceed a total leakage rate of 11.0 grams 
per year or a percent leakage rate of 1.50 percent per year, whichever 
is greater. Calculate the total leakage rate in g/year as specified in 
Sec.  86.1867-12(a). Calculate the percent leakage rate as: [total 
leakage rate (g/yr)] / [total refrigerant capacity (g)] x 100. Round 
your percent leakage rate to the nearest one-hundredth of a percent.
    (1) For purpose of this requirement, ``refrigerant capacity'' is 
the total mass of refrigerant recommended by the vehicle manufacturer 
as representing a full charge. Where full charge is specified as a 
pressure, use good engineering judgment to convert the pressure and 
system volume to a mass.
    (2) If your system uses a refrigerant other than HFC-134a that is 
listed as an acceptable substitute refrigerant for heavy-duty vehicles 
under 40 CFR part 82, subpart G, and the substitute refrigerant is 
identified in Sec.  86.1867-12(e), your system is deemed to meet the 
leakage standard in this paragraph (h), consistent with good 
engineering judgment, and the reporting requirement of Sec.  86.1844-
01(d)(7))(iv) does not apply. If your system uses any other refrigerant 
that is listed as an acceptable substitute refrigerant for heavy-duty 
vehicles under 40 CFR part 82, subpart G, contact us for procedures for 
calculating the leakage rate in a way that appropriately accounts for 
the refrigerant's properties.
    (i) [Reserved]
    (j) Optional GHG certification under this subpart. You may certify 
certain complete or cab-complete vehicles to the GHG standards of this 
section. All vehicles optionally certified under this paragraph (j) are 
deemed to be subject to the GHG standards of this section. Note that 
for vehicles above 14,000 pounds GVWR and at or below 26,000 pounds 
GVWR, GHG certification under this paragraph (j) does not affect how 
you may or may not certify with respect to criteria pollutants.
    (1) For GHG compliance, you may certify any complete or cab-
complete spark-ignition vehicles above 14,000 pounds GVWR and at or 
below 26,000 pounds GVWR to the GHG standards of this section even 
though this section otherwise specifies that you may certify

[[Page 40563]]

vehicles to the GHG standards of this section only if they are chassis-
certified for criteria pollutants.
    (2) You may apply the provisions of this section to cab-complete 
vehicles based on a complete sister vehicle. In unusual circumstances, 
you may ask us to apply these provisions to Class 2b or Class 3 
incomplete vehicles that do not meet the definition of cab-complete.
    (i) Except as specified in paragraph (j)(3) of this section, for 
purposes of this section, a complete sister vehicle is a complete 
vehicle of the same vehicle configuration as the cab-complete vehicle. 
You may not apply the provisions of this paragraph (j) to any vehicle 
configuration that has a four-wheel rear axle if the complete sister 
vehicle has a two-wheel rear axle.
    (ii) Calculate the target value for fleet-average CO2 
emissions under paragraph (a) or (k)(4) of this section based on the 
work factor value that applies for the complete sister vehicle.
    (iii) Test these cab-complete vehicles using the same equivalent 
test weight and other dynamometer settings that apply for the complete 
vehicle from which you used the work factor value (the complete sister 
vehicle). For GHG certification, you may submit the test data from that 
complete sister vehicle instead of performing the test on the cab-
complete vehicle.
    (iv) You are not required to produce the complete sister vehicle 
for sale to use the provisions of this paragraph (j)(2). This means the 
complete sister vehicle may be a carryover vehicle from a prior model 
year or a vehicle created solely for the purpose of testing.
    (3) For GHG purposes, if a cab-complete vehicle is not of the same 
vehicle configuration as a complete sister vehicle due only to certain 
factors unrelated to coastdown performance, you may use the road-load 
coefficients from the complete sister vehicle for certification testing 
of the cab-complete vehicle, but you may not use emission data from the 
complete sister vehicle for certifying the cab-complete vehicle.
    (k) Interim provisions. The following provisions apply instead of 
other provisions in this subpart:
    (1) Incentives for early introduction. Manufacturers may 
voluntarily certify in model year 2013 (or earlier model years for 
electric vehicles) to the greenhouse gas standards that apply starting 
in model year 2014 as specified in 40 CFR 1037.150(a).
    (2) Early credits. To generate early credits under this paragraph 
(k)(2) for any vehicles other than electric vehicles, you must certify 
your entire U.S.-directed fleet to these standards. If you calculate a 
separate fleet average for advanced-technology vehicles under paragraph 
(k)(7) of this section, you must certify your entire U.S.-directed 
production volume of both advanced and conventional vehicles within the 
fleet. If some test groups are certified after the start of the model 
year, you may generate credits only for production that occurs after 
all test groups are certified. For example, if you produce three test 
groups in an averaging set and you receive your certificates for those 
test groups on January 4, 2013, March 15, 2013, and April 24, 2013, you 
may not generate credits for model year 2013 for vehicles from any of 
the test groups produced before April 24, 2013. Calculate credits 
relative to the standard that would apply in model year 2014 using the 
applicable equations in this subpart and your model year 2013 U.S.-
directed production volumes. These credits may be used to show 
compliance with the standards of this subpart for 2014 and later model 
years. We recommend that you notify us of your intent to use this 
provision before submitting your applications.
    (3) Compliance date. Compliance with the standards of this section 
was optional before January 1, 2014 as specified in 40 CFR 1037.150(g).
    (4) Phase-in provisions. Each manufacturer must choose one of the 
options specified in paragraphs (k)(4)(i) and (ii) of this section for 
phasing in the Phase 1 standards. Manufacturers must follow the 
schedule described in paragraph (k)(4)(iii) of this section for phasing 
in the Phase 2 standards.
    (i) Phase 1--Option 1. You may implement the Phase 1 standards by 
applying CO2 target values as specified in the following 
table for model year 2014 through 2020 vehicles:

                      Table 1 of Sec.   86.1819-14
------------------------------------------------------------------------
      Model year and engine cycle        Alternate CO2 target  (g/mile)
------------------------------------------------------------------------
2014 Spark-Ignition...................  0.0482 x (WF) + 371
2015 Spark-Ignition...................  0.0479 x (WF) + 369
2016 Spark-Ignition...................  0.0469 x (WF) + 362
2017 Spark-Ignition...................  0.0460 x (WF) + 354
2018-2020 Spark-Ignition..............  0.0440 x (WF) + 339
2014 Compression-Ignition.............  0.0478 x (WF) + 368
2015 Compression-Ignition.............  0.0474 x (WF) + 366
2016 Compression-Ignition.............  0.0460 x (WF) + 354
2017 Compression-Ignition.............  0.0445 x (WF) + 343
2018-2020 Compression-Ignition........  0.0416 x (WF) + 320
------------------------------------------------------------------------

    (ii) Phase 1--Option 2. You may implement the Phase 1 standards by 
applying CO2 target values specified in the following table 
for model year 2014 through 2020 vehicles:

                      Table 2 of Sec.   86.1819-14
------------------------------------------------------------------------
      Model year and engine cycle        Alternate CO2 target  (g/mile)
------------------------------------------------------------------------
2014 Spark-Ignition...................  0.0482 x (WF) + 371
2015 Spark-Ignition...................  0.0479 x (WF) + 369
2016-2018 Spark-Ignition..............  0.0456 x (WF) + 352
2019-2020 Spark-Ignition..............  0.0440 x (WF) + 339
2014 Compression-Ignition.............  0.0478 x (WF) + 368
2015 Compression-Ignition.............  0.0474 x (WF) + 366
2016-2018 Compression-Ignition........  0.0440 x (WF) + 339
2019-2020 Compression-Ignition........  0.0416 x (WF) + 320
------------------------------------------------------------------------

    (iii) Phase 2. Apply Phase 2 CO2 target values as 
specified in the following table for model year 2021 through 2026 
vehicles:

                      Table 3 of Sec.   86.1819-14
------------------------------------------------------------------------
      Model year and engine cycle        Alternate CO2 target  (g/mile)
------------------------------------------------------------------------
2021 Spark-Ignition...................  0.0429 x (WF) + 331
2022 Spark-Ignition...................  0.0418 x (WF) + 322
2023 Spark-Ignition...................  0.0408 x (WF) + 314
2024 Spark-Ignition...................  0.0398 x (WF) + 306
2025 Spark-Ignition...................  0.0388 x (WF) + 299
2026 Spark-Ignition...................  0.0378 x (WF) + 291
2021 Compression-Ignition.............  0.0406 x (WF) + 312
2022 Compression-Ignition.............  0.0395 x (WF) + 304
2023 Compression-Ignition.............  0.0386 x (WF) + 297
2024 Compression-Ignition.............  0.0376 x (WF) + 289
2025 Compression-Ignition.............  0.0367 x (WF) + 282
2026 Compression-Ignition.............  0.0357 x (WF) + 275
------------------------------------------------------------------------

    (5) Provisions for small manufacturers. Standards 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 336111 for vehicle manufacturers and 811198 for companies 
performing fuel conversions with vehicles manufactured by a different 
company. Qualifying manufacturers are not subject to the greenhouse gas 
standards of this section for vehicles built before January 1, 2019, as 
specified in 40 CFR 1037.150(c). The employee and revenue limits apply 
to the total number employees and total revenue together for affiliated 
companies. In addition, manufacturers producing vehicles that run on 
any fuel other than gasoline, E85, or diesel fuel may delay complying 
with every new standard under this part by one model year.
    (6) Alternate N2O standards. Manufacturers may show 
compliance with the N2O standards using an engineering 
analysis. This allowance also applies for model year 2015 and later 
test groups or emission families carried over from model 2014 
consistent with the provisions of Sec.  86.1839. You may not certify to 
an N2O FEL different than the standard without measuring 
N2O emissions.
    (7) Advanced technology credits. Credits generated from hybrid 
vehicles

[[Page 40564]]

with regenerative braking or from vehicles with other advanced 
technologies may be used to show compliance with any standards of this 
part or 40 CFR part 1036, subject to the service class restrictions in 
40 CFR 1037.740. You may multiply these credits by 1.50. Include these 
vehicles in a separate fleet-average calculation (and exclude them from 
your conventional fleet-average calculation). You must first apply 
these advanced technology vehicle credits to any deficits for other 
vehicles in the averaging set before applying them to other averaging 
sets. Credits you generate under this paragraph (k)(7) may be used to 
demonstrate compliance with the CO2 emission standards in 40 
CFR part 1036 and part 1037. Similarly, you may use advanced-technology 
credits generated under 40 CFR 1036.615 or 1037.615 to demonstrate 
compliance with the CO2 standards in this section. You may 
generate advanced technology credits under this paragraph (k)(7) only 
with Phase 1 vehicles.
    (8) Loose engine sales. This paragraph (k)(8) applies for model 
year 2020 and earlier spark-ignition engines identical to engines used 
in vehicles certified to the standards of this section, where you sell 
such engines as loose engines or as engines installed in incomplete 
vehicles that are not cab-complete vehicles. For purposes of this 
paragraph (k)(8), engines would not be considered to be identical if 
they used different engine hardware. You may include such engines in a 
test group certified to the standards of this section, subject to the 
following provisions:
    (i) Engines certified under this paragraph (k)(8) are deemed to be 
certified to the standards of 40 CFR 1036.108 as specified in 40 CFR 
1036.150(j).
    (ii) The U.S.-directed production volume of engines you sell as 
loose engines or installed in incomplete heavy-duty vehicles that are 
not cab-complete vehicles in any given model year may not exceed ten 
percent of the total U.S-directed production volume of engines of that 
design that you produce for heavy-duty applications for that model 
year, including engines you produce for complete vehicles, cab-complete 
vehicles, and other incomplete vehicles. The total number of engines 
you may certify under this paragraph (k)(8), of all engine designs, may 
not exceed 15,000 in any model year. Engines produced in excess of 
either of these limits are not covered by your certificate. For 
example, if you produce 80,000 complete model year 2017 Class 2b pickup 
trucks with a certain engine and 10,000 incomplete model year 2017 
Class 3 vehicles with that same engine, and you do not apply the 
provisions of this paragraph (k)(8) to any other engine designs, you 
may produce up to 10,000 engines of that design for sale as loose 
engines under this paragraph (k)(8). If you produced 11,000 engines of 
that design for sale as loose engines, the last 1,000 of them that you 
produced in that model year 2017 would be considered uncertified.
    (iii) This paragraph (k)(8) does not apply for engines certified to 
the standards of 40 CFR 1036.108.
    (iv) Label the engines as specified in 40 CFR 1036.135 including 
the following compliance statement: ``THIS ENGINE WAS CERTIFIED TO THE 
ALTERNATE GREENHOUSE GAS EMISSION STANDARDS OF 40 CFR 1036.150(j).'' 
List the test group name instead of an engine family name.
    (v) Vehicles using engines certified under this paragraph (k)(8) 
are subject to the emission standards of 40 CFR 1037.105.
    (vi) For certification purposes, your engines are deemed to have a 
CO2 target value and test result equal to the CO2 
target value and test result for the complete vehicle in the applicable 
test group with the highest equivalent test weight, except as specified 
in paragraph (k)(8)(vi)(B) of this section. Use these values to 
calculate your target value, fleet-average emission rate, and in-use 
emission standard. Where there are multiple complete vehicles with the 
same highest equivalent test weight, select the CO2 target 
value and test result as follows:
    (A) If one or more of the CO2 test results exceed the 
applicable target value, use the CO2 target value and test 
result of the vehicle that exceeds its target value by the greatest 
amount.
    (B) If none of the CO2 test results exceed the 
applicable target value, select the highest target value and set the 
test result equal to it. This means that you may not generate emission 
credits from vehicles certified under this paragraph (k)(8).
    (vii) State in your applications for certification that your test 
group and engine family will include engines certified under this 
paragraph (k)(8). This applies for your greenhouse gas vehicle test 
group and your criteria pollutant engine family. List in each 
application the name of the corresponding test group/engine family.
    (9) Credit adjustment for useful life. For credits that you 
calculate based on a useful life of 120,000 miles, multiply any banked 
credits that you carry forward for use in model year 2021 and later by 
1.25.
    (10) CO2 rounding. For model year 2014 and earlier vehicles, you 
may round measured and calculated CO2 emission levels to the 
nearest 0.1 g/mile, instead of the nearest whole g/mile as specified in 
paragraphs (a), (b), and (g) of this section.
0
61. Section 86.1823-08 is amended by revising the definition of ``R'' 
in paragraph (d)(3) to read as follows:

Sec.  86.1823-08  Durability demonstration procedures for exhaust 
emissions.

* * * * *
    (d) * * *
    (3) * * *

R = Catalyst thermal reactivity coefficient. You may use a default 
value of 17,500 for the SBC.
* * * * *
0
62. Section 86.1838-01 is amended by revising paragraph (b)(1)(i)(B), 
adding paragraph (b)(1)(i)(C), and revising paragraph (d)(3)(iii) 
introductory text to read as follows:

Sec.  86.1838-01  Small-volume manufacturer certification procedures.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) No small-volume sales threshold applies for the heavy-duty 
greenhouse gas standards; alternative small-volume criteria apply as 
described in Sec.  86.1819-14(k)(4).
    (C) 15,000 units for all other requirements. See Sec.  86.1845 for 
separate provisions that apply for in-use testing.
* * * * *
    (d) * * *
    (3) * * *
    (iii) Notwithstanding the requirements of paragraph (d)(3)(ii) of 
this section, an applicant may satisfy the requirements of this 
paragraph (d)(3) if the requirements of this paragraph (d)(3) are 
completed by an auditor who is an employee of the applicant, provided 
that such employee:
* * * * *
0
63. Section 86.1844-01 is amended by adding paragraph (d)(7)(iv) to 
read as follows:

Sec.  86.1844-01  Information requirements: Application for 
certification and submittal of information upon request.

* * * * *
    (d) * * *
    (7) * * *
    (iv) For heavy-duty vehicles subject to air conditioning standards 
under Sec.  86.1819, include the refrigerant leakage rates (leak 
scores), describe the type of refrigerant, and identify the refrigerant 
capacity of the air conditioning systems. If another

[[Page 40565]]

company will install the air conditioning system, also identify the 
corporate name of the final installer.
* * * * *
0
64. Section 86.1846-01 is amended by revising paragraph (b)(1)(i) to 
read as follows:

Sec.  86.1846-01  Manufacturer in-use confirmatory testing 
requirements.

* * * * *
    (b) * * *
    (1) * * *
    (i) Additional testing is not required under this paragraph (b)(1) 
based on evaporative/refueling testing or based on low-mileage 
Supplemental FTP testing conducted under Sec.  86.1845-04(b)(5)(i). 
Testing conducted at high altitude under the requirements of Sec.  
86.1845-04(c) will be included in determining if a test group meets the 
criteria triggering the testing required under this section.
* * * * *
0
65. Section 86.1848-10 is amended by revising paragraph (c)(9) to read 
as follows:

Sec.  86.1848-10  Compliance with emission standards for the purpose of 
certification.

* * * * *
    (c) * * *
    (9) For 2012 and later model year LDVs, LDTs, and MDPVs, all 
certificates of conformity issued are conditional upon compliance with 
all provisions of Sec. Sec.  86.1818 and 86.1865 both during and after 
model year production. Similarly, for 2014 and later model year HDV, 
and other HDV subject to standards under Sec.  86.1819, all 
certificates of conformity issued are conditional upon compliance with 
all provisions of Sec. Sec.  86.1819 and 86.1865 both during and after 
model year production. The manufacturer bears the burden of 
establishing to the satisfaction of the Administrator that the terms 
and conditions upon which the certificate(s) was (were) issued were 
satisfied. For recall and warranty purposes, vehicles not covered by a 
certificate of conformity will continue to be held to the standards 
stated or referenced in the certificate that otherwise would have 
applied to the vehicles.
    (i) Failure to meet the fleet average CO2 requirements 
will be considered a failure to satisfy the terms and conditions upon 
which the certificate(s) was (were) issued and the vehicles sold in 
violation of the fleet average CO2 standard will not be 
covered by the certificate(s). The vehicles sold in violation will be 
determined according to Sec.  86.1865-12(k)(8).
    (ii) Failure to comply fully with the prohibition against selling 
credits that are not generated or that are not available, as specified 
in Sec.  86.1865-12, will be considered a failure to satisfy the terms 
and conditions upon which the certificate(s) was (were) issued and the 
vehicles sold in violation of this prohibition will not be covered by 
the certificate(s).
    (iii) For manufacturers using the conditional exemption under Sec.  
86.1801-12(k), failure to fully comply with the fleet production 
thresholds that determine eligibility for the exemption will be 
considered a failure to satisfy the terms and conditions upon which the 
certificate(s) was (were) issued and the vehicles sold in violation of 
the stated sales and/or production thresholds will not be covered by 
the certificate(s).
    (iv) For manufacturers that are determined to be operationally 
independent under Sec.  86.1838-01(d), failure to report a material 
change in their status within 60 days as required by Sec.  86.1838-
01(d)(2) will be considered a failure to satisfy the terms and 
conditions upon which the certificate(s) was (were) issued and the 
vehicles sold in violation of the operationally independent criteria 
will not be covered by the certificate(s).
    (v) For manufacturers subject to an alternative fleet average 
greenhouse gas emission standard approved under Sec.  86.1818-12(g), 
failure to comply with the annual sales thresholds that are required to 
maintain use of those standards, including the thresholds required for 
new entrants into the U.S. market, will be considered a failure to 
satisfy the terms and conditions upon which the certificate(s) was 
(were) issued and the vehicles sold in violation of stated sales and/or 
production thresholds will not be covered by the certificate(s).
* * * * *
0
66. Section 86.1853-01 is revised to read as follows:

Sec.  86.1853-01  Certification hearings.

    If a manufacturer's request for a hearing is approved, EPA will 
follow the hearing procedures specified in 40 CFR part 1068, subpart G.
0
67. Section 86.1854-12 is amended by adding paragraph (b)(5) to read as 
follows:

Sec.  86.1854-12  Prohibited acts.

* * * * *
    (b) * * *
    (5) Certified motor vehicles and motor vehicle engines and their 
emission control devices must remain in their certified configuration 
even if they are used solely for competition or if they become nonroad 
vehicles or engines; anyone modifying a certified motor vehicle or 
motor vehicle engine for any reason is subject to the tampering and 
defeat device prohibitions of paragraph (a)(3) of this section and 42 
U.S.C. 7522(a)(3).
0
68. Section 86.1862-04 is amended by revising paragraph (d) to read as 
follows:

Sec.  86.1862-04  Maintenance of records and submittal of information 
relevant to compliance with fleet-average standards.

* * * * *
    (d) Notice of opportunity for hearing. Any voiding of the 
certificate under paragraph (a)(6) of this section will be made only 
after EPA has offered the manufacturer concerned an opportunity for a 
hearing conducted in accordance with 40 CFR part 1068, subpart G and, 
if a manufacturer requests such a hearing, will be made only after an 
initial decision by the Presiding Officer.
0
69. Section 86.1865-12 is revised to read as follows:

Sec.  86.1865-12  How to comply with the fleet average CO2 
standards.

    (a) Applicability. (1) Unless otherwise exempted under the 
provisions of paragraph (d) of this section, CO2 fleet 
average exhaust emission standards of this subpart apply to:
    (i) 2012 and later model year passenger automobiles and light 
trucks.
    (ii) Heavy-duty vehicles subject to standards under Sec.  86.1819.
    (iii) Vehicles imported by ICIs as defined in 40 CFR 85.1502.
    (2) The terms ``passenger automobile'' and ``light truck'' as used 
in this section have the meanings given in Sec.  86.1818-12.
    (b) Useful life requirements. Full useful life requirements for 
CO2 standards are defined in Sec. Sec.  86.1818 and 86.1819. 
There is not an intermediate useful life standard for CO2 
emissions.
    (c) Altitude. Greenhouse gas emission standards apply for testing 
at both low-altitude conditions and at high-altitude conditions, as 
described in Sec. Sec.  86.1818 and 86.1819.
    (d) Small volume manufacturer certification procedures. (1) 
Passenger automobiles and light trucks. Certification procedures for 
small volume manufacturers are provided in Sec.  86.1838. Small 
businesses meeting certain criteria may be exempted from the greenhouse 
gas emission standards in Sec.  86.1818 according to the provisions of 
Sec.  86.1801-12(j) or (k).
    (2) Heavy-duty vehicles. HDV manufacturers that qualify as small 
businesses are not subject to the Phase 1 greenhouse gas standards of 
this subpart as specified in Sec.  86.1819-14(k)(5).

[[Page 40566]]

    (e) CO2 fleet average exhaust emission standards. The fleet average 
standards referred to in this section are the corporate fleet average 
CO2 standards for passenger automobiles and light trucks set 
forth in Sec.  86.1818-12(c) and (e), and for HDV in Sec.  86.1819. 
Each manufacturer must comply with the applicable CO2 fleet 
average standard on a production-weighted average basis, for each 
separate averaging set, at the end of each model year, using the 
procedure described in paragraph (j) of this section. The fleet average 
CO2 standards applicable in a given model year are 
calculated separately for passenger automobiles and light trucks for 
each manufacturer and each model year according to the provisions in 
Sec.  86.1818. Calculate the HDV fleet average CO2 standard 
in a given model year as described in Sec.  86.1819-14(a).
    (f) In-use CO2 standards. In-use CO2 exhaust emission 
standards are provided in Sec.  86.1818-12(d) for passenger automobiles 
and light trucks and in Sec.  86.1819-14(b) for HDV.
    (g) Durability procedures and method of determining deterioration 
factors (DFs). Deterioration factors for CO2 exhaust 
emission standards are provided in Sec.  86.1823-08(m) for passenger 
automobiles and light trucks and in Sec.  86.1819-14(d)(5) for HDV.
    (h) Vehicle test procedures. (1) The test procedures for 
demonstrating compliance with CO2 exhaust emission standards 
are described at Sec.  86.101 and 40 CFR part 600, subpart B.
    (2) Testing to determine compliance with CO2 exhaust 
emission standards must be on a loaded vehicle weight (LVW) basis for 
passenger automobiles and light trucks (including MDPV), and on an 
adjusted loaded vehicle weight (ALVW) basis for non-MDPV heavy-duty 
vehicles.
    (3) Testing for the purpose of providing certification data is 
required only at low-altitude conditions. If hardware and software 
emission control strategies used during low-altitude condition testing 
are not used similarly across all altitudes for in-use operation, the 
manufacturer must include a statement in the application for 
certification, in accordance with Sec.  86.1844-01(d)(11), stating what 
the different strategies are and why they are used.
    (i) Calculating fleet average carbon-related exhaust emissions for 
passenger automobiles and light trucks. (1) Manufacturers must compute 
separate production-weighted fleet average carbon-related exhaust 
emissions at the end of the model year for passenger automobiles and 
light trucks, using actual production, where production means vehicles 
produced and delivered for sale, and certifying model types to 
standards as defined in Sec.  86.1818-12. The model type carbon-related 
exhaust emission results determined according to 40 CFR part 600, 
subpart F (in units of grams per mile rounded to the nearest whole 
number) become the certification standard for each model type.
    (2) Manufacturers must separately calculate production-weighted 
fleet average carbon-related exhaust emissions levels for the following 
averaging sets according to the provisions of 40 CFR part 600, subpart 
F:
    (i) Passenger automobiles subject to the fleet average 
CO2 standards specified in Sec.  86.1818-12(c)(2);
    (ii) Light trucks subject to the fleet average CO2 
standards specified in Sec.  86.1818-12(c)(3);
    (iii) Passenger automobiles subject to the Temporary Leadtime 
Allowance Alternative Standards specified in Sec.  86.1818-12(e), if 
applicable; and
    (iv) Light trucks subject to the Temporary Leadtime Allowance 
Alternative Standards specified in Sec.  86.1818-12(e), if applicable.
    (j) Certification compliance and enforcement requirements for CO2 
exhaust emission standards. (1) Compliance and enforcement requirements 
are provided in this section and Sec.  86.1848-10(c)(9).
    (2) The certificate issued for each test group requires all model 
types within that test group to meet the in-use emission standards to 
which each model type is certified. The in-use standards for passenger 
automobiles and light duty trucks (including MDPV) are described in 
Sec.  86.1818-12(d). The in-use standards for non-MDPV heavy-duty 
vehicles are described in Sec.  86.1819-14(b).
    (3) Each manufacturer must comply with the applicable 
CO2 fleet average standard on a production-weighted average 
basis, at the end of each model year. Use the procedure described in 
paragraph (i) of this section for passenger automobiles and light 
trucks (including MDPV). Use the procedure described in Sec.  
86.1819(d)(9)(iv) for non-MDPV heavy-duty vehicles.
    (4) Each manufacturer must comply on an annual basis with the fleet 
average standards as follows:
    (i) Manufacturers must report in their annual reports to the Agency 
that they met the relevant corporate average standard by showing that 
the applicable production-weighted average CO2 emission 
levels are at or below the applicable fleet average standards; or
    (ii) If the production-weighted average is above the applicable 
fleet average standard, manufacturers must obtain and apply sufficient 
CO2 credits as authorized under paragraph (k)(8) of this 
section. A manufacturer must show that they have offset any exceedance 
of the corporate average standard via the use of credits. Manufacturers 
must also include their credit balances or deficits in their annual 
report to the Agency.
    (iii) If a manufacturer fails to meet the corporate average 
CO2 standard for four consecutive years, the vehicles 
causing the corporate average exceedance will be considered not covered 
by the certificate of conformity (see paragraph (k)(8) of this 
section). A manufacturer will be subject to penalties on an individual-
vehicle basis for sale of vehicles not covered by a certificate.
    (iv) EPA will review each manufacturer's production to designate 
the vehicles that caused the exceedance of the corporate average 
standard. EPA will designate as nonconforming those vehicles in test 
groups with the highest certification emission values first, continuing 
until reaching a number of vehicles equal to the calculated number of 
noncomplying vehicles as determined in paragraph (k)(8) of this 
section. In a group where only a portion of vehicles would be deemed 
nonconforming, EPA will determine the actual nonconforming vehicles by 
counting backwards from the last vehicle produced in that test group. 
Manufacturers will be liable for penalties for each vehicle sold that 
is not covered by a certificate.
    (k) Requirements for the CO2 averaging, banking and trading (ABT) 
program. (1) A manufacturer whose CO2 fleet average 
emissions exceed the applicable standard must complete the calculation 
in paragraph (k)(4) of this section to determine the size of its 
CO2 deficit. A manufacturer whose CO2 fleet 
average emissions are less than the applicable standard may complete 
the calculation in paragraph (k)(4) of this section to generate 
CO2 credits. In either case, the number of credits or debits 
must be rounded to the nearest whole number.
    (2) There are no property rights associated with CO2 
credits generated under this subpart. Credits are a limited 
authorization to emit the designated amount of emissions. Nothing in 
this part or any other provision of law should be construed to limit 
EPA's authority to terminate or limit this authorization through a 
rulemaking.
    (3) Each manufacturer must comply with the reporting and 
recordkeeping requirements of paragraph (l) of this section for 
CO2 credits, including early credits. The averaging, banking 
and trading program is enforceable through

[[Page 40567]]

the certificate of conformity that allows the manufacturer to introduce 
any regulated vehicles into U.S. commerce.
    (4) Credits are earned on the last day of the model year. 
Manufacturers must calculate, for a given model year and separately for 
passenger automobiles, light trucks, and heavy-duty vehicles, the 
number of credits or debits it has generated according to the following 
equation rounded to the nearest megagram:

CO2 Credits or Debits (Mg) = [(CO2 Standard - 
Manufacturer's Production-Weighted Fleet Average CO2 
Emissions) x (Total Number of Vehicles Produced) x (Mileage)] / 
1,000,000

Where:

CO2 Standard = the applicable standard for the model year 
as determined by Sec.  86.1818 or Sec.  86.1819;
Manufacturer's Production-Weighted Fleet Average CO2 
Emissions = average calculated according to paragraph (i) of this 
section;
Total Number of Vehicles Produced = the number of vehicles 
domestically produced plus those imported as defined in Sec.  
600.511-08 of this chapter; and
Mileage = useful life value (in miles) for HDV, and vehicle lifetime 
miles of 195,264 for passenger automobiles and 225,865 for light 
trucks.

    (5) Determine total HDV debits and credits for a model year as 
described in Sec.  86.1819-14(d)(6). Determine total passenger car and 
light truck debits and credits for a model year as described in this 
paragraph (k)(5). Total credits or debits generated in a model year, 
maintained and reported separately for passenger automobiles and light 
trucks, shall be the sum of the credits or debits calculated in 
paragraph (k)(4) of this section and any of the following credits, if 
applicable, minus any CO2-equivalent debits for 
N2O and/or CH4 calculated according to the 
provisions of Sec.  86.1818-12(f)(4):
    (i) Air conditioning leakage credits earned according to the 
provisions of Sec.  86.1867-12(b).
    (ii) Air conditioning efficiency credits earned according to the 
provisions of Sec.  86.1868-12(c).
    (iii) Off-cycle technology credits earned according to the 
provisions of Sec.  86.1869-12(d).
    (iv) Full size pickup truck credits earned according to the 
provisions of Sec.  86.1870-12(c).
    (v) CO2-equivalent debits for N2O and/or 
CH4 accumulated according to the provisions of Sec.  
86.1818-12(f)(4).
    (6) Unused CO2 credits generally retain their full value 
through five model years after the model year in which they were 
generated. Credits remaining at the end of the fifth model year after 
the model year in which they were generated may not be used to 
demonstrate compliance for later model years. The following particular 
provisions apply for passenger cars and light trucks:
    (i) Unused CO2 credits from the 2009 model year shall 
retain their full value through the 2014 model year. Credits from the 
2009 model year that remain at the end of the 2014 model year may not 
be used to demonstrate compliance for later model years.
    (ii) Unused CO2 credits from the 2010 through 2015 model 
years shall retain their full value through the 2021 model year. 
Credits remaining from these model years at the end of the 2021 model 
year may not be used to demonstrate compliance for later model years.
    (7) Credits may be used as follows:
    (i) Credits generated and calculated according to the method in 
paragraphs (k)(4) and (5) of this section may not be used to offset 
deficits other than those deficits accrued within the respective 
averaging set, except that credits may be transferred between the 
passenger automobile and light truck fleets of a given manufacturer. 
Credits may be banked and used in a future model year in which a 
manufacturer's average CO2 level exceeds the applicable 
standard. Credits may also be traded to another manufacturer according 
to the provisions in paragraph (k)(8) of this section. Before trading 
or carrying over credits to the next model year, a manufacturer must 
apply available credits to offset any deficit, where the deadline to 
offset that credit deficit has not yet passed. This paragraph (k)(7)(i) 
applies for MDPV, but not for other HDV.
    (ii) The use of credits shall not change Selective Enforcement 
Auditing or in-use testing failures from a failure to a non-failure. 
The enforcement of the averaging standard occurs through the vehicle's 
certificate of conformity as described in paragraph (k)(8) of this 
section. A manufacturer's certificate of conformity is conditioned upon 
compliance with the averaging provisions. The certificate will be void 
ab initio if a manufacturer fails to meet the corporate average 
standard and does not obtain appropriate credits to cover its 
shortfalls in that model year or subsequent model years (see deficit 
carry-forward provisions in paragraph (k)(8) of this section).
    (iii) The following provisions apply for passenger automobiles and 
light trucks under the Temporary Leadtime Allowance Alternative 
Standards:
    (A) Credits generated by vehicles subject to the fleet average 
CO2 standards specified in Sec.  86.1818-12(c) may only be 
used to offset a deficit generated by vehicles subject to the Temporary 
Leadtime Allowance Alternative Standards specified in Sec.  86.1818-
12(e).
    (B) Credits generated by a passenger automobile or light truck 
averaging set subject to the Temporary Leadtime Allowance Alternative 
Standards specified in Sec.  86.1818-12(e)(4)(i) or (ii) of this 
section may be used to offset a deficit generated by an averaging set 
subject to the Temporary Leadtime Allowance Alternative Standards 
through the 2015 model year, except that manufacturers qualifying under 
the provisions of Sec.  86.1818-12(e)(3) may use such credits to offset 
a deficit generated by an averaging set subject to the Temporary 
Leadtime Allowance Alternative Standards through the 2016 model year.
    (C) Credits generated by an averaging set subject to the Temporary 
Leadtime Allowance Alternative Standards specified in Sec.  86.1818-
12(e)(4)(i) or (ii) of this section may not be used to offset a deficit 
generated by an averaging set subject to the fleet average 
CO2 standards specified in Sec.  86.1818-12(c)(2) or (3) or 
otherwise transferred to an averaging set subject to the fleet average 
CO2 standards specified in Sec.  86.1818-12(c)(2) or (3).
    (D) Credits generated by vehicles subject to the Temporary Leadtime 
Allowance Alternative Standards specified in Sec.  86.1818-12(e)(4)(i) 
or (ii) may be banked for use in a future model year (to offset a 
deficit generated by an averaging set subject to the Temporary Leadtime 
Allowance Alternative Standards). All such credits may not be used to 
demonstrate compliance for model year 2016 and later vehicles, except 
that manufacturers qualifying under the provisions of Sec.  86.1818-
12(e)(3) may use such credits to offset a deficit generated by an 
averaging set subject to the Temporary Leadtime Allowance Alternative 
Standards through the 2016 model year.
    (E) A manufacturer with any vehicles subject to the Temporary 
Leadtime Allowance Alternative Standards specified in Sec.  86.1818-
12(e)(4)(i) or (ii) of this section in a model year in which that 
manufacturer also generates credits with vehicles subject to the fleet 
average CO2 standards specified in Sec.  86.1818-12(c) may 
not trade or bank credits earned against the fleet average standards in 
Sec.  86.1818-12(c) for use in a future model year.
    (iv) Credits generated in the 2017 through 2020 model years under 
the

[[Page 40568]]

provisions of Sec.  86.1818-12(e)(3)(ii) may not be traded or otherwise 
provided to another manufacturer.
    (v) Credits generated under any alternative fleet average standards 
approved under Sec.  86.1818-12(g) may not be traded or otherwise 
provided to another manufacturer.
    (8) The following provisions apply if a manufacturer calculates 
that it has negative credits (also called ``debits'' or a ``credit 
deficit'') for a given model year:
    (i) The manufacturer may carry the credit deficit forward into the 
next three model years. Such a carry-forward may only occur after the 
manufacturer exhausts any supply of banked credits. The deficit must be 
covered with an appropriate number of credits that the manufacturer 
generates or purchases by the end of the third model year. Any 
remaining deficit is subject to a voiding of the certificate ab initio, 
as described in this paragraph (k)(8). Manufacturers are not permitted 
to have a credit deficit for four consecutive years.
    (ii) If the credit deficit is not offset within the specified time 
period, the number of vehicles not meeting the fleet average 
CO2 standards (and therefore not covered by the certificate) 
must be calculated.
    (A) Determine the negative credits for the noncompliant vehicle 
category by multiplying the total megagram deficit by 1,000,000 and 
then dividing by the mileage specified in paragraph (k)(4) of this 
section.
    (B) Divide the result by the fleet average standard applicable to 
the model year in which the debits were first incurred and round to the 
nearest whole number to determine the number of vehicles not meeting 
the fleet average CO2 standards.
    (iii) EPA will determine the vehicles not covered by a certificate 
because the condition on the certificate was not satisfied by 
designating vehicles in those test groups with the highest carbon-
related exhaust emission values first and continuing until reaching a 
number of vehicles equal to the calculated number of non-complying 
vehicles as determined in this paragraph (k)(8). The same approach 
applies for HDV, except that EPA will make these designations by 
ranking test groups based on CO2 emission values. If these 
calculations determines that only a portion of vehicles in a test group 
contribute to the debit situation, then EPA will designate actual 
vehicles in that test group as not covered by the certificate, starting 
with the last vehicle produced and counting backwards.
    (iv)(A) If a manufacturer ceases production of passenger 
automobiles, light trucks, or heavy-duty vehicles, the manufacturer 
continues to be responsible for offsetting any debits outstanding 
within the required time period. Any failure to offset the debits will 
be considered a violation of paragraph (k)(8)(i) of this section and 
may subject the manufacturer to an enforcement action for sale of 
vehicles not covered by a certificate, pursuant to paragraphs 
(k)(8)(ii) and (iii) of this section.
    (B) If a manufacturer is purchased by, merges with, or otherwise 
combines with another manufacturer, the controlling entity is 
responsible for offsetting any debits outstanding within the required 
time period. Any failure to offset the debits will be considered a 
violation of paragraph (k)(8)(i) of this section and may subject the 
manufacturer to an enforcement action for sale of vehicles not covered 
by a certificate, pursuant to paragraphs (k)(8)(ii) and (iii) of this 
section.
    (v) For purposes of calculating the statute of limitations, a 
violation of the requirements of paragraph (k)(8)(i) of this section, a 
failure to satisfy the conditions upon which a certificate(s) was 
issued and hence a sale of vehicles not covered by the certificate, all 
occur upon the expiration of the deadline for offsetting debits 
specified in paragraph (k)(8)(i) of this section.
    (9) The following provisions apply to CO2 credit 
trading:
    (i) EPA may reject CO2 credit trades if the involved 
manufacturers fail to submit the credit trade notification in the 
annual report.
    (ii) A manufacturer may not sell credits that are no longer valid 
for demonstrating compliance based on the model years of the subject 
vehicles, as specified in paragraph (k)(6) of this section.
    (iii) In the event of a negative credit balance resulting from a 
transaction, both the buyer and seller are liable for the credit 
shortfall. EPA may void ab initio the certificates of conformity of all 
test groups that generate or use credits in such a trade.
    (iv) (A) If a manufacturer trades a credit that it has not 
generated pursuant to paragraph (k) of this section or acquired from 
another party, the manufacturer will be considered to have generated a 
debit in the model year that the manufacturer traded the credit. The 
manufacturer must offset such debits by the deadline for the annual 
report for that same model year.
    (B) Failure to offset the debits within the required time period 
will be considered a failure to satisfy the conditions upon which the 
certificate(s) was issued and will be addressed pursuant to paragraph 
(k)(8) of this section.
    (v) A manufacturer may only trade credits that it has generated 
pursuant to paragraphs (k)(4) and (5) of this section or acquired from 
another party.
    (1) Maintenance of records and submittal of information relevant to 
compliance with fleet average CO2 standards--(1) Maintenance of 
records. (i) Manufacturers producing any light-duty vehicles, light-
duty trucks, medium-duty passenger vehicles, or other heavy-duty 
vehicles subject to the provisions in this subpart must establish, 
maintain, and retain all the following information in adequately 
organized records for each model year:
    (A) Model year.
    (B) Applicable fleet average CO2 standards for each 
averaging set as defined in paragraph (i) of this section.
    (C) The calculated fleet average CO2 value for each 
averaging set as defined in paragraph (i) of this section.
    (D) All values used in calculating the fleet average CO2 
values.
    (ii) Manufacturers must establish, maintain, and retain all the 
following information in adequately organized records for each vehicle 
produced that is subject to the provisions in this subpart:
    (A) Model year.
    (B) Applicable fleet average CO2 standard.
    (C) EPA test group.
    (D) Assembly plant.
    (E) Vehicle identification number.
    (F) Carbon-related exhaust emission standard (automobile and light 
truck only), N2O emission standard, and CH4 
emission standard to which the vehicle is certified.
    (G) In-use carbon-related exhaust emission standard for passenger 
automobiles and light truck, and in-use CO2 standard for 
HDV.
    (H) Information on the point of first sale, including the 
purchaser, city, and state.
    (iii) Manufacturers must retain all required records for a period 
of eight years from the due date for the annual report. Records may be 
stored in any format and on any media, as long as manufacturers can 
promptly send EPA organized written records in English if requested by 
the Administrator. Manufacturers must keep records readily available as 
EPA may review them at any time.
    (iv) The Administrator may require the manufacturer to retain 
additional records or submit information not specifically required by 
this section.
    (v) Pursuant to a request made by the Administrator, the 
manufacturer must submit to the Administrator the

[[Page 40569]]

information that the manufacturer is required to retain.
    (vi) EPA may void ab initio a certificate of conformity for 
vehicles certified to emission standards as set forth or otherwise 
referenced in this subpart for which the manufacturer fails to retain 
the records required in this section or to provide such information to 
the Administrator upon request, or to submit the reports required in 
this section in the specified time period.
    (2) Reporting. (i) Each manufacturer must submit an annual report. 
The annual report must contain for each applicable CO2 
standard, the calculated fleet average CO2 value, all values 
required to calculate the CO2 emissions value, the number of 
credits generated or debits incurred, all the values required to 
calculate the credits or debits, and the resulting balance of credits 
or debits. For each applicable alternative N2O and/or 
CH4 standard selected under the provisions of Sec.  86.1818-
12(f)(3) for passenger automobiles and light trucks (or Sec.  86.1819-
14(c) for HDV), the report must contain the CO2-equivalent 
debits for N2O and/or CH4 calculated according to 
Sec.  86.1818-12(f)(4) (or Sec.  86.1819-14(c) for HDV) for each test 
group and all values required to calculate the number of debits 
incurred.
    (ii) For each applicable fleet average CO2 standard, the 
annual report must also include documentation on all credit 
transactions the manufacturer has engaged in since those included in 
the last report. Information for each transaction must include all of 
the following:
    (A) Name of credit provider.
    (B) Name of credit recipient.
    (C) Date the trade occurred.
    (D) Quantity of credits traded in megagrams.
    (E) Model year in which the credits were earned.
    (iii) Manufacturers calculating air conditioning leakage and/or 
efficiency credits under paragraph Sec.  86.1871-12(b) shall include 
the following information for each model year and separately for 
passenger automobiles and light trucks and for each air conditioning 
system used to generate credits:
    (A) A description of the air conditioning system.
    (B) The leakage credit value and all the information required to 
determine this value.
    (C) The total credits earned for each averaging set, model year, 
and region, as applicable.
    (iv) Manufacturers calculating advanced technology vehicle credits 
under paragraph Sec.  86.1871-12(c) shall include the following 
information for each model year and separately for passenger 
automobiles and light trucks:
    (A) The number of each model type of eligible vehicle sold.
    (B) The cumulative model year production of eligible vehicles 
starting with the 2009 model year.
    (C) The carbon-related exhaust emission value by model type and 
model year.
    (v) Manufacturers calculating off-cycle technology credits under 
paragraph Sec.  86.1871-12(d) shall include, for each model year and 
separately for passenger automobiles and light trucks, all test results 
and data required for calculating such credits.
    (vi) Unless a manufacturer reports the data required by this 
section in the annual production report required under Sec.  86.1844-
01(e) or the annual report required under Sec.  600.512-12 of this 
chapter, a manufacturer must submit an annual report for each model 
year after production ends for all affected vehicles produced by the 
manufacturer subject to the provisions of this subpart and no later 
than May 1 of the calendar year following the given model year. Annual 
reports must be submitted to: Director, Compliance Division, U.S. 
Environmental Protection Agency, 2000 Traverwood Dr., Ann Arbor, 
Michigan 48105.
    (vii) Failure by a manufacturer to submit the annual report in the 
specified time period for all vehicles subject to the provisions in 
this section is a violation of section 203(a)(1) of the Clean Air Act 
(42 U.S.C. 7522(a)(1)) for each applicable vehicle produced by that 
manufacturer.
    (viii) If EPA or the manufacturer determines that a reporting error 
occurred on an annual report previously submitted to EPA, the 
manufacturer's credit or debit calculations will be recalculated. EPA 
may void erroneous credits, unless traded, and will adjust erroneous 
debits. In the case of traded erroneous credits, EPA must adjust the 
selling manufacturer's credit balance to reflect the sale of such 
credits and any resulting credit deficit.
    (3) Notice of opportunity for hearing. Any voiding of the 
certificate under paragraph (l)(1)(vi) of this section will be made 
only after EPA has offered the affected manufacturer an opportunity for 
a hearing conducted in accordance with 40 CFR part 1068, subpart G, 
and, if a manufacturer requests such a hearing, will be made only after 
an initial decision by the Presiding Officer.
0
70. Section 86.1866-12 is amended by adding introductory text and 
revising paragraph (b) introductory text to read as follows:

Sec.  86.1866-12  CO2 credits for advanced technology 
vehicles.

    This section describes how to apply CO2 credits for 
advanced technology passenger automobiles and light trucks (including 
MDPV). This section does not apply for heavy-duty vehicles that are not 
MDPV.
* * * * *
    (b) For electric vehicles, plug-in hybrid electric vehicles, fuel 
cell vehicles, dedicated natural gas vehicles, and dual-fuel natural 
gas vehicles as those terms are defined in Sec.  86.1803-01, that are 
certified and produced for U.S. sale in the 2017 through 2021 model 
years and that meet the additional specifications in this section, the 
manufacturer may use the production multipliers in this paragraph (b) 
when determining the manufacturer's fleet average carbon-related 
exhaust emissions under Sec.  600.510-12 of this chapter. Full size 
pickup trucks eligible for and using a production multiplier are not 
eligible for the performance-based credits described in Sec.  86.1870-
12(b).
* * * * *
0
71. Section 86.1867-12 is amended by revising the introductory text to 
read as follows:

Sec.  86.1867-12  CO2 credits for reducing leakage of air 
conditioning refrigerant.

    Manufacturers may generate credits applicable to the CO2 
fleet average program described in Sec.  86.1865-12 by implementing 
specific air conditioning system technologies designed to reduce air 
conditioning refrigerant leakage over the useful life of their 
passenger automobiles and/or light trucks (including MDPV); only the 
provisions of paragraph (a) this section apply for non-MDPV heavy-duty 
vehicles. Credits shall be calculated according to this section for 
each air conditioning system that the manufacturer is using to generate 
CO2 credits. Manufacturers may also generate early air 
conditioning refrigerant leakage credits under this section for the 
2009 through 2011 model years according to the provisions of Sec.  
86.1871-12(b).
* * * * *
0
72. Section 86.1868-12 is amended by revising the introductory text and 
paragraphs (e)(5), (f)(1), (g)(1), and (g)(3) introductory text to read 
as follows:

Sec.  86.1868-12  CO2 credits for improving the efficiency 
of air conditioning systems.

    Manufacturers may generate credits applicable to the CO2 
fleet average program described in Sec.  86.1865-12 by implementing 
specific air conditioning system technologies designed to reduce air 
conditioning-related CO2 emissions

[[Page 40570]]

over the useful life of their passenger automobiles and/or light trucks 
(including MDPV). The provisions of this section do not apply for non-
MDPV heavy-duty vehicles. Credits shall be calculated according to this 
section for each air conditioning system that the manufacturer is using 
to generate CO2 credits. Manufacturers may also generate 
early air conditioning efficiency credits under this section for the 
2009 through 2011 model years according to the provisions of Sec.  
86.1871-12(b). For model years 2012 and 2013 the manufacturer may 
determine air conditioning efficiency credits using the requirements in 
paragraphs (a) through (d) of this section. For model years 2014 
through 2016 the eligibility requirements specified in either paragraph 
(e) or (f) of this section must be met before an air conditioning 
system is allowed to generate credits. For model years 2017 through 
2019 the eligibility requirements specified in paragraph (f) of this 
section must be met before an air conditioning system is allowed to 
generate credits. For model years 2020 and later the eligibility 
requirements specified in paragraph (g) of this section must be met 
before an air conditioning system is allowed to generate credits.
* * * * *
    (e) * * *
    (5) Air conditioning systems with compressors that are solely 
powered by electricity shall submit Air Conditioning Idle Test 
Procedure data to be eligible to generate credits in the 2014 and later 
model years, but such systems are not required to meet a specific 
threshold to be eligible to generate such credits, as long as the 
engine remains off for a period of at least 2 cumulative minutes during 
the air conditioning on portion of the Idle Test Procedure in Sec.  
86.165-12(d).
    (f) * * *
    (1) The manufacturer shall perform the AC17 test specified in 40 
CFR 1066.845 on each unique air conditioning system design and vehicle 
platform combination (as those terms are defined in Sec.  86.1803) for 
which the manufacturer intends to accrue air conditioning efficiency 
credits. The manufacturer must test at least one unique air 
conditioning system within each vehicle platform in a model year, 
unless all unique air conditioning systems within a vehicle platform 
have been previously tested. A unique air conditioning system design is 
a system with unique or substantially different component designs or 
types and/or system control strategies (e.g., fixed displacement vs. 
variable displacement compressors, orifice tube vs. thermostatic 
expansion valve, single vs. dual evaporator, etc.). In the first year 
of such testing, the tested vehicle configuration shall be the highest 
production vehicle configuration within each platform. In subsequent 
model years the manufacturer must test other unique air conditioning 
systems within the vehicle platform, proceeding from the highest 
production untested system until all unique air conditioning systems 
within the platform have been tested, or until the vehicle platform 
experiences a major redesign. Whenever a new unique air conditioning 
system is tested, the highest production configuration using that 
system shall be the vehicle selected for testing. Air conditioning 
system designs which have similar cooling capacity, component types, 
and control strategies, yet differ in terms of compressor pulley ratios 
or condenser or evaporator surface areas will not be considered to be 
unique system designs. The test results from one unique system design 
may represent all variants of that design. Manufacturers must use good 
engineering judgment to identify the unique air conditioning system 
designs which will require AC17 testing in subsequent model years. 
Results must be reported separately for all four phases (two phases 
with air conditioning off and two phases with air conditioning on) of 
the test to the Environmental Protection Agency, and the results of the 
calculations required in 40 CFR 1066.845 must also be reported. In each 
subsequent model year additional air conditioning system designs, if 
such systems exist, within a vehicle platform that is generating air 
conditioning credits must be tested using the AC17 procedure. When all 
unique air conditioning system designs within a platform have been 
tested, no additional testing is required within that platform, and 
credits may be carried over to subsequent model years until there is a 
significant change in the platform design, at which point a new 
sequence of testing must be initiated. No more than one vehicle from 
each credit-generating platform is required to be tested in each model 
year.
* * * * *
    (g) * * *
    (1) For each air conditioning system (as defined in Sec.  86.1803) 
selected by the manufacturer to generate air conditioning efficiency 
credits, the manufacturer shall perform the AC17 Air Conditioning 
Efficiency Test Procedure specified in 40 CFR 1066.845, according to 
the requirements of this paragraph (g).
* * * * *
    (3) For the first model year for which an air conditioning system 
is expected to generate credits, the manufacturer must select for 
testing the projected highest-selling configuration within each 
combination of vehicle platform and air conditioning system (as those 
terms are defined in Sec.  86.1803). The manufacturer must test at 
least one unique air conditioning system within each vehicle platform 
in a model year, unless all unique air conditioning systems within a 
vehicle platform have been previously tested. A unique air conditioning 
system design is a system with unique or substantially different 
component designs or types and/or system control strategies (e.g., 
fixed-displacement vs. variable displacement compressors, orifice tube 
vs. thermostatic expansion valve, single vs. dual evaporator, etc.). In 
the first year of such testing, the tested vehicle configuration shall 
be the highest production vehicle configuration within each platform.
    In subsequent model years the manufacturer must test other unique 
air conditioning systems within the vehicle platform, proceeding from 
the highest production untested system until all unique air 
conditioning systems within the platform have been tested, or until the 
vehicle platform experiences a major redesign. Whenever a new unique 
air conditioning system is tested, the highest production configuration 
using that system shall be the vehicle selected for testing. Credits 
may continue to be generated by the air conditioning system installed 
in a vehicle platform provided that:
* * * * *
0
73. Section 86.1869-12 is amended by adding introductory text and 
revising paragraphs (b)(2) introductory text, (b)(4)(ii), and (f) to 
read as follows:

Sec.  86.1869-12  CO2 credits for off-cycle CO2-
reducing technologies.

    This section describes how manufacturers may generate credits for 
off-cycle CO2-reducing technologies. The provisions of this 
section do not apply for non-MDPV heavy-duty vehicles, except that 
Sec.  86.1819-14(d)(13) describes how to apply paragraphs (c) and (d) 
this section for those vehicles.
* * * * *
    (b) * * *
    (2) The maximum allowable decrease in the manufacturer's combined 
passenger automobile and light truck fleet average CO2 
emissions attributable

[[Page 40571]]

to use of the default credit values in paragraph (b)(1) of this section 
is 10 grams per mile. If the total of the CO2 g/mi credit 
values from paragraph (b)(1) of this section does not exceed 10 g/mi 
for any passenger automobile or light truck in a manufacturer's fleet, 
then the total off-cycle credits may be calculated according to 
paragraph (f) of this section. If the total of the CO2 g/mi 
credit values from paragraph (b)(1) of this section exceeds 10 g/mi for 
any passenger automobile or light truck in a manufacturer's fleet, then 
the gram per mile decrease for the combined passenger automobile and 
light truck fleet must be determined according to paragraph (b)(2)(i) 
of this section to determine whether the 10 g/mi limitation has been 
exceeded.
* * * * *
    (4) * * *
    (ii) High efficiency exterior lighting means a lighting technology 
that, when installed on the vehicle, is expected to reduce the total 
electrical demand of the exterior lighting system when compared to 
conventional lighting systems. To be eligible for this credit, the high 
efficiency lighting must be installed in one or more of the following 
lighting components: Low beam, high beam, parking/position, front and 
rear turn signals, front and rear side markers, taillights, and/or 
license plate lighting.
* * * * *
    (f) Calculation of total off-cycle credits. Total off-cycle credits 
in Megagrams of CO2 (rounded to the nearest whole number) 
shall be calculated separately for passenger automobiles and light 
trucks according to the following formula:

Total Credits (Megagrams) = (Credit x Production x VLM) / 1,000,000

Where:

Credit = the credit value in grams per mile determined in paragraph 
(b), (c) or (d) of this section.
Production = The total number of passenger automobiles or light 
trucks, whichever is applicable, produced with the off-cycle 
technology to which to the credit value determined in paragraph (b), 
(c), or (d) of this section applies.
VLM = vehicle lifetime miles, which for passenger automobiles shall 
be 195,264 and for light trucks shall be 225,865.

0
74. Section 86.1870-12 is amended by revising the section heading, 
introductory text, and paragraph (a) introductory text and adding 
paragraph (a)(3) to read as follows:

Sec.  86.1870-12  CO2 credits for qualifying full-size light 
pickup trucks.

    Full-size pickup trucks may be eligible for additional credits 
based on the implementation of hybrid technologies or on exhaust 
emission performance, as described in this section. Credits may be 
generated under either paragraph (a) or (b) of this section for a 
qualifying pickup truck, but not both. The provisions of this section 
do not apply for heavy-duty vehicles.
    (a) Credits for implementation of hybrid electric technology. Full 
size pickup trucks that implement hybrid electric technologies may be 
eligible for an additional credit under this paragraph (a). Pickup 
trucks earning the credits under this paragraph (a) may not earn the 
credits described in paragraph (b) of this section. To claim this 
credit, the manufacturer must measure the recovered energy over the 
Federal Test Procedure according to 40 CFR 600.116-12(d) to determine 
whether a vehicle is a mild or strong hybrid electric vehicle. To 
provide for EPA testing, the vehicle must be able to broadcast battery 
pack voltage via an on-board diagnostics parameter ID channel.
* * * * *
    (3) If you produce both mild and strong hybrid electric full size 
pickup trucks but do not qualify for credits under paragraph (a)(1) or 
(2) of this section, your hybrid electric full size pickup trucks may 
be eligible for a credit of 10 grams/mile. To receive this credit in a 
given model year, you must produce a quantity of hybrid electric full 
size pickup trucks such that the proportion of combined mild and strong 
full size hybrid electric pickup trucks produced in a model year, when 
compared to your total production of full size pickup trucks, is not 
less than the required minimum percentages specified in paragraph 
(a)(1) of this section.
* * * * *
0
75. Section 86.1871-12 is amended by revising the introductory text and 
paragraphs (a) introductory text, (b)(1), and (d) to read as follows:

Sec.  86.1871-12  Optional early CO2 credit programs.

    Manufacturers may optionally generate CO2 credits in the 
2009 through 2011 model years for use in the 2012 and later model years 
subject to EPA approval and to the provisions of this section. The 
provisions of Sec.  86.1819-14(j)(1) apply instead of the provisions of 
this section for non-MDPV heavy-duty vehicles. Manufacturers may 
generate early fleet average credits, air conditioning leakage credits, 
air conditioning efficiency credits, early advanced technology credits, 
and early off-cycle technology credits. Manufacturers generating any 
credits under this section must submit an early credits report to the 
Administrator as required in this section. The terms ``sales'' and 
``sold'' as used in this section shall mean vehicles produced for U.S. 
sale, where ``U.S.'' means the states and territories of the United 
States. The expiration date of unused CO2 credits is based 
on the model year in which the credits are earned, as described in 
Sec.  86.1865-12(k)(6).
    (a) Early fleet average CO2 reduction credits. Manufacturers may 
optionally generate credits for reductions in their fleet average 
CO2 emissions achieved in the 2009 through 2011 model years. 
To generate early fleet average CO2 reduction credits, 
manufacturers must select one of the four pathways described in 
paragraphs (a)(1) through (4) of this section. The manufacturer may 
select only one pathway, and that pathway must remain in effect for the 
2009 through 2011 model years. Fleet average credits (or debits) must 
be calculated and reported to EPA for each model year under each 
selected pathway.
* * * * *
    (b) Early air conditioning leakage and efficiency credits. (1) 
Manufacturers may optionally generate air conditioning refrigerant 
leakage credits according to the provisions of Sec.  86.1867 and/or air 
conditioning efficiency credits according to the provisions of Sec.  
86.1868 in model years 2009 through 2011. Credits must be tracked by 
model type and model year.
* * * * *
    (d) Early off-cycle technology credits. Manufacturers may 
optionally generate credits for the implementation of certain 
CO2-reducing technologies according to the provisions of 
Sec.  86.1869 in model years 2009 through 2011. Credits must be tracked 
by model type and model year.
* * * * *

Subpart T--Manufacturer-Run In-Use Testing Program for Heavy-Duty 
Diesel Engines

0
76. Section 86.1910 is amended by revising paragraph (i) to read as 
follows:

Sec.  86.1910  How must I prepare and test my in-use engines?

* * * * *
    (i) You may count a vehicle as meeting the vehicle-pass criteria 
described in Sec.  86.1912 if a shift day of testing or two-shift days 
of testing (with the requisite non-idle/idle operation time as in 
paragraph (g) of this section), or if the extended testing you elected 
under paragraph (h) of this section does not generate a single valid 
NTE sampling event, as described in Sec.  86.1912(b). Count the vehicle 
towards

[[Page 40572]]

meeting your testing requirements under this subpart.
* * * * *
0
77. Section 86.1912 is revised to read as follows:

Sec.  86.1912  How do I determine whether an engine meets the vehicle-
pass criteria?

    In general, the average emissions for each regulated pollutant must 
remain at or below the NTE threshold in paragraph (a) of this section 
for at least 90 percent of the valid NTE sampling events, as defined in 
paragraph (b) of this section. For 2007 through 2009 model year 
engines, the average emissions from every NTE sampling event must also 
remain below the NTE thresholds in paragraph (g)(2) of this section. 
Perform the following steps to determine whether an engine meets the 
vehicle-pass criteria:
    (a) Determine the NTE threshold for each pollutant subject to an 
NTE standard by adding all three of the following terms and rounding 
the result to the same number of decimal places as the applicable NTE 
standard:
    (1) The applicable NTE standard.
    (2) The in-use compliance testing margin specified in Sec.  86.007-
11(h), if any.
    (3) An accuracy margin for portable in-use equipment when testing 
is performed under the special provisions of Sec.  86.1930, depending 
on the pollutant, as follows:
    (i) NMHC: 0.17 g/hp[middot]hr.
    (ii) CO: 0.60 g/hp[middot]hr.
    (iii) NOX: 0.50 g/hp[middot]hr.
    (iv) PM: 0.10 g/hp[middot]hr.
    (v) NOX + NMHC: 0.67 g/hp[middot]hr.
    (4) Accuracy margins for portable in-use equipment when testing is 
not performed under the special provisions of Sec.  86.1930 for 2007 
through 2009 model year engine families that are selected for testing 
in any calendar year as follows:
    (i) NMHC using the emission calculation method specified in 40 CFR 
1065.650(a)(1): 0.02 g/hp[middot]hr.
    (ii) NMHC using the emission calculation method specified in 40 CFR 
1065.650(a)(3): 0.01 g/hp[middot]hr.
    (iii) NMHC using an alternative emission calculation method we 
approve under 40 CFR 1065.915(d)(5)(iv): 0.01 g/hp[middot]hr.
    (iv) CO using the emission calculation method specified in 40 CFR 
1065.650(a)(1): 0.5 g/hp[middot]hr.
    (v) CO using the emission calculation method specified in 40 CFR 
1065.650(a)(3): 0.25 g/hp[middot]hr.
    (vi) CO using an alternative emission calculation method we approve 
under 40 CFR 1065.915(d)(5)(iv): 0.25 g/hp[middot]hr.
    (vii) NOX using the emission calculation method 
specified in 40 CFR 1065.650(a)(1): 0.45 g/hp[middot]hr.
    (viii) NOX using the emission calculation method 
specified in 40 CFR 1065.650(a)(3): 0.15 g/hp[middot]hr.
    (ix) NOX using an alternative emission calculation 
method we approve under 40 CFR 1065.915(d)(5)(iv): 0.15 g/hp[middot]hr.
    (x) NOX + NMHC using the emission calculation method 
specified in 40 CFR 1065.650(a)(1): 0.47 g/hp[middot]hr.
    (xi) NOX + NMHC using the emission calculation method 
specified in 40 CFR 1065.650(a)(3): 0.16 g/hp[middot]hr.
    (xii) NOX + NMHC using an alternative emission 
calculation method we approve under 40 CFR 1065.915(d)(5)(iv): 0.16 g/
hp[middot]hr.
    (xiii) PM: 0.006 g/hp[middot]hr.
    (5) Accuracy margins for portable in-use equipment when testing is 
not performed under the special provisions of Sec.  86.1930 for 2010 or 
later model year engines families that are selected for testing in any 
calendar year as follows:
    (i) NMHC using any emission calculation method specified in 40 CFR 
1065.650(a) or an alternative emission calculation method we approve 
under 40 CFR 1065.915(d)(5)(iv): 0.01 g/hp[middot]hr.
    (ii) CO using any emission calculation method specified in 40 CFR 
1065.650(a) or an alternative emission calculation method we approve 
under 40 CFR 1065.915(d)(5)(iv): 0.25 g/hp[middot]hr.
    (iii) NOX using any emission calculation method 
specified in 40 CFR 1065.650(a) or an alternative emission calculation 
method we approve under 40 CFR 1065.915(d)(5)(iv): 0.15 g/hp[middot]hr.
    (iv) PM: 0.006 g/hp[middot]hr.
    (b) For the purposes of this subpart, a valid NTE sampling event 
consists of at least 30 seconds of continuous operation in the NTE 
control area. An NTE event begins when the engine starts to operate in 
the NTE control area and continues as long as engine operation remains 
in this area (see Sec.  86.1370). When determining a valid NTE sampling 
event, exclude all engine operation in approved NTE limited testing 
regions under Sec.  86.1370-2007(b)(6) and any approved NTE 
deficiencies under Sec.  86.007-11(a)(4)(iv). Engine operation in the 
NTE control area of less than 30 contiguous seconds does not count as a 
valid NTE sampling event; operating periods of less than 30 seconds in 
the NTE control area, but outside of any allowed deficiency area or 
limited testing region, will not be added together to make a 30 second 
or longer event. Exclude any portion of a sampling event that would 
otherwise exceed the 5.0 percent limit for the time-weighted carve-out 
defined in Sec.  86.1370-2007(b)(7). For EGR-equipped engines, exclude 
any operation that occurs during the cold-temperature operation defined 
by the equations in Sec.  86.1370-2007(f)(1).
    (c) Calculate the average emission level for each pollutant over 
each valid NTE sampling event as specified in 40 CFR part 1065, subpart 
G, using each NTE event as an individual test interval. This should 
include valid NTE events from all days of testing.
    (d) If the engine has an open crankcase, account for these 
emissions by adding 0.00042 g/hp[middot]hr to the PM emission result 
for every NTE event.
    (e) Calculate a time-weighted vehicle-pass ratio (Rpass) 
for each pollutant. To do this, first sum the time from each valid NTE 
sampling event whose average emission level is at or below the NTE 
threshold for that pollutant, then divide this value by the sum of the 
engine operating time from all valid NTE events for that pollutant. 
Round the resulting vehicle-pass ratio to two decimal places.
    (1) Calculate the time-weighted vehicle-pass ratio for each 
pollutant as follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.023

Where:

npass = the number of valid sampling events for which the 
average emission level is at or below the NTE threshold.
ntotal = the total number of valid NTE sampling events.

    (2) For both the numerator and the denominator of the vehicle-pass 
ratio, use the smallest of the following values for determining the 
duration, t, of any NTE sampling event:
    (i) The measured time in the NTE zone that is valid for an NTE 
sampling event.
    (ii) 600 seconds.
    (iii) 10 times the length of the shortest valid NTE sampling event 
for all testing with that engine.
    (f) The following example illustrates how to select the duration of 
NTE sampling events for calculations, as described in paragraph (f) of 
this section:

[[Page 40573]]

----------------------------------------------------------------------------------------------------------------
                                                                                               Duration used  in
               NTE sample                 Duration of  NTE       Duration limit applied?          calculations
                                         sample  (seconds)                                         (seconds)
----------------------------------------------------------------------------------------------------------------
1......................................                 45  No...............................                 45
2......................................                168  No...............................                168
3......................................                605  Yes. Use 10 times shortest valid                 450
                                                             NTE.
4......................................                490  Yes. Use 10 times shortest valid                 450
                                                             NTE.
5......................................                 65  No...............................                 65
----------------------------------------------------------------------------------------------------------------

    (g) Engines meet the vehicle-pass criteria under this section if 
they meet both of the following criteria:
    (1) The vehicle-pass ratio calculated according to paragraph (e) of 
this section must be at least 0.90 for each pollutant.
    (2) For model year 2007 through 2009 engines, emission levels from 
every valid NTE sampling event must be less than 2.0 times the NTE 
thresholds calculated according to paragraph (a) of this section for 
all pollutants, except that engines certified to a NOX FEL 
at or below 0.50 g/hp[middot]hr may meet the vehicle-pass criteria for 
NOX if measured NOX emissions from every valid 
NTE sample are less than either 2.0 times the NTE threshold for 
NOX or 2.0 g/hp[middot]hr, whichever is greater.
0
78. Section 86.1920 is amended by revising paragraph (b) introductory 
text to read as follows:

Sec.  86.1920  What in-use testing information must I report to EPA?

* * * * *
    (b) Within 45 days after the end of each calendar quarter, send us 
reports containing the test data from each engine for which testing was 
completed during the calendar quarter. Alternatively, you may 
separately send us the test data within 30 days after you complete 
testing for an engine. If you request it, we may allow additional time 
to send us this information. Once you send us information under this 
section, you need not send that information again in later reports. 
Prepare your test reports as follows:
* * * * *

Appendix I to Part 86--[Amended]

0
79. Appendix I to part 86 is amended by removing paragraph (f)(3).

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

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

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

Subpart A--General Provisions

0
81. Section 600.002 is amended by revising the definitions for ``Engine 
code'', ``Subconfiguration'', ``Transmission class'', and ``Vehicle 
configuration'' to read as follows:

Sec.  600.002  Definitions.

* * * * *
    Engine code means one of the following:
    (1) For LDV, LDT, and MDPV, engine code means a unique combination, 
within an engine-system combination (as defined in Sec.  86.1803 of 
this chapter), of displacement, fuel injection (or carburetion or other 
fuel delivery system), calibration, distributor calibration, choke 
calibration, auxiliary emission control devices, and other engine and 
emission control system components specified by the Administrator. For 
electric vehicles, engine code means a unique combination of 
manufacturer, electric traction motor, motor configuration, motor 
controller, and energy storage device.
    (2) For HDV, engine code has the meaning given in Sec.  86.1819-
14(d)(12).
* * * * *
    Subconfiguration means one of the following:
    (1) For LDV, LDT, and MDPV, subconfiguration means a unique 
combination within a vehicle configuration of equivalent test weight, 
road-load horsepower, and any other operational characteristics or 
parameters which the Administrator determines may significantly affect 
fuel economy or CO2 emissions within a vehicle 
configuration.
    (2) For HDV, subconfiguration has the meaning given in Sec.  
86.1819-14(d)(12).
* * * * *
    Transmission class means a group of transmissions having the 
following common features: Basic transmission type (e.g., automatic, 
manual, automated manual, semi-automatic, or continuously variable); 
number of forward gears used in fuel economy testing (e.g., manual 
four-speed, three-speed automatic, two-speed semi-automatic); drive 
system (e.g., front wheel drive, rear wheel drive; four wheel drive), 
type of overdrive, if applicable (e.g., final gear ratio less than 
1.00, separate overdrive unit); torque converter type, if applicable 
(e.g., non-lockup, lockup, variable ratio); and other transmission 
characteristics that may be determined to be significant by the 
Administrator.
* * * * *
    Vehicle configuration means one of the following:
    (1) For LDV, LDT, and MDPV, vehicle configuration means a unique 
combination of basic engine, engine code, inertia weight class, 
transmission configuration, and axle ratio within a base level.
    (2) For HDV, vehicle configuration has the meaning given for 
``configuration'' in Sec.  86.1819-14(d)(12).

Subpart B--Fuel Economy and Carbon-Related Exhaust Emission Test 
Procedures

0
82. Section 600.113-12 is amended by revising paragraphs (m), (n) 
introductory text, (n)(2), and (n)(3) and adding paragraph (o) to read 
as follows:

Sec.  600.113-12  Fuel economy, CO2 emissions, and carbon-
related exhaust emission calculations for FTP, HFET, US06, SC03 and 
cold temperature FTP tests.

* * * * *
    (m)(1) For automobiles fueled with liquefied petroleum gas and 
automobiles designed to operate on gasoline and liquefied petroleum 
gas, the fuel economy in miles per gallon of liquefied petroleum gas is 
to be calculated using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.024

[[Page 40574]]

Where:

mpge = miles per gasoline gallon equivalent of liquefied 
petroleum gas.
CWFfuel = carbon weight fraction based on the hydrocarbon 
constituents in the liquefied petroleum gas fuel as obtained in 
paragraph (f)(5) of this section and rounded according to paragraph 
(g)(3) of this section.
SG = Specific gravity of the fuel as determined in paragraph (f)(5) 
of this section and rounded according to paragraph (g)(3) of this 
section.
3781.8 = Grams of H2O per gallon conversion factor.
CWFHC = Carbon weight fraction of exhaust hydrocarbon = 
CWFfuel as determined in paragraph (f)(4) of this section 
and rounded according to paragraph (f)(3) of this section.
HC = Grams/mile HC as obtained in paragraph (g)(2) of this section.
CO = Grams/mile CO as obtained in paragraph (g)(2) of this section.
CO2 = Grams/mile CO2 as obtained in paragraph 
(g)(2) of this section.

    (2)(i) For automobiles fueled with liquefied petroleum gas and 
automobiles designed to operate on gasoline and liquefied petroleum 
gas, the carbon-related exhaust emissions in grams per mile while 
operating on liquefied petroleum gas is to be calculated for 2012 and 
later model year vehicles using the following equation and rounded to 
the nearest 1 gram per mile:

CREE = (CWFHC/0.273 x HC) + (1.571 x CO) + CO2

Where:

CREE means the carbon-related exhaust emission value as defined in 
Sec.  600.002.
CWFHC = Carbon weight fraction of exhaust hydrocarbon = 
CWFfuel as determined in paragraph (f)(5) of this section 
and rounded according to paragraph (g)(3) of this section.
HC = Grams/mile HC as obtained in paragraph (g)(2) of this section.
CO = Grams/mile CO as obtained in paragraph (g)(2) of this section.
CO2 = Grams/mile CO2 as obtained in paragraph 
(g)(2) of this section.

    (ii) For manufacturers complying with the fleet averaging option 
for N2O and CH4 as allowed under Sec.  86.1818 of 
this chapter, the carbon-related exhaust emissions in grams per mile 
for 2012 and later model year automobiles fueled with liquefied 
petroleum gas and automobiles designed to operate on mixtures of 
gasoline and liquefied petroleum gas while operating on liquefied 
petroleum gas is to be calculated using the following equation and 
rounded to the nearest 1 gram per mile:

CREE = [(CWFexHC/0.273) x NMHC] + (1.571 x CO) + 
CO2 + (298 x N2O) + (25 x CH4)

Where:

CREE means the carbon-related exhaust emission value as defined in 
Sec.  600.002.
CWFHC = Carbon weight fraction of exhaust hydrocarbon = 
CWFfuel as determined in paragraph (f)(5) of this section 
and rounded according to paragraph (g)(3) of this section.
NMHC = Grams/mile HC as obtained in paragraph (g)(2) of this 
section.
CO = Grams/mile CO as obtained in paragraph (g)(2) of this section.
CO2 = Grams/mile CO2 as obtained in paragraph 
(g)(2) of this section.
N2O = Grams/mile N2O as obtained in paragraph 
(g)(2) of this section.
CH4 = Grams/mile CH4 as obtained in paragraph 
(g)(2) of this section.

    (n) Manufacturers shall determine CO2 emissions and 
carbon-related exhaust emissions for electric vehicles, fuel cell 
vehicles, and plug-in hybrid electric vehicles according to the 
provisions of this paragraph (n). Subject to the limitations on the 
number of vehicles produced and delivered for sale as described in 
Sec.  86.1866 of this chapter, the manufacturer may be allowed to use a 
value of 0 grams/mile to represent the emissions of fuel cell vehicles 
and the proportion of electric operation of a electric vehicles and 
plug-in hybrid electric vehicles that is derived from electricity that 
is generated from sources that are not onboard the vehicle, as 
described in paragraphs (n)(1) through (3) of this section. For 
purposes of labeling under this part, the CO2 emissions for 
electric vehicles shall be 0 grams per mile. Similarly, for purposes of 
labeling under this part, the CO2 emissions for plug-in 
hybrid electric vehicles shall be 0 grams per mile for the proportion 
of electric operation that is derived from electricity that is 
generated from sources that are not onboard the vehicle. For 
manufacturers no longer eligible to use 0 grams per mile to represent 
electric operation, and for all 2026 and later model year electric 
vehicles, fuel cell vehicles, and plug-in hybrid electric vehicles, the 
provisions of this paragraph (n) shall be used to determine the non-
zero value for CREE for purposes of meeting the greenhouse gas emission 
standards described in Sec.  86.1818 of this chapter.
* * * * *
    (2) For plug-in hybrid electric vehicles the carbon-related exhaust 
emissions in grams per mile is to be calculated according to the 
provisions of Sec.  600.116, except that the CREE for charge-depleting 
operation shall be the sum of the CREE associated with gasoline 
consumption and the net upstream CREE determined according to paragraph 
(n)(1) of this section, rounded to the nearest one gram per mile.
    (3) For 2012 and later model year fuel cell vehicles, the carbon-
related exhaust emissions in grams per mile shall be calculated using 
the method specified in paragraph (n)(1) of this section, except that 
CREEUP shall be determined according to procedures 
established by the Administrator under Sec.  600.111-08(f). As 
described in Sec.  86.1866 of this chapter the value of CREE may be set 
equal to zero for a certain number of 2012 through 2025 model year fuel 
cell vehicles.
    (o) Equations for fuels other than those specified in this section 
may be used with advance EPA approval. Alternate calculation methods 
for fuel economy and carbon-related exhaust emissions may be used in 
lieu of the methods described in this section if shown to yield 
equivalent or superior results and if approved in advance by the 
Administrator.
0
83. Section 600.116-12 is amended as follows:
0
a. By revising paragraph (c)(1) introductory text.
0
b. By redesignating paragraphs (c)(2) through (9) as paragraphs (c)(3) 
through (10), respectively.
0
c. By adding a new paragraph (c)(2).
0
d. By revising newly redesignated paragraph (c)(4).
0
e. By revising newly redesignated paragraph (c)(5) introductory text.
0
f. By revising paragraphs (d)(1)(i)(C), (d)(1)(ii), (d)(2)(ii), and 
(d)(3).
    The revisions and addition read as follows:

Sec.  600.116-12  Special procedures related to electric vehicles and 
hybrid electric vehicles.

* * * * *
    (c) * * *
    (1) To determine CREE values to demonstrate compliance with GHG 
standards, calculate composite values representing combined operation 
during charge-depleting and charge-sustaining operation using the 
following utility factors except as specified in this paragraph (c):
* * * * *
    (2) Determine fuel economy values to demonstrate compliance with 
CAFE standards as follows:
    (i) For vehicles that do not qualify as dual fueled automobiles 
under 49 CFR 538.5, determine fuel economy using the utility factors 
described in paragraph (c)(1) of this section. Do not use the 
petroleum-equivalence factors described in 10 CFR 474.3.
    (ii) For vehicles that qualify as dual fueled automobiles under 49 
CFR 538.5, determine fuel economy based on the procedure described in 
paragraph (c)(2)(i) of this section, or based on the

[[Page 40575]]

following equation, separately for city and highway driving:
[GRAPHIC] [TIFF OMITTED] TP13JY15.025

Where:

MPGgas = The miles per gallon measured while operating on 
gasoline during charge-sustaining operation as determined using the 
procedures of SAE J1711 (incorporated by reference in Sec.  
600.011).
MPGeelec = The miles per gallon equivalent measured while 
operating on electricity.

    Calculate this value by dividing the equivalent all-electric range 
determined from the equation in Sec.  86.1866-12(b)(2)(ii) by the 
corresponding measured Watt-hours of energy consumed; apply the 
appropriate petroleum-equivalence factor from 10 CFR 474.3 to convert 
Watt-hours to gallons equivalent. Note that if vehicles use no gasoline 
during charge-depleting operation, MPGeelec is the same as 
the charge-depleting fuel economy specified in SAE J1711.
* * * * *
    (4) You may calculate performance values under paragraphs (c)(1) 
through (3) of this section by combining phases during FTP testing. For 
example, you may treat the first 7.45 miles as a single phase by adding 
the individual utility factors for that portion of driving and 
assigning emission levels to the combined phase. Do this consistently 
throughout a test run.
    (5) Instead of the utility factors specified in paragraphs (c)(1) 
through (3) of this section, calculate utility factors using the 
following equation for vehicles whose maximum speed is less than the 
maximum speed specified in the driving schedule, where the vehicle's 
maximum speed is determined, to the nearest 0.1 mph, from observing the 
highest speed over the first duty cycle (FTP, HFET, etc.):
* * * * *
    (d) * * *
    (1) * * *
    (i) * * *
    (C) Determine braking power in kilowatts using the following 
equation. Note that during braking events, Pbrake, 
Paccel, and Proadload will all be negative (i.e., 
resistive) forces on the vehicle.

Pbrake = Paccel-Proadload

Where:

Paccel = the value determined in paragraph (d)(1)(i)(B) 
of this section;
Proadload = the value determined in paragraph 
(d)(1)(i)(A) of this section; and
Pbrake = 0 if Paccel is greater than or equal 
to Proadload.

    (ii) The total maximum braking energy (Ebrake) that 
could theoretically be recovered is equal to the absolute value of the 
sum of all the values of Pbrake determined in paragraph 
(d)(1)(i)(C) of this section, divided by 36000 (to convert 10 Hz data 
to hours) and rounded to the nearest 0.01 kilowatt-hours.
    (2) * * *
    (ii) At each sampling point where current is flowing into the 
battery, calculate the energy flowing into the battery, in Watt-hours, 
as follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.026

Where:

Et = the energy flowing into the battery, in Watt-hours, 
at time t in the test;
It = the electrical current, in Amps, at time t in the 
test; and
Vnominal = the nominal voltage of the hybrid battery 
system determined according to paragraph (d)(4) of this section.
* * * * *
    (3) The percent of braking energy recovered by a hybrid system 
relative to the total available energy is determined by the following 
equation, rounded to the nearest one percent:
[GRAPHIC] [TIFF OMITTED] TP13JY15.027

Where:

Erec = The actual total energy recovered, in kilowatt-
hours, as determined in paragraph (d)(2) of this section; and
Ebrake = The theoretical maximum amount of energy, in 
kilowatt-hours, that could be recovered by a hybrid electric vehicle 
over the FTP test cycle, as determined in paragraph (d)(1) of this 
section.
* * * * *

Subpart C--Procedures for Calculating Fuel Economy and Carbon-
Related Exhaust Emission Values

0
84. Section 600.208-12 is amended by revising paragraph (a)(2)(iii) to 
read as follows:

Sec.  600.208-12  Calculation of FTP-based and HFET-based fuel economy, 
CO2 emissions, and carbon-related exhaust emissions for a 
model type.

    (a) * * *
    (2) * * *
    (iii) All subconfigurations within the new base level are 
represented by test data in accordance with Sec.  600.010(c)(1)(iii).
* * * * *
0
85. Section 600.210-12 is amended by revising paragraph (c)(2)(iv)(C) 
to read as follows:

Sec.  600.210-12  Calculation of fuel economy and CO2 
emission values for labeling.

* * * * *
    (c) * * *
    (2) * * *
    (iv) * * *
    (C) Calculate a composite city CO2 emission rate and a 
composite highway CO2 emission rate by combining the 
separate results for battery and engine operation using the procedures 
described in Sec.  600.116. Use these values to calculate the vehicle's 
combined CO2 emissions as described in paragraph (c)(2)(i) 
of this section.
* * * * *

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

0
86. Section 600.510-12 is amended by revising paragraph (h) to read as 
follows:

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

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

------------------------------------------------------------------------
                                                               Maximum
                         Model year                            increase
                                                                (mpg)
------------------------------------------------------------------------
1993-2014..................................................          1.2
2015.......................................................          1.0
2016.......................................................          0.8
2017.......................................................          0.6
2018.......................................................          0.4
2019.......................................................          0.2
2020 and later.............................................          0.0
------------------------------------------------------------------------

    (1) The Administrator shall calculate the increase in average fuel 
economy to determine if the maximum increase provided in this paragraph 
(h) has been reached. The Administrator shall calculate the increase in 
average fuel economy for each category of automobiles specified in 
paragraph (a)(1) of this section by subtracting the average fuel 
economy values calculated in accordance with this section, assuming all 
alcohol dual fuel automobiles are operated exclusively on

[[Page 40576]]

gasoline (or diesel fuel), from the average fuel economy values 
determined in paragraph (c) of this section. The difference is limited 
to the maximum increase specified in this paragraph (h).
    (2) [Reserved]
* * * * *

PART 1033--CONTROL OF EMISSIONS FROM LOCOMOTIVES

0
87. The authority citation for part 1033 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart A--Overview and Applicability

0
88. Section 1033.1 is amended by revising paragraph (e) to read as 
follows:

Sec.  1033.1  Applicability.

* * * * *
    (e) The provisions of this part apply as specified for locomotives 
manufactured or remanufactured on or after July 7, 2008. See Sec.  
1033.102 to determine whether the standards of this part or the 
standards specified in Appendix I of this part apply for model years 
2008 through 2012. For example, for a locomotive that was originally 
manufactured in 2007 and remanufactured on April 10, 2014, the 
provisions of this part begin to apply on April 10, 2014.
0
89. Section 1033.30 is revised to read as follows:

Sec.  1033.30  Submission of information.

    Unless we specify otherwise, send all reports and requests for 
approval to the Designated Compliance Officer (see Sec.  1033.901). See 
Sec.  1033.925 for additional reporting and recordkeeping provisions.

Subpart B--Emission Standards and Related Requirements

0
90. Section 1033.101 is amended by revising paragraphs (f)(1)(ii) and 
(f)(2)(i) and (iii) to read as follows:

Sec.  1033.101  Exhaust emission standards.

* * * * *
    (f) * * *
    (1) * * *
    (ii) Gaseous-fueled locomotives: NMHC emissions. This includes 
dual-fuel and flexible-fuel locomotives that use a combination of a 
gaseous fuel and a nongaseous fuel.
* * * * *
    (2) * * *
    (i) Certify your Tier 4 and later diesel-fueled locomotives for 
operation with only Ultra Low Sulfur Diesel (ULSD) fuel. Use ULSD as 
the test fuel for these locomotives. You may alternatively certify Tier 
4 and later locomotives using Low Sulfur Diesel Fuel (LSD).
* * * * *
    (iii) Certify your Tier 3 and earlier diesel-fueled locomotives for 
operation with either ULSD fuel or LSD fuel if they do not include 
sulfur-sensitive technology or if you demonstrate compliance using an 
LSD test fuel (including commercial LSD fuel).
* * * * *
0
91. Section 1033.102 is revised to read as follows:

Sec.  1033.102  Transition to the standards specified in this subpart.

    (a) Except as specified in Sec.  1033.150(a), the Tier 0 and Tier 1 
standards of Sec.  1033.101 apply for new locomotives beginning January 
1, 2010, except as specified in Sec.  1033.150(a). The Tier 0 and Tier 
1 standards specified in Appendix I of this part apply for earlier 
model years.
    (b) Except as specified in Sec.  1033.150(a), the Tier 2 standards 
of Sec.  1033.101 apply for new locomotives beginning January 1, 2013. 
The Tier 2 standards specified in Appendix I of this part apply for 
earlier model years.
    (c) The Tier 3 and Tier 4 standards of Sec.  1033.101 apply for the 
model years specified in that section.
0
92. Section 1033.120 is amended by revising paragraph (b) to read as 
follows:

Sec.  1033.120  Emission-related warranty requirements.

* * * * *
    (b) Warranty period. Except as specified in this paragraph, the 
minimum warranty period is one-third of the useful life. Your emission-
related warranty must be valid for at least as long as the minimum 
warranty periods listed in this paragraph (b) in MW-hrs of operation 
(or miles for Tier 0 locomotives not equipped with MW-hr meters) and 
years, whichever comes first. You may offer an emission-related 
warranty more generous than we require. The emission-related warranty 
for the locomotive may not be shorter than any basic mechanical 
warranty you provide without charge for the locomotive. Similarly, the 
emission-related warranty for any component may not be shorter than any 
warranty you provide without charge for that component. This means that 
your warranty may not treat emission-related and nonemission-related 
defects differently for any component. If you provide an extended 
warranty to individual owners for any components covered in paragraph 
(c) of this section for an additional charge, your emission-related 
warranty must cover those components for those owners to the same 
degree. If the locomotive does not record MW-hrs, we base the warranty 
periods in this paragraph (b) only on years. The warranty period begins 
when the locomotive is placed into service, or back into service after 
remanufacture.
* * * * *
0
93. Section 1033.1135 is amended by revising paragraph (b)(3) to read 
as follows:

Sec.  1033.135  Labeling.

* * * * *
    (b) * * *
    (3) Label diesel-fueled locomotives near the fuel inlet to identify 
the allowable fuels, consistent with Sec.  1033.101. For example, Tier 
4 locomotives with sulfur sensitive technology (or that otherwise 
require ULSD for compliance) should be labeled ``ULTRA LOW SULFUR 
DIESEL FUEL ONLY''. You do not need to label Tier 3 and earlier 
locomotives certified for use with both LSD and ULSD.
* * * * *

Subpart C--Certifying Engine Families

0
94. Section 1033.201 is amended by revising paragraphs (a) and (g) to 
read as follows:

Sec.  1033.201  General requirements for obtaining a certificate of 
conformity.

* * * * *
    (a) You must send us a separate application for a certificate of 
conformity for each engine family. A certificate of conformity is valid 
for new production from the indicated effective date, until the end of 
the model year for which it is issued, which may not extend beyond 
December 31 of that year. No certificate will be issued after December 
31 of the model year. You may amend your application for certification 
after the end of the model year in certain circumstances as described 
in Sec. Sec.  1033.220 and 1033.225. You must renew your certification 
annually for any locomotives you continue to produce.
* * * * *
    (g) We may require you to deliver your test locomotives (including 
test engines, as applicable) to a facility we designate for our testing 
(see Sec.  1033.235(c)). Alternatively, you may choose to deliver 
another engine/locomotive that is identical in all material respects to 
the test locomotive, or another engine/locomotive that we determine can 
appropriately serve as an emission-data locomotive for the engine 
family.
* * * * *
0
95. Section 1033.225 is amended by revising the introductory text and

[[Page 40577]]

adding paragraph (b)(4) to read as follows:

Sec.  1033.225  Amending applications for certification.

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified locomotive configurations, 
subject to the provisions of this section. After we have issued your 
certificate of conformity, but before the end of the model year, you 
may send us an amended application requesting that we include new or 
modified locomotive configurations within the scope of the certificate, 
subject to the provisions of this section. Before the end of the model 
year, you must also amend your application if any changes occur with 
respect to any information that is included or should be included in 
your application. For example, you must amend your application if you 
determine that your actual production variation for an adjustable 
parameter exceeds the tolerances specified in your application. After 
the end of the model year, you may amend your application only to 
update maintenance instructions as described in Sec.  1033.220 or to 
modify an FEL as described in paragraph (f) of this section.
* * * * *
    (b) * * *
    (4) Include any other information needed to make your application 
correct and complete.
* * * * *
0
96. Section 1033.235 is amended by revising paragraphs (b), (c)(4), and 
(d)(1) to read as follows:

Sec.  1033.235  Emission testing required for certification.

* * * * *
    (b) Test your emission-data locomotives using the procedures and 
equipment specified in subpart F of this part. In the case of dual-fuel 
locomotives, measure emissions when operating with each type of fuel 
for which you intend to certify the locomotive. In the case of 
flexible-fuel locomotives, measure emissions when operating with the 
fuel mixture that best represents in-use operation or is most likely to 
have the highest NOX emissions, though you may ask us 
instead to perform tests with both fuels separately if you can show 
that intermediate mixtures are not likely to occur in use.
    (c) * * *
    (4) Before we test one of your locomotives, we may calibrate it 
within normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply for a parameter 
that is subject to production variability because it is adjustable 
during production, but is not considered an adjustable parameter (as 
defined in Sec.  1033.901) because it is permanently sealed.
    (d) * * *
    (1) The engine family from the previous model year differs from the 
current engine family only with respect to model year, items identified 
in Sec.  1033.225(a), or other factors not related to emissions. We may 
waive this criterion for differences we determine not to be relevant.
* * * * *
0
97. Section 1033.245 is amended by revising the introductory text and 
paragraph (b) introductory text and adding paragraphs (b)(3) through 
(5) to read as follows:

Sec.  1033.245  Deterioration factors.

    Establish deterioration factors for each pollutant to determine 
whether your locomotives will meet emission standards for each 
pollutant throughout the useful life, as described in Sec.  1033.240. 
Determine deterioration factors as described in this section, either 
with an engineering analysis, with pre-existing test data, or with new 
emission measurements. The deterioration factors are intended to 
reflect the deterioration expected to result during the useful life of 
a locomotive maintained as specified in Sec.  1033.125. If you perform 
durability testing, the maintenance that you may perform on your 
emission-data locomotive is limited to the maintenance described in 
Sec.  1033.125. You may carry across a deterioration factor from one 
engine family to another consistent with good engineering judgment.
* * * * *
    (b) Apply deterioration factors as follows:
* * * * *
    (3) Sawtooth deterioration patterns. The deterioration factors 
described in paragraphs (b)(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 (b)(3) 
apply where good engineering judgment indicates that the highest 
emissions over the useful life 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. Base deterioration factors 
for locomotives with such emission patterns on the difference between 
(or ratio of) the point of the sawtooth 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.
    (4) Dual-fuel and flexible-fuel engines. In the case of dual-fuel 
and flexible-fuel locomotives, apply deterioration factors separately 
for each fuel type by measuring emissions with each fuel type at each 
test point. You may accumulate service hours on a single emission-data 
engine using the type of fuel or the fuel mixture expected to have the 
highest combustion and exhaust temperatures; you may ask us to approve 
a different fuel mixture if you demonstrate that a different criterion 
is more appropriate.
    (5) Deterioration factor for crankcase emissions. If your engine 
vents crankcase emissions to the exhaust or to the atmosphere, you must 
account for crankcase emission deterioration, using good engineering 
judgment. You may use separate deterioration factors for crankcase 
emissions of each pollutant (either multiplicative or additive) or 
include the effects in combined deterioration factors that include 
exhaust and crankcase emissions together for each pollutant.
* * * * *
0
98. Section 1033.250 is amended by revising paragraphs (b)(3)(iv) and 
(c) to read as follows:

Sec.  1033.250  Reporting and recordkeeping.

* * * * *
    (b) * * *
    (3) * * *
    (iv) All your emission tests (valid and invalid), including the 
date and purpose of each test and documentation of test parameters as 
specified in part 40 CFR part 1065, and the date and purpose of each 
test.
* * * * *
    (c) Keep required data from emission tests and all other 
information specified in this section for eight years after we issue 
your certificate. If you use the same emission data or other 
information for a later model year, the eight-year period restarts with 
each year that you continue to rely on the information.
* * * * *
0
99. Section 1033.255 is amended by revising paragraphs (c)(2), (c)(4), 
(d), and (e) to read as follows:

Sec.  1033.255  EPA decisions.

* * * * *
    (c) * * *
    (2) Submit false or incomplete information (paragraph (e) of this 
section applies if this is fraudulent).

[[Page 40578]]

This includes doing anything after submission of your application to 
render any of the submitted information false or incomplete.
* * * * *
    (4) Deny us from completing authorized activities (see 40 CFR 
1068.20). This includes a failure to provide reasonable assistance.
* * * * *
    (d) We may void the certificate of conformity for an engine family 
if you fail to keep records, send reports, or give us information as 
required under this part or the Act. Note that these are also 
violations of 40 CFR 1068.101(a)(2).
    (e) We may void your certificate if we find that you intentionally 
submitted false or incomplete information. This includes rendering 
submitted information false or incomplete after submission.
* * * * *

Subpart F--Test Procedures

0
100. Section 1033.501 is amended by revising paragraph (a)(3) and 
adding paragraphs (a)(4), (a)(5), and (j) to read as follows:

Sec.  1033.501  General provisions.

    (a) * * *
    (3) The following provisions apply for engine mapping, duty cycle 
generation, and cycle validation to account for the fact that 
locomotive operation and locomotive duty cycles are based on operator 
demand from locomotive notch settings, not on target values for engine 
speed and load:
    (i) The provisions related to engine mapping, duty cycle 
generation, and cycle validation in 40 CFR 1065.510, 1065.512, and 
1065.514 do not apply for testing complete locomotives.
    (ii) The provisions related to engine mapping and duty cycle 
generation in 40 CFR 1065.510 and 1065.512 are not required for testing 
with an engine dynamometer; however, the cycle validation criteria of 
40 CFR 1065.514 apply for such testing. Demonstrate compliance with 
cycle validation criteria based on manufacturer-declared values for 
maximum torque, maximum power, and maximum test speed, or determine 
these values from an engine map generated according to 40 CFR 1065.510. 
If you test using a ramped-modal cycle, you may perform cycle 
validation over all the test intervals together.
    (4) If you perform discrete-mode testing and use only one batch 
fuel measurement to determine your mean raw exhaust flow rate, you must 
target a constant sample flow rate over the mode. Verify proportional 
sampling as described in 40 CFR 1065.545 using the mean raw exhaust 
molar flow rate paired with each recorded sample flow rate.
    (5) If you perform discrete-mode testing by grouping the modes in 
the same manner as the test intervals of the ramped modal cycle using 
three different dilution settings for the groups, as allowed in Sec.  
1033.515(c)(5)(ii), you may verify proportional sampling over each 
phase instead of each discrete mode.
* * * * *
    (j) The following provisions apply for locomotives using 
aftertreatment technology with infrequent regeneration events that may 
occur during testing:
    (1) Adjust measured emissions to account for aftertreatment 
technology with infrequent regeneration as described in Sec.  1033.535.
    (2) Invalidate a smoke test if active regeneration starts to occur 
during the test.
0
101. Section 1033.515 is amended by revising paragraphs (c)(2)(ii) and 
(c)(5)(ii) to read as follows:

Sec.  1033.515  Discrete-mode steady-state emission tests of 
locomotives and locomotive engines.

* * * * *
    (c) * * *
    (2) * * *
    (ii) The sample period is 300 seconds for all test modes except 
mode 8. The sample period for test mode 8 is 600 seconds.
* * * * *
    (5) * * *
    (ii) Group the modes in the same manner as the test intervals of 
the ramped modal cycle and use three different dilution settings for 
the groups. Use one setting for both idle modes, one for dynamic brake 
through Notch 5, and one for Notch 6 through Notch 8. For each group, 
ensure that the mode with the highest exhaust flow (typically normal 
idle, Notch 5, and Notch 8) meets the criteria for minimum dilution 
ratio in 40 CFR part 1065.
* * * * *
0
102. Section 1033.520 is revised to read as follows:

Sec.  1033.520  Alternative ramped modal cycles.

    (a) Locomotive testing over a ramped modal cycle is intended to 
improve measurement accuracy at low emission levels by allowing the use 
of batch sampling of PM and gaseous emissions over multiple locomotive 
notch settings. Ramped modal cycles combine multiple test modes of a 
discrete-mode steady-state into a single sample period. Time in notch 
is varied to be proportional to weighting factors. The ramped modal 
cycle for line-haul locomotives is shown in Table 1 to this section. 
The ramped modal cycle for switch locomotives is shown in Table 2 to 
this section. Both ramped modal cycles consist of a warm-up followed by 
three test intervals that are each weighted in a manner that maintains 
the duty cycle weighting of the line-haul and switch locomotive duty 
cycles in Sec.  1033.530. You may use ramped modal cycle testing for 
any locomotives certified under this part.
    (b) Ramped modal testing requires continuous gaseous analyzers and 
three separate PM filters (one for each test interval). You may collect 
a single batch sample for each test interval, but you must also measure 
gaseous emissions continuously to allow calculation of notch caps as 
required under Sec.  1033.101.
    (c) You may operate the engine in any way you choose to warm it up. 
Then follow the provisions of 40 CFR part 1065, subpart F for general 
pre-test procedures (including engine and sampling system pre-
conditioning).
    (d) Begin the test by operating the locomotive over the pre-test 
portion of the cycle. For locomotives not equipped with catalysts, you 
may begin the test as soon as the engine reaches its lowest idle 
setting. For catalyst-equipped locomotives, you may begin the test in 
normal idle mode if the engine does not reach its lowest idle setting 
within 15 minutes. If you do start in normal idle, run the low idle 
mode after normal idle, then resume the specified mode sequence 
(without repeating the normal idle mode).
    (e) Start the test according to 40 CFR 1065.530.
    (1) Each test interval begins when operator demand is set to the 
first operator demand setting of each test interval of the ramped modal 
cycle. Each test interval ends when the time in mode is reached for the 
last mode in the test interval.
    (2) For PM emissions (and other batch sampling), the sample period 
over which emissions for the test interval are averaged generally 
begins within 10 seconds after the operator demand is changed to start 
the test interval and ends within 5 seconds of the sampling time for 
the test mode is reached (see Table 1 to this section). You may ask to 
delay the start of the sample period to account for sample system 
residence times longer than 10 seconds.
    (3) Use good engineering judgment when transitioning between test 
intervals.
    (i) You should come as close as possible to simultaneously:

[[Page 40579]]

    (A) Ending batch sampling of the previous test interval.
    (B) Starting batch sampling of the next test interval.
    (C) Changing the operator demand to the notch setting for the first 
mode in the next test interval.
    (ii) Avoid the following:
    (A) Overlapping batch sampling of the two test intervals.
    (B) An unnecessarily long delay before starting the next test 
interval.
    (iii) For example, the following sequence would generally be 
appropriate:
    (A) End batch sampling for Interval 2 after 304 seconds in Notch 5.
    (B) Switch the operator demand to Notch 6 one second later.
    (C) Begin batch sampling for Interval 3 one second after switching 
to Notch 6.
    (4) If applicable, begin the smoke test at the start of the first 
test test interval of the applicable ramped modal cycle. Continue 
collecting smoke data until the completion of final test interval. 
Refer to Sec.  1033.101 to determine applicability of the smoke 
standards and Sec.  1033.525 for details on how to conduct a smoke 
test.
    (5) Proceed through each test interval of the applicable ramped 
modal cycle in the order specified until the test is completed.
    (6) If you must void a test interval, you may repeat it. To do so, 
begin with a warm engine operating at the notch setting for the last 
mode in the previous test interval. You do not need to repeat later 
test intervals if they were valid. (Note: you must report test results 
for all voided tests and test test intervals.)
    (7) Following the completion of the third test test interval of the 
applicable ramped modal cycle, conduct the post-test sampling 
procedures specified in 40 CFR 1065.530.
    (f) Calculate your cycle-weighted brake-specific emission rates as 
follows:
    (1) For each test interval j:
    (i) Calculate emission rates (Eij) for each pollutant i 
as the total mass emissions divided by the total time in the test 
interval.
    (ii) Calculate average power (Pj) as the total work 
divided by the total time in the test interval.
    (2) For each pollutant, calculate your cycle-weighted brake-
specific emission rate using the following equation, where 
wj is the weighting factor for test interval j:
[GRAPHIC] [TIFF OMITTED] TP13JY15.028

    (g) The following tables define applicable ramped modal cycles for 
line-haul and switch locomotives:

                                           Table 1 to Sec.   1033.520--Line-Haul Locomotive Ramped Modal Cycle
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       Time in mode
              RMC test interval                Weighting factor       RMC mode          (seconds)                        Notch setting
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pre-test idle...............................                 NA                 NA         600 to 900  Lowest idle setting.\1\
Interval 1 (Idle test)......................              0.380                  A                600  Low Idle.\2\
                                                                                 B                600  Normal Idle.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Interval Transition
--------------------------------------------------------------------------------------------------------------------------------------------------------
Interval 2..................................              0.389                  C              1,000  Dynamic Brake.\3\
                                                                                 1                520  Notch 1.
                                                                                 2                520  Notch 2.
                                                                                 3                416  Notch 3.
                                                                                 4                352  Notch 4.
                                                                                 5                304  Notch 5.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Interval Transition
--------------------------------------------------------------------------------------------------------------------------------------------------------
Interval 3..................................              0.231                  6                144  Notch 6.
                                                                                 7                111  Notch 7.
                                                                                 8                600  Notch 8.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ See paragraph (d) of this section for alternate pre-test provisions.
\2\ Operate at normal idle for modes A and B if not equipped with multiple idle settings.
\3\ Operate at normal idle if not equipped with a dynamic brake.

                                            Table 2 to Sec.   1033.520--Switch Locomotive Ramped Modal Cycle
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       Time in mode
              RMC test interval                Weighting factor       RMC mode          (seconds)                        Notch setting
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pre-test idle...............................                 NA                 NA         600 to 900  Lowest idle setting.\1\
Interval 1 (Idle test)......................              0.598                  A                600  Low Idle.\2\
                                                                                 B                600  Normal Idle.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Interval Transition
--------------------------------------------------------------------------------------------------------------------------------------------------------
Interval 2..................................              0.377                  1                868  Notch 1.
                                                                                 2                861  Notch 2.
                                                                                 3                406  Notch 3.
                                                                                 4                252  Notch 4.
                                                                                 5                252  Notch 5.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Interval Transition
--------------------------------------------------------------------------------------------------------------------------------------------------------
Interval 3..................................              0.025                  6              1,080  Notch 6.
                                                                                 7                144  Notch 7.

[[Page 40580]]

 
                                                                                 8                576  Notch 8.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ See paragraph (d) of this section for alternate pre-test provisions.
\2\ Operate at normal idle for modes A and B if not equipped with multiple idle settings.

0
103. Section 1033.535 is revised to read as follows:

Sec.  1033.535  Adjusting emission levels to account for infrequently 
regenerating aftertreatment devices.

    For locomotives using aftertreatment technology with infrequent 
regeneration events that may occur during testing, take one of the 
following approaches to account for the emission impact of 
regeneration:
    (a) You may use the calculation methodology described in 40 CFR 
1065.680 to adjust measured emission results. Do this by developing an 
upward adjustment factor and a downward adjustment factor for each 
pollutant based on measured emission data and observed regeneration 
frequency as follows:
    (1) Adjustment factors should generally apply to an entire engine 
family, but you may develop separate adjustment factors for different 
configurations within an engine family. Use the adjustment factors from 
this section for all testing for the engine family.
    (2) You may use carryover or carry-across data to establish 
adjustment factors for an engine family as described in Sec.  1033.235, 
consistent with good engineering judgment.
    (3) Determine the frequency of regeneration, F, as described in 40 
CFR 1065.680 from in-use operating data or from running repetitive 
tests in a laboratory. If the engine is designed for regeneration at 
fixed time intervals, you may apply good engineering judgment to 
determine F based on those design parameters.
    (4) Identify the value of F in each application for the 
certification for which it applies.
    (5) Apply the provisions for ramped-modal testing based on 
measurements for each test interval rather than the whole ramped-modal 
test.
    (b) You may ask us to approve an alternate methodology to account 
for regeneration events. We will generally limit approval to cases 
where your engines use aftertreatment technology with extremely 
infrequent regeneration and you are unable to apply the provisions of 
this section.
    (c) You may choose to make no adjustments to measured emission 
results if you determine that regeneration does not significantly 
affect emission levels for an engine family (or configuration) or if it 
is not practical to identify when regeneration occurs. If you choose 
not to make adjustments under paragraph (a) or (b) of this section, 
your locomotives must meet emission standards for all testing, without 
regard to regeneration.

Subpart G--Special Compliance Provisions

0
104. Section 1033.601 is amended by adding paragraph (f) to read as 
follows:

Sec.  1033.601  General compliance provisions.

* * * * *
    (f) Multi-fuel locomotives. Subpart C of this part describes how to 
test and certify dual-fuel and flexible-fuel locomotives. Some multi-
fuel locomotives may not fit either of those defined terms. For such 
locomotives, we will determine whether it is most appropriate to treat 
them as single-fuel locomotives, dual-fuel locomotives, or flexible-
fuel locomotives based on the range of possible and expected fuel 
mixtures. For example, a locomotive might burn natural gas but initiate 
combustion with a pilot injection of diesel fuel. If the locomotive is 
designed to operate with a single fueling algorithm (i.e., fueling 
rates are fixed at a given engine speed and load condition), we would 
generally treat it as a single-fuel locomotive, In this context, the 
combination of diesel fuel and natural gas would be its own fuel type. 
If the locomotive is designed to also operate on diesel fuel alone, we 
would generally treat it as a dual-fueled locomotive. If the locomotive 
is designed to operate on varying mixtures of the two fuels, we would 
generally treat it as a flexible-fueled locomotive. To the extent that 
requirements vary for the different fuels or fuel mixtures, we may 
apply the more stringent requirements.

Subpart H--Averaging, Banking, and Trading for Certification

0
105. Section 1033.701 is amended by adding paragraph (k) to read as 
follows:

Sec.  1033.701  General provisions.

* * * * *
    (k) You may use either of the following approaches to retire or 
forego emission credits:
    (1) You may retire emission credits generated from any number of 
your locomotives. This may be considered donating emission credits to 
the environment. Identify any such credits in the reports described in 
Sec.  1033.730. Locomotives must comply with the applicable FELs even 
if you donate or sell the corresponding emission credits under this 
paragraph (e). Those credits may no longer be used by anyone to 
demonstrate compliance with any EPA emission standards.
    (2) You may certify a family using an FEL below the emission 
standard as described in this part and choose not to generate emission 
credits for that family. If you do this, you do not need to calculate 
emission credits for those families and you do not need to submit or 
keep the associated records described in this subpart for that family.
0
106. Section 1033.710 is amended by revising paragraph (c) to read as 
follows:

Sec.  1033.710  Averaging emission credits.

* * * * *
    (c) If you certify an engine family to an FEL that exceeds the 
otherwise applicable emission standard, you must obtain enough emission 
credits to offset the engine family's deficit by the due date for the 
final report required in Sec.  1033.730. The emission credits used to 
address the deficit may come from your other engine families that 
generate emission credits in the same model year, 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 or by transfer.
0
107. Section 1033.725 is amended by revising paragraph (b)(2) to read 
as follows:

Sec.  1033.725  Requirements for your application for certification.

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid negative credit balances

[[Page 40581]]

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
108. Section 1033.730 is amended by revising paragraphs (b)(1), (b)(4), 
and (c)(2) to read as follows:

Sec.  1033.730  ABT reports.

* * * * *
    (b) * * *
    (1) Engine family designation and averaging sets (whether switch, 
line-haul, or both).
* * * * *
    (4) The projected and actual U.S.-directed production volumes for 
the model year as described in Sec.  1033.705. If you changed an FEL 
during the model year, identify the actual U.S.-directed production 
volume associated with each FEL.
* * * * *
    (c) * * *
    (2) State whether you will retain any emission credits for banking. 
If you choose to retire emission credits that would otherwise be 
eligible for banking, identify the engine families that generated the 
emission credits, including the number of emission credits from each 
family.
* * * * *
0
109. Section 1033.735 is amended by revising paragraphs (a) and (b) to 
read as follows:

Sec.  1033.735  Required records.

    (a) You must organize and maintain your records as described in 
this section.
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits.
* * * * *

Subpart I--Requirements for Owners and Operators

0
110. Section 1033.815 is amended by revising paragraphs (b) and (e) 
introductory text to read as follows:

Sec.  1033.815  Maintenance, operation, and repair.

* * * * *
    (b) Perform unscheduled maintenance in a timely manner. This 
includes malfunctions identified through the locomotive's emission 
control diagnostics system and malfunctions discovered in components of 
the diagnostics system itself. For most repairs, this paragraph (b) 
requires that the maintenance be performed no later than the 
locomotive's next periodic (92-day or 184-day) inspection. See 
paragraph (e) of this section, for reductant replenishment requirements 
in a locomotive equipped with an SCR system.
* * * * *
    (e) For locomotives equipped with emission controls requiring the 
use of specific fuels, lubricants, or other fluids, proper maintenance 
includes complying with the manufacturer/remanufacturer's 
specifications for such fluids when operating the locomotives. This 
requirement applies without regard to whether misfueling permanently 
disables the emission controls. For locomotives certified on ultra-low 
sulfur diesel fuel, but that do not include sulfur-sensitive emission 
controls, you may use low-sulfur diesel fuel instead of ultra-low 
sulfur diesel fuel, consistent with good engineering judgment. The 
following additional provisions apply for locomotives equipped with SCR 
systems requiring the use of urea or other reductants:
* * * * *

Subpart J--Definitions and Other Reference Information

0
111. Section 1033.901 is amended as follows:
0
a. By revising the definition for ``Designated Compliance Officer''.
0
b. By adding definitions for ``Dual-fuel'' and ``Flexible-fuel''.
0
c. By revising the definitions for ``Remanufacture system or 
remanufacturing system'' and ``Total hydrocarbon equivalent''.
    The revisions and addition read as follows:

Sec.  1033.901  Definitions.

* * * * *
    Designated Compliance Officer means the Director, Diesel Engine 
Compliance Center, U.S. Environmental Protection Agency, 2000 
Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov; epa.gov/otaq/verify.
* * * * *
    Dual-fuel means relating to a locomotive designed for operation on 
two different fuels but not on a continuous mixture of those fuels (see 
Sec.  1033.601(f)). For purposes of this part, such a locomotive 
remains a dual-fuel locomotive even if it is designed for operation on 
three or more different fuels.
* * * * *
    Flexible-fuel means relating to a locomotive designed for operation 
on any mixture of two or more different fuels (see Sec.  1033.601(f)).
* * * * *
    Remanufacture system or remanufacturing system means all components 
(or specifications for components) and instructions necessary to 
remanufacture a locomotive or locomotive engine in accordance with 
applicable requirements of this part.
* * * * *
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001. This generally means the sum of the carbon mass 
contributions of non-oxygenated hydrocarbon, alcohols and aldehydes, or 
other organic compounds that are measured separately as contained in a 
gas sample, expressed as exhaust hydrocarbon from petroleum-fueled 
locomotives. The atomic hydrogen-to-carbon ratio of the equivalent 
hydrocarbon is 1.85:1.
* * * * *
0
112. Section 1033.915 is revised to read as follows:

Sec.  1033.915  Confidential information.

    The provisions of 40 CFR 1068.10 apply for information you consider 
confidential.
0
113. Section 1033.925 is revised to read as follows:

Sec.  1033.925  Reporting and recordkeeping requirements.

    (a) This part includes various requirements to submit and record 
data or other information. Unless we specify otherwise, store required 
records in any format and on any media and keep them readily available 
for eight years after you send an associated application for 
certification, or eight years after you generate the data if they do 
not support an application for certification. You are expected to keep 
your own copy of required records rather than relying on someone else 
to keep records on your behalf. We may review these records at any 
time. You must promptly send us organized, written records in English 
if we ask for them. We may require you to submit written records in an 
electronic format.
    (b) The regulations in Sec.  1033.255, 40 CFR 1068.25, and 40 CFR 
1068.101 describe your obligation to report truthful and complete 
information. This includes information not related to certification. 
Failing to properly report information and keep the records we specify 
violates 40 CFR 1068.101(a)(2), which may involve civil or criminal 
penalties.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1033.801).

[[Page 40582]]

    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.
    (e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. Failing to 
properly report information and keep the records we specify violates 40 
CFR 1068.101(a)(2), which may involve civil or criminal penalties. The 
following items illustrate the kind of reporting and recordkeeping we 
require for locomotives regulated under this part:
    (1) We specify the following requirements related to locomotive 
certification in this part 1033:
    (i) In Sec.  1033.150 we state the requirements for interim 
provisions.
    (ii) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (iii) In Sec.  1033.325 we specify certain records related to 
production-line testing.
    (iv) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (v) In Sec. Sec.  1033.725, 1033.730, and 1033.735 we specify 
certain records related to averaging, banking, and trading.
    (vi) In subpart I of this part we specify certain records related 
to meeting requirements for remanufactured engines.
    (2) We specify the following requirements related to testing in 40 
CFR part 1065:
    (i) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (ii) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (iii) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (iv) In 40 CFR 1065.695 we identify the specific information and 
data items to record when measuring emissions.
    (3) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (i) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (ii) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (iii) In 40 CFR 1068.27 we require manufacturers to make 
locomotives available for our testing or inspection if we make such a 
request.
    (iv) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (v) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing locomotives and engines.
    (vi) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line locomotives in a selective 
enforcement audit.
    (vii) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (viii) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming locomotives.
0
114. Appendix I to part 1033 is added to read as follows:

Appendix I to Part 1033--Original Standards for Tier 0, Tier 1 and Tier 
2 Locomotives

    (a) The following emission standards applied for new locomotives 
not yet subject to this part 1033:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                   Standards (g/bhp-hr)
             Type of standard                 Year of original                 Tier             --------------------------------------------------------
                                                 manufacture                                            NOX             PM-primary      PM-alternate \a\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Line-haul.................................             1973-1992  Tier 0.......................                9.5               0.60               0.30
                                                       1993-2004  Tier 1.......................                7.4               0.45               0.22
                                                       2005-2011  Tier 2.......................                5.5               0.20               0.10
Switch....................................             1973-1992  Tier 0.......................               14.0               0.72               0.36
                                                       1993-2004  Tier 1.......................               11.0               0.54               0.27
                                                       2005-2011  Tier 2.......................                8.1               0.24               0.12
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Locomotives certified to the alternate PM standards are also subject to alternate CO standards of 10.0 for the line-haul cycle and 12.0 for the
  switch cycle.

    (b) The original Tier 0, Tier 1, and Tier 2 standards for HC and 
CO emissions and smoke are the same standards identified in Sec.  
1033.101.

0
115. Part 1036 is revised to read as follows:

PART 1036--CONTROL OF EMISSIONS FROM NEW AND IN-USE HEAVY-DUTY 
HIGHWAY ENGINES

Subpart A--Overview and Applicability
Sec.
1036.1 Does this part apply for my engines?
1036.2 Who is responsible for compliance?
1036.5 Which engines are excluded from this part's requirements?
1036.10 How is this part organized?
1036.15 Do any other regulation parts apply to me?
1036.30 Submission of information.
Subpart B--Emission Standards and Related Requirements
1036.100 Overview of exhaust emission standards.
1036.108 Greenhouse gas emission standards.
1036.115 Other requirements.
1036.130 Installation instructions for vehicle manufacturers.
1036.135 Labeling.
1036.140 Primary intended service class and engine cycle.
1036.150 Interim provisions.
Subpart C--Certifying Engine Families
1036.205 What must I include in my application?
1036.210 Preliminary approval before certification.
1036.225 Amending my application for certification.
1036.230 Selecting engine families.
1036.235 Testing requirements for certification.
1036.241 Demonstrating compliance with greenhouse gas emission 
standards.
1036.250 Reporting and recordkeeping for certification.
1036.255 What decisions may EPA make regarding my certificate of 
conformity?
Subpart D--Testing Production Engines
1036.301 Measurements related to GEM inputs in a selective 
enforcement audit.
Subpart E--In-use Testing
1036.401 In-use testing.

[[Page 40583]]

Subpart F--Test Procedures
1036.501 How do I run a valid emission test?
1036.525 Hybrid engines.
1036.530 Calculating greenhouse gas emission rates.
1036.535 Determining engine fuel maps and fuel consumption at idle.
Subpart G--Special Compliance Provisions
1036.601 What compliance provisions apply?
1036.610 Off-cycle technology credits and adjustments for reducing 
greenhouse gas emissions.
1036.615 Engines with Rankine cycle waste heat recovery and hybrid 
powertrains.
1036.620 Alternate CO2 standards based on model year 2011 
compression-ignition engines.
1036.625 In-use compliance with family emission limits (FELs).
1036.630 Certification of engine GHG emissions for powertrain 
testing.
Subpart H--Averaging, Banking, and Trading for Certification
1036.701 General provisions.
1036.705 Generating and calculating emission credits.
1036.710 Averaging.
1036.715 Banking.
1036.720 Trading.
1036.725 What must I include in my application for certification?
1036.730 ABT reports.
1036.735 Recordkeeping.
1036.740 Restrictions for using emission credits.
1036.745 End-of-year CO2 credit deficits.
1036.750 What can happen if I do not comply with the provisions of 
this subpart?
1036.755 Information provided to the Department of Transportation.
Subpart I--Definitions and Other Reference Information
1036.801 Definitions.
1036.805 Symbols, abbreviations, and acronyms.
1036.810 Incorporation by reference.
1036.815 Confidential information.
1036.820 Requesting a hearing.
1036.825 Reporting and recordkeeping requirements.

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--Overview and Applicability

Sec.  1036.1  Does this part apply for my engines?

    (a) Except as specified in Sec.  1036.5, the provisions of this 
part apply for engines that will be installed in heavy-duty vehicles 
above 14,000 pounds GVWR for propulsion. These provisions also apply 
for engines that will be installed in incomplete heavy-duty vehicles at 
or below 14,000 pounds GVWR unless the engine is installed in a vehicle 
that is covered by a certificate of conformity under 40 CFR part 86, 
subpart S.
    (b) This part does not apply with respect to exhaust emission 
standards for HC, CO, NOX, or PM except as follows:
    (1) The provisions of Sec.  1036.601 apply.
    (2) 40 CFR parts 85 and/or 86 may specify that certain provisions 
apply.
    (c) The provisions of this part also apply for fuel conversions of 
all engines described in paragraph (a) of this section as described in 
40 CFR 85.502.
    (d) Gas turbine heavy-duty engines and other heavy-duty engines not 
meeting the definition compression-ignition or spark-ignition are 
deemed to be compression-ignition engines for purposes of this part.

Sec.  1036.2  Who is responsible for compliance?

    The regulations in this part 1036 contain provisions that affect 
both engine manufacturers and others. However, the requirements of this 
part are generally addressed to the engine manufacturer(s). The term 
``you'' generally means the engine manufacturer(s), especially for 
issues related to certification. Additional requirements and 
prohibitions apply to other persons as specified in Sec.  1036.601 and 
40 CFR part 1068.

Sec.  1036.5  Which engines are excluded from this part's requirements?

    (a) The provisions of this part do not apply to engines used in 
medium-duty passenger vehicles or other heavy-duty vehicles that are 
subject to regulation under 40 CFR part 86, subpart S, except as 
specified in 40 CFR part 86, subpart S, and Sec.  1036.108(a)(4). For 
example, this exclusion applies for engines used in vehicles certified 
to the standards of 40 CFR 86.1819.
    (b) An engine installed in a heavy-duty vehicle that is not used to 
propel the vehicle is not a heavy-duty engine. The provisions of this 
part therefore do not apply to these engines. Note that engines used to 
indirectly propel the vehicle (such as electrical generator engines 
that provide power to batteries for propulsion) are subject to this 
part. See 40 CFR part 1039, 1048, or 1054 for other requirements that 
apply for these auxiliary engines. See 40 CFR part 1037 for 
requirements that may apply for vehicles using these engines, such as 
the evaporative emission requirements of 40 CFR 1037.103.
    (c) The provisions of this part do not apply to aircraft or 
aircraft engines. Standards apply separately to certain aircraft 
engines, as described in 40 CFR part 87.
    (d) The provisions of this part do not apply to engines that are 
not internal combustion engines. For example, the provisions of this 
part do not apply to fuel cells.
    (e) The provisions of this part do not apply for model year 2013 
and earlier heavy-duty engines unless they were voluntarily certified 
to this part.

Sec.  1036.10  How is this part organized?

    This part 1036 is divided into the following subparts:
    (a) Subpart A of this part defines the applicability of this part 
1036 and gives an overview of regulatory requirements.
    (b) Subpart B of this part describes the emission standards and 
other requirements that must be met to certify engines under this part. 
Note that Sec.  1036.150 describes certain interim requirements and 
compliance provisions that apply only for a limited time.
    (c) Subpart C of this part describes how to apply for a certificate 
of conformity.
    (d) [Reserved]
    (e) Subpart E of this part describes provisions for testing in-use 
engines.
    (f) Subpart F of this part describes how to test your engines 
(including references to other parts of the Code of Federal 
Regulations).
    (g) Subpart G of this part describes requirements, prohibitions, 
and other provisions that apply to engine manufacturers, vehicle 
manufacturers, owners, operators, rebuilders, and all others.
    (h) Subpart H of this part describes how you may generate and use 
emission credits to certify your engines.
    (i) Subpart I of this part contains definitions and other reference 
information.

Sec.  1036.15  Do any other regulation parts apply to me?

    (a) Part 86 of this chapter describes additional requirements that 
apply to engines that are subject to this part 1036. This part 
extensively references portions of 40 CFR part 86. For example, the 
regulations of part 86 specify emission standards and certification 
procedures related to criteria pollutants.
    (b) Part 1037 of this chapter describes requirements for 
controlling evaporative emissions and greenhouse gas emissions from 
heavy-duty vehicles, whether or not they use engines certified under 
this part. It also includes standards and requirements that apply 
instead of the standards and requirements of this part in some cases.
    (c) Part 1065 of this chapter describes procedures and equipment 
specifications for testing engines to measure exhaust emissions. 
Subpart F of this part 1036 describes how to apply the provisions of 
part 1065 of this chapter to determine whether engines meet the exhaust 
emission standards in this part.

[[Page 40584]]

    (d) Certain provisions of part 1068 of this chapter apply as 
specified in Sec.  1036.601 to everyone, including anyone who 
manufactures, imports, installs, owns, operates, or rebuilds any of the 
engines subject to this part 1036, or vehicles containing these 
engines. Part 1068 of this chapter describes general provisions that 
apply broadly, but do not necessarily apply for all engines or all 
persons. See Sec.  1036.601 to determine how to apply the part 1068 
regulations for heavy-duty engines. The issues addressed by these 
provisions include these seven areas:
    (1) Prohibited acts and penalties for engine manufacturers, vehicle 
manufacturers, and others.
    (2) Rebuilding and other aftermarket changes.
    (3) Exclusions and exemptions for certain engines.
    (4) Importing engines.
    (5) Selective enforcement audits of your production.
    (6) Recall.
    (7) Procedures for hearings.
    (e) Other parts of this chapter apply if referenced in this part.

Sec.  1036.30  Submission of information.

    Unless we specify otherwise, send all reports and requests for 
approval to the Designated Compliance Officer (see Sec.  1036.801). See 
Sec.  1036.825 for additional reporting and recordkeeping provisions.

Subpart B--Emission Standards and Related Requirements

Sec.  1036.100  Overview of exhaust emission standards.

    Engines used in vehicles certified to the applicable chassis 
standards for greenhouse gases described in 40 CFR 86.1819 are not 
subject to the standards specified in this part. All other engines 
subject to this part must meet the greenhouse gas standards in Sec.  
1036.108 in addition to the criteria pollutant standards of 40 CFR part 
86.

Sec.  1036.108  Greenhouse gas emission standards.

    This section 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. This 
section describes the applicable CO2, N2O, and 
CH4 standards for engines. These standards do not apply for 
engines used in vehicles subject to (or voluntarily certified to) the 
CO2, N2O, and CH4 standards for 
vehicles specified in 40 CFR 86.1819.
    (a) Emission standards. Emission standards apply for engines 
measured using the test procedures specified in subpart F of this part 
as follows:
    (1) CO2 emission standards apply as specified in this 
paragraph (a)(1). The applicable test cycle for measuring 
CO2 emissions differs depending on the engine family's 
primary intended service class and the extent to which the engines will 
be (or were designed to be) used in tractors. For medium and heavy 
heavy-duty engines certified as tractor engines, measure CO2 
emissions using the steady-state duty cycle specified in 40 CFR 86.1362 
(referred to as the ramped-modal cycle, or RMC, even though emission 
sampling involves measurements from discrete modes). This is intended 
for engines designed to be used primarily in tractors and other line-
haul applications. Note that the use of some RMC-certified tractor 
engines in vocational applications does not affect your certification 
obligation under this paragraph (a)(1); see other provisions of this 
part and 40 CFR part 1037 for limits on using engines certified to only 
one cycle. For medium and heavy heavy-duty engines certified as both 
tractor and vocational engines, measure CO2 emissions using 
the steady-state duty cycle and the transient duty cycle (sometimes 
referred to as the FTP engine cycle), both of which are specified in 40 
CFR part 86, subpart N. This is intended for engines that are designed 
for use in both tractor and vocational applications. For all other 
engines (including all spark-ignition engines), measure CO2 
emissions using the appropriate transient duty cycle specified in 40 
CFR part 86, subpart N.
    (i) The CO2 standard for model year 2016 and later 
spark-ignition engines is 627 g/hp-hr.
    (ii) The following CO2 standards apply for compression-
ignition engines, including engines that are deemed to be compression-
ignition engines under Sec.  1036.1 (in g/hp-hr):

----------------------------------------------------------------------------------------------------------------
                                                   Medium heavy-   Heavy heavy-
           Model years             Light heavy-       duty--          duty--       Medium heavy-   Heavy heavy-
                                       duty         vocational      vocational    duty-- tractor  duty-- tractor
----------------------------------------------------------------------------------------------------------------
2014-2016.......................             600             600             567             502             475
2017-2020.......................             576             576             555             487             460
2021-2023.......................             565             565             544             479             453
2024-2026.......................             556             556             536             469             443
2027 and later..................             553             553             533             466             441
----------------------------------------------------------------------------------------------------------------

    (2) The CH4 emission standard is 0.10 g/hp-hr when 
measured over the applicable transient duty cycle specified in 40 CFR 
part 86, subpart N. This standard begins in model year 2014 for 
compression-ignition engines and in model year 2016 for spark-ignition 
engines. Note that this standard applies for all fuel types just as the 
other standards of this section do.
    (3) N2O emission standards applies as follows for 
engines when measured over the appropriate transient duty cycle 
specified in 40 CFR part 86, subpart N:
    (i) An emission standard of 0.05 g/hp-hr applies for model year 
2021 and later engines.
    (ii) An emission standard of 0.10 g/hp-hr applies for compression-
ignition engines for model years 2014 through 2020.
    (iii) An emission standard of 0.10 g/hp-hr applies for spark-
ignition engines for model years 2016 through 2020.
    (b) Family certification levels. You must specify a CO2 
Family Certification Level (FCL) for each engine family. The FCL may 
not be less than the certified emission level for the engine family. 
The CO2 Family Emission Limit (FEL) for the engine family is 
equal to the FCL multiplied by 1.03.
    (c) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program described in subpart H of this part for demonstrating 
compliance with CO2 emission standards. Credits (positive 
and negative) are calculated from the difference between the FCL and 
the applicable emission standard. As described in Sec.  1036.705, you 
may use CO2 credits to certify your engine families to FELs 
for N2O and/or CH4, instead of the 
N2O/CH4 standards of this

[[Page 40585]]

section that otherwise apply. Except as specified in Sec. Sec.  
1036.150 and 1036.705, you may not generate or use credits for 
N2O or CH4 emissions.
    (d) Useful life. The exhaust emission standards of this section 
apply for the full useful life, expressed in service miles, operating 
hours, or calendar years, whichever comes first. The useful life values 
applicable to the criteria pollutant standards of 40 CFR part 86 apply 
for the standards of this section, except that model year 2021 and 
later spark-ignition engines and light heavy-duty compression-ignition 
engines are subject to the standards of this section over a useful life 
of 15 years or 150,000 miles, whichever comes first.
    (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 fuel maps and powertrain test results also serve as standards as 
described in Sec.  1036.535, Sec.  1036.630 and 40 CFR 1037.550.
    (f) Multi-fuel engines. For dual-fuel, multi-fuel, and flexible-
fuel engines, perform exhaust testing on each fuel type (for example, 
gasoline and E85).
    (1) This paragraph (f)(1) applies where you demonstrate the 
relative amount of each fuel type that your engines consume in actual 
use. Based on your demonstration, we will specify a weighting factor 
and allow you to submit the weighted average of your emission results. 
For example, if you certify an E85 flexible-fuel engine and we 
determine the engine will produce one-half of its work from E85 and 
one-half of its work from gasoline, you may apply a 50% weighting 
factor to each of your E85 and gasoline emission results.
    (2) If you certify your engine family to N2O and/or 
CH4 FELs the FELs apply for testing on all fuel types for 
which your engine is designed, to the same extent as criteria emission 
standards apply.

Sec.  1036.115  Other requirements.

    (a) The warranty and maintenance requirements, adjustable parameter 
provisions, and defeat device prohibition of 40 CFR part 86 apply with 
respect to the standards of this part.
    (b) You must create a fuel map and establish idle-specific fuel-
consumption values for your engine as described in Sec.  1036.535. You 
may alternatively perform powertrain testing as specified in Sec.  
1036.630 and 40 CFR 1037.550 for some or all of your configurations 
within the engine family.
    (c) You must design and produce your engines to comply with 
evaporative emission standards as follows:
    (1) For complete heavy-duty vehicles you produce, you must certify 
the vehicles to emission standards as specified in 40 CFR 1037.103.
    (2) For incomplete heavy-duty vehicles, and for engines used in 
vehicles you do not produce, you do not need to certify your engines to 
evaporative emission standards or otherwise meet those standards. 
However, vehicle manufacturers certifying their vehicles with your 
engines may depend on you to produce your engines according to their 
specifications. Also, your engines must meet applicable exhaust 
emission standards in the installed configuration.

Sec.  1036.130  Installation instructions for vehicle manufacturers.

    (a) If you sell an engine for someone else to install in a vehicle, 
give the engine installer instructions for installing it consistent 
with the requirements of this part. Include all information necessary 
to ensure that an engine will be installed in its certified 
configuration.
    (b) Make sure these instructions have the following information:
    (1) Include the heading: ``Emission-related installation 
instructions''.
    (2) State: ``Failing to follow these instructions when installing a 
certified engine in a heavy-duty motor vehicle violates federal law, 
subject to fines or other penalties as described in the Clean Air 
Act.''
    (3) Provide all instructions needed to properly install the exhaust 
system and any other components.
    (4) Describe any necessary steps for installing any diagnostic 
system required under 40 CFR part 86.
    (5) Describe how your certification is limited for any type of 
application. For example, if you certify heavy heavy-duty engines to 
the CO2 standards using only steady-state transient FTP 
testing, you must make clear that the engine may not be installed in 
tractors.
    (6) Describe any other instructions to make sure the installed 
engine will operate according to design specifications in your 
application for certification. This may include, for example, 
instructions for installing aftertreatment devices when installing the 
engines.
    (7) State: ``If you install the engine in a way that makes the 
engine's emission control information label hard to read during normal 
engine maintenance, you must place a duplicate label on the vehicle, as 
described in 40 CFR 1068.105.''
    (c) Give the vehicle manufacturer fuel map results as described in 
Sec.  1036.535 or powertrain results as described in Sec.  1036.630 and 
40 CFR 1037.550 for each engine configuration, as appropriate.
    (d) You do not need installation instructions for engines that you 
install in your own vehicles.
    (e) Provide instructions in writing or in an equivalent format. For 
example, you may post instructions on a publicly available Web site for 
downloading or printing. If you do not provide the instructions in 
writing, explain in your application for certification how you will 
ensure that each installer is informed of the installation 
requirements.

Sec.  1036.135  Labeling.

    Label your engines as described in 40 CFR 86.007-35(a)(3), with the 
following additional information:
    (a) [Reserved]
    (b) Identify the emission control system. Use terms and 
abbreviations as described in 40 CFR 1068.45 or other applicable 
conventions.
    (c) Identify any limitations on your certification. For example, if 
you certify heavy heavy-duty engines to the CO2 standards 
using only transient cycle testing, include the statement ``VOCATIONAL 
VEHICLES ONLY''.
    (d) You may ask us to approve modified labeling requirements in 
this part 1036 if you show that it is necessary or appropriate. We will 
approve your request if your alternate label is consistent with the 
requirements of this part. We may also specify modified labeling 
requirement to be consistent with the intent of 40 CFR part 1037.

Sec.  1036.140  Primary intended service class and engine cycle.

    (a) You must identify a single primary intended service class for 
each engine family. Select the class that best describes vehicles for 
which you design and market the engine. There are three primary 
intended service classes for vehicles with engines that are not 
gasoline-fueled: Light heavy-duty, medium heavy-duty, and heavy heavy-
duty. Unless otherwise specified, engines that qualify as medium heavy-

[[Page 40586]]

duty or heavy heavy-duty engines and do not operate on gasoline must 
meet all the emission standards and other requirements of this part 
that apply for compression-ignition engines, even if they qualify under 
the definitions as spark-ignition engines. Also, spark-ignition engines 
that qualify as light heavy-duty engines must meet all the emission 
standards and other requirements of this part that apply for spark-
ignition engines, regardless of fuel. These spark-ignition light-heavy-
duty engines and all sizes of gasoline-fueled heavy-duty engines 
together form a separate primary intended service class. For purposes 
of this section, dual-fuel and flexible fuel engines that operate on 
gasoline are considered gasoline-fueled engines.
    (b) Divide engines other than gasoline-fueled engines into primary 
intended service classes based on the following engine and vehicle 
characteristics:
    (1) Light heavy-duty engines usually are not designed for rebuild 
and do not have cylinder liners. Vehicle body types in this group might 
include any heavy-duty vehicle built from a light-duty truck chassis, 
van trucks, multi-stop vans, motor homes and other recreational 
vehicles, and some straight trucks with a single rear axle. Typical 
applications would include personal transportation, light-load 
commercial delivery, passenger service, agriculture, and construction. 
The GVWR of these vehicles is normally below 19,500 pounds.
    (2) Medium heavy-duty engines may be designed for rebuild and may 
have cylinder liners. Vehicle body types in this group would typically 
include school buses, straight trucks with dual rear axles, city 
tractors, and a variety of special purpose vehicles such as small dump 
trucks, and refuse trucks. Typical applications would include 
commercial short haul and intra-city delivery and pickup. Engines in 
this group are normally used in vehicles whose GVWR ranges from 19,500 
to 33,000 pounds.
    (3) Heavy heavy-duty engines are designed for multiple rebuilds and 
have cylinder liners. Vehicles in this group are normally tractors, 
trucks, and buses used in inter-city, long-haul applications. These 
vehicles normally exceed 33,000 pounds GVWR.

Sec.  1036.150  Interim provisions.

    The provisions in this section apply instead of other provisions in 
this part.
    (a) Early banking of greenhouse gas emissions. You may generate 
CO2 emission credits for engines you certify in model year 
2013 (2015 for spark-ignition engines) to the standards of Sec.  
1036.108.
    (1) Except as specified in paragraph (a)(2) of this section, to 
generate early credits, you must certify your entire U.S.-directed 
production volume within that averaging set to these standards. This 
means that you may not generate early credits while you produce engines 
in the averaging set that are certified to the criteria pollutant 
standards but not to the greenhouse gas standards. Calculate emission 
credits as described in subpart H of this part relative to the standard 
that would apply for model year 2014 (2016 for spark-ignition engines).
    (2) You may generate early credits for an individual compression-
ignition engine family where you demonstrate that you have improved a 
model year 2013 engine model's CO2 emissions relative to its 
2012 baseline level and certify it to an FCL below the applicable 
standard. Calculate emission credits as described in subpart H of this 
part relative to the lesser of the standard that would apply for model 
year 2014 engines or the baseline engine's CO2 emission 
rate. Use the smaller U.S.-directed production volume of the 2013 
engine family or the 2012 baseline engine family. We will not allow you 
to generate emission credits under this paragraph (a)(2) unless we 
determine that your 2013 engine is the same engine as the 2012 baseline 
or that it replaces it.
    (3) You may bank credits equal to the surplus credits you generate 
under this paragraph (a) multiplied by 1.50. For example, if you have 
10 Mg of surplus credits for model year 2013, you may bank 15 Mg of 
credits. Credit deficits for an averaging set prior to model year 2014 
(2016 for spark-ignition engines) do not carry over to model year 2014 
(2016 for spark-ignition engines). We recommend that you notify us of 
your intent to use this provision before submitting your applications.
    (b) Model year 2014 N2O standards. In model year 2014 
and earlier, manufacturers may show compliance with the N2O 
standards using an engineering analysis. This allowance also applies 
for later families certified using carryover CO2 data from 
model 2014 consistent with Sec.  1036.235(d).
    (c) Engine cycle classification. Through model year 2020, engines 
meeting the definition of spark-ignition, but regulated as diesel 
engines under 40 CFR part 86, must be certified to the requirements 
applicable to compression-ignition engines under this part. Such 
engines are deemed to be compression-ignition engines for purposes of 
this part. Similarly, engines meeting the definition of compression-
ignition, but regulated as Otto-cycle under 40 CFR part 86 must be 
certified to the requirements applicable to spark-ignition engines 
under this part. Such engines are deemed to be spark-ignition engines 
for purposes of this part. See Sec.  1036.140 for provisions that apply 
for model year 2021 and later.
    (d) Small manufacturers. Standards 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, 333618 
for engine manufacturers with respect to other engines, and 811198 with 
respect to fuel conversions with engines manufactured by a different 
company. Qualifying manufacturers are not subject to the greenhouse gas 
emission standards in Sec.  1036.108 for engines built before January 
1, 2022. In addition, qualifying manufacturers producing engines that 
run on any fuel other than gasoline, E85, or diesel fuel may delay 
complying with every new standard under this part by one model year. 
Small businesses may certify their engines and generate emission 
credits under this part 1036 before standards start to apply, but only 
if they certify their entire U.S.-directed production volume within 
that averaging set for that model year.
    (e) Alternate phase-in standards. Where a manufacturer certifies 
all of its model year 2013 compression-ignition engines within a given 
primary intended service class to the applicable alternate standards of 
this paragraph (e), its compression-ignition engines within that 
primary intended service class are subject to the standards of this 
paragraph (e) for model years 2013 through 2016. This means that once a 
manufacturer chooses to certify a primary intended service class to the 
standards of this paragraph (e), it is not allowed to opt out of these 
standards. Engines certified to these standards are not eligible for 
early credits under paragraph (a) of this section.

----------------------------------------------------------------------------------------------------------------
              Tractors                     LHD Engines             MHD Engines               HHD Engines
----------------------------------------------------------------------------------------------------------------
Model Years 2013-2015..............  NA....................  512 g/hp-hr...........  485 g/hp-hr.

[[Page 40587]]

 
Model Years 2016 and later.\a\.....  NA....................  487 g/hp-hr...........  460 g/hp-hr.
Vocational.........................  LHD Engines...........  MHD Engines...........  HHD Engines.
Model Years 2013-2015..............  618 g/hp-hr...........  618 g/hp-hr...........  577 g/hp-hr.
Model Years 2016 and later.\a\.....  576 g/hp-hr...........  576 g/hp-hr...........  555 g/hp-hr.
----------------------------------------------------------------------------------------------------------------
\a\ Note: These alternate standards for 2016 and later are the same as the otherwise applicable standards for
  2017 and later.

    (f) Separate OBD families. This paragraph (f) applies where you 
separately certify engines for the purpose of applying OBD requirements 
(for engines used in vehicles under 14,000 pounds GVWR) from non-OBD 
engines that could be certified as a single engine family. You may 
treat the two engine families as a single engine family in certain 
respects for the purpose of this part, as follows:
    (1) This paragraph (f) applies only where the two families are 
identical in all respects except for the engine ratings offered and the 
inclusion of OBD.
    (2) For purposes of this part and 40 CFR part 86, the two families 
remain two separate families except for the following:
    (i) Specify the testable configurations of the non-OBD engine 
family as the testable configurations for the OBD family.
    (ii) Submit the same CO2, N2O, and 
CH4 emission data for both engine families.
    (g) Assigned deterioration factors. You may use assigned 
deterioration factors (DFs) without performing your own durability 
emission tests or engineering analysis as follows:
    (1) You may use an assigned additive DF of 0.0 g/hp-hr for 
CO2 emissions from engines that do not use advanced or off-
cycle technologies. If we determine it to be consistent with good 
engineering judgment, we may allow you to use an assigned additive DF 
of 0.0 g/hp-hr for CO2 emissions from your engines with 
advanced or off-cycle technologies.
    (2) You may use an assigned additive DF of 0.020 g/hp-hr for 
N2O emissions from any engine through model year 2020, and 
0.010 g/hp-hr for later model years.
    (3) You may use an assigned additive DF of 0.020 g/hp-hr for 
CH4 emissions from any engine.
    (h) Advanced technology credits. If you generate credits from model 
year 2020 and earlier engines certified for advanced technology you may 
multiply these credits by 1.5, except that you may not apply this 
multiplier and the early-credit multiplier of paragraph (a) of this 
section.
    (i) CO2 credits for low N2O emissions. If you 
certify your model year 2014, 2015, or 2016 engines to an 
N2O FEL less than 0.04 g/hp-hr (provided you measure 
N2O emissions from your emission-data engines), you may 
generate additional CO2 credits under this paragraph (i). 
Calculate the additional CO2 credits from the following 
equation instead of the equation in Sec.  1036.705:

CO2 Credits (Mg) = (0.04 - FELN2O) [middot] (CF) 
[middot] (Volume) [middot] (UL) [middot] (10-6) [middot] 
(298)
    (j) Alternate standards under 40 CFR part 86. This paragraph (j) 
describes alternate emission standards for 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 consistent 
with the provisions of 40 CFR 86.1819-14(k)(8)(vi). The CO2 
standard for the engines equals the test result specified in 40 CFR 
86.1819-14(k)(8)(vi) multiplied by 1.10 and rounded to the nearest 0.1 
g/mile. The N2O and CH4 standards are both 0.05 
g/mile (or any alternate standards that apply to the corresponding 
vehicle test group). The only requirements of this part that apply to 
these engines are those in this paragraph (j) and those in Sec. Sec.  
1036.115 through 1036.135.
    (k) ABT reports. Through model year 2017, you may submit a final 
report under Sec.  1036.730 up to 270 days after the end of the model 
year, as long as you send a draft report with the same information 
within 90 days after the end of the model year.
    (l) Credit adjustment for spark-ignition engines and light heavy-
duty compression-ignition engines. For emission credits generated from 
model year 2020 and earlier spark-ignition engines and light heavy-duty 
compression-ignition engines, multiply any banked credits that you 
carry forward to demonstrate compliance with model year 2021 and later 
standards by 1.36.
    (m) Infrequent regeneration. For model year 2020 and earlier, you 
may invalidate any test interval with respect to CO2 
measurements if an infrequent regeneration event occurs during the test 
interval.
    (n) Supplying fuel maps. Certifying engine manufacturers must 
supply vehicle manufacturers with fuel maps (or powertrain test 
results) as described in Sec.  1036.130 for model year 2020 engines.

Subpart C--Certifying Engine Families

Sec.  1036.205  What must I include in my application?

    Submit an application for certification as described in 40 CFR 
86.007-21, with the following additional information:
    (a) Describe the engine family's specifications and other basic 
parameters of the engine's design and emission controls with respect to 
compliance with the requirements of this part. 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 or test engine. Identify 
the part number of each component you describe. For this paragraph (a), 
treat as separate AECDs any devices that modulate or activate 
differently from each other.
    (b) Describe any test equipment and procedures that you used if you 
performed any tests that did not also involve measurement of criteria 
pollutants. Describe any special or alternate test procedures you used 
(see 40 CFR 1065.10(c)).
    (c) Include the emission-related installation instructions you will 
provide if someone else installs your engines in their vehicles (see 
Sec.  1036.130).
    (d) Describe the label information specified in Sec.  1036.135. We 
may require you to include a copy of the label.
    (e) Identify the CO2 FCLs with which you are certifying 
engines in the engine family; also identify any FELs that apply for 
CH4 and N2O. The actual U.S.-directed production 
volume of configurations that have CO2 emission rates at or 
below the FCL and CH4 and N2O emission rates at 
or below the applicable standards or FELs must be at least one percent 
of your actual (not projected) U.S.-directed production volume for the 
engine family. Identify configurations within the family that have 
emission rates at or below the FCL and meet the one percent 
requirement. For example, if your U.S.-directed production volume for 
the engine family is 10,583 and the U.S.-directed

[[Page 40588]]

production volume for the tested rating is 75 engines, then you can 
comply with this provision by setting your FCL so that one more rating 
with a U.S.-directed production volume of at least 31 engines meets the 
FCL. Where applicable, also identify other testable configurations 
required under Sec.  1036.230(b)(2).
    (f) Identify the engine family's deterioration factors and describe 
how you developed them (see Sec.  1036.241). Present any test data you 
used for this.
    (g) Present emission data to show that you meet emission standards, 
as follows:
    (1) Present exhaust emission data for CO2, 
CH4, and N2O on an emission-data engine to show 
that your engines meet the applicable emission standards we specify in 
Sec.  1036.108. Show emission figures before and after applying 
deterioration factors for each engine. In addition to the composite 
results, show individual measurements for cold-start testing and hot-
start testing over the transient test cycle.
    (2) Note that Sec.  1036.235 allows you to submit an application in 
certain cases without new emission data.
    (h) State whether your certification is limited for certain 
engines. For example, if you certify heavy heavy-duty engines to the 
CO2 standards using only transient testing, the engines may 
be installed only in vocational vehicles.
    (i) Unconditionally certify that all the engines in the engine 
family comply with the requirements of this part, other referenced 
parts of the CFR, and the Clean Air Act. Note that Sec.  1036.235 
specifies which engines to test to show that engines in the entire 
family comply with the requirements of this part.
    (j) Include the information required by other subparts of this 
part. For example, include the information required by Sec.  1036.725 
if you participate in the ABT program.
    (k) Include the warranty statement and maintenance instructions if 
we request them.
    (l) Include other applicable information, such as information 
specified in this part or 40 CFR part 1068 related to requests for 
exemptions.
    (m) For imported engines or equipment, identify the following:
    (1) Describe your normal practice for importing engines. For 
example, this may include identifying the names and addresses of any 
agents you have authorized to import your engines. Engines imported by 
nonauthorized agents are not covered by your certificate.
    (2) The location of a test facility in the United States where you 
can test your engines if we select them for testing under a selective 
enforcement audit, as specified in 40 CFR part 1068, subpart E.
    (n) Include information needed to certify vehicles to GHG standards 
under 40 CFR part 1037, as follows:
    (1) Identify the engine parameters used for GEM modeling as 
described in 40 CFR 1037.520.
    (2) Report the measured fuel consumption rate and NOX 
emission level corresponding to each point of the fuel map and at each 
measured idle point as described in Sec.  1036.535.
    (3) State whether your application is intended to cover engine 
emissions measured during powertrain testing under 40 CFR 1037.550; 
include any associated test results and powertrain information. You may 
omit the fuel map specified in paragraph (n)(2) of this section (but 
not the idle points) if you certify the powertrain test results. If you 
omit the fuel map data, you will be deemed to not be certifying a fuel 
map.

Sec.  1036.210  Preliminary approval before certification.

    If you send us information before you finish the application, we 
may review it and make any appropriate determinations, especially for 
questions related to engine family definitions, auxiliary emission 
control devices, adjustable parameters, deterioration factors, testing 
for service accumulation, and maintenance. Decisions made under this 
section are considered to be preliminary approval, subject to final 
review and approval. We will generally not reverse a decision where we 
have given you preliminary approval, unless we find new information 
supporting a different decision. If you request preliminary approval 
related to the upcoming model year or the model year after that, we 
will make best-efforts to make the appropriate determinations as soon 
as practicable. We will generally not provide preliminary approval 
related to a future model year more than two years ahead of time.

Sec.  1036.225  Amending my application for certification.

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified engine configurations, subject 
to the provisions of this section. After we have issued your 
certificate of conformity, but before the end of the model year, you 
may send us an amended application requesting that we include new or 
modified engine configurations within the scope of the certificate, 
subject to the provisions of this section. You must amend your 
application if any changes occur with respect to any information that 
is included or should be included in your application.
    (a) You must amend your application before you take any of the 
following actions:
    (1) Add an engine configuration to an engine family. In this case, 
the engine configuration added must be consistent with other engine 
configurations in the engine family with respect to the criteria listed 
in Sec.  1036.230.
    (2) Change an engine configuration already included in an engine 
family in a way that may affect emissions, or change any of the 
components you described in your application for certification. This 
includes production and design changes that may affect emissions any 
time during the engine's lifetime.
    (3) Modify an FEL and FCL for an engine family as described in 
paragraph (f) of this section.
    (b) To amend your application for certification, send the relevant 
information to the Designated Compliance Officer.
    (1) Describe in detail the addition or change in the engine model 
or configuration you intend to make.
    (2) Include engineering evaluations or data showing that the 
amended engine family complies with all applicable requirements. You 
may do this by showing that the original emission-data engine is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
    (3) If the original emission-data engine for the engine family is 
not appropriate to show compliance for the new or modified engine 
configuration, include new test data showing that the new or modified 
engine configuration meets the requirements of this part.
    (4) Include any other information needed to make your application 
correct and complete.
    (c) We may ask for more test data or engineering evaluations. You 
must give us these within 30 days after we request them.
    (d) For engine families already covered by a certificate of 
conformity, we will determine whether the existing certificate of 
conformity covers your newly added or modified engine. You may ask for 
a hearing if we deny your request (see Sec.  1036.820).
    (e) For engine families already covered by a certificate of 
conformity, you may start producing the new or modified engine 
configuration any time after you send us your amended application and 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected engines do not meet applicable 
requirements, we will notify

[[Page 40589]]

you to cease production of the engines and may require you to recall 
the engines at no expense to the owner. Choosing to produce engines 
under this paragraph (e) is deemed to be consent to recall all engines 
that we determine do not meet applicable emission standards or other 
requirements and to remedy the nonconformity at no expense to the 
owner. If you do not provide information required under paragraph (c) 
of this section within 30 days after we request it, you must stop 
producing the new or modified engines.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production, but before the end of the model year. If 
you change an FEL for CO2, your FCL for CO2 is 
automatically set to your new FEL divided by 1.03. The changed FEL may 
not apply to engines you have already introduced into U.S. commerce, 
except as described in this paragraph (f). You may ask us to approve a 
change to your FEL in the following cases:
    (1) You may ask to raise your FEL for your engine family at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. Use the appropriate FELs/FCLs with corresponding production 
volumes to calculate emission credits for the model year, as described 
in subpart H of this part.
    (2) You may ask to lower the FEL for your engine family only if you 
have test data from production engines showing that emissions are below 
the proposed lower FEL (or below the proposed FCL for CO2). 
The lower FEL/FCL applies only to engines you produce after we approve 
the new FEL/FCL. Use the appropriate FELs/FCLs with corresponding 
production volumes to calculate emission credits for the model year, as 
described in subpart H of this part.

Sec.  1036.230  Selecting engine families.

    See 40 CFR 86.001-24 for instructions on how to divide your product 
line into families of engines that are expected to have similar 
emission characteristics throughout the useful life. You must certify 
your engines to the standards of Sec.  1036.108 using the same engine 
families you use for criteria pollutants under 40 CFR part 86. The 
following provisions also apply:
    (a) Engines certified as hybrid engines may not be included in an 
engine family with engines with conventional powertrains. Note that 
this does not prevent you from including engines in a conventional 
family if they are used in hybrid vehicles, as long as you certify them 
conventionally.
    (b) If you certify engines in the family for use as both vocational 
and tractor engines, you must split your family into two separate 
subfamilies. Indicate in the application for certification that the 
engine family is to be split.
    (1) Calculate emission credits relative to the vocational engine 
standard for the number of engines sold into vocational applications 
and relative to the tractor engine standard for the number of engines 
sold into non-vocational tractor applications. You may assign the 
numbers and configurations of engines within the respective subfamilies 
at any time before submitting the final report required by Sec.  
1036.730. If the family participates in averaging, banking, or trading, 
you must identify the type of vehicle in which each engine is 
installed; we may alternatively allow you to use statistical methods to 
determine this for a fraction of your engines. Keep records to document 
this determination.
    (2) If you restrict use of the test configuration for your split 
family to only tractors, or only vocational vehicles, you must identify 
a second testable configuration for the other type of vehicle (or an 
unrestricted configuration). Identify this configuration in your 
application for certification. The FCL for the engine family applies 
for this configuration as well as the primary test configuration.
    (c) If you certify in separate engine families engines that could 
have been certified in vocational and tractor engine subfamilies in the 
same engine family, count the two families as one family for purposes 
of determining your obligations with respect to the OBD requirements 
and in-use testing requirements of 40 CFR part 86. Indicate in the 
applications for certification that the two engine families are covered 
by this paragraph (c).
    (d) Engine configurations within an engine family must use 
equivalent greenhouse gas emission controls. Unless we approve it, you 
may not produce nontested configurations without the same emission 
control hardware included on the tested configuration. We will only 
approve it if you demonstrate that the exclusion of the hardware does 
not increase greenhouse gas emissions.

Sec.  1036.235  Testing requirements for certification.

    This section describes the emission testing you must perform to 
show compliance with the greenhouse gas emission standards in Sec.  
1036.108.
    (a) Select a single emission-data engine from each engine family as 
specified in 40 CFR part 86. The standards of this part apply only with 
respect to emissions measured from this tested configuration and other 
configurations identified in Sec.  1036.205(e). Note that 
configurations identified in Sec.  1036.205(e) are considered to be 
``tested configurations'' whether or not you actually tested them for 
certification. However, you must apply the same (or equivalent) 
emission controls to all other engine configurations in the engine 
family.
    (b) Test your emission-data engines using the procedures and 
equipment specified in subpart F of this part. In the case of dual-fuel 
and flexible-fuel engines, measure emissions when operating with each 
type of fuel for which you intend to certify the engine. (Note: 
Measurement of criteria emissions from flexible-fuel engines generally 
involves operation with the fuel mixture that best represents in-use 
operation, or with the fuel mixture with the highest emissions.) 
Measure CO2, CH4, and N2O emissions 
using the specified duty cycle(s), including cold-start and hot-start 
testing as specified in 40 CFR part 86, subpart N. The following 
provisions apply regarding test cycles for demonstrating compliance 
with tractor and vocational standards:
    (1) If you are certifying the engine for use in tractors, you must 
measure CO2 emissions using the ramped-modal cycle and 
measure CH4, and N2O emissions using the 
specified transient cycle.
    (2) If you are certifying the engine for use in vocational 
applications, you must measure CO2, CH4, and 
N2O emissions using the specified transient duty cycle, 
including cold-start and hot-start testing as specified in 40 CFR part 
86, subpart N.
    (3) You may certify your engine family for both tractor and 
vocational use by submitting CO2 emission data from both 
ramped-modal and transient cycle testing and specifying FCLs for both.
    (4) Engines certified for use in tractors may also be used in 
vocational vehicles; however, you may not knowingly circumvent the 
intent of this part (to reduce in-use emissions of CO2) by 
certifying engines designed for vocational vehicles (and rarely used in 
tractors) to the ramped-modal cycle and not the transient cycle. For 
example, we would generally not allow you to certify all your engines 
to the ramped-modal cycle without certifying any to the transient 
cycle.
    (c) We may measure emissions from any of your emission-data 
engines.
    (1) We may decide to do the testing at your plant or any other 
facility. If we

[[Page 40590]]

do this, you must deliver the engine to a test facility we designate. 
The engine you provide must include appropriate manifolds, 
aftertreatment devices, electronic control units, and other emission-
related components not normally attached directly to the engine block. 
If we do the testing at your plant, you must schedule it as soon as 
possible and make available the instruments, personnel, and equipment 
we need.
    (2) If we measure emissions on your engine, the results of that 
testing become the official emission results for the engine. Unless we 
later invalidate these data, we may decide not to consider your data in 
determining if your engine family meets applicable requirements. This 
applies equally to testing for fuel maps under Sec.  1036.535 and to 
engine-based powertrain testing under Sec.  1036.630 and 40 CFR 
1037.550, except that the results of our testing at individual test 
points do not become the official emission result if they are lower 
than your declared values.
    (3) Before we test one of your engines, we may set its adjustable 
parameters to any point within the physically adjustable ranges.
    (4) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply for an engine 
parameter that is subject to production variability because it is 
adjustable during production, but is not considered an adjustable 
parameter (as defined in Sec.  1036.801) because it is permanently 
sealed. For parameters that relate to a level of performance that is 
itself subject to a specified range (such as maximum power output), we 
will generally perform any calibration under this paragraph (c)(4) in a 
way that keeps performance within the specified range.
    (d) You may ask to use carryover emission data from a previous 
model year instead of doing new tests, but only if all the following 
are true:
    (1) The engine family from the previous model year differs from the 
current engine family only with respect to model year, items identified 
in Sec.  1036.225(a), or other characteristics unrelated to emissions. 
We may waive this criterion for differences we determine not to be 
relevant.
    (2) The emission-data engine from the previous model year remains 
the appropriate emission-data engine under paragraph (b) of this 
section.
    (3) The data show that the emission-data engine would meet all the 
requirements that apply to the engine family covered by the application 
for certification.
    (e) We may require you to test a second engine of the same 
configuration in addition to the engine tested under paragraph (a) of 
this section.
    (f) If you use an alternate test procedure under 40 CFR 1065.10 and 
later testing shows that such testing does not produce results that are 
equivalent to the procedures specified in subpart F of this part, we 
may reject data you generated using the alternate procedure.

Sec.  1036.241  Demonstrating compliance with greenhouse gas emission 
standards.

    (a) For purposes of certification, your engine family is considered 
in compliance with the emission standards in Sec.  1036.108 if all 
emission-data engines representing the tested configuration of that 
engine family have test results showing official emission results and 
deteriorated emission levels at or below the standards. Note that your 
FCLs are considered to be the applicable emission standards with which 
you must comply for certification.
    (b) Your engine family is deemed not to comply if any emission-data 
engine representing the tested configuration of that engine family has 
test results showing an official emission result or a deteriorated 
emission level for any pollutant that is above an applicable emission 
standard (generally the FCL). Note that you may increase your FCL if 
any certification test results exceed your initial FCL.
    (c) Apply deterioration factors to the measured emission levels for 
each pollutant to show compliance with the applicable emission 
standards. Your deterioration factors must take into account any 
available data from in-use testing with similar engines. Apply 
deterioration factors as follows:
    (1) Additive deterioration factor for greenhouse gas emissions. 
Except as specified in paragraphs (c)(2) and (3) of this section, use 
an additive deterioration factor for exhaust emissions. An additive 
deterioration factor is the difference between the highest exhaust 
emissions (typically at the end of the useful life) and exhaust 
emissions at the low-hour test point. In these cases, adjust the 
official emission results for each tested engine at the selected test 
point by adding the factor to the measured emissions. If the factor is 
less than zero, use zero. Additive deterioration factors must be 
specified to one more decimal place than the applicable standard.
    (2) Multiplicative deterioration factor for greenhouse gas 
emissions. Use a multiplicative deterioration factor for a pollutant if 
good engineering judgment calls for the deterioration factor for that 
pollutant to be the ratio of the highest exhaust emissions (typically 
at the end of the useful life) to exhaust emissions at the low-hour 
test point. Adjust the official emission results for each tested engine 
at the selected test point by multiplying the measured emissions by the 
deterioration factor. If the factor is less than one, use one. A 
multiplicative deterioration factor may not be appropriate in cases 
where testing variability is significantly greater than engine-to-
engine variability. Multiplicative deterioration factors must be 
specified to one more significant figure than the applicable standard.
    (3) Sawtooth 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 electric hybrid engines. Base deterioration factors for 
engines with such emission patterns on the difference between (or ratio 
of) the point of the sawtooth 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.
    (4) [Reserved]
    (5) Dual-fuel and flexible-fuel engines. In the case of dual-fuel 
and flexible-fuel engines, apply deterioration factors separately for 
each fuel type by measuring emissions with each fuel type at each test 
point. You may accumulate service hours on a single emission-data 
engine using the type of fuel or the fuel mixture expected to have the 
highest combustion and exhaust temperatures; you may ask us to approve 
a different fuel mixture if you demonstrate that a different criterion 
is more appropriate.
    (d) Calculate emission data using measurements to at least one more 
decimal place than the applicable standard. Apply the deterioration 
factor to the official emission result, as described in paragraph (c) 
of this section, then round the adjusted figure to the same number of 
decimal places as the emission standard. Compare the rounded emission 
levels to the emission standard for each emission-data engine.

[[Page 40591]]

    (e) If you identify more than one configuration in Sec.  
1036.205(e), we may test (or require you to test) any of the identified 
configurations. We may also require you to provide an engineering 
analysis that demonstrates that untested configurations listed in Sec.  
1036.205(e) comply with their FCL.

Sec.  1036.250  Reporting and recordkeeping for certification.

    (a) Within 90 days after 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. Small manufacturers may omit this requirement. You may 
combine this report with reports required under subpart H of this part.
    (b) Organize and maintain the following records:
    (1) A copy of all applications and any summary information you send 
us.
    (2) Any of the information we specify in Sec.  1036.205 that you 
were not required to include in your application.
    (c) Keep routine data from emission tests required by this part 
(such as test cell temperatures and relative humidity readings) for one 
year after we issue the associated certificate of conformity. Keep all 
other information specified in this section for eight years after we 
issue your certificate.
    (d) Store these records in any format and on any media, as long as 
you can promptly send us organized, written records in English if we 
ask for them. You must keep these records readily available. We may 
review them at any time.

Sec.  1036.255  What decisions may EPA make regarding my certificate of 
conformity?

    (a) If we determine your application is complete and shows that the 
engine family meets all the requirements of this part and the Act, we 
will issue a certificate of conformity for your engine family for that 
model year. We may make the approval subject to additional conditions.
    (b) We may deny your application for certification if we determine 
that your engine family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
    (c) In addition, we may deny your application or suspend or revoke 
your certificate if you do any of the following:
    (1) Refuse to comply with any testing or reporting requirements.
    (2) Submit false or incomplete information (paragraph (e) of this 
section applies if this is fraudulent). This includes doing anything 
after submission of your application to render any of the submitted 
information false or incomplete.
    (3) Render inaccurate any test data.
    (4) Deny us from completing authorized activities (see 40 CFR 
1068.20). This includes a failure to provide reasonable assistance.
    (5) Produce engines for importation into the United States at a 
location where local law prohibits us from carrying out authorized 
activities.
    (6) Fail to supply requested information or amend your application 
to include all engines being produced.
    (7) Take any action that otherwise circumvents the intent of the 
Act or this part, with respect to your engine family.
    (d) We may void the certificate of conformity for an engine family 
if you fail to keep records, send reports, or give us information as 
required under this part or the Act. Note that these are also 
violations of 40 CFR 1068.101(a)(2).
    (e) We may void your certificate if we find that you intentionally 
submitted false or incomplete information. This includes rendering 
submitted information false or incomplete after submission.
    (f) If we deny your application or suspend, revoke, or void your 
certificate, you may ask for a hearing (see Sec.  1036.820).

Subpart D--Testing Production Engines

Sec.  1036.301  Measurements related to GEM inputs in a selective 
enforcement audit.

    (a) Selective enforcement audits apply for engines as specified in 
40 CFR part 1068, subpart E. This section describes how this applies 
uniquely in certain circumstances.
    (b) Selective enforcement audit provisions apply with respect to 
your fuel maps as follows:
    (1) A selective enforcement audit for fuel maps would consist of 
performing measurements with production engines to determine the fuel-
consumption rates at each of the specified points under the engine map 
as declared for GEM simulations, and running GEM over one or more 
applicable duty cycles based on those measured values, using GEM inputs 
that represent any applicable vehicle configuration for which the 
engine is being used. The engine is considered passing for a given 
configuration if the new modeled emission result for every applicable 
duty cycle is at or below the modeled emission result corresponding to 
the declared GEM inputs.
    (2) We may specify up to ten unique vehicle configurations for an 
audit to verify that an engine's fuel map is part of a complying 
certified engine configuration. If the audit includes fuel-map testing 
in conjunction with engine testing relative to exhaust emission 
standards, the fuel-map simulations for the whole set of vehicles and 
duty cycles counts as a single test result for purposes of evaluating 
whether the engine family meets the pass-fail criteria under 40 CFR 
1068.420. If the audit includes only fuel-map testing, the fuel-map 
simulation for each vehicle configuration counts as a separate test for 
the engine.
    (c) If your certification includes powertrain testing as specified 
in 40 CFR 1036.630, the selective enforcement audit provisions apply 
with respect to powertrain test results as specified in 40 CFR 1037.301 
and 1037.550. We may allow manufacturers to instead perform the engine-
based testing to simulate the powertrain test as specified in 40 CFR 
1037.551.
    (d) We may suspend or revoke certificates, based on the outcome of 
a selective enforcement audit, for any appropriate configurations 
within one or more engine families.

Subpart E--In-Use Testing

Sec.  1036.401  In-use testing.

    We may perform in-use testing of any engine family subject to the 
standards of this part, consistent with the Clean Air Act and the 
provisions of Sec.  1036.235. Note that this provision does not affect 
your obligation to test your in-use engines as described in 40 CFR part 
86, subpart T.

Subpart F--Test Procedures

Sec.  1036.501  How do I run a valid emission test?

    (a) Use the equipment and procedures specified in 40 CFR 86.1305 to 
determine whether engines meet the emission standards in Sec.  
1036.108. These same procedures apply for determining engine fuel maps 
and fuel consumption at idle as specified in Sec.  1036.535. These 
procedures also apply for engine-based measurement procedures to 
simulate powertrain testing as specified in 40 CFR 1037.551.
    (b) You may use special or alternate procedures to the extent we 
allow them under 40 CFR 1065.10.
    (c) This subpart is addressed to you as a manufacturer, but it 
applies equally to anyone who does testing for you, and to us when we 
perform testing to

[[Page 40592]]

determine if your engines meet emission standards.
    (d) For engines that use aftertreatment technology with infrequent 
regeneration events, apply infrequent regeneration adjustment factors 
as described in Sec.  1036.530.
    (e) Test hybrid engines as described in Sec.  1036.525 and 40 CFR 
part 1065.
    (f) Determine engine fuel maps and fuel consumption at idle as 
described in Sec.  1036.535.
    (g) The following additional provisions apply for testing to 
demonstrate compliance with the emission standards in Sec.  1036.108 
for model year 2021 and later engines:
    (1) When calculating total engine work, exclude work during any 
portion of the duty cycle that has a zero reference value for 
normalized torque.
    (2) If your engine is intended for installation in a vehicle 
equipped with stop-start technology, you may use good engineering 
judgment to turn the engine off during the idle portions of the duty 
cycle to represent in-use operation, consistent with good engineering 
judgment.
    (3) Use continuous sampling (not batch sampling) to measure 
CO2 emissions over the ramped-modal cycle specified in 40 
CFR 86.1362. Integrate the test results by mode to establish separate 
emission rates for each mode (including the transition following each 
mode, as applicable). Apply the weighting factors specified in 40 CFR 
86.1362 to calculate a composite emission result.

Sec.  1036.525  Hybrid engines.

    (a) If your engine system includes features that recover and store 
energy during engine motoring operation, test the engine as described 
in paragraph (d) of this section. For purposes of this section, 
features that recover energy between the engine and transmission are 
considered related to engine motoring.
    (b) If you produce a hybrid engine designed with power take-off 
capability and sell the engine coupled with a transmission, you may 
calculate a reduction in CO2 emissions resulting from the 
power take-off operation as described in 40 CFR 1037.525. Use good 
engineering judgment to use the vehicle-based procedures to quantify 
the CO2 reduction for your engines.
    (c) The hardware that must be included in these tests is the 
engine, the hybrid electric motor, the rechargeable energy storage 
system (RESS) and the power electronics between the hybrid electric 
motor and the RESS. You may ask us to modify the provisions of this 
section to allow testing non-electric hybrid vehicles, consistent with 
good engineering judgment.
    (d) Measure emissions using the same procedures that apply for 
testing non-hybrid engines under this part, except as specified 
otherwise in this part and/or 40 CFR part 1065. If you test hybrid 
engines using the ramped-modal cycle, deactivate the hybrid features 
unless we have specified otherwise. The five differences that apply 
under this section are related to engine mapping, engine shutdown 
during the test cycle, calculating work, limits on braking energy, and 
state of charge constraints.
    (1) Map the engine as specified in 40 CFR 1065.510. This requires 
separate torque maps for the engine with and without the hybrid 
features active. For transient testing, denormalize the test cycle 
using the map generated with the hybrid feature active. For steady-
state testing, denormalize the test cycle using the map generated with 
the hybrid feature inactive.
    (2) If the engine will be configured in actual use to shut down 
automatically during idle operation, you may let the engine shut down 
during the idle portions of the test cycle.
    (3) Follow 40 CFR 1065.650(d) to calculate the work done over the 
cycle except as specified in this paragraph (d)(3). For the positive 
work over the cycle, set negative hybrid power to zero. For the 
negative work over the cycle set the positive power to zero and the set 
the non-hybrid power to zero.
    (4) Calculate brake energy fraction, xb, as follows:
    (i) Calculate xb as the integrated negative work over 
the cycle divided by the integrated positive work over the cycle 
according to Equation 1036.525-1. Calculate the brake energy limit for 
the engine, xbl, according to Equation 1036.525-2. If 
xb is less than xbl, use the integrated positive 
work for your emission calculations. If xb is greater than 
xbl use Equation 1036.525-3 to calculate the positive work 
done over the cycle. Use Wcycle as the integrated positive 
work when calculating brake-specific emissions. To avoid the need to 
delete extra brake work from positive work you may set an instantaneous 
brake target that will prevent xb from being larger than 
xbl.
[GRAPHIC] [TIFF OMITTED] TP13JY15.029

    (ii) The following definitions apply for this paragraph (d)(4):

xb = the brake energy fraction.
Wneg = the negative work over the cycle.
Wpos = the positive work over the cycle.
xbl = the brake energy fraction limit.
Pmax = the maximum power of the engine with the hybrid 
system engaged (kW).
Wcycle = the work over the cycle when xb is 
greater than xbl.

    (iii) Note that these calculations are specified with SI units 
(such as kW), consistent with 40 CFR part 1065. Emission results are 
converted to g/hp-hr at the end of the calculations.
    (5) Correct for the net energy change of the energy storage device 
as described in 40 CFR 1066.501.

Sec.  1036.530  Calculating greenhouse gas emission rates.

    This section describes how to calculate official emission results 
for CO2, CH4, and N2O.

[[Page 40593]]

    (a) Calculate brake-specific emission rates for each applicable 
duty cycle as specified in 40 CFR 1065.650. Apply infrequent 
regeneration adjustment factors to your cycle-average results as 
described in 40 CFR 86.004-28 for CO2 starting in model year 
2021. You may optionally apply infrequent regeneration adjustment 
factors for CH4 and N2O.
    (b) Adjust CO2 emission rates calculated under paragraph 
(a) of this section for measured test fuel properties as specified in 
this paragraph (b) to obtain the official emission results. You are not 
required to apply this adjustment for fuels containing at least 75 
percent pure alcohol, such as E85. The purpose of this adjustment is to 
make official emission results independent of differences in test fuels 
within a fuel type. Use good engineering judgment to develop and apply 
testing protocols to minimize the impact of variations in test fuels.
    (1) Determine mass-specific net energy content, 
Emfuelmeas, also known as lower heating value, in MJ/kg, 
expressed to at least three decimal places, as follows:
    (i) For liquid fuels, determine Emfuelmeas according to 
ASTM D4809 (recommended) or ASTM D240 (both incorporated by reference 
in Sec.  1036.810).
    (ii) For gaseous fuels, determine Emfuelmeas using good 
engineering judgment.
    (iii) If you determine based on good engineering judgment that your 
careful control of test fuel properties causes variations in the actual 
mass-specific energy content and carbon mass fraction to be the same as 
or smaller than the repeatability of measuring those values, you may 
use constant values equal to the average values for your test fuel. If 
you use a constant value, you must update or verify the value at least 
once per year, or after changes in test fuel suppliers or 
specifications.
    (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 rather than using the 
default values specified in Table 1 of 40 CFR 1065.655.
    (3) Correct measured CO2 emission rates as follows:
    [GRAPHIC] [TIFF OMITTED] TP13JY15.030
    
Where:
eCO2 = the calculated CO2 emission result.
Emfuelmeas = the mass-specific net energy content of the 
test fuel as determined by paragraph (b)(1) of this section.
EmfuelCref = the reference value of carbon-specific net 
energy content for the appropriate fuel, as determined in Table 1 of 
this section.
wCmeas = carbon mass fraction of the test fuel as 
determined under paragraph (b)(2) of this section.
    Example: 
    [GRAPHIC] [TIFF OMITTED] TP13JY15.031
    

          Table 1 of Sec.   1036.530--Reference Fuel Properties
------------------------------------------------------------------------
                                                 Reference
                                                fuel carbon-
                                                   mass-      Reference
                                                  specific   fuel carbon
                 Fuel Type\a\                    net energy      mass
                                                  content,    fraction,
                                                EmfuelCref,     wCref
                                                  (MJ/kgC)
------------------------------------------------------------------------
Diesel fuel...................................      49.3112        0.874
Gasoline......................................      50.4742        0.846
Natural Gas...................................      66.2910        0.750
LPG...........................................      56.5218        0.820
Dimethyl Ether................................      55.3886        0.521
------------------------------------------------------------------------
\a\ For fuels that are not listed, you must ask us to approve a
  reference fuel and its properties.

    (c) Your official CO2 emission result equals your 
calculated brake-specific emission rate multiplied by all applicable 
adjustment factors, other than the deterioration factor.

Sec.  1036.535  Determining engine fuel maps and fuel consumption at 
idle.

    This section describes procedures for determining an engine's fuel-
consumption rate for model year 2021 and later vehicles. Note that 
vehicle manufacturers will generally use these values to demonstrate 
compliance with vehicle-based Phase 2 emission standards that rely on 
emission modeling using the GEM simulation tool, as described in 40 CFR 
1037.510.
    (a) General test provisions. Perform fuel mapping using the 
procedure described in paragraph (b) of this section to establish 
measured fuel-consumption rates at a range of engine speed and load 
settings. Measure fuel consumption at idle using the procedure 
described in paragraph (c) of this section. Use these measured fuel-
consumption values to declare fuel-consumption rates for certification 
as described in paragraph (d) of this section. Also measure 
NOX emissions (in g/s) during each of the specified sampling 
periods consistent with the data requirements 40 CFR part 86, subpart 
T. Perform emission measurements as described in 40 CFR 1065.530 for 
discrete-mode steady-state testing. Control engine speed and torque to 
within 20 rpm and 20 N[middot]m, or 20 percent 
of the speed and torque setpoint, whichever is greater. This section 
uses engine parameters and variables that are consistent with 40 CFR 
part 1065. For molar mass values, see 40 CFR 1065.1005.
    (b) Steady-state fuel mapping. Determine fuel-consumption rates for 
each engine configuration over a series of steady-state engine 
operating points as described in this paragraph (b). You may use shared 
data across an engine platform to the extent that the fuel-consumption 
rates remain valid. For example, if you test a high-output 
configuration and create a different configuration that uses the same 
fueling strategy but limits the engine operation to be a subset of that 
from the high-output configuration, you may use the fuel-consumption 
rates for the reduced number of mapped points for the low-output 
configuration, as long as the narrower map includes at least 100 
points. Perform fuel mapping as follows:
    (1) Select 13 speed points that include warm idle speed, 
fnidle, the highest speed above maximum power at which 70% 
of

[[Page 40594]]

maximum power occurs, nhi, and 11 equally spaced points 
between fnidle and nhi. If operating the engine 
at the specified speeds causes unstable engine operation due to 
operating on the low or high speed governor you may adjust the speed 
setpoint for those points as needed. Typically this would only happen 
at fnidle above zero torque and nhi at 100% 
torque. fnidle and zero torque must be one of the test 
points.
    (2) Select 11 normalized torque values at each of the speed points 
determined in paragraph (b)(1) of this section, including T = 0, 
maximum mapped torque, Tmax mapped, and 9 equally spaced 
points between T = 0 and Tmax mapped. Normalized torque 
values are expressed as a percentage of Tmax mapped at a 
given engine speed.
    (3) Warm up the engine as described in 40 CFR 1065.510(b)(2).
    (4) Within 60 seconds after concluding the warm-up procedure, 
operate the engine at fntest and the highest torque value, 
Tmax, at that speed.
    (5) After the engine operates at the set speed and torque for 60 
seconds, start recording measurements using one of the following 
methods:
    (i) Carbon mass balance. Record speed and torque and measure 
emissions of CO2, CO, NMHC, and CH4 for (29 to 
31) seconds and determine the corresponding mean values for the 
sampling period.
    (ii) Direct measurement of fuel flow. Record speed and torque and 
measure fuel consumption with a fuel flow meter for (29 to 31) seconds 
and determine the corresponding mean values for the sampling period.
    (6) Within 15 seconds after completing the sampling period 
described in paragraph (b)(5) of this section, set the engine to 
operate at the next lowest torque value while holding speed constant. 
Perform the measurements described at the new torque setting and repeat 
this sequence for all remaining torque values down to T = 0.
    (7) Continue testing to complete fuel mapping as follows:
    (i) Within 15 seconds after sampling at T = 0, set the engine to 
operate at the next lowest speed value and increase torque to 
Tmax. Perform measurements for all the torque values at the 
selected speed as described in paragraphs (b)(5) and (6) of this 
section. Repeat this sequence for all remaining speed values down to 
fnidle to complete the fuel-mapping procedure. You may 
interrupt the mapping sequence to calibrate emission-measurement 
instrumentation only during stabilization at Tmax for a 
given speed.
    (ii) If an infrequent regeneration event occurs during fuel 
mapping, invalidate all the measurements made at that engine speed. 
Allow the regeneration event to finish, then restart engine 
stabilization at Tmax at the same engine speed and continue 
with measurements from that point in the fuel-mapping sequence.
    (8) If you determine fuel-consumption rates using emission 
measurements from the raw or diluted exhaust, calculate the mean fuel 
mass flow rate,, for each point in the fuel map using the following 
equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.032

Where:

mfuel = mean fuel mass flow rate for a given fuel map 
setpoint, expressed to at least the nearest 0.001 g/s.
MC = molar mass of carbon.
wCmeas = carbon mass fraction of fuel as determined by 40 
CFR 1065.655(d), except that you may not use the default properties 
in Table 1 of 40 CFR 1065.655 to determine [alpha], [beta], and 
wC for liquid fuels.
nexh = 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 in 
the exhaust per mole of dry exhaust.
xH2Oexhdry = the mean concentration of H2O in 
exhaust per mole of dry exhaust.
miCO2urea = the mean CO2 mass emission rate 
from urea decomposition as described in paragraph (b)(9) of this 
section. If your engine does not utilize urea SCR for emission 
control, or if you choose not to perform this correction, set 
miCO2urea equal to 0.
MCO2 = molar mass of carbon dioxide.

    Example: 
    [GRAPHIC] [TIFF OMITTED] TP13JY15.033
    
    (9) If you determine fuel-consumption rates using emission 
measurements with engines that have urea SCR for NOX 
control, you may correct for the mean CO2 emissions 
coming from urea decomposition, miCO2urea, at each fuel 
map setpoint using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.034

Where:
murea = the mean mass flow rate of injected urea solution 
for a given sampling period.
MCO2 = molar mass of carbon dioxide.
MFCH4N2O = mass fraction of urea in aqueous solution. 
Note that the subscript ``CH4N2O'' refers to 
urea as a pure compound and the subscript ``urea'' refers to the 
aqueous urea solution.
MCH4N2O = molar mass of urea.
    Example: 
miurea= 0. 304 g/s
MCO2 = 44.0095 g/mol
MFCH4N2O = 32.5% = 0.325
MCH4N2O = 60.05526 g/mol

[[Page 40595]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.035

    (10) For all fuels except those that have at least 75% pure 
alcohol, correct the measured or calculated mean fuel mass flow rate, 
mifuel at each engine operating condition to a mass-specific 
net energy content of a reference fuel using the following equation and 
the values specified in Table 1 of Sec.  1036.530:
[GRAPHIC] [TIFF OMITTED] TP13JY15.036

    Example: 
mifuel = 0.933 g/s
Emfuelmeas = 42.7984 MJ/kgC
wCref = 0.874
EmfuelCref = 49.3112 MJ/kgC

[GRAPHIC] [TIFF OMITTED] TP13JY15.037

    (c) Fuel consumption at idle. Determine values for fuel-consumption 
rate at idle for each engine configuration as described in this 
paragraph (c). You may use shared data across engine configurations, 
consistent with good engineering judgment. Perform measurements as 
follows:
    (1) Warm up the engine as described in 40 CFR 1065.510(b)(2).
    (2) Within 60 seconds after concluding the warm-up procedure, 
operate the engine at its minimum declared warm idle speed, 
fnidlemin, as described in 40 CFR 1065.510(b)(3), set zero 
torque, and start the sampling period. Continue sampling for (595 to 
605) seconds. Perform measurements using one of the following methods 
during the sampling period:
    (i) Carbon mass balance. Record speed and torque and measure 
emissions of CO2, CO, NMHC, and CH4 and determine 
the corresponding mean values for the sampling period. Calculate the 
mean fuel mass flow rate, mifuel, during the sampling period 
as described in paragraph (b)(8) of this section.
    (ii) Direct measurement of fuel flow. Record speed and torque and 
measure fuel consumption with a fuel flow meter and determine the 
corresponding mean values for the sampling period.
    (3) Repeat the steps in paragraphs (c)(1) and (2) of this section 
with the engine set to operate at idle torque, Tidle. 
Determine Tidle using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.038

Where:

Tfnstall = the maximum engine torque at 
fnstall.
fnidle = the applicable engine idle speed as described in 
this paragraph (c).
fnstall = the stall speed of the torque converter; use 
fntest or 2250 rpm, whichever is lower.
Pacc = accessory power for the vehicle class; use 1300 W.

    Example: 
fntest = 1740.8 rpm = 182.30 rad/s
fnstall = 1740.8 rpm = 182.30 rad/s
Tfnstall = 1870 N[middot]m
Pacc = 1300 W
fnidle = 600 rpm = 62.83 rad/s
[GRAPHIC] [TIFF OMITTED] TP13JY15.039

    (4) Repeat the steps in paragraphs (c)(1) through (3) of this 
section with the engine operated at its declared maximum warm idle 
speed, fnidlemax.
    (5) If an infrequent regeneration event occurs during this 
procedure, invalidate any measurements made at that idle condition. 
Allow the regeneration event to finish, then repeat the measurement and 
continue with the test sequence.
    (6) Correct the measured or calculated mean fuel mass flow rate, 
mifuel at each of the four idle settings to account for 
mass-specific net energy content as described in paragraph (b)(10) of 
this section.
    (d) Measured vs. declared fuel-consumption rates. Select fuel-
consumption rates (g/s) to characterize the engine's fuel map and fuel-
consumption rate at idle. These declared values may not be lower than 
any corresponding measured values determined in paragraphs (b) and (c) 
of this section. You may select any value that is at or above the 
corresponding measured value. Use good engineering judgment to select 
values that will be at or below the fuel-consumption rates for your 
production engines. These declared fuel-consumption rates are the 
values that vehicle manufacturers will use for certification. Note that 
production engines are subject to GEM cycle-weighted limits as 
described in Sec.  1036.301.

[[Page 40596]]

Subpart G--Special Compliance Provisions

Sec.  1036.601  What compliance provisions apply?

    (a) Engine and vehicle manufacturers, as well as owners, operators, 
and rebuilders of engines subject to the requirements of this part, and 
all other persons, must observe the provisions of this part, the 
provisions of 40 CFR part 1068, and the provisions of the Clean Air 
Act. The provisions of 40 CFR part 1068 apply for heavy-duty highway 
engines as specified in that part, subject to the following provisions:
    (1) The hardship exemption provisions of 40 CFR 1068.245, 1068.250, 
and 1068.255 do not apply for motor vehicle engines.
    (2) The provisions of 40 CFR 1068.235 that allow for modifying 
certified engines for competition do not apply for heavy-duty vehicles 
or heavy-duty engines. Certified motor vehicles and motor vehicle 
engines and their emission control devices must remain in their 
certified configuration even if they are used solely for competition or 
if they become nonroad vehicles or engines; anyone modifying a 
certified motor vehicle or motor vehicle engine for any reason is 
subject to the tampering and defeat device prohibitions of 40 CFR 
1068.101(b) and 42 U.S.C. 7522(a)(3). Note that a new engine that will 
be installed in a vehicle that will be used solely for competition may 
be excluded from the requirements of this part based on a determination 
that the vehicle is not a motor vehicle under 40 CFR 85.1703.
    (3) The tampering prohibition in 40 CFR 1068.101(b)(1) applies for 
alternative fuel conversions as specified in 40 CFR part 85, subpart F.
    (4) The warranty-related prohibitions in section 203(a)(4) of the 
Act (42 U.S.C. 7522(a)(4)) apply to manufacturers of new heavy-duty 
highway engines in addition to the prohibitions described in 40 CFR 
1068.101(b)(6). We may assess a civil penalty up to $37,500 for each 
engine or vehicle in violation.
    (b) Engines exempted from the applicable standards of 40 CFR part 
86 are exempt from the standards of this part without request.
    (c) The emergency vehicle field modification provisions of 40 CFR 
85.1716 apply with respect to the standards of this part.
    (d) Subpart C of this part describes how to test and certify dual-
fuel and flexible-fuel engines. Some multi-fuel engines may not fit 
either of those defined terms. For such engines, we will determine 
whether it is most appropriate to treat them as single-fuel engines, 
dual-fuel engines, or flexible-fuel engines based on the range of 
possible and expected fuel mixtures. For example, an engine might burn 
natural gas but initiate combustion with a pilot injection of diesel 
fuel. If the engine is designed to operate with a single fueling 
algorithm (i.e., fueling rates are fixed at a given engine speed and 
load condition), we would generally treat it as a single-fuel engine. 
In this context, the combination of diesel fuel and natural gas would 
be its own fuel type. If the engine is designed to also operate on 
diesel fuel alone, we would generally treat it as a dual-fueled engine. 
If the engine is designed to operate on varying mixtures of the two 
fuels, we would generally treat it as a flexible-fueled engine. To the 
extent that requirements vary for the different fuels or fuel mixtures, 
we may apply the more stringent requirements.

Sec.  1036.610  Off-cycle technology credits and adjustments for 
reducing greenhouse gas emissions.

    (a) You may ask us to apply the provisions of this section for 
CO2 emission reductions resulting from powertrain 
technologies that were not in common use with heavy-duty vehicles 
before model year 2010 that are not reflected in the specified test 
procedure. We will apply these provisions only for technologies that 
will result in a measurable, demonstrable, and verifiable real-world 
CO2 reduction. Note that prior to MY 2016, these 
technologies were referred to as ``innovative technologies''.
    (b) The provisions of this section may be applied as either an 
improvement factor (used to adjust emission results) or as a separate 
credit within the engine family, consistent with good engineering 
judgment. Note that the term ``credit'' in this section describes an 
additive adjustment to emission rates and is not equivalent to an 
emission credit in the ABT program of subpart H of this part. We 
recommend that you base your credit/adjustment on A to B testing of 
pairs of engines/vehicles differing only with respect to the technology 
in question.
    (1) Calculate improvement factors as the ratio of in-use emissions 
with the technology divided by the in-use emissions without the 
technology. Adjust the emission results by multiplying by the 
improvement factor. Use the improvement-factor approach where good 
engineering judgment indicates that the actual benefit will be 
proportional to emissions measured over the test procedures specified 
in this part. For example, the benefits from technologies that reduce 
engine operation would generally be proportional to the engine's 
emission rate.
    (2) Calculate separate credits based on the difference between the 
in-use emission rate (g/ton-mile) with the technology and the in-use 
emission rate without the technology. Subtract this value from your 
measured emission result and use this adjusted value to determine your 
FEL. We may also allow you to calculate the credits based on g/hp-hr 
emission rates. Use the separate-credit approach where good engineering 
judgment indicates that the actual benefit will not be proportional to 
emissions measured over the test procedures specified in this part.
    (3) We may require you to discount or otherwise adjust your 
improvement factor or credit to account for uncertainty or other 
relevant factors.
    (c) Send your request to the Designated Compliance Officer. We 
recommend that you do not begin collecting test data (for submission to 
EPA) before contacting us. For technologies for which the vehicle 
manufacturer could also claim credits (such as transmissions in certain 
circumstances), we may require you to include a letter from the vehicle 
manufacturer stating that it will not seek credits for the same 
technology. Your request must contain the following items:
    (1) A detailed description of the off-cycle technology and how it 
functions to reduce CO2 emissions under conditions not 
represented on the duty cycles required for certification.
    (2) A list of the engine configurations that will be equipped with 
the technology.
    (3) A detailed description and justification of the selected test 
engines.
    (4) All testing and simulation data required under this section, 
plus any other data you have considered in your analysis. You may ask 
for our preliminary approval of your test plan under Sec.  1036.210.
    (5) A complete description of the methodology used to estimate the 
off-cycle benefit of the technology and all supporting data, including 
engine testing and in-use activity data. Also include a statement 
regarding your recommendation for applying the provisions of this 
section for the given technology as an improvement factor or a credit.
    (6) An estimate of the off-cycle benefit by engine model, and the 
fleetwide benefit based on projected sales of engine models equipped 
with the technology.
    (7) A demonstration of the in-use durability of the off-cycle 
technology,

[[Page 40597]]

based on any available engineering analysis or durability testing data 
(either by testing components or whole engines).
    (d) We may seek public comment on your request, consistent with the 
provisions of 40 CFR 86.1869-12(d). However, we will generally not seek 
public comment on credits/adjustments based on A to B engine 
dynamometer testing, chassis testing, or in-use testing.
    (e) We may approve an improvement factor or credit for any engine 
family that is properly represented by your testing. You may similarly 
continue to use an approved improvement factor or credit for any 
appropriate engine families in future model years through 2020. 
Starting in model year 2021, you must request our approval before 
applying an improvement factor or credit under this section for any 
kind of technology, even if we approved an improvement factor or credit 
for similar engine models before model year 2021.

Sec.  1036.615  Engines with Rankine cycle waste heat recovery and 
hybrid powertrains.

    This section specifies how to generate advanced technology-specific 
emission credits for hybrid powertrains that include energy storage 
systems and regenerative braking (including regenerative engine 
braking) and for engines that include Rankine-cycle (or other bottoming 
cycle) exhaust energy recovery systems. This section applies only for 
model year 2020 and earlier engines.
    (a) Pre-transmission hybrid powertrains. Test pre-transmission 
hybrid powertrains with the hybrid engine test procedures of 40 CFR 
part 1065 or with the post-transmission test procedures in 40 CFR 
1037.550. 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.
    (b) Rankine engines. Test engines that include Rankine-cycle 
exhaust energy recovery systems according to the test procedures 
specified in subpart F of this part unless we approve alternate 
procedures.
    (c) Calculating credits. Calculate credits as specified in subpart 
H of this part. Credits generated from engines and powertrains 
certified under this section may be used in other averaging sets as 
described in Sec.  1036.740(c).
    (d) Off-cycle technologies. You may certify using both the 
provisions of this section and the off-cycle technology provisions of 
Sec.  1036.610, provided you do not double-count emission benefits.

Sec.  1036.620  Alternate CO2 standards based on model year 
2011 compression-ignition engines.

    For model years 2014 through 2016, you may certify your 
compression-ignition engines to the CO2 standards of this 
section instead of the CO2 standards in Sec.  1036.108. 
However, you may not certify engines to these alternate standards if 
they are part of an averaging set in which you carry a balance of 
banked credits. You may submit applications for certifications before 
using up banked credits in the averaging set, but such certificates 
will not become effective until you have used up (or retired) your 
banked credits in the averaging set. For purposes of this section, you 
are deemed to carry credits in an averaging set if you carry credits 
from advanced technology that are allowed to be used in that averaging 
set.
    (a) The standards of this section are determined from the measured 
emission rate of the test engine of the applicable baseline 2011 engine 
family(ies) as described in paragraphs (b) and (c) of this section. 
Calculate the CO2 emission rate of the baseline test engine 
using the same equations used for showing compliance with the otherwise 
applicable standard. The alternate CO2 standard for light 
and medium heavy-duty vocational-certified engines (certified for 
CO2 using the transient cycle) is equal to the baseline 
emission rate multiplied by 0.975. The alternate CO2 
standard for tractor-certified engines (certified for CO2 
using the ramped-modal cycle) and all other heavy heavy-duty engines is 
equal to the baseline emission rate multiplied by 0.970. The in-use FEL 
for these engines is equal to the alternate standard multiplied by 
1.03.
    (b) This paragraph (b) applies if you do not certify all your 
engine families in the averaging set to the alternate standards of this 
section. Identify separate baseline engine families for each engine 
family that you are certifying to the alternate standards of this 
section. For an engine family to be considered the baseline engine 
family, it must meet the following criteria:
    (1) It must have been certified to all applicable emission 
standards in model year 2011. If the baseline engine was certified to a 
NOX FEL above the standard and incorporated the same 
emission control technologies as the new engine family, you may adjust 
the baseline CO2 emission rate to be equivalent to an engine 
meeting the 0.20 g/hp-hr NOX standard (or your higher FEL as 
specified in this paragraph (b)(1)), using certification results from 
model years 2009 through 2011, consistent with good engineering 
judgment.
    (i) Use the following equation to relate model year 2009-2011 
NOX and CO2 emission rates (g/hp-hr): 
CO2 = a x log(NOX)+b.
    (ii) For model year 2014-2016 engines certified to NOX 
FELs above 0.20 g/hp-hr, correct the baseline CO2 emissions 
to the actual NOX FELs of the 2014-2016 engines.
    (iii) Calculate separate adjustments for emissions over the ramped-
modal cycle and the transient cycle.
    (2) The baseline configuration tested for certification must have 
the same engine displacement as the engines in the engine family being 
certified to the alternate standards, and its rated power must be 
within five percent of the highest rated power in the engine family 
being certified to the alternate standards.
    (3) The model year 2011 U.S.-directed production volume of the 
configuration tested must be at least one percent of the total 2011 
U.S.-directed production volume for the engine family.
    (4) The tested configuration must have cycle-weighted BSFC 
equivalent to or better than all other configurations in the engine 
family.
    (c) This paragraph (c) applies if you certify all your engine 
families in the primary intended service class to the alternate 
standards of this section. For purposes of this section, you may 
combine light heavy-duty and medium heavy-duty engines into a single 
averaging set. Determine your baseline CO2 emission rate as 
the production-weighted emission rate of the certified engine families 
you produced in the 2011 model year. If you produce engines for both 
tractors and vocational vehicles, treat them as separate averaging 
sets. Adjust the CO2 emission rates to be equivalent to an 
engine meeting the average NOX FEL of new engines (assuming 
engines certified to the 0.20 g/hp-hr NOX standard have a 
NOX FEL equal to 0.20 g/hp-hr), as described in paragraph 
(b)(1) of this section.
    (d) Include the following statement on the emission control 
information label: ``THIS ENGINE WAS CERTIFIED TO AN ALTERNATE 
CO2 STANDARD UNDER Sec.  1036.620.''
    (e) You may not bank CO2 emission credits for any engine 
family in the same averaging set and model year in which you certify 
engines to the standards of this section. You may not bank any advanced 
technology credits in any averaging set for the model year you certify 
under this section (since such credits would be available for use in 
this averaging set). Note that the

[[Page 40598]]

provisions of Sec.  1036.745 apply for deficits generated with respect 
to the standards of this section.
    (f) You need our approval before you may certify engines under this 
section, especially with respect to the numerical value of the 
alternate standards. We will not approve your request if we determine 
that you manipulated your engine families or test engine configurations 
to certify to less stringent standards, or that you otherwise have not 
acted in good faith. You must keep and provide to us any information we 
need to determine that your engine families meet the requirements of 
this section. Keep these records for at least five years after you stop 
producing engines certified under this section.

Sec.  1036.625  In-use compliance with family emission limits (FELs).

    Section 1036.225 describes how to change the FEL for an engine 
family during the model year. This section, which describes how you may 
ask us to increase an engine family's FEL after the end of the model 
year, is intended to address circumstances in which it is in the public 
interest to apply a higher in-use FEL based on forfeiting an 
appropriate number of emission credits.
    (a) You may ask us to increase an engine family's FEL after the end 
of the model year if you believe some of your in-use engines exceed the 
CO2 FEL that applied during the model year (or the 
CO2 emission standard if the family did not generate or use 
emission credits). We may consider any available information in making 
our decision to approve or deny your request.
    (b) If we approve your request under this section, you must apply 
emission credits to cover the increased FEL for all affected engines. 
Apply the emission credits as part of your credit demonstration for the 
current production year. Include the appropriate calculations in your 
final report under Sec.  1036.730.
    (c) Submit your request to the Designated Compliance Officer. 
Include the following in your request:
    (1) Identify the names of each engine family that is the subject of 
your request. Include separate family names for different model years
    (2) Describe why your request does not apply for similar engine 
models or additional model years, as applicable.
    (3) Identify the FEL(s) that applied during the model year and 
recommend a replacement FEL for in-use engines; include a supporting 
rationale to describe how you determined the recommended replacement 
FEL.
    (4) Describe whether the needed emission credits will come from 
averaging, banking, or trading.
    (d) If we approve your request, we will identify the replacement 
FEL. The value we select will reflect our best judgment to accurately 
reflect the actual in-use performance of your engines, consistent with 
the testing provisions specified in this part. We may apply the higher 
FELs to other engine families from the same or different model years to 
the extent they used equivalent emission controls. We may include any 
appropriate conditions with our approval.
    (e) If we order a recall for an engine family under 40 CFR 
1068.505, we will no longer approve a replacement FEL under this 
section for any of your engines from that engine family, or from any 
other engine family that relies on equivalent emission controls.

Sec.  1036.630  Certification of engine GHG emissions for powertrain 
testing.

    For engines included in powertrain families under 40 CFR part 1037, 
you may choose to include the corresponding engine emissions in your 
engine families under this part 1036.
    (a) If you choose to include engine emissions in an engine family, 
the declared powertrain emission levels become standards that apply for 
selective enforcement audits and in-use testing. We may require that 
you provide the engine test cycle (not normalized) corresponding to a 
given powertrain for each of the specified duty cycles.
    (b) If you choose to certify only fuel map emissions for an engine 
family and to not certify emissions over powertrain test cycles under 
40 CFR 1037.550, 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 does not apply if you also 
hold the certificate of conformity for the vehicle.

Subpart H--Averaging, Banking, and Trading for Certification

Sec.  1036.701  General provisions.

    (a) You may average, bank, and trade (ABT) 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.  1036.108. 
Participation in this program is voluntary. (Note: As described in 
subpart B of this part, you must assign an FCL to all engine families, 
whether or not they participate in the ABT provisions of this subpart.)
    (b) The definitions of subpart I of this part apply to this 
subpart. The following definitions also apply:
    (1) Actual emission credits means emission credits you have 
generated that we have verified by reviewing your final report.
    (2) Averaging set means a set of engines in which emission credits 
may be exchanged. Credits generated by one engine may only be used by 
other engines in the same averaging set. See Sec.  1036.740.
    (3) Broker means any entity that facilitates a trade of emission 
credits between a buyer and seller.
    (4) Buyer means the entity that receives emission credits as a 
result of a trade.
    (5) Reserved emission credits means emission credits you have 
generated that we have not yet verified by reviewing your final report.
    (6) Seller means the entity that provides emission credits during a 
trade.
    (7) Standard means the emission standard that applies under subpart 
B of this part for engines not participating in the ABT program of this 
subpart.
    (8) Trade means to exchange emission credits, either as a buyer or 
seller.
    (c) Emission credits may be exchanged only within an averaging set 
as specified in Sec.  1036.740.
    (d) You may not use emission credits generated under this subpart 
to offset any emissions that exceed an FCL or standard. This applies 
for all testing, including certification testing, in-use testing, 
selective enforcement audits, and other production-line testing. 
However, if emissions from an engine exceed an FCL or standard (for 
example, during a selective enforcement audit), you may use emission 
credits to recertify the engine family with a higher FCL that applies 
only to future production.
    (e) You may use either of the following approaches to retire or 
forego emission credits:
    (1) You may retire emission credits generated from any number of 
your engines. This may be considered donating emission credits to the 
environment. Identify any such credits in the reports described in 
Sec.  1036.730. Engines must comply with the applicable FELs even if 
you donate or sell the corresponding emission credits under this 
paragraph (h). Those credits may no longer be used by anyone to 
demonstrate compliance with any EPA emission standards.
    (2) You may certify an engine family using an FEL (FCL for 
CO2) below the

[[Page 40599]]

emission standard as described in this part and choose not to generate 
emission credits for that family. If you do this, you do not need to 
calculate emission credits for those engine families and you do not 
need to submit or keep the associated records described in this subpart 
for that family.
    (f) Emission credits may be used in the model year they are 
generated. Surplus emission credits may be banked for future model 
years. Surplus emission credits may sometimes be used for past model 
years, as described in Sec.  1036.745.
    (g) You may increase or decrease an FCL during the model year by 
amending your application for certification under Sec.  1036.225. The 
new FCL may apply only to engines you have not already introduced into 
commerce.
    (h) See Sec.  1036.740 for special credit provisions that apply for 
greenhouse gas credits generated under 40 CFR 86.1819-14(k)(7) or Sec.  
1036.615 or 40 CFR 1037.615.
    (i) Unless the regulations explicitly allow it, you may not 
calculate credits more than once for any emission reduction. For 
example, if you generate CO2 emission credits for a hybrid 
engine under this part for a given vehicle, no one may generate 
CO2 emission credits for that same hybrid engine and vehicle 
under 40 CFR part 1037. However, credits could be generated for 
identical vehicles using engines that did not generate credits under 
this part.
    (j) You may use emission credits generated in one model year 
without adjustment for certifying vehicles in a later model year, even 
if emission standards are different.
    (k) Engine families you certify with a nonconformance penalty under 
40 CFR part 86, subpart L, may not generate emission credits.

Sec.  1036.705  Generating and calculating emission credits.

    (a) The provisions of this section apply separately for calculating 
emission credits for each pollutant.
    (b) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission standard 
based on the engine family's FCL for greenhouse gases. If your engine 
family is certified to both the vocational and tractor engine 
standards, calculate credits separately for the vocational engines and 
the tractor engines (as specified in paragraph (b)(3) of this section). 
Calculate positive emission credits for a family that has an FCL below 
the standard. Calculate negative emission credits for a family that has 
an FCL 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 throughout the 
following equations:
    (1) For vocational engines:

Emission credits (Mg) = (Std--FCL) [middot] (CF) [middot] (Volume) 
[middot] (UL) [middot] (10-6)

Where:

Std = the emission standard, in g/hp-hr, that applies under subpart 
B of this part for engines not participating in the ABT program of 
this subpart (the ``otherwise applicable standard'').
FCL = the Family Certification Level for the engine family, in g/hp-
hr, measured over the transient duty cycle, rounded to the same 
number of decimal places as the emission standard.
CF = a transient cycle conversion factor (hp-hr/mile), calculated by 
dividing the total (integrated) horsepower-hour over the duty cycle 
(average of vocational engine configurations weighted by their 
production volumes) by 6.3 miles for spark-ignition engines and 6.5 
miles for compression-ignition engines. This represents the average 
work performed by vocational engines in the family over the mileage 
represented by operation over the duty cycle.
Volume = the number of vocational engines eligible to participate in 
the averaging, banking, and trading program within the given engine 
family during the model year, as described in paragraph (c) of this 
section.
UL = the useful life for the given engine family, in miles.

    (2) For tractor engines:

Emission credits (Mg) = (Std--FCL) [middot] (CF) [middot] (Volume) 
[middot] (UL) [middot] (10-6)

Where:

Std = the emission standard, in g/hp-hr, that applies under subpart 
B of this part for engines not participating in the ABT program of 
this subpart (the ``otherwise applicable standard'').
FCL = the Family Certification Level for the engine family, in g/hp-
hr, measured over the ramped-modal cycle rounded to the same number 
of decimal places as the emission standard.
CF = a transient cycle conversion factor (hp-hr/mile), calculated by 
dividing the total (integrated) horsepower-hour over the duty cycle 
(average of tractor-engine configurations weighted by their 
production volumes) by 6.3 miles for spark-ignition engines and 6.5 
miles for compression-ignition engines. This represents the average 
work performed by tractor engines in the family over the mileage 
represented by operation over the duty cycle. Note that this 
calculation requires you to use the transient cycle conversion 
factor even for engines certified to standards based on the ramped-
modal cycle.
Volume = the number of tractor engines eligible to participate in 
the averaging, banking, and trading program within the given engine 
family during the model year, as described in paragraph (c) of this 
section.
UL = the useful life for the given engine family, in miles.

    (3) For engine families certified to both the vocational and 
tractor engine standards, we may allow you to use statistical methods 
to estimate the total production volumes where a small fraction of the 
engines cannot be tracked precisely.
    (4) You may not generate emission credits for tractor engines 
(i.e., engines not certified to the transient cycle for CO2) 
installed in vocational vehicles (including vocational tractors 
certified pursuant to 40 CFR 1037.630 or exempted pursuant to 40 CFR 
1037.631). We will waive this requirement where you demonstrate that 
less than five percent of the engines in your tractor family were 
installed in vocational vehicles. For example, if you know that 96 
percent of your tractor engines were installed in non-vocational 
tractors, but cannot determine the vehicle type for the remaining four 
percent, you may generate credits for all the engines in the family.
    (c) As described in Sec.  1036.730, compliance with the 
requirements of this subpart is determined at the end of the model year 
based on actual U.S.-directed production volumes. Keep appropriate 
records to document these production volumes. Do not include any of the 
following engines to calculate emission credits:
    (1) Engines 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 engines.
    (3) Engines not subject to the requirements of this part, such as 
those excluded under Sec.  1036.5. For example, do not include engines 
used in vehicles certified to the greenhouse gas standards of 40 CFR 
86.1819.
    (4) Any other engines if we indicate elsewhere in this part 1036 
that they are not to be included in the calculations of this subpart.
    (d) You may use CO2 emission credits to show compliance 
with CH4 and/or N2O FELs instead of the otherwise 
applicable emission standards. To do this, calculate the CH4 
and/or N2O emission credits needed (negative credits) using 
the equation in paragraph (b) of this section, using the FEL(s) you 
specify for your engines during certification instead of the FCL. You 
must use 25 Mg of positive CO2 credits to offset 1 Mg of 
negative CH4 credits. You must use 298 Mg of positive 
CO2 credits to offset 1 Mg of negative N2O 
credits.

[[Page 40600]]

Sec.  1036.710  Averaging.

    (a) Averaging is the exchange of emission credits among your engine 
families. You may average emission credits only within the same 
averaging set.
    (b) You may certify one or more engine families to an FCL above the 
applicable standard, subject to any applicable FEL caps and other the 
provisions in subpart B of this part, if you show in your application 
for certification that your projected balance of all emission-credit 
transactions in that model year is greater than or equal to zero, or 
that a negative balance is allowed under Sec.  1036.745.
    (c) If you certify an engine family to an FCL that exceeds the 
otherwise applicable standard, you must obtain enough emission credits 
to offset the engine family's deficit by the due date for the final 
report required in Sec.  1036.730. The emission credits used to address 
the deficit may come from your other engine families that generate 
emission credits in the same model year (or from later model years as 
specified in Sec.  1036.745), from emission credits you have banked, or 
from emission credits you obtain through trading.

Sec.  1036.715  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.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1036.730 as reserved credits. During the 
model year and before the due date for the final report, you may 
designate your reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke these emission credits if we 
are unable to verify them after reviewing your reports or auditing your 
records.
    (d) Banked credits retain the designation of the averaging set in 
which they were generated.

Sec.  1036.720  Trading.

    (a) Trading is the exchange of emission credits between 
manufacturers. 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.
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
manufacturer.
    (c) If a negative emission credit balance results from a 
transaction, both the buyer and seller are liable, except in cases we 
deem to involve fraud. See Sec.  1036.255(e) for cases involving fraud. 
We may void the certificates of all engine families participating in a 
trade that results in a manufacturer having a negative balance of 
emission credits. See Sec.  1036.745.

Sec.  1036.725  What must I include in my application for 
certification?

    (a) You must declare in your application for certification your 
intent to use the provisions of this subpart for each engine family 
that will be certified using the ABT program. You must also declare the 
FELs/FCL you select for the engine family for each pollutant for which 
you are using the ABT program. Your FELs must comply with the 
specifications of subpart B of this part, including the FEL caps. FELs/
FCLs must be expressed to the same number of decimal places as the 
applicable standards.
    (b) Include the following in your application for certification:
    (1) A statement that, to the best of your belief, you will not have 
a negative balance of emission credits for any averaging set when all 
emission credits are calculated at the end of the year; or a statement 
that you will have a negative balance of emission credits for one or 
more averaging sets, but that it is allowed under Sec.  1036.745.
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected U.S.-directed production volumes. 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.

Sec.  1036.730  ABT reports.

    (a) If any of your engine families are certified using the ABT 
provisions of this subpart, you must send a final report by March 31 
following the end of the model year. You may ask us to extend the 
deadline for the final report to April 30.
    (b) Your final report must include the following information for 
each engine family participating in the ABT program:
    (1) Engine-family designation and averaging set.
    (2) The emission standards that would otherwise apply to the engine 
family.
    (3) The FCL for each pollutant. If you change the FCL after the 
start of production, identify the date that you started using the new 
FCL and/or give the engine identification number for the first engine 
covered by the new FCL. In this case, identify each applicable FCL and 
calculate the positive or negative emission credits as specified in 
Sec.  1036.225.
    (4) The projected and actual U.S.-directed production volumes for 
the model year. If you changed an FCL during the model year, identify 
the actual production volume associated with each FCL.
    (5) The transient cycle conversion factor for each engine 
configuration as described in Sec.  1036.705.
    (6) Useful life.
    (7) Calculated positive or negative emission credits for the whole 
engine family. Identify any emission credits that you traded, as 
described in paragraph (d)(1) of this section.
    (c) Your final report must include the following additional 
information:
    (1) Show that your net balance of emission credits from all your 
participating engine families in each averaging set in the applicable 
model year is not negative, except as allowed under Sec.  1036.745. 
Your credit tracking must account for the limitation on credit life 
under Sec.  1036.740(d).
    (2) State whether you will reserve any emission credits for 
banking.
    (3) State that the report's contents are accurate.
    (d) If you trade emission credits, you must send us a report within 
90 days after the transaction, as follows:
    (1) As the seller, you must include the following information in 
your report:
    (i) The corporate names of the buyer and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) The engine families that generated emission credits for the 
trade, including the number of emission credits from each family.
    (2) As the buyer, you must include the following information in 
your report:
    (i) The corporate names of the seller and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) How you intend to use the emission credits, including the 
number of emission credits you intend to apply to each engine family 
(if known).
    (e) Send your reports electronically to the Designated Compliance 
Officer

[[Page 40601]]

using an approved information format. If you want to use a different 
format, send us a written request with justification for a waiver.
    (f) Correct errors in your final report as follows:
    (1) If you or we determine before the due date for the final report 
that errors mistakenly decreased your balance of emission credits, you 
may correct the errors and recalculate the balance of emission credits. 
You may not make these corrections for errors that are determined after 
the due date for the final report. If you report a negative balance of 
emission credits, we may disallow corrections under this paragraph 
(f)(1).
    (2) If you or we determine anytime that errors mistakenly increased 
your balance of emission credits, you must correct the errors and 
recalculate the balance of emission credits.

Sec.  1036.735  Recordkeeping.

    (a) You must organize and maintain your records as described in 
this section. We may review your records at any time.
    (b) Keep the records required by this section for at least eight 
years after the due date for the final report. You may not use emission 
credits for any engines if you do not keep all the records required 
under this section. You must therefore keep these records to continue 
to bank valid credits. Store these records in any format and on any 
media, as long as you can promptly send us organized, written records 
in English if we ask for them. You must keep these records readily 
available. We may review them at any time.
    (c) Keep a copy of the reports we require in Sec. Sec.  1036.725 
and 1036.730.
    (d) Keep records of the engine identification number (usually the 
serial number) for each engine you produce that generates or uses 
emission credits under the ABT program. You may identify these numbers 
as a range. If you change the FEL after the start of production, 
identify the date you started using each FCL and the range of engine 
identification numbers associated with each FCL. You must also identify 
the purchaser and destination for each engine you produce to the extent 
this information is available.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

Sec.  1036.740  Restrictions for using emission credits.

    The following restrictions apply for using emission credits:
    (a) Averaging sets. Except as specified in paragraph (c) of this 
section, emission credits may be exchanged only within the following 
averaging sets:
    (1) Spark-ignition engines.
    (2) Compression-ignition light heavy-duty engines.
    (3) Compression-ignition medium heavy-duty engines.
    (4) Compression-ignition heavy heavy-duty engines.
    (b) Applying credits to prior year deficits. Where your credit 
balance for the previous year is negative, you may apply credits to 
that credit deficit only after meeting your credit obligations for the 
current year.
    (c) Credits from hybrid engines and other advanced technologies. 
Credits you generate under Sec.  1036.615 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 86.1819 and 40 CFR part 
1037. Similarly, you may use advanced-technology credits generated 
under 40 CFR 86.1819-14(k)(7) or 40 CFR 1037.615 to demonstrate 
compliance with the CO2 standards in this part. In the case 
of spark-ignition engines and compression-ignition light heavy-duty 
engines, you may not use more than 60,000 Mg of credits from other 
averaging sets in any model year.
    (1) The maximum amount of CO2 credits you may bring into 
the following service class groups is 60,000 Mg per model year:
    (i) Spark-ignition engines, light heavy-duty compression-ignition 
engines, and light heavy-duty vehicles. This group comprises the 
averaging sets listed in paragraphs (a)(1) and (2) of this section and 
the averaging set listed in 40 CFR 1037.740(a)(1).
    (ii) Medium heavy-duty compression-ignition engines and medium 
heavy-duty vehicles. This group comprises the averaging sets listed in 
paragraph (a)(3) of this section and 40 CFR 1037.740(a)(2).
    (iii) Heavy heavy-duty compression-ignition engines and heavy 
heavy-duty vehicles. This group comprises the averaging sets listed in 
paragraph (a)(4) of this section and 40 CFR 1037.740(a)(3).
    (2) The limit specified in paragraph (c)(1) of this section does 
not limit the amount of advanced technology credits that can be used 
within a service class group if they were generated in that same 
service class group.
    (d) Credit life. Credits may be used only for five model years 
after the year in which they are generated. For example, credits you 
generate in model year 2018 may be used to demonstrate compliance with 
emission standards only through model year 2023.
    (e) Other restrictions. Other sections of this part specify 
additional restrictions for using emission credits under certain 
special provisions.

Sec.  1036.745  End-of-year CO2 credit deficits.

    Except as allowed by this section, we may void the certificate of 
any engine family certified to an FCL above the applicable standard for 
which you do not have sufficient credits by the deadline for submitting 
the final report.
    (a) Your certificate for an engine 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. For example, if 
you have a credit deficit of 500 Mg for an engine 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.
    (b) You may not bank or trade away CO2 credits in the 
averaging set in any model year in which you have a deficit.
    (c) You may apply only surplus credits to your deficit. You may not 
apply credits to a deficit from an earlier model year if they were 
generated in a model year for which any of your engine families for 
that averaging set had an end-of-year credit deficit.
    (d) If you do not remedy the deficit with surplus credits within 
three model years, we may void your certificate for that engine family. 
Note that voiding a certificate applies ab initio. Where the net 
deficit is less than the total amount of negative credits originally 
generated by the family, we will void the certificate only with respect 
to the number of engines needed to reach the amount of the net deficit. 
For example, if the original engine family generated 500 Mg of negative 
credits, and the manufacturer's net deficit after three years was 250 
Mg, we would void the certificate with respect to half of the engines 
in the family.
    (e) For purposes of calculating the statute of limitations, the 
following actions are all considered to occur at the expiration of the 
deadline for offsetting a deficit as specified in paragraph (a) of this 
section:
    (1) Failing to meet the requirements of paragraph (a) of this 
section.
    (2) Failing to satisfy the conditions upon which a certificate was 
issued relative to offsetting a deficit.
    (3) Selling, offering for sale, introducing or delivering into U.S. 
commerce, or importing vehicles that are found not to be covered by a 
certificate as a result of failing to offset a deficit.

[[Page 40602]]

Sec.  1036.750  What can happen if I do not comply with the provisions 
of this subpart?

    (a) For each engine family participating in the ABT program, the 
certificate of conformity is conditioned upon full compliance with the 
provisions of this subpart during and after the model year. You are 
responsible to establish to our satisfaction that you fully comply with 
applicable requirements. We may void the certificate of conformity for 
an engine family if you fail to comply with any provisions of this 
subpart.
    (b) You may certify your engine family to an FCL above an 
applicable standard based on a projection that you will have enough 
emission credits to offset the deficit for the engine family. See Sec.  
1036.745 for provisions specifying what happens if you cannot show in 
your final report that you have enough actual emission credits to 
offset a deficit for any pollutant in an engine family.
    (c) We may void the certificate of conformity for an engine family 
if you fail to keep records, send reports, or give us information we 
request. Note that failing to keep records, send reports, or give us 
information we request is also a violation of 42 U.S.C. 7522(a)(2).
    (d) You may ask for a hearing if we void your certificate under 
this section (see Sec.  1036.820).

Sec.  1036.755  Information provided to the Department of 
Transportation.

    After receipt of each manufacturer's final report as specified in 
Sec.  1036.730 and completion of any verification testing required to 
validate the manufacturer's submitted final data, we will issue a 
report to the Department of Transportation with CO2 emission 
information and will verify the accuracy of each manufacturer's 
equivalent fuel consumption data that required by NHTSA under 49 CFR 
535.8. We will send a report to DOT for each engine manufacturer based 
on each regulatory category and subcategory, including sufficient 
information for NHTSA to determine fuel consumption and associated 
credit values. See 49 CFR 535.8 to determine if NHTSA deems submission 
of this information to EPA to also be a submission to NHTSA.

Subpart I--Definitions and Other Reference Information

Sec.  1036.801  Definitions.

    The following definitions apply to this part. The definitions apply 
to all subparts unless we note otherwise. All undefined terms have the 
meaning the Act gives to them. The definitions follow:
    Act means the Clean Air Act, as amended, 42 U.S.C. 7401-7671q.
    Adjustable parameter has the meaning given in 40 CFR part 86.
    Advanced technology means technology certified under 40 CFR 
86.1819-14(k)(7), Sec.  1036.615, or 40 CFR 1037.615.
    Aftertreatment means relating to a catalytic converter, particulate 
filter, or any other system, component, or technology mounted 
downstream of the exhaust valve (or exhaust port) whose design function 
is to decrease emissions in the engine exhaust before it is exhausted 
to the environment. Exhaust-gas recirculation (EGR) and turbochargers 
are not aftertreatment.
    Aircraft means any vehicle capable of sustained air travel more 
than 100 feet above the ground.
    Alcohol-fueled engine mean an engine that is designed to run using 
an alcohol fuel. For purposes of this definition, alcohol fuels do not 
include fuels with a nominal alcohol content below 25 percent by 
volume.
    Auxiliary emission control device means any element of design that 
senses temperature, motive speed, engine rpm, transmission gear, or any 
other parameter for the purpose of activating, modulating, delaying, or 
deactivating the operation of any part of the emission control system.
    Averaging set has the meaning given in Sec.  1036.740.
    Calibration means the set of specifications and tolerances specific 
to a particular design, version, or application of a component or 
assembly capable of functionally describing its operation over its 
working range.
    Carryover means relating to certification based on emission data 
generated from an earlier model year as described in Sec.  1036.235(d).
    Certification means relating to the process of obtaining a 
certificate of conformity for an engine family that complies with the 
emission standards and requirements in this part.
    Certified emission level means the highest deteriorated emission 
level in an engine family for a given pollutant from the applicable 
transient and/or steady-state testing, rounded to the same number of 
decimal places as the applicable standard. Note that you may have two 
certified emission levels for CO2 if you certify a family 
for both vocational and tractor use.
    Complete vehicle means a vehicle meeting the definition of complete 
vehicle in 40 CFR 1037.801 when it is first sold as a vehicle. For 
example, where a vehicle manufacturer sells an incomplete vehicle to a 
secondary manufacturer, the vehicle is not a complete vehicle under 
this part, even after its final assembly.
    Compression-ignition means relating to a type of reciprocating, 
internal-combustion engine that is not a spark-ignition engine. Note 
that Sec.  1036.1 also deems gas turbine engines and other engines to 
be compression-ignition engines. Note also that certain spark-ignition 
engines are subject to the requirements for compression-ignition 
engines.
    Crankcase emissions means airborne substances emitted to the 
atmosphere from any part of the engine crankcase's ventilation or 
lubrication systems. The crankcase is the housing for the crankshaft 
and other related internal parts.
    Criteria pollutants means emissions of NOX, HC, PM, and 
CO. Note that these pollutants are also sometimes described 
collectively as ``non-greenhouse gas pollutants'', although they do not 
necessarily have negligible global warming potentials.
    Designated Compliance Officer means one of the following:
    (1) For compression-ignition engines, Designated Compliance Officer 
means Director, Diesel Engine Compliance Center, U.S. Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; 
complianceinfo@epa.gov; epa.gov/otaq/verify/
    (2) For spark-ignition engines, Designated Compliance Officer means 
Director, Gasoline Engine Compliance Center, U.S. Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; nonroad-si-cert@epa.gov; epa.gov/otaq/verify.
    Deteriorated emission level means the emission level that results 
from applying the appropriate deterioration factor to the official 
emission result of the emission-data engine. Note that where no 
deterioration factor applies, references in this part to the 
deteriorated emission level mean the official emission result.
    Deterioration factor means the relationship between emissions at 
the end of useful life (or point of highest emissions if it occurs 
before the end of useful life) and emissions at the low-hour/low-
mileage test point, expressed in one of the following ways:
    (1) For multiplicative deterioration factors, the ratio of 
emissions at the end of useful life (or point of highest emissions) to 
emissions at the low-hour test point.
    (2) For additive deterioration factors, the difference between 
emissions at the end of useful life (or point of highest emissions) and 
emissions at the low-hour test point.
    Dual-fuel means relating to an engine designed for operation on two 
different types of fuel but not on a continuous

[[Page 40603]]

mixture of those fuels (see Sec.  1036.601(d). For purposes of this 
part, such an engine remains a dual-fuel engine even if it is designed 
for operation on three or more different fuels.
    Emission control system means any device, system, or element of 
design that controls or reduces the emissions of regulated pollutants 
from an engine.
    Emission-data engine means an engine that is tested for 
certification. This includes engines tested to establish deterioration 
factors.
    Emission-related maintenance means maintenance that substantially 
affects emissions or is likely to substantially affect emission 
deterioration.
    Engine configuration means a unique combination of engine hardware 
and calibration (related to the emission standards) within an engine 
family. Engines within a single engine configuration differ only with 
respect to normal production variability or factors unrelated to 
compliance with emission standards.
    Engine family has the meaning given in Sec.  1036.230.
    Excluded means relating to engines that are not subject to some or 
all of the requirements of this part as follows:
    (1) An engine that has been determined not to be a heavy-duty 
engine is excluded from this part.
    (2) Certain heavy-duty engines are excluded from the requirements 
of this part under Sec.  1036.5.
    (3) Specific regulatory provisions of this part may exclude a 
heavy-duty engine generally subject to this part from one or more 
specific standards or requirements of this part.
    Exempted has the meaning given in 40 CFR 1068.30.
    Exhaust-gas recirculation means a technology that reduces emissions 
by routing exhaust gases that had been exhausted from the combustion 
chamber(s) back into the engine to be mixed with incoming air before or 
during combustion. The use of valve timing to increase the amount of 
residual exhaust gas in the combustion chamber(s) that is mixed with 
incoming air before or during combustion is not considered exhaust-gas 
recirculation for the purposes of this part.
    Family certification level (FCL) means a CO2 emission 
level declared by the manufacturer that is at or above emission test 
results for all emission-data engines. The FCL serves as the emission 
standard for the engine family with respect to certification testing if 
it is different than the otherwise applicable standard. The FCL must be 
expressed to the same number of decimal places as the emission standard 
it replaces.
    Family emission limit (FEL) means an emission level declared by the 
manufacturer to serve in place of an otherwise applicable emission 
standard (other than CO2 standards) under the ABT program in 
subpart H of this part. The FEL must be expressed to the same number of 
decimal places as the emission standard it replaces. The FEL serves as 
the emission standard for the engine family with respect to all 
required testing except certification testing for CO2. The 
CO2 FEL is equal to the CO2 FCL multiplied by 
1.03 and rounded to the same number of decimal places as the standard 
(e.g., the nearest whole g/hp-hr for the 2016 CO2 
standards).
    Flexible-fuel means relating to an engine designed for operation on 
any mixture of two or more different types of fuels (see Sec.  
1036.601(d).
    Fuel type means a general category of fuels such as diesel fuel, 
gasoline, or natural gas. There can be multiple grades within a single 
fuel type, such as premium gasoline, regular gasoline, or gasoline with 
10 percent ethanol.
    Good engineering judgment has the meaning given in 40 CFR 1068.30. 
See 40 CFR 1068.5 for the administrative process we use to evaluate 
good engineering judgment.
    Greenhouse gas means one or more compounds regulated under this 
part based primarily on their impact on the climate. This generally 
includes CO2, CH4, and N2O.
    Greenhouse gas emissions model (GEM) means the GEM simulation tool 
described in 40 CFR 1037.520. Note that an updated version of GEM 
applies starting in model year 2021 (see 40 CFR 1037.810).
    Gross vehicle weight rating (GVWR) means the value specified by the 
vehicle manufacturer as the maximum design loaded weight of a single 
vehicle, consistent with good engineering judgment.
    Heavy-duty engine means any engine which the engine manufacturer 
could reasonably expect to be used for motive power in a heavy-duty 
vehicle. For purposes of this definition in this part, the term 
``engine'' includes internal combustion engines and other devices that 
convert chemical fuel into motive power. For example, a fuel cell or a 
gas turbine used in a heavy-duty vehicle is a heavy-duty engine.
    Heavy-duty vehicle means any motor vehicle above 8,500 pounds GVWR 
or that has a vehicle curb weight above 6,000 pounds or that has a 
basic vehicle frontal area greater than 45 square feet. Curb weight has 
the meaning given in 40 CFR 86.1803. Basic vehicle frontal area has the 
meaning given in 40 CFR 86.1803.
    Hybrid means relating to an engine or powertrain that includes 
energy storage features other than a conventional battery system or 
conventional flywheel. Supplemental electrical batteries and hydraulic 
accumulators are examples of hybrid energy storage systems. Note that 
certain provisions in this part treat hybrid engines and powertrains 
intended for vehicles that include regenerative braking different than 
those intended for vehicles that do not include regenerative braking.
    Hydrocarbon (HC) means the hydrocarbon group on which the emission 
standards are based for each fuel type. For alcohol-fueled engines, HC 
means nonmethane hydrocarbon equivalent (NMHCE). For all other engines, 
HC means nonmethane hydrocarbon (NMHC).
    Identification number means a unique specification (for example, a 
model number/serial number combination) that allows someone to 
distinguish a particular engine from other similar engines.
    Incomplete vehicle means a vehicle meeting the definition of 
incomplete vehicle in 40 CFR 1037.801 when it is first sold as a 
vehicle.
    Innovative technology means technology certified under Sec.  
1036.610.
    Liquefied petroleum gas (LPG) means a liquid hydrocarbon fuel that 
is stored under pressure and is composed primarily of nonmethane 
compounds that are gases at atmospheric conditions. Note that, although 
this commercial term includes the word ``petroleum'', LPG is not 
considered to be a petroleum fuel under the definitions of this 
section.
    Low-hour means relating to an engine that has stabilized emissions 
and represents the undeteriorated emission level. This would generally 
involve less than 125 hours of operation.
    Manufacture means the physical and engineering process of 
designing, constructing, and/or assembling a heavy-duty engine or a 
heavy-duty vehicle.
    Manufacturer has the meaning given in section 216(1) of the Act. In 
general, this term includes any person who manufactures or assembles an 
engine, vehicle, or piece of equipment for sale in the United States or 
otherwise introduces a new engine into commerce in the United States. 
This includes importers who import engines or vehicles for resale.
    Medium-duty passenger vehicle has the meaning given in 40 CFR 
86.1803.

[[Page 40604]]

    Model year means the manufacturer's annual new model production 
period, except as restricted under this definition. 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. Manufacturers may not 
adjust model years to circumvent or delay compliance with emission 
standards or to avoid the obligation to certify annually.
    Motor vehicle has the meaning given in 40 CFR 85.1703.
    Natural gas means a fuel whose primary constituent is methane.
    New motor vehicle engine has the meaning given in the Act. This 
generally means a motor vehicle engine meeting the criteria of either 
paragraph (1), (2), or (3) of this definition.
    (1) A motor vehicle engine for which the ultimate purchaser has 
never received the equitable or legal title is a new motor vehicle 
engine. This kind of engine might commonly be thought of as ``brand 
new'' although a new motor vehicle engine may include previously used 
parts. Under this definition, the engine is new from the time it is 
produced until the ultimate purchaser receives the title or places it 
into service, whichever comes first.
    (2) An imported motor vehicle engine is a new motor vehicle engine 
if it was originally built on or after January 1, 1970.
    (3) Any motor vehicle engine installed in a new motor vehicle.
    Noncompliant engine means an engine that was originally covered by 
a certificate of conformity, but is not in the certified configuration 
or otherwise does not comply with the conditions of the certificate.
    Nonconforming engine means an engine not covered by a certificate 
of conformity that would otherwise be subject to emission standards.
    Nonmethane hydrocarbon (NMHC) means the sum of all hydrocarbon 
species except methane, as measured according to 40 CFR part 1065.
    Nonmethane hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001.
    Off-cycle technology means technology certified under Sec.  
1036.610.
    Official emission result means the measured emission rate for an 
emission-data engine on a given duty cycle before the application of 
any deterioration factor, but after the applicability of any required 
regeneration or other adjustment factors.
    Owners manual means a document or collection of documents prepared 
by the engine or vehicle manufacturer for the owner or operator to 
describe appropriate engine maintenance, applicable warranties, and any 
other information related to operating or keeping the engine. The 
owners manual is typically provided to the ultimate purchaser at the 
time of sale.
    Oxides of nitrogen has the meaning given in 40 CFR 1065.1001.
    Percent has the meaning given in 40 CFR 1065.1001. Note that this 
means percentages identified in this part are assumed to be infinitely 
precise without regard to the number of significant figures. For 
example, one percent of 1,493 is 14.93.
    Petroleum means gasoline or diesel fuel or other fuels normally 
derived from crude oil. This does not include methane or LPG.
    Placed into service means put into initial use for its intended 
purpose, excluding incidental use by the manufacturer or a dealer.
    Preliminary approval means approval granted by an authorized EPA 
representative prior to submission of an application for certification, 
consistent with the provisions of Sec.  1036.210.
    Primary intended service class has the meaning given in Sec.  
1036.140.
    Rechargeable Energy Storage System (RESS) means the component(s) of 
a hybrid engine or vehicle that store recovered energy for later use, 
such as the battery system in an electric hybrid vehicle.
    Revoke has the meaning given in 40 CFR 1068.30.
    Round has the meaning given in 40 CFR 1065.1001.
    Scheduled maintenance means adjusting, repairing, removing, 
disassembling, cleaning, or replacing components or systems 
periodically to keep a part or system from failing, malfunctioning, or 
wearing prematurely. It also may mean actions you expect are necessary 
to correct an overt indication of failure or malfunction for which 
periodic maintenance is not appropriate.
    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 affiliated 
companies. Note that manufacturers with low production volumes may or 
may not be ``small manufacturers''.
    Spark-ignition means relating to a gasoline-fueled engine or any 
other type of engine with a spark plug (or other sparking device) and 
with operating characteristics significantly similar to the theoretical 
Otto combustion cycle. Spark-ignition engines usually use a throttle to 
regulate intake air flow to control power during normal operation. Note 
that some spark-ignition engines are subject to requirements that apply 
for compression-ignition engines as described in Sec.  1036.140.
    Steady-state has the meaning given in 40 CFR 1065.1001.
    Suspend has the meaning given in 40 CFR 1068.30.
    Test engine means an engine in a test sample.
    Test sample means the collection of engines selected from the 
population of an engine family for emission testing. This may include 
testing for certification, production-line testing, or in-use testing.
    Tractor means a vehicle meeting the definition of ``tractor'' in 40 
CFR 1037.801, but not classified as a ``vocational tractor'' under 40 
CFR 1037.630, or relating to such a vehicle.
    Tractor engine means an engine certified for use in tractors. Where 
an engine family is certified for use in both tractors and vocational 
vehicles, ``tractor engine'' means an engine that the engine 
manufacturer reasonably believes will be (or has been) installed in a 
tractor. Note that the provisions of this part may require a 
manufacturer to document how it determines that an engine is a tractor 
engine.
    Ultimate purchaser means, with respect to any new engine or 
vehicle, the first person who in good faith purchases such new engine 
or vehicle for purposes other than resale.
    United States has the meaning given in 40 CFR 1068.30.
    Upcoming model year means for an engine family the model year after 
the one currently in production.
    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. This does not 
include engines certified to state emission standards that are 
different than the emission standards in this part.
    Vehicle has the meaning given in 40 CFR 1037.801.
    Vocational engine means an engine certified for use in vocational 
vehicles. Where an engine family is certified for use in both tractors 
and vocational vehicles, ``vocational engine'' means an engine that the 
engine manufacturer reasonably believes will be (or has been) installed 
in a vocational vehicle. Note that the provisions of this part may 
require a manufacturer to document how it determines that an engine is 
a vocational engine.

[[Page 40605]]

    Vocational vehicle means a vehicle meeting the definition of 
``vocational'' vehicle in 40 CFR 1037.801.
    Void has the meaning given in 40 CFR 1068.30.
    We (us, our) means the Administrator of the Environmental 
Protection Agency and any authorized representatives.

Sec.  1036.805  Symbols, abbreviations, and acronyms.

    The procedures in this part generally follow either the 
International System of Units (SI) or the United States customary 
units, as detailed in NIST Special Publication 811, which we 
incorporate by reference in Sec.  1036.810. See 40 CFR 1065.20 for 
specific provisions related to these conventions. This section 
summarizes the way we use symbols, units of measure, and other 
abbreviations.
    (a) Symbols for chemical species. This part uses the following 
symbols for chemical species and exhaust constituents:

------------------------------------------------------------------------
               Symbol                               Species
------------------------------------------------------------------------
C...................................  carbon.
CH4.................................  methane.
CH4N2O..............................  urea.
CO..................................  carbon monoxide.
CO2.................................  carbon dioxide.
H2O.................................  water.
HC..................................  hydrocarbon.
NMHC................................  nonmethane hydrocarbon.
NMHCE...............................  nonmethane hydrocarbon equivalent.
NO..................................  nitric oxide.
NO2.................................  nitrogen dioxide.
NOX.................................  oxides of nitrogen.
N2O.................................  nitrous oxide.
PM..................................  particulate matter.
THC.................................  total hydrocarbon.
THCE................................  total hydrocarbon equivalent.
------------------------------------------------------------------------

    (b) Symbols for quantities. This part uses the following symbols 
and units of measure for various quantities:

----------------------------------------------------------------------------------------------------------------
   Symbol         Quantity             Unit           Unit symbol           Unit in terms of SI base units
----------------------------------------------------------------------------------------------------------------
[alpha]....  atomic hydrogen-   mole per mole....  mol/mol..........  1
              to-carbon ratio.
[beta].....  atomic oxygen-to-  mole per mole....  mol/mol..........  1
              carbon ratio.
e..........  mass weighted      grams/ton-mile...  g/ton-mi.........  g/kg-km
              emission result.
Em.........  mass-specific net  megajoules/        MJ/kg............  m\2\[middot]s-\2\
              energy content.    kilogram.
fn.........  angular speed      revolutions per    r/min............  [pi][middot]30[middot]s-\1\
              (shaft).           minute.
m..........  mass.............  pound mass or      lbm or kg........  kg
                                 kilogram.
M..........  molar mass.......  gram per mole....  g/mol............  10-\3\[middot]kg[middot]mol-\1\
MF.........  mass fraction....
P..........  power............  kilowatt.........  kW...............  10\3\[middot]m\2\[middot]kg[middot]s-\3\
T..........  torque (moment of  newton meter.....  N[middot]m.......  m\2\[middot]kg[middot]s-\2\
              force).
W..........  work.............  kilowatt-hour....  kW[middot]hr.....  3.6[middot]m\2\[middot]kg[middot]s-\1\
wC.........  carbon mass        gram/gram........  g/g..............  1
              fraction.
x..........  amount of          mole per mole....  mol/mol..........  1
              substance mole
              fraction.
xb.........  brake energy       .................  .................  ..........................................
              fraction.
xbl........  brake energy
              limit.
----------------------------------------------------------------------------------------------------------------

    (c) Superscripts. This part uses the following superscripts to 
define a quantity:

------------------------------------------------------------------------
                Superscript                           Quantity
------------------------------------------------------------------------
overbar (such as y )......................  arithmetic mean.
overdot (such as y )......................  quantity per unit time.
------------------------------------------------------------------------

    (d) Subscripts. This part uses the following subscripts to define a 
quantity:

 
------------------------------------------------------------------------
                 Subscript                            Quantity
------------------------------------------------------------------------
acc.......................................  accessory.
Ccombdry..................................  carbon from fuel per mole of
                                             dry exhaust.
CO2urea...................................  CO2 from urea decomposition.
cor.......................................  corrected.
cycle.....................................  test cycle.
exh.......................................  raw exhaust.
fuel......................................  fuel.
H2Oexhaustdry.............................  H2O in exhaust per mole of
                                             exhaust.
idle......................................  idle.
max.......................................  maximum.
mapped....................................  mapped.
meas......................................  measured quantity.
neg.......................................  negative.
mapped....................................  mapped.
pos.......................................  positive.
ref.......................................  reference quantity.
stall.....................................  stall.
test......................................  test.
------------------------------------------------------------------------

    (e) Other acronyms and abbreviations. This part uses the following 
additional abbreviations and acronyms:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
ABT.................................  averaging, banking, and trading.
AECD................................  auxiliary emission control device.
ASTM................................  American Society for Testing and
                                       Materials.
BTU.................................  British thermal units.
CFR.................................  Code of Federal Regulations.
DF..................................  deterioration factor.
DOT.................................  Department of Transportation.
E85.................................  gasoline blend including nominally
                                       85 percent denatured ethanol.
EPA.................................  Environmental Protection Agency.
FCL.................................  Family Certification Level.
FEL.................................  Family Emission Limit.
GEM.................................  Greenhouse gas Emissions Model.
g/hp-hr.............................  grams per brake horsepower-hour.
GVWR................................  gross vehicle weight rating.
LPG.................................  liquefied petroleum gas.
NARA................................  National Archives and Records
                                       Administration.
NHTSA...............................  National Highway Traffic Safety
                                       Administration.
NTE.................................  not-to-exceed.
RESS................................  rechargeable energy storage
                                       system.
RMC.................................  ramped-modal cycle.
rpm.................................  revolutions per minute.
SCR.................................  Selective catalytic reduction.
U.S.................................  United States.
U.S.C...............................  United States Code.
------------------------------------------------------------------------

    (f) Prefixes. This part uses the following prefixes to define a 
quantity:

------------------------------------------------------------------------
              Symbol                     Quantity             Value
------------------------------------------------------------------------
[mu].............................  micro...............  10 \6\
m................................  milli...............  10-\3\
c................................  centi...............  10-\2\
k................................  kilo................  10\3\
M................................  mega................  10\6\
------------------------------------------------------------------------

Sec.  1036.810  Incorporation by reference.

    (a) Certain material is incorporated by reference into this part 
with the approval of the Director of the Federal Register under 5 
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, the Environmental Protection Agency

[[Page 40606]]

must publish a notice of the change in the Federal Register and the 
material must be available to the public. All approved material is 
available for inspection at U.S. EPA, Air and Radiation Docket and 
Information Center, 1301 Constitution Ave. NW., Room B102, EPA West 
Building, Washington, DC 20460, (202) 202-1744, and is available from 
the sources listed below. It is also available for inspection at the 
National Archives and Records Administration (NARA). For information on 
the availability of this material at NARA, call 202-741-6030, or go to 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (b) American Society for Testing and Materials, 100 Barr Harbor 
Drive, P.O. Box C700, West Conshohocken, PA 19428-2959, (610) 832-9585, 
http://www.astm.org/.
    (1) ASTM D240-14 Standard Test Method for Heat of Combustion of 
Liquid Hydrocarbon Fuels by Bomb Calorimeter, approved October 1, 2014, 
(``ASTM D240''), IBR approved for Sec.  1036.530(b).
    (2) ASTM D4809-13 Standard Test Method for Heat of Combustion of 
Liquid Hydrocarbon Fuels by Bomb Calorimeter (Precision Method), 
approved May 1, 2013, (``ASTM D4809''), IBR approved for Sec.  
1036.530(b).
    (c) National Institute of Standards and Technology, 100 Bureau 
Drive, Stop 1070, Gaithersburg, MD 20899-1070, (301) 975-6478, or 
www.nist.gov.
    (1) NIST Special Publication 811, 2008 Edition, Guide for the Use 
of the International System of Units (SI), March 2008, IBR approved for 
Sec.  1036.805.
    (2) [Reserved]

Sec.  1036.815  Confidential information.

    The provisions of 40 CFR 1068.10 apply for information you consider 
confidential.

Sec.  1036.820  Requesting a hearing.

    (a) You may request a hearing under certain circumstances, as 
described elsewhere in this part. To do this, you must file a written 
request, including a description of your objection and any supporting 
data, within 30 days after we make a decision.
    (b) For a hearing you request under the provisions of this part, we 
will approve your request if we find that your request raises a 
substantial factual issue.
    (c) If we agree to hold a hearing, we will use the procedures 
specified in 40 CFR part 1068, subpart G.

Sec.  1036.825  Reporting and recordkeeping requirements.

    (a) This part includes various requirements to submit and record 
data or other information. Unless we specify otherwise, store required 
records in any format and on any media and keep them readily available 
for eight years after you send an associated application for 
certification, or eight years after you generate the data if they do 
not support an application for certification. You are expected to keep 
your own copy of required records rather than relying on someone else 
to keep records on your behalf. We may review these records at any 
time. You must promptly send us organized, written records in English 
if we ask for them. We may require you to submit written records in an 
electronic format.
    (b) The regulations in Sec.  1036.255 and 40 CFR 1068.25 and 
1068.101 describe your obligation to report truthful and complete 
information. This includes information not related to certification. 
Failing to properly report information and keep the records we specify 
violates 40 CFR 1068.101(a)(2), which may involve civil or criminal 
penalties.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1036.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. Keep 
these records for eight years unless the regulations specify a 
different period. We may require you to send us these records whether 
or not you are a certificate holder.
    (e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
engines and vehicles regulated under this part:
    (1) We specify the following requirements related to engine 
certification in this part 1036:
    (i) In Sec.  1036.135 we require engine manufacturers to keep 
certain records related to duplicate labels sent to vehicle 
manufacturers.
    (ii) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (iii) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (iv) In Sec. Sec.  1036.725, 1036.730, and 1036.735 we specify 
certain records related to averaging, banking, and trading.
    (2) We specify the following requirements related to testing in 40 
CFR part 1065:
    (i) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (ii) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (iii) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (iv) In 40 CFR 1065.695 we identify the specific information and 
data items to record when measuring emissions.
    (3) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (i) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (ii) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (iii) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (iv) In 40 CFR 1068.105 we require vehicle manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (v) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (vi) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (vii) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (viii) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (ix) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (x) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.
0
116. Part 1037 is revised to read as follows:

[[Page 40607]]

PART 1037--CONTROL OF EMISSIONS FROM NEW HEAVY-DUTY MOTOR VEHICLES

Subpart A--Overview and Applicability
Sec.
1037.1 Applicability.
1037.2 Who is responsible for compliance?
1037.5 Excluded vehicles.
1037.10 How is this part organized?
1037.15 Do any other regulation parts apply to me?
1037.30 Submission of information.
Subpart B--Emission Standards and Related Requirements
1037.101 Overview of emission standards for heavy-duty vehicles.
1037.102 Exhaust emission standards for NOX, HC, PM, and 
CO.
1037.103 Evaporative and refueling emission standards.
1037.104 Exhaust emission standards for CO2, 
CH4, and N2O for heavy-duty vehicles at or 
below 14,000 pounds GVWR.
1037.105 Exhaust emission standards for CO2 for 
vocational vehicles.
1037.106 Exhaust emission standards for CO2 for tractors 
above 26,000 pounds GVWR.
1037.107 Emission standards for trailers.
1037.115 Other requirements.
1037.120 Emission-related warranty requirements.
1037.125 Maintenance instructions and allowable maintenance.
1037.130 Assembly instructions for secondary vehicle manufacturers.
1037.135 Labeling.
1037.140 Determining vehicle parameters.
1037.150 Interim provisions.
Subpart C--Certifying Vehicle Families
1037.201 General requirements for obtaining a certificate of 
conformity.
1037.205 What must I include in my application?
1037.210 Preliminary approval before certification.
1037.211 Preliminary approval for manufacturers of aerodynamic 
devices.
1037.220 Amending maintenance instructions.
1037.225 Amending applications for certification.
1037.230 Vehicle families, sub-families, and configurations.
1037.231 Powertrain families.
1037.235 Testing requirements for certification.
1037.241 Demonstrating compliance with exhaust emission standards 
for greenhouse gas pollutants.
1037.243 Demonstrating compliance with evaporative emission 
standards.
1037.250 Reporting and recordkeeping.
1037.255 What decisions may EPA make regarding my certificate of 
conformity?
Subpart D--Testing Production Vehicles and Engines
1037.301 Measurements related to GEM inputs in a selective 
enforcement audit.
Subpart E--In-use Testing
1037.401 General provisions.
Subpart F--Test and Modeling Procedures
1037.501 General testing and modeling provisions.
1037.510 Duty-cycle exhaust testing.
1037.515 Determining CO2 emissions to show compliance for 
trailers.
1037.520 Modeling CO2 emissions to show compliance for 
vocational vehicles and tractors.
1037.525 Aerodynamic measurements.
1037.527 Coastdown procedures for calculating drag area 
(CDA).
1037.529 Wind-tunnel procedures for calculating drag area 
(CDA).
1037.531 Using computational fluid dynamics to calculate drag area 
(CDA).
1037.533 Constant-speed procedure for calculating drag area 
(CDA).
1037.540 Special procedures for testing vehicles with hybrid power 
take-off.
1037.550 Powertrain testing.
1037.551 Engine-based simulation of powertrain testing.
1037.555 Special procedures for testing Phase 1 post-transmission 
hybrid systems.
1037.560 Rear-axle efficiency test.
Subpart G--Special Compliance Provisions
1037.601 General compliance provisions.
1037.605 Installing engines certified to alternate standards for 
specialty vehicles.
1037.610 Vehicles with off-cycle technologies.
1037.615 Hybrid vehicles and other advanced technologies.
1037.620 Responsibilities for multiple manufacturers.
1037.621 Delegated assembly.
1037.622 Shipment of incomplete vehicles to secondary vehicle 
manufacturers.
1037.630 Special purpose tractors.
1037.631 Exemption for vocational vehicles intended for off-road 
use.
1037.635 Glider kits.
1037.640 Variable vehicle speed limiters.
1037.645 In-use compliance with family emission limits (FELs).
1037.650 Tire manufacturers.
1037.655 Post-useful life vehicle modifications.
1037.660 Automatic engine shutdown systems.
1037.665 In-use tractor testing.
Subpart H--Averaging, Banking, and Trading for Certification
1037.701 General provisions.
1037.705 Generating and calculating emission credits.
1037.710 Averaging.
1037.715 Banking.
1037.720 Trading.
1037.725 What must I include in my application for certification?
1037.730 ABT reports.
1037.735 Recordkeeping.
1037.740 Restrictions for using emission credits.
1037.745 End-of-year CO2 credit deficits.
1037.750 What can happen if I do not comply with the provisions of 
this subpart?
1037.755 Information provided to the Department of Transportation.
Subpart I--Definitions and Other Reference Information
1037.801 Definitions.
1037.805 Symbols, abbreviations, and acronyms.
1037.810 Incorporation by reference.
1037.815 Confidential information.
1037.820 Requesting a hearing.
1037.825 Reporting and recordkeeping requirements.
Appendix I to Part 1037--Heavy-duty Transient Test Cycle
Appendix II to Part 1037--Power Take-Off Test Cycle
Appendix III to Part 1037--Emission Control Identifiers
Appendix IV to Part 1037--Heavy-Duty Grade Profile for Phase 2 
Steady-State Test Cycles

    Authority:  42 U.S.C. 7401-7671q.

Subpart A--Overview and Applicability

Sec.  1037.1  Applicability.

    (a) 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, perflurocarbons, and sulfur hexafluoride. The 
regulations in this part 1037 apply for all new heavy-duty vehicles, 
except as provided in Sec. Sec.  1037.5 and 1037.104. This includes 
electric vehicles and vehicles fueled by conventional and alternative 
fuels. This also includes certain trailers as described in Sec. Sec.  
1037.5, 1037.150, and 1037.801.
    (b) The provisions of this part apply for alternative fuel 
conversions as specified in 40 CFR part 85, subpart F.

Sec.  1037.2  Who is responsible for compliance?

    The regulations in this part 1037 contain provisions that affect 
both vehicle manufacturers and others. However, the requirements of 
this part are generally addressed to the vehicle manufacturer(s). The 
term ``you'' generally means the vehicle manufacturer(s), especially 
for issues related to certification. Additional requirements and 
prohibitions apply to other persons as specified in Sec.  1037.601 and 
40 CFR part 1068.

Sec.  1037.5  Excluded vehicles.

    Except for the definitions specified in Sec.  1037.801, this part 
does not apply to the following vehicles:
    (a) Vehicles not meeting the definition of ``motor vehicle'' in 
Sec.  1037.801.
    (b) Vehicles excluded from the definition of ``heavy-duty vehicle'' 
in Sec.  1037.801 because of vehicle weight, weight rating, and frontal 
area (such as light-duty vehicles and light-duty trucks).

[[Page 40608]]

    (c) Vehicles produced in model years before 2014, unless they are 
certified under Sec.  1037.150.
    (d) Medium-duty passenger vehicles and other vehicles subject to 
the light-duty greenhouse gas standards of 40 CFR part 86. See 40 CFR 
86.1818 for greenhouse gas standards that apply for these vehicles. An 
example of such a vehicle would be a vehicle meeting the definition of 
``heavy-duty vehicle'' in Sec.  1037.801 and 40 CFR 86.1803, but also 
meeting the definition of ``light truck'' in 40 CFR 86.1818-12(b)(2).
    (e) Vehicles subject to the heavy-duty greenhouse gas standards of 
40 CFR part 86. See 40 CFR 86.1819 for greenhouse gas standards that 
apply for these vehicles. This generally applies for complete heavy-
duty vehicles at or below 14,000 pounds GVWR.
    (f) Aircraft meeting the definition of ``motor vehicle''. For 
example, this would include certain convertible aircraft that can be 
adjusted to operate on public roads. Standards apply separately to 
certain aircraft engines, as described in 40 CFR part 87.
    (g) Trailers meeting one or more of the following characteristics:
    (1) Trailers designed specifically for in-field operations in 
logging or mining.
    (2) Trailers designed to operate at low speeds such that they are 
unsuitable for normal highway operation.
    (3) Trailers with permanently affixed components designed for heavy 
construction that allow the trailer to perform its primary function 
while stationary. This would include crane trailers and concrete 
trailers. Trailers would not qualify under this paragraph (g)(3) based 
on welding equipment or other components that are commonly used 
separate from trailers.
    (4) Trailers less than 35 feet long with three axles, and all 
trailers with four or more axles.
    (5) Trailers intended for temporary or permanent residence, office 
space, or other work space, such as campers, mobile homes, and carnival 
trailers.
    (6) Trailers designed specifically to transport livestock.
    (7) Trailers built before January 1, 2018.
    (8) Note that the definition of trailer in Sec.  1037.801 excludes 
equipment that serves similar purposes but are not intended to be 
pulled by a tractor. For example, car-hauling equipment does not 
qualify as a trailer under this part if it is designed to be pulled by 
a heavy-duty vehicle with a pintle hook or hitch instead of a fifth 
wheel.
    (h) Where it is unclear, you may ask us to make a determination 
regarding the exclusions identified in this section. We recommend that 
you make your request before you produce the vehicle.

Sec.  1037.10  How is this part organized?

    This part 1037 is divided into the following subparts:
    (a) Subpart A of this part defines the applicability of part 1037 
and gives an overview of regulatory requirements.
    (b) Subpart B of this part describes the emission standards and 
other requirements that must be met to certify vehicles under this 
part. Note that Sec.  1037.150 discusses certain interim requirements 
and compliance provisions that apply only for a limited time.
    (c) Subpart C of this part describes how to apply for a certificate 
of conformity for vehicles subject to the standards of Sec.  1037.105 
or Sec.  1037.106.
    (d) [Reserved]
    (e) Subpart E of this part addresses testing of in-use vehicles.
    (f) Subpart F of this part describes how to test your vehicles and 
perform emission modeling (including references to other parts of the 
Code of Federal Regulations) for vehicles subject to the standards of 
Sec.  1037.105 or Sec.  1037.106.
    (g) Subpart G of this part and 40 CFR part 1068 describe 
requirements, prohibitions, and other provisions that apply to 
manufacturers, owners, operators, rebuilders, and all others. Section 
1037.601 describes how 40 CFR part 1068 applies for heavy-duty 
vehicles.
    (h) Subpart H of this part describes how you may generate and use 
emission credits to certify vehicles that are subject to the standards 
of Sec.  1037.105 or Sec.  1037.106.
    (i) Subpart I of this part contains definitions and other reference 
information.

Sec.  1037.15  Do any other regulation parts apply to me?

    (a) Parts 1065 and 1066 of this chapter describe procedures and 
equipment specifications for testing engines and vehicles to measure 
exhaust emissions. Subpart F of this part 1037 describes how to apply 
the provisions of part 1065 and part 1066 of this chapter to determine 
whether vehicles meet the exhaust emission standards in this part.
    (b) As described in Sec.  1037.601, certain requirements and 
prohibitions of part 1068 of this chapter apply to everyone, including 
anyone who manufactures, imports, installs, owns, operates, or rebuilds 
any of the vehicles subject to this part 1037. Part 1068 of this 
chapter describes general provisions that apply broadly, but do not 
necessarily apply for all vehicles or all persons. The issues addressed 
by these provisions include these seven areas:
    (1) Prohibited acts and penalties for manufacturers and others.
    (2) Rebuilding and other aftermarket changes.
    (3) Exclusions and exemptions for certain vehicles.
    (4) Importing vehicles.
    (5) Selective enforcement audits of your production.
    (6) Recall.
    (7) Procedures for hearings.
    (c) [Reserved]
    (d) Other parts of this chapter apply if referenced in this part.

Sec.  1037.30  Submission of information.

    Unless we specify otherwise, send all reports and requests for 
approval to the Designated Compliance Officer (see Sec.  1037.801). See 
Sec.  1037.825 for additional reporting and recordkeeping provisions.

Subpart B--Emission Standards and Related Requirements

Sec.  1037.101  Overview of emission standards for heavy-duty vehicles.

    (a) This part specifies emission standards for certain vehicles and 
for certain pollutants. 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, perflurocarbons, and sulfur 
hexafluoride.
    (b) The regulated emissions are addressed in four groups:
    (1) Exhaust emissions of NOX, HC, PM, and CO. 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 pollutant ozone. These 
pollutants are also sometimes described collectively as ``non-
greenhouse gas pollutants'', although they do not necessarily have 
negligible global warming potential. As described in Sec.  1037.102, 
standards for these pollutants are provided in 40 CFR part 86.
    (2) Exhaust emissions of CO2, CH4, and 
N2O. These pollutants are described collectively in this 
part as ``greenhouse gas pollutants'' because they are regulated 
primarily based on their impact on the climate. These standards are 
provided in Sec. Sec.  1037.105 through 1037.107.
    (3) Hydrofluorocarbons. These pollutants are also ``greenhouse gas 
pollutants'' but are treated separately from exhaust greenhouse gas 
pollutants

[[Page 40609]]

listed in paragraph (b)(2) of this section. These standards are 
provided in Sec.  1037.115.
    (4) Fuel evaporative emissions. These requirements are described in 
Sec.  1037.103.
    (c) The regulated heavy-duty vehicles are addressed in different 
groups as follows:
    (1) For criteria pollutants, vocational vehicles and tractors are 
regulated based on gross vehicle weight rating (GVWR), whether they are 
considered ``spark-ignition'' or ``compression-ignition,'' and whether 
they are first sold as complete or incomplete vehicles.
    (2) For greenhouse gas pollutants, vehicles are regulated in the 
following groups:
    (i) Tractors above 26,000 pounds GVWR.
    (ii) Trailers are subject to standards as specified in Sec.  
1037.107.
    (iii) All other motor vehicles subject to standards under this 
part. These other vehicles are referred to as ``vocational'' vehicles.
    (iv) The greenhouse gas emission standards in some cases apply 
differently for ``spark-ignition'' and ``compression-ignition'' engines 
or vehicles. Engine requirements are similarly differentiated, as 
described in 40 CFR 1036.140. References in this part 1037 to ``spark-
ignition'' or ``compression-ignition'' defer to the application of 
standards under 40 CFR 1036.140. For example, any vehicle with an 
engine certified to spark-ignition standards under 40 CFR part 1036 is 
subject to requirements under this part 1037 that apply for spark-
ignition vehicles.
    (3) For evaporative and refueling emissions, vehicles are regulated 
based on the type of fuel they use. Vehicles fueled with volatile 
liquid fuels or gaseous fuels are subject to evaporative emission 
standards. Vehicles up to a certain size that are fueled with gasoline, 
diesel fuel, ethanol, methanol, or LPG are subject to refueling 
emission standards.

Sec.  1037.102  Exhaust emission standards for NOX, HC, PM, and CO.

    See 40 CFR part 86 for the exhaust emission standards for 
NOX, HC, PM, and CO that apply for heavy-duty vehicles.

Sec.  1037.103  Evaporative and refueling emission standards.

    (a) Applicability. Evaporative and refueling emission standards 
apply to heavy-duty vehicles as follows:
    (1) Complete and incomplete heavy-duty vehicles at or below 14,000 
pounds GVWR must meet evaporative and refueling emission standards as 
specified in 40 CFR part 86, subpart S, instead of the requirements 
specified in this section.
    (2) Heavy-duty vehicles above 14,000 pounds GVWR that run on 
volatile liquid fuel (such as gasoline or ethanol) or gaseous fuel 
(such as natural gas or LPG) must meet evaporative and refueling 
emission standards as specified in this section.
    (b) Emission standards. The evaporative and refueling emission 
standards and measurement procedures specified in 40 CFR 86.1813 apply 
for vehicles above 14,000 pounds GVWR, except as described in this 
section. The evaporative emission standards phase in over model years 
2018 through 2022, with provisions allowing for voluntary compliance 
with the standards as early as model year 2015. Count vehicles subject 
to standards under this section the same as heavy-duty vehicles at or 
below 14,000 pounds GVWR to comply with the phase-in requirements 
specified in 40 CFR 86.1813. These vehicles may generate and use 
emission credits as described in 40 CFR part 86, subpart S, but only 
for vehicles that are tested for certification instead of relying on 
the provisions of paragraph (c) of this section. The following 
provisions apply instead of what is specified in 40 CFR 86.1813:
    (1) The refueling standards in 40 CFR 86.1813-17(b) apply to 
complete vehicles starting in model year 2022; they are optional for 
incomplete vehicles.
    (2) The leak standard in 40 CFR 86.1813-17(a)(4) does not apply.
    (3) The FEL cap relative to the diurnal plus hot soak standard for 
low-altitude testing is 1.9 grams per test.
    (4) The diurnal plus hot soak standard for high-altitude testing is 
2.3 grams per test.
    (5) Testing does not require measurement of exhaust emissions. 
Disregard references in subpart B of this part to procedures, equipment 
specifications, and recordkeeping related to measuring exhaust 
emissions. All references to the exhaust test under 40 CFR part 86, 
subpart B, are considered the ``dynamometer run'' as part of the 
evaporative testing sequence under this subpart.
    (6) Vehicles not yet subject to the Tier 3 standards in 40 CFR 
86.1813 must meet evaporative emission standards as specified in 40 CFR 
86.008-10(b)(1) and (2) for Otto-cycle applications and 40 CFR 86.007-
11(b)(3)(ii) and (b)(4)(ii) for diesel-cycle applications.
    (c) Compliance demonstration. You may provide a statement in the 
application for certification that vehicles above 14,000 pounds GVWR 
comply with evaporative and refueling emission standards instead of 
submitting test data if you include an engineering analysis describing 
how vehicles include design parameters, equipment, operating controls, 
or other elements of design that adequately demonstrate that vehicles 
comply with the standards. We would expect emission control components 
and systems to exhibit a comparable degree of control relative to 
vehicles that comply based on testing. For example, vehicles that 
comply under this paragraph (c) should rely on comparable material 
specifications to limit fuel permeation, and components should be sized 
and calibrated to correspond with the appropriate fuel capacities, fuel 
flow rates, purge strategies, and other vehicle operating 
characteristics. You may alternatively show that design parameters are 
comparable to those for vehicles at or below 14,000 pounds GVWR 
certified under 40 CFR part 86, subpart S.
    (d) CNG refueling requirement. Compressed natural gas vehicles must 
meet the requirements for fueling connection devices as specified in 40 
CFR 86.1813-17(f)(1). Vehicles meeting these requirements are deemed to 
comply with evaporative and refueling emission standards.
    (e) LNG refueling requirement. Liquefied natural gas vehicles must 
meet the requirements in Section 4.2 of SAE J2343 (incorporated by 
reference in Sec.  1037.810), which specifies that vehicles meet a 
five-day hold time after a refueling event before the fuel reaches the 
point of venting to relieve pressure. This hold time starts immediately 
after a conventional refueling event corresponding to the vehicle's 
refueling fittings and other hardware, without any stabilization period 
to reach a different starting condition for the fuel in the tank. The 
vehicle must remain parked away from direct sun with ambient 
temperatures between (20 and 30) [deg]C throughout the measurement 
procedure. This standard and procedure are consistent with Section 
9.3.5 of NFPA 52, except that NFPA specifies a three-day hold time. 
Vehicles meeting these requirements are deemed to comply with 
evaporative and refueling emission standards. The provisions of this 
paragraph (e) are optional for vehicles produced before January 1, 
2020.
    (f) Incomplete vehicles. If you sell incomplete vehicles, you must 
identify the maximum fuel tank capacity for which you designed the 
vehicle's evaporative emission control system.
    (g) Useful life. The evaporative emission standards of this section 
apply

[[Page 40610]]

for the full useful life, expressed in service miles or calendar years, 
whichever comes first. The useful life values for the standards of this 
section are described in 40 CFR 86.1805.
    (h) Auxiliary engines and separate fuel systems. The provisions of 
this paragraph (g) apply for vehicles with auxiliary engines. This 
includes any engines installed in the final vehicle configuration that 
contribute no motive power through the vehicle's transmission.
    (1) Auxiliary engines and associated fuel-system components must be 
installed when testing complete vehicles. If the auxiliary engine draws 
fuel from a separate fuel tank, you must fill the extra fuel tank 
before the start of diurnal testing as described for the vehicle's main 
fuel tank. Use good engineering judgment to ensure that any nonmetal 
portions of the fuel system related to the auxiliary engine have 
reached stabilized levels of permeation emissions. The auxiliary engine 
must not operate during the running loss test or any other portion of 
testing under this section.
    (2) For testing with incomplete vehicles, you may omit installation 
of auxiliary engines and associated fuel-system components as long as 
those components installed in the final configuration are certified to 
meet the applicable emission standards for Small SI equipment described 
in 40 CFR 1054.112 or for Large SI engines in 40 CFR 1048.105. For any 
fuel-system components that you do not install, your installation 
instructions must describe this certification requirement.

Sec.  1037.104  Exhaust emission standards for CO2, CH4, and N2O for 
heavy-duty vehicles at or below 14,000 pounds GVWR.

    Heavy-duty vehicles at or below 14,000 pounds GVWR are not subject 
to the provisions of this part 1037 if they are subject to 40 CFR part 
86, subpart S, including all vehicles certified under 40 CFR part 86, 
subpart S. See 40 CFR 86.1819 and 86.1865 for detailed provisions that 
apply for these vehicles.

Sec.  1037.105  Exhaust emission standards for CO2 for vocational 
vehicles.

    (a) The standards of this section apply for the following vehicles:
    (1) Vehicles above 14,000 pounds GVWR and at or below 26,000 pounds 
GVWR, but not certified to the vehicle standards in 40 CFR 86.1819.
    (2) Vehicles above 26,000 pounds GVWR that are not tractors.
    (3) Vocational tractors.
    (4) Heavy-duty vehicles at or below 14,000 pounds GVWR that are 
excluded from the standards in 40 CFR 86.1819 or that use engines 
certified under Sec.  1037.150(m).
    (b) CO2 standards apply as described in this paragraph 
(b). The provisions of Sec.  1037.241 specify how to comply with these 
standards. Standards differ based on engine cycle, vehicle weight 
class, and intended vehicle duty cycle. See Sec.  1037.510(c) to 
determine which duty cycle applies.
    (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 Sec.   1037.105--Phase 2 CO2 Standards for Model Year 2027 and Later Vocational Vehicles
                                                  [g/ton-mile]
----------------------------------------------------------------------------------------------------------------
             Engine type                    Vehicle size        Multi-purpose       Regional          Urban
----------------------------------------------------------------------------------------------------------------
Compression-ignition................  Class 2b-5.............              280              292              272
Compression-ignition................  Class 6-7..............              174              170              172
Compression-ignition................  Class 8................              183              174              182
Spark-ignition......................  Class 2b-5.............              308              321              299
Spark-ignition......................  Class 6-7..............              191              187              189
Spark-ignition......................  Class 8................              198              188              196
----------------------------------------------------------------------------------------------------------------

    (2) Model year 2024 through 2026 vehicles are subject to 
CO2 standards corresponding to the selected subcategories as 
shown in the following table:

       Table 2 of Sec.   1037.105--Phase 2 CO2 Standards for Model Year 2024 and Later Vocational Vehicles
                                                  [g/ton-mile]
----------------------------------------------------------------------------------------------------------------
             Engine type                    Vehicle size        Multi-purpose       Regional          Urban
----------------------------------------------------------------------------------------------------------------
Compression-ignition................  Class 2b-5.............              292              304              284
Compression-ignition................  Class 6-7..............              181              178              179
Compression-ignition................  Class 8................              192              182              190
Spark-ignition......................  Class 2b-5.............              321              334              312
Spark-ignition......................  Class 6-7..............              199              196              197
Spark-ignition......................  Class 8................              210              199              208
----------------------------------------------------------------------------------------------------------------

    (3) Model year 2021 through 2023 vehicles are subject to 
CO2 standards corresponding to the selected subcategories as 
shown in the following table:

[[Page 40611]]

     Table 3 of Sec.   1037.105--Phase 2 CO2 Standards for Model Year 2021 Through 2023 Vocational Vehicles
                                                  [g/ton-mile]
----------------------------------------------------------------------------------------------------------------
             Engine type                    Vehicle size        Multi-purpose       Regional          Urban
----------------------------------------------------------------------------------------------------------------
Compression-ignition................  Class 2b-5.............              305              318              296
Compression-ignition................  Class 6-7..............              190              186              188
Compression-ignition................  Class 8................              200              189              198
Spark-ignition......................  Class 2b-5.............              329              343              320
Spark-ignition......................  Class 6-7..............              205              201              203
Spark-ignition......................  Class 8................              216              204              214
----------------------------------------------------------------------------------------------------------------

    (4) You may certify model year 2021 and later emergency vehicles to 
the CO2 standards specified in Table 5 of this section 
instead of the standards specified in paragraphs (b)(1) through (3) of 
this section. Vehicles certified to these alternative standards may not 
generate emission credits.

    Table 5 of Sec.   1037.105--Alternative Phase 2 CO2 Standards for
                           Emergency Vehicles
                              [g/ton-mile]
------------------------------------------------------------------------
                      Vehicle size                         CO2 standard
------------------------------------------------------------------------
Class 2b-5.............................................              321
Class 6-7..............................................              201
Class 8................................................              213
------------------------------------------------------------------------

    (5) Model year 2014 through 2020 vehicles are subject to Phase 1 
CO2 standards as shown in the following table:

     Table 4 of Sec.   1037.105--Phase 1 CO2 Standards for Model Year 2014 Through 2020 Vocational Vehicles
                                                  [g/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                               CO2 standard for model    CO2 standard for model
                        Vehicle size                               years 2014-2016         year 2017 and later
----------------------------------------------------------------------------------------------------------------
Class 2b-5..................................................                       388                       373
Class 6-7...................................................                       234                       225
Class 8.....................................................                       226                       222
----------------------------------------------------------------------------------------------------------------

    (c) No CH4 or N2O standards apply under this 
section. See 40 CFR part 1036 for CH4 or N2O 
standards that apply to engines used in these vehicles.
    (d) You may generate or use emission credits for averaging, 
banking, and trading as described in subpart H of this part. This 
requires that you specify a Family Emission Limit (FEL) for 
CO2 for each vehicle subfamily. The FEL may not be less than 
the result of emission modeling from Sec.  1037.520. These FELs serve 
as the emission standards for the vehicle subfamily instead of the 
standards specified in paragraph (b) of this section.
    (e) The exhaust emission standards of this section apply for the 
full useful life, expressed in service miles or calendar years, 
whichever comes first. The following useful life values apply for the 
standards of this section:
    (1) 150,000 miles or 15 years, whichever comes first, for Class 2b 
through Class 5 vehicles.
    (2) 185,000 miles or 10 years, whichever comes first, for Class 6 
and Class 7 vehicles.
    (3) 435,000 miles or 10 years, whichever comes first, for Class 8 
vehicles.
    (f) See Sec.  1037.631 for provisions that exempt certain vehicles 
used in off-road operation from the standards of this section.
    (g) You may optionally certify a vocational vehicle to the 
standards and useful life applicable to a heavier vehicle service class 
(such as medium heavy-duty instead of light heavy-duty), provided you 
do not generate credits with the vehicle. If you include lighter 
vehicles in a credit-generating subfamily (with an FEL below the 
standard), exclude their production volume from the credit calculation. 
Conversely, if you include lighter vehicles in a credit-using 
subfamily, you must include their production volume in the credit 
calculation.

Sec.  1037.106  Exhaust emission standards for CO2 for 
tractors above 26,000 pounds GVWR.

    (a) The CO2 standards of this section apply for tractors 
above 26,000 pounds GVWR. Note that the standards of this section do 
not apply for vehicles classified as ``vocational tractors'' under 
Sec.  1037.630,
    (b) The CO2 standards for tractors above 26,000 pounds 
GVWR are given in Table 1 of this section. The provisions of Sec.  
1037.241 specify how to comply with these standards.

                                Table 1 of Sec.   1037.106--CO2 Standards for Class 7 and Class 8 Tractors by Model Year
                                                                      [g/ton-mile]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Phase 1           Phase 1           Phase 2           Phase 2           Phase 2
                                                                  standards for     standards for     standards for     standards for     standards for
                        Subcategory \1\                         model years 2014- model years 2017- model years 2021- model years 2024-  model year 2027
                                                                      2016              2020              2023              2026            and later
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class 7 Low-Roof (all cab styles).............................               107               104                97                90                87
Class 7 Mid-Roof (all cab styles).............................               119               115               107               100                96
Class 7 High-Roof (all cab styles)............................               124               120               109               101                96
Class 8 Low-Roof Day Cab......................................                81                80                78                72                70

[[Page 40612]]

 
Class 8 Low-Roof Sleeper Cab..................................                68                66                70                64                62
Class 8 Mid-Roof Day Cab......................................                88                86                84                78                76
Class 8 Mid-Roof Sleeper Cab..................................                76                73                78                71                69
Class 8 High-Roof Day Cab.....................................                92                89                86                79                76
Class 8 High-Roof Sleeper Cab.................................                75                72                77                70                67
Heavy-Haul Tractors...........................................  ................  ................                54                52                51
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Sub-category terms are defined in Sec.   1037.801.

    (c) No CH4 or N2O standards apply under this 
section. See 40 CFR part 1036 for CH4 or N2O 
standards that apply to engines used in these vehicles.
    (d) You may generate or use emission credits for averaging, 
banking, and trading as described in subpart H of this part. This 
requires that you calculate a credit quantity if you specify a Family 
Emission Limit (FEL) that is different than the standard specified in 
this section for a given pollutant. The FEL may not be less than the 
result of emission modeling from Sec.  1037.520. These FELs serve as 
the emission standards for the specific vehicle subfamily instead of 
the standards specified in paragraph (a) of this section.
    (e) The exhaust emission standards of this section apply for the 
full useful life, expressed in service miles or calendar years, 
whichever comes first. The following useful life values apply for the 
standards of this section:
    (1) 185,000 miles or 10 years, whichever comes first, for vehicles 
at or below 33,000 pounds GVWR.
    (2) 435,000 miles or 10 years, whichever comes first, for vehicles 
above 33,000 pounds GVWR.
    (f) You may optionally certify a tractor to the standards and 
useful life applicable to a heavier vehicle service class (such as 
heavy heavy-duty instead of medium heavy-duty), provided you do not 
generate credits with the vehicle. If you include lighter vehicles in a 
credit-generating subfamily (with an FEL below the standard), exclude 
its production volume from the credit calculation. Conversely, if you 
include lighter vehicles in a credit-using subfamily, you must include 
their production volume in the credit calculation.

Sec.  1037.107  Emission standards for trailers.

    The exhaust emission standards specified in this section apply to 
trailers based on the effect of trailer designs on the performance of 
the trailer in conjunction with a tractor; this accounts for the effect 
of the trailer on the tractor's exhaust emissions, even though trailers 
themselves have no exhaust emissions.
    (a) Standards apply for trailers as follows:
    (1) Different levels of stringency apply for box vans depending on 
features that may affect aerodynamic performance. You may optionally 
meet less stringent standards for different trailer types, which we 
characterize as follows:
    (i) For trailers 35 feet or longer, ``non-aero trailers'' are box 
vans that have a rear lift gate or rear hinged ramp, and at least one 
of the following side features: side lift gate, belly box, side-mounted 
pull-out platform, steps for side-door access, or a drop-deck design. 
For trailers less than 35 feet long, ``non-aero trailers'' are 
refrigerated box vans with at least one of the side features identified 
for longer trailers.
    (ii) ``Partial-aero trailers'' are box vans that have at least one 
of the side features identified in paragraph (a)(1)(i) of this section. 
Long box vans also qualify as partial-aero trailers if they have a rear 
lift gate or rear hinged ramp. Note that this paragraph (a)(1)(ii) does 
not apply for box vans designated as ``non-aero trailers'' under 
paragraph (a)(1)(i) of this section.
    (iii) ``Full-aero trailers'' are box vans that do not meet the 
specifications of either paragraph (a)(1)(i) or (ii) of this section.
    (2) CO2 standards apply for full-aero trailers as 
specified in the following table:

                         Table 1 of Sec.   1037.107--Phase 2 CO2 Standards for Trailers
                                                  [g/ton-mile]
----------------------------------------------------------------------------------------------------------------
                                                           Dry van                      Refrigerated van
                 Model year                  -------------------------------------------------------------------
                                                   Short             Long            Short             Long
----------------------------------------------------------------------------------------------------------------
2018-2020...................................             144               83              147               84
2021-2023...................................             143               81              146               82
2024-2026...................................             141               79              144               79
2027+.......................................             140               77              144               77
----------------------------------------------------------------------------------------------------------------

    (3) Partial-aero trailers may continue to meet the 2024 standards 
in 2027 and later model years.
    (4) Non-box trailers and non-aero trailers must meet standards as 
follows:
    (i) Trailers must use qualified automatic tire inflation systems 
with wheels on all axles.
    (ii) Trailers must use tires with a TRRL at or below 4.7 kg/ton. 
Through model year 2023, trailers may instead use tires with a TRRL at 
or below 5.1 kg/ton.
    (5) You may generate or use emission credits for averaging to 
demonstrate compliance with the standards specified in paragraph (a)(2) 
of this section as described in subpart H of this part. This requires 
that you specify a Family Emission Limit (FEL) for CO2 for 
each vehicle subfamily. The FEL may not be less than the result of the 
emission calculation in Sec.  1037.515. These FELs serve as the 
emission standards for the

[[Page 40613]]

specific vehicle subfamily instead of the standards specified in 
paragraph (a) of this section. You may not use averaging for non-box 
trailers, partial-aero trailers, or non-aero trailers that meet 
standards under paragraph (a)(3) or (a)(4) of this section, and you may 
not use emission credits for banking or trading for any trailers.
    (6) The provisions of Sec.  1037.241 specify how to comply with the 
standards of this section.
    (b) No CH4, N2O, or HFC standards apply under 
this section.
    (c) The emission standards of this section apply for a useful life 
of 10 years.

Sec.  1037.115  Other requirements.

    Vehicles required to meet the emission standards of this part must 
meet the following additional requirements, except as noted elsewhere 
in this part:
    (a) Adjustable parameters. Vehicles that have adjustable parameters 
must meet all the requirements of this part for any adjustment in the 
physically adjustable range. We may require that you set adjustable 
parameters to any specification within the adjustable range during any 
testing. See 40 CFR 86.094-22 for information related to determining 
whether or not an operating parameter is considered adjustable. You 
must ensure safe vehicle operation throughout the physically adjustable 
range of each adjustable parameter, including consideration of 
production tolerances. Note that adjustable roof fairings and trailer 
rear fairings are deemed not to be adjustable parameters.
    (b) Prohibited controls. You may not design your vehicles with 
emission control devices, systems, or elements of design that cause or 
contribute to an unreasonable risk to public health, welfare, or safety 
while operating. For example, this would apply if the vehicle emits a 
noxious or toxic substance it would otherwise not emit that contributes 
to such an unreasonable risk.
    (c) [Reserved]
    (d) Defeat devices. 40 CFR 1068.101 prohibits the use of defeat 
devices.
    (e) Air conditioning leakage. Loss of refrigerant from your air 
conditioning systems may not exceed a total leakage rate of 11.0 grams 
per year or a percent leakage rate of 1.50 percent per year, whichever 
is greater. Calculate the total leakage rate in g/year as specified in 
40 CFR 86.1867-12(a). Calculate the percent leakage rate as: [total 
leakage rate (g/yr)] / [total refrigerant capacity (g)] x 100. Round 
your percent leakage rate to the nearest one-hundredth of a percent. 
This paragraph (e) does not apply for refrigeration units installed on 
trailers or for refrigeration units on vocational vehicles that are 
limited to cooling cargo.
    (1) For purposes of this requirement, ``refrigerant capacity'' is 
the total mass of refrigerant recommended by the vehicle manufacturer 
as representing a full charge. Where full charge is specified as a 
pressure, use good engineering judgment to convert the pressure and 
system volume to a mass.
    (2) If your system uses a refrigerant other than HFC-134a that is 
listed as an acceptable substitute refrigerant for heavy-duty vehicles 
under 40 CFR part 82, subpart G, and the substitute refrigerant is 
identified in 40 CFR 86.1867-12(e), your system is deemed to meet the 
leakage standard in this paragraph (e), consistent with good 
engineering judgment, and the leakage rate reporting requirement of 
Sec.  1037.205(c)(1) does not apply. If your system uses any other 
refrigerant that is listed as an acceptable substitute refrigerant for 
heavy-duty vehicles under 40 CFR part 82, subpart G, contact us for 
procedures for calculating the leakage rate in a way that appropriately 
accounts for the refrigerant's properties.

Sec.  1037.120  Emission-related warranty requirements.

    (a) General requirements. You must warrant to the ultimate 
purchaser and each subsequent purchaser that the new vehicle, including 
all parts of its emission control system, meets two conditions:
    (1) It is designed, built, and equipped so it conforms at the time 
of sale to the ultimate purchaser with the requirements of this part.
    (2) It is free from defects in materials and workmanship that cause 
the vehicle to fail to conform to the requirements of this part during 
the applicable warranty period.
    (b) Warranty period. (1) Your emission-related warranty must be 
valid for at least:
    (i) 5 years or 50,000 miles for spark-ignition vehicles and Class 5 
and lighter heavy-duty vehicles (except tires).
    (ii) 5 years or 100,000 miles for Class 6 through Class 8 heavy-
duty vehicles (except tires).
    (iii) 5 years for trailers (except tires).
    (iv) 1 year for tires installed on trailers, and 2 years or 24,000 
miles for all other tires.
    (2) You may offer an emission-related warranty more generous than 
we require. The emission-related warranty for the vehicle may not be 
shorter than any basic mechanical warranty you provide to that owner 
without charge for the vehicle. Similarly, the emission-related 
warranty for any component may not be shorter than any warranty you 
provide to that owner without charge for that component. This means 
that your warranty for a given vehicle may not treat emission-related 
and nonemission-related defects differently for any component. The 
warranty period begins when the vehicle is placed into service.
    (c) Components covered. The emission-related warranty covers tires, 
automatic tire inflation systems, vehicle speed limiters, idle shutdown 
systems, hybrid system components, and 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), 
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. 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 emissions (for vehicles 
subject to evaporative emission standards). The emission-related 
warranty covers these components even if another company produces the 
component. Your emission-related warranty does not need to cover 
components whose failure would not increase a vehicle's emissions of 
any regulated pollutant.
    (d) Limited applicability. You may deny warranty claims under this 
section if the operator caused the problem through improper maintenance 
or use, as described in 40 CFR 1068.115.
    (e) Owners manual. Describe in the owners manual the emission-
related warranty provisions from this section that apply to the 
vehicle.

Sec.  1037.125  Maintenance instructions and allowable maintenance.

    Give the ultimate purchaser of each new vehicle written 
instructions for properly maintaining and using the vehicle, including 
the emission control system. The maintenance instructions also apply to 
service accumulation on any of your emission-data vehicles. See 
paragraph (i) of this section for requirements related to tire 
replacement. Only the provisions of paragraph (h) of this section apply 
for trailers.

[[Page 40614]]

    (a) Critical emission-related maintenance. Critical emission-
related maintenance includes any adjustment, cleaning, repair, or 
replacement of critical emission-related components. This may also 
include additional emission-related maintenance that you determine is 
critical if we approve it in advance. You may schedule critical 
emission-related maintenance on these components if you demonstrate 
that the maintenance is reasonably likely to be done at the recommended 
intervals on in-use vehicles. We will accept scheduled maintenance as 
reasonably likely to occur if you satisfy any of the following 
conditions:
    (1) You present data showing that, if a lack of maintenance 
increases emissions, it also unacceptably degrades the vehicle's 
performance.
    (2) You present survey data showing that at least 80 percent of 
vehicles in the field get the maintenance you specify at the 
recommended intervals.
    (3) You provide the maintenance free of charge and clearly say so 
in your maintenance instructions.
    (4) You otherwise show us that the maintenance is reasonably likely 
to be done at the recommended intervals.
    (b) Recommended additional maintenance. You may recommend any 
additional amount of maintenance on the components listed in paragraph 
(a) of this section, as long as you state clearly that these 
maintenance steps are not necessary to keep the emission-related 
warranty valid. If operators do the maintenance specified in paragraph 
(a) of this section, but not the recommended additional maintenance, 
this does not allow you to disqualify those vehicles from in-use 
testing or deny a warranty claim. Do not take these maintenance steps 
during service accumulation on your emission-data vehicles.
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
vehicle operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
vehicle operation that is not atypical, or that the maintenance is 
unlikely to occur in use. If we determine that certain maintenance 
items do not qualify as special maintenance under this paragraph (c), 
you may identify this as recommended additional maintenance under 
paragraph (b) of this section.
    (d) Noncritical emission-related maintenance. Subject to the 
provisions of this paragraph (d), you may schedule any amount of 
emission-related inspection or maintenance that is not covered by 
paragraph (a) of this section (that is, maintenance that is neither 
explicitly identified as critical emission-related maintenance, nor 
that we approve as critical emission-related maintenance). Noncritical 
emission-related maintenance generally includes maintenance on the 
components we specify in 40 CFR part 1068, Appendix I, that is not 
covered in paragraph (a) of this section. You must state in the owners 
manual that these steps are not necessary to keep the emission-related 
warranty valid. If operators fail to do this maintenance, this does not 
allow you to disqualify those vehicles from in-use testing or deny a 
warranty claim. Do not take these inspection or maintenance steps 
during service accumulation on your emission-data vehicles.
    (e) Maintenance that is not emission-related. For maintenance 
unrelated to emission controls, you may schedule any amount of 
inspection or maintenance. You may also take these inspection or 
maintenance steps during service accumulation on your emission-data 
vehicles, as long as they are reasonable and technologically necessary. 
You may perform this nonemission-related maintenance on emission-data 
vehicles at the least frequent intervals that you recommend to the 
ultimate purchaser (but not the intervals recommended for severe 
service).
    (f) Source of parts and repairs. State clearly on the first page of 
your written maintenance instructions that a repair shop or person of 
the owner's choosing may maintain, replace, or repair emission control 
devices and systems. Your instructions may not require components or 
service identified by brand, trade, or corporate name. Also, do not 
directly or indirectly condition your warranty on a requirement that 
the vehicle be serviced by your franchised dealers or any other service 
establishments with which you have a commercial relationship. You may 
disregard the requirements in this paragraph (f) if you do one of two 
things:
    (1) Provide a component or service without charge under the 
purchase agreement.
    (2) Get us to waive this prohibition in the public's interest by 
convincing us the vehicle will work properly only with the identified 
component or service.
    (g) [Reserved]
    (h) Owners manual. Explain the owner's responsibility for proper 
maintenance in the owners manual.
    (i) Tire maintenance and replacement. Include instructions that 
will enable the owner to replace tires so that the vehicle conforms to 
the original certified vehicle configuration.

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 an engine will be in its certified 
configuration.
    (b) Make sure these instructions have the following information:
    (1) Include the heading: ``Emission-related installation 
instructions''.
    (2) State: ``Failing to follow these instructions when completing 
assembly of a heavy-duty motor vehicle violates federal law, subject to 
fines or other penalties as described in the Clean Air Act.''
    (3) Describe the necessary steps for installing any diagnostic 
system required under 40 CFR part 86.
    (4) Describe how your certification is limited for any type of 
application, as illustrated in the following examples:
    (i) If the incomplete vehicle is at or below 8,500 pounds GVWR, 
state that the vehicle's certification is valid under this part 1037 
only if the final configuration has a vehicle curb weight above 6,000 
pounds or basic vehicle frontal area above 45 square feet.
    (ii) If your engine will be installed in a vehicle that you certify 
to meet diurnal emission standards using an evaporative canister, but 
you do not install the fuel tank, identify the maximum permissible fuel 
tank capacity if tank size affects compliance.
    (5) Describe any other instructions to make sure the vehicle will 
operate according to design specifications in your application for 
certification.
    (c) Provide instructions in writing or in an equivalent format. You 
may include this information with the incomplete vehicle document 
required by DOT. If you do not provide the instructions in writing, 
explain in your application for certification how you will ensure that 
each installer is informed of the installation requirements.

Sec.  1037.135  Labeling.

    (a) Assign each vehicle a unique identification number and 
permanently

[[Page 40615]]

affix, engrave, or stamp it on the vehicle in a legible way. The 
vehicle identification number (VIN) serves this purpose.
    (b) At the time of manufacture, affix a permanent and legible label 
identifying each vehicle. The label must be--
    (1) Attached in one piece so it is not removable without being 
destroyed or defaced.
    (2) Secured to a part of the vehicle needed for normal operation 
and not normally requiring replacement.
    (3) Durable and readable for the vehicle's entire life.
    (4) Written in English.
    (c) The label must--
    (1) Include the heading ``VEHICLE EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark. You may 
identify another company and use its trademark instead of yours if you 
comply with the branding provisions of 40 CFR 1068.45.
    (3) Include EPA's standardized designation for the vehicle family.
    (4) State the regulatory subcategory that determines the applicable 
emission standards for the vehicle family (see definition in Sec.  
1037.801).
    (5) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]. You may omit this from the label if you stamp, engrave, or 
otherwise permanently identify it elsewhere on the vehicle, in which 
case you must also describe in your application for certification where 
you will identify the date on the vehicle.
    (6) Identify the emission control system. Use terms and 
abbreviations as described in Appendix III to this part or other 
applicable conventions. Phase 2 tractors and Phase 2 vocational 
vehicles (other than those certified to standards for emergency 
vehicles) may omit this information.
    (7) Identify any requirements for fuel and lubricants that do not 
involve fuel-sulfur levels.
    (8) State: ``THIS VEHICLE COMPLIES WITH U.S. EPA REGULATIONS FOR 
[MODEL YEAR] HEAVY-DUTY VEHICLES.''
    (9) If you rely on another company to design and install fuel tanks 
in incomplete vehicles that use an evaporative canister for controlling 
diurnal emissions, include the following statement: ``THIS VEHICLE IS 
DESIGNED TO COMPLY WITH EVAPORATIVE EMISSION STANDARDS WITH UP TO x 
GALLONS OF FUEL TANK CAPACITY.'' Complete this statement by identifying 
the maximum specified fuel tank capacity associated with your 
certification.
    (d) You may add information to the emission control information 
label to identify other emission standards that the vehicle meets or 
does not meet (such as European standards). You may also add other 
information to ensure that the vehicle will be properly maintained and 
used.
    (e) You may ask us to approve modified labeling requirements in 
this part 1037 if you show that it is necessary or appropriate. We will 
approve your request if your alternate label is consistent with the 
requirements of this part.

Sec.  1037.140  Determining vehicle parameters.

    (a) Where applicable, a vehicle's roof height and a trailer's 
length are determined from nominal design specifications, as provided 
in this section. Specify design values for roof height and trailer 
length to the nearest inch.
    (b) Base roof height on fully inflated tires having a static loaded 
radius equal to the arithmetic mean of the largest and smallest static 
loaded radius of tires you offer or a standard tire we approve.
    (c) Base trailer length on the outer dimensions of the load-
carrying structure. Do not include aerodynamic devices or HVAC units.
    (d) The nominal design specifications must be within the range of 
the actual values from production vehicles considering normal 
production variability. In the case of roof height, use the mean tire 
radius specified in paragraph (b) of this section. If after production 
begins it is determined that your nominal design specifications do not 
represent production vehicles, we may require you to amend your 
application for certification under Sec.  1037.225.
    (e) If your vehicle is equipped with an adjustable roof fairing, 
measure the roof height with the fairing in its lowest setting.
    (f) For any provisions in this part that depend on the number of 
axles on a vehicle, include lift axles or any other installed axles 
that can be used to carry the vehicle's weight while in motion.

Sec.  1037.150  Interim provisions.

    The provisions in this section apply instead of other provisions in 
this part.
    (a) Incentives for early introduction. The provisions of this 
paragraph (a) apply with respect to vehicles produced in model years 
before 2014 Manufacturers may voluntarily certify in model year 2013 
(or earlier model years for electric vehicles) to the greenhouse gas 
standards of this part.
    (1) This paragraph (a)(1) applies for regulatory subcategories 
subject to the standards of Sec.  1037.105 or Sec.  1037.106. Except as 
specified in paragraph (a)(3) of this section, to generate early 
credits under this paragraph for any vehicles other than electric 
vehicles, you must certify your entire U.S.-directed production volume 
within the regulatory subcategory to these standards. Except as 
specified in paragraph (a)(4) of this section, if some vehicle families 
within a regulatory subcategory are certified after the start of the 
model year, you may generate credits only for production that occurs 
after all families are certified. For example, if you produce three 
vehicle families in an averaging set and you receive your certificates 
for those families on January 4, 2013, March 15, 2013, and April 24, 
2013, you may not generate credits for model year 2013 production in 
any of the families that occurs before April 24, 2013. Calculate 
credits relative to the standard that would apply in model year 2014 
using the equations in subpart H of this part. You may bank credits 
equal to the surplus credits you generate under this paragraph (a) 
multiplied by 1.50. For example, if you have 1.0 Mg of surplus credits 
for model year 2013, you may bank 1.5 Mg of credits. Credit deficits 
for an averaging set prior to model year 2014 do not carry over to 
model year 2014. These credits may be used to show compliance with the 
standards of this part for 2014 and later model years. We recommend 
that you notify EPA of your intent to use this provision before 
submitting your applications.
    (2) [Reserved]
    (3) You may generate emission credits for the number of additional 
SmartWay designated tractors (relative to your 2012 production), 
provided you do not generate credits for those vehicles under paragraph 
(a)(1) of this section. Calculate credits for each regulatory 
subcategory relative to the standard that would apply in model year 
2014 using the equations in subpart H of this part. Use a production 
volume equal to the number of designated model year 2013 SmartWay 
tractors minus the number of designated model year 2012 SmartWay 
tractors. You may bank credits equal to the surplus credits you 
generate under this paragraph (a)(3) multiplied by 1.50. Your 2012 and 
2013 model years must be equivalent in length.
    (4) This paragraph (a)(4) applies where you do not receive your 
final certificate in a regulatory subcategory within 30 days of 
submitting your final application for that subcategory. Calculate your 
credits for all production that occurs 30 days or more after you

[[Page 40616]]

submit your final application for the subcategory.
    (b) Interim standards for pickups and vans. See 40 CFR part 86, 
subpart S, for interim standards that apply for certain heavy-duty 
pickups and vans.
    (c) Provisions for small manufacturers. Standards 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 336120 for vocational vehicles and tractors and 336212 for 
trailers. Qualifying manufacturers are not subject to the greenhouse 
gas standards of Sec. Sec.  1037.105 and 1037.106 for vehicles built 
before January 1, 2022, Similarly, qualifying manufacturers are not 
subject to the greenhouse gas standards of Sec.  1037.107 for trailers 
built before January 1, 2019. In addition, qualifying manufacturers 
producing vehicles that run on any fuel other than gasoline, E85, or 
diesel fuel may delay complying with every new standard under this part 
by one model year. Qualifying manufacturers must notify the Designated 
Compliance Officer each model year before introducing these 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. You must label your excluded vehicles with the 
following statement: ``THIS VEHICLE IS EXCLUDED UNDER 40 CFR 
1037.150(c).'' Small businesses may certify their vehicles under this 
part 1037 before standards start to apply; however, they may generate 
emission credits only if they certify their entire U.S.-directed 
production volume within the applicable averaging set for that model 
year.
    (d) Air conditioning leakage for vocational vehicles. The air 
conditioning leakage standard of Sec.  1037.115 does not apply for 
model year 2020 and earlier vocational vehicles.
    (e) [Reserved]
    (f) Electric vehicles. All electric vehicles are deemed to have 
zero emissions of CO2, CH4, and N2O. 
No emission testing is required for electric vehicles. Use good 
engineering judgment to apply other requirements of this part to 
electric vehicles.
    (g) Compliance date. Compliance with the standards of this part was 
optional prior to January 1, 2014. This means that if your 2014 model 
year begins before January 1, 2014, you may certify for a partial model 
year that begins on January 1, 2014 and ends on the day your model year 
would normally end. You must label model year 2014 vehicles excluded 
under this paragraph (g) with the following statement: ``THIS VEHICLE 
IS EXCLUDED UNDER 40 CFR 1037.150(g).''
    (h) Off-road vehicle exemption. In unusual circumstances, vehicle 
manufacturers may ask us to exempt vehicles under Sec.  1037.631 based 
on other criteria that are equivalent to those specified in Sec.  
1037.631(a). For example, we would normally not grant relief in cases 
where the vehicle manufacturer had credits or could otherwise comply 
with applicable standards. Request approval for the exemption before 
you produce the subject vehicles. Send your request with supporting 
information to the Designated Compliance Officer; we will coordinate 
with NHTSA in making a determination under Sec.  1037.210. If you 
introduce into U.S. commerce vehicles that depend on our approval under 
this paragraph (h) before we inform you of our approval, those vehicles 
violate 40 CFR 1068.101(a)(1).
    (i) Credit multiplier for advanced technology. If you generate 
credits from model year 2020 and earlier vehicles certified with 
advanced technology, you may multiply these 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.
    (j) Limited prohibition related to early model year engines. The 
provisions of this paragraph (j) apply only for vehicles that have a 
date of manufacture before January 1, 2018. See Sec.  1037.635 for 
related provisions that apply in later model years. The prohibition in 
Sec.  1037.601 against introducing into U.S. commerce a vehicle 
containing an engine not certified to the standards applicable for the 
calendar year of installation does not apply for vehicles using model 
year 2014 or 2015 spark-ignition engines, or any model year 2013 or 
earlier engines.
    (k) Verifying drag areas from in-use vehicles. This paragraph (k) 
applies instead of Sec.  1037.401(b) through model year 2020. We may 
measure the drag area of your vehicles after they have been placed into 
service. To account for measurement variability, your vehicle is deemed 
to conform 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 above the bin to which you certified (for 
example, Bin II if you certified the vehicle to Bin III), unless we 
determine that you knowingly produced the vehicle to have a higher drag 
area than is allowed for the bin to which it was certified.
    (l) Optional sister-vehicle certification under 40 CFR part 86. You 
may certify certain complete or cab-complete vehicles to the GHG 
standards of 40 CFR 86.1819 instead of the standards of Sec.  1037.105 
as specified in 40 CFR 86.1819-14(j).
    (m) Loose engine sales. Manufacturers may certify certain model 
year 2020 and earlier spark-ignition engines to emission standards 
under 40 CFR 1036.108 where they are identical to engines used in 
vehicles certified to the standards of 40 CFR 86.1819. Vehicles in 
which those engines are installed are subject to standards under this 
part as specified in Sec.  1037.105. See 40 CFR 86.1819-14(k)(8).
    (n) Streamlined preliminary approval for trailer devices. Before 
January 1, 2018, manufacturers of aerodynamic devices for trailers may 
ask for preliminary EPA approval of compliance data for their devices 
based on qualifying for designation under the SmartWay program based on 
measured CDA values, whether or not that involves testing or 
other methods specified in Sec.  1037.525. Trailer manufacturers may 
certify based on delta CDA values established under this 
paragraph (n) through model year 2020. Manufacturers must perform 
testing as specified in subpart F of this part for any vehicles or 
aerodynamic devices not qualifying for approval under this paragraph 
(n).
    (o) Phase 1 coastdown procedures. For tractors subject to Phase 1 
standards under Sec.  1037.106, the default method for measuring drag 
area (CDA) is the coastdown procedure specified in 40 CFR 
part 1066, subpart D. This includes preparing the tractor and the 
standard trailer with wheels meeting specifications of Sec.  
1037.527(b) and submitting information related to your coastdown 
testing under Sec.  1037.527(h).
    (p) ABT reports. Through model year 2017, you may submit a final 
report under Sec.  1037.730 up to 270 days after the end of the model 
year, as long as you send a draft report with the same information 
within 90 days after the end of the model year.
    (q) Vehicle families for advanced and off-cycle technologies. For 
vocational vehicles and tractors subject to Phase 1 standards, create 
separate vehicle families for vehicles that contain advanced or off-
cycle technologies; group those vehicles together in a vehicle family 
if they use the same advanced or off-cycle technologies.
    (r) Limited carryover from Phase 1 to Phase 2. The provisions for 
carryover data in Sec.  1037.235(d) do not allow you to use aerodynamic 
test results from Phase 1 to support a compliance demonstration for 
Phase 2 certification.

[[Page 40617]]

    (s) Interim useful life for light heavy-duty vocational vehicles. 
Class 2b through Class 5 vocational vehicles certified to Phase 1 
standards are subject to a useful life of 110,000 miles or 10 years, 
whichever comes first, instead of the useful life specified in Sec.  
1037.105. For emission credits generated from these Phase 1 vehicles, 
multiply any banked credits that you carry forward to demonstrate 
compliance with Phase 2 standards by 1.36.

Subpart C--Certifying Vehicle Families

Sec.  1037.201  General requirements for obtaining a certificate of 
conformity.

    (a) You must send us a separate application for a certificate of 
conformity for each vehicle family. A certificate of conformity is 
valid from the indicated effective date until the end of the model year 
for which it is issued, which may not extend beyond December 31 of that 
year. You must renew your certification annually for any vehicles you 
continue to produce.
    (b) The application must contain all the information required by 
this part and must not include false or incomplete statements or 
information (see Sec.  1037.255).
    (c) We may ask you to include less information than we specify in 
this subpart, as long as you maintain all the information required by 
Sec.  1037.250.
    (d) You must use good engineering judgment for all decisions 
related to your application (see 40 CFR 1068.5).
    (e) An authorized representative of your company must approve and 
sign the application.
    (f) See Sec.  1037.255 for provisions describing how we will 
process your application.
    (g) We may perform confirmatory testing on your vehicles; for 
example, we may test vehicles to verify drag areas or other GEM inputs. 
This includes tractors used to determine Falt-aero under 
Sec.  1037.525. We may require you to deliver your test vehicles or 
components to a facility we designate for our testing. Alternatively, 
you may choose to deliver another vehicle or component that is 
identical in all material respects to the test vehicle or component, or 
a different vehicle or component that we determine can appropriately 
serve as an emission-data vehicle for the family. We may perform 
confirmatory testing on engines under 40 CFR part 1036 and may require 
you to apply modified fuel maps from that testing for certification 
under this part.
    (h) The certification and testing provisions of 40 CFR part 86, 
subpart S, apply instead of the provisions of this subpart relative to 
the evaporative and refueling emission standards specified in Sec.  
1037.103, except that Sec.  1037.245 describes how to demonstrate 
compliance with evaporative emission standards.
    (i) Vehicles and installed engines must meet exhaust, evaporative, 
and refueling emission standards and certification requirements in 40 
CFR part 86 or 40 CFR part 1036, as applicable. Include the information 
described in 40 CFR part 86, subpart S, or 40 CFR 1036.205 in your 
application for certification in addition to what we specify in Sec.  
1037.205 so we can issue a single certificate of conformity for all the 
requirements that apply for your vehicle and the installed engine.

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.  1037.515 or 1037.520.
    (a) Describe the vehicle family's specifications and other basic 
parameters of the vehicle's design and emission controls. List the fuel 
type on which your vocational vehicles and tractors are designed to 
operate (for example, ultra low-sulfur diesel fuel).
    (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. Sec.  1037.515 and 1037.520, 
with the following additional information if it applies for your 
vehicles:
    (1) Describe your design for vehicle speed limiters, consistent 
with Sec.  1037.640.
    (2) Describe your design for predictive cruise control.
    (3) Describe your design for automatic engine shutdown systems, 
consistent with Sec.  1037.660.
    (4) Describe your engineering analysis demonstrating that your air 
conditioning compressor qualifies as a high-efficiency model as 
described in 40 CFR 86.1868-12(h)(5).
    (5) Describe your design for stop-start technology, including the 
logic for engine shutdown and the maximum duration of engine operation 
after the onset of any vehicle conditions described in Sec.  
1037.520(f)(8)(iii).
    (6) If you perform powertrain testing under Sec.  1037.550, report 
both CO2 and NOX emission levels corresponding to 
each test run.
    (7) Include measurements for vehicles with hybrid power take-off 
systems.
    (c) For vehicles subject to air conditioning standards, include:
    (1) The refrigerant leakage rates (leak scores).
    (2) The type of refrigerant and the refrigerant capacity of the air 
conditioning systems.
    (3) The corporate name of the final installer of the air 
conditioning system.
    (d) Describe any vehicles you selected for testing and the reasons 
for selecting them.
    (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 for tractors and trailers as specified 
in Sec.  1037.525.
    (f) Describe how you operated any emission-data vehicle before 
testing, including the duty cycle and the number of vehicle operating 
miles used to stabilize emission-related performance. Explain why you 
selected the method of service accumulation. Describe any scheduled 
maintenance you did.
    (g) Where applicable, list the specifications of any test fuel to 
show that it falls within the required ranges we specify in 40 CFR part 
1065.
    (h) Identify the vehicle family's useful life.
    (i) Include the maintenance instructions and warranty statement you 
will give to the ultimate purchaser of each new vehicle (see Sec. Sec.  
1037.120 and 1037.125).
    (j) Describe your emission control information label (see Sec.  
1037.135).
    (k) Identify the emission standards or FELs to which you are 
certifying vehicles in the vehicle family. For families containing 
multiple subfamilies, this means that you must identify multiple 
CO2 FELs. For example, you may identify the highest and 
lowest FELs to which any of your subfamilies will be certified and also 
list all possible FELs in between (which will be in 1 g/ton-mile 
increments).
    (l) Where applicable, identify the vehicle family's deterioration 
factors and describe how you developed them.

[[Page 40618]]

Present any emission test data you used for this (see Sec.  
1037.241(c)).
    (m) Where applicable, state that you operated your emission-data 
vehicles as described in the application (including the test 
procedures, test parameters, and test fuels) to show you meet the 
requirements of this part.
    (n) [Reserved]
    (o) Report calculated and modeled emission results as follows:
    (1) For vocational vehicles and tractors, report modeling results 
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.
    (2) For trailers that demonstrate compliance with g/ton-mile 
emission standards as described in Sec.  1037.515, report 
CO2 emission results for the configurations with the highest 
and lowest calculated values, and for the configuration with the 
highest projected sales.
    (p) Where applicable, describe all adjustable operating parameters 
(see Sec.  1037.115), including production tolerances. You do not need 
to include parameters that do not affect emissions covered by your 
application. Include the following in your description of each 
parameter:
    (1) The nominal or recommended setting.
    (2) The intended physically adjustable range.
    (3) The limits or stops used to establish adjustable ranges.
    (4) Information showing why the limits, stops, or other means of 
inhibiting adjustment are effective in preventing adjustment of 
parameters on in-use vehicles to settings outside your intended 
physically adjustable ranges.
    (q) [Reserved]
    (r) Unconditionally certify that all the vehicles in the vehicle 
family comply with the requirements of this part, other referenced 
parts of the CFR, and the Clean Air Act.
    (s) Include good-faith estimates of U.S.-directed production 
volumes by subfamily. We may require you to describe the basis of your 
estimates.
    (t) Include the information required by other subparts of this 
part. For example, include the information required by Sec.  1037.725 
if you plan to generate or use emission credits.
    (u) Include other applicable information, such as information 
specified in this part or 40 CFR part 1068 related to requests for 
exemptions.
    (v) Name an agent for service located in the United States. Service 
on this agent constitutes service on you or any of your officers or 
employees for any action by EPA or otherwise by the United States 
related to the requirements of this part.

Sec.  1037.210  Preliminary approval before certification.

    If you send us information before you finish the application, we 
may review it and make any appropriate determinations. Decisions made 
under this section are considered to be preliminary approval, subject 
to final review and approval. We will generally not reverse a decision 
where we have given you preliminary approval, unless we find new 
information supporting a different decision. If you request preliminary 
approval related to the upcoming model year or the model year after 
that, we will make best-efforts to make the appropriate determinations 
as soon as practicable. We will generally not provide preliminary 
approval related to a future model year more than two years ahead of 
time.

Sec.  1037.211  Preliminary approval for manufacturers of aerodynamic 
devices.

    (a) If you design or manufacture aerodynamic devices for trailers, 
you may ask us to provide preliminary approval for the measured 
performance of your devices. While decisions made under this section 
are considered to be preliminary approval, we will not reverse a 
decision where we have given you preliminary approval, unless we find 
new information supporting a different decision. For example, where we 
measure the performance of your device after giving you preliminary 
approval and its measured performance is less than your data indicated, 
we may rescind the preliminary approval of your test results.
    (b) To request this, you must provide test data for delta 
CDA values as specified in Sec.  1037.150(n) or Sec.  
1037.525. Trailer manufacturers may use approved delta CDA 
values as inputs under Sec.  1037.515 to support their application for 
certification.
    (c) The following provisions apply for combining multiple devices 
under this section for the purpose of certifying trailers:
    (1) If the device manufacturer establishes a delta CDA 
value in a single test with multiple aerodynamic devices installed, 
trailer manufacturers may use that delta CDA value directly 
for the same combination of aerodynamic devices installed on production 
trailers.
    (2) Trailer manufacturers may combine delta CDA values 
for aerodynamic devices that are not tested together, as long as each 
device does not significantly impair the effectiveness of another, 
consistent with good engineering judgment. To approximate the overall 
benefit of multiple devices, calculate a composite delta CDA 
value for multiple aerodynamic devices by applying the full delta 
CDA value for the device with the greatest aerodynamic 
improvement, adding the second-highest delta CDA value 
multiplied by 0.9, and adding any other delta CDA values 
multiplied by 0.8.

Sec.  1037.220  Amending maintenance instructions.

    You may amend your emission-related maintenance instructions after 
you submit your application for certification as long as the amended 
instructions remain consistent with the provisions of Sec.  1037.125. 
You must send the Designated Compliance Officer a written request to 
amend your application for certification for a vehicle family if you 
want to change the emission-related maintenance instructions in a way 
that could affect emissions. In your request, describe the proposed 
changes to the maintenance instructions. If operators follow the 
original maintenance instructions rather than the newly specified 
maintenance, this does not allow you to disqualify those vehicles from 
in-use testing or deny a warranty claim.
    (a) If you are decreasing or eliminating any specified maintenance, 
you may distribute the new maintenance instructions to your customers 
30 days after we receive your request, unless we disapprove your 
request. This would generally include replacing one maintenance step 
with another. We may approve a shorter time or waive this requirement.
    (b) If your requested change would not decrease the specified 
maintenance, you may distribute the new maintenance instructions 
anytime after you send your request. For example, this paragraph (b) 
would cover adding instructions to increase the frequency of filter 
changes for vehicles in severe-duty applications.
    (c) You need not request approval if you are making only minor 
corrections (such as correcting typographical mistakes), clarifying 
your maintenance instructions, or changing instructions for maintenance 
unrelated to emission control. We may ask you to send us copies of 
maintenance instructions revised under this paragraph (c).

Sec.  1037.225  Amending applications for certification.

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified

[[Page 40619]]

vehicle configurations, subject to the provisions of this section. 
After we have issued your certificate of conformity, but before the end 
of the model year, you may send us an amended application requesting 
that we include new or modified vehicle configurations within the scope 
of the certificate, subject to the provisions of this section. Before 
the end of the model year, you must amend your application if any 
changes occur with respect to any information that is included or 
should be included in your application. After the end of the model 
year, you may amend your application only to update maintenance 
instructions as described in Sec.  1037.220 or to modify an FEL as 
described in paragraph (f) of this section.
    (a) You must amend your application before you take any of the 
following actions:
    (1) Add a vehicle configuration to a vehicle family. In this case, 
the vehicle configuration added must be consistent with other vehicle 
configurations in the vehicle family with respect to the criteria 
listed in Sec.  1037.230.
    (2) Change a vehicle configuration already included in a vehicle 
family in a way that may affect emissions, or change any of the 
components you described in your application for certification. This 
includes production and design changes that may affect emissions any 
time during the vehicle's lifetime.
    (3) Modify an FEL for a vehicle family as described in paragraph 
(f) of this section.
    (b) To amend your application for certification, send the relevant 
information to the Designated Compliance Officer.
    (1) Describe in detail the addition or change in the vehicle model 
or configuration you intend to make.
    (2) Include engineering evaluations or data showing that the 
amended vehicle family complies with all applicable requirements. You 
may do this by showing that the original emission-data vehicle is still 
appropriate for showing that the amended family complies with all 
applicable requirements.
    (3) If the original emission-data vehicle or emission modeling for 
the vehicle family is not appropriate to show compliance for the new or 
modified vehicle configuration, include new test data or emission 
modeling showing that the new or modified vehicle configuration meets 
the requirements of this part.
    (4) Include any other information needed to make your application 
correct and complete.
    (c) We may ask for more test data or engineering evaluations. You 
must give us these within 30 days after we request them.
    (d) For vehicle families already covered by a certificate of 
conformity, we will determine whether the existing certificate of 
conformity covers your newly added or modified vehicle. You may ask for 
a hearing if we deny your request (see Sec.  1037.820).
    (e) For vehicle families already covered by a certificate of 
conformity, you may start producing the new or modified vehicle 
configuration anytime after you send us your amended application and 
before we make a decision under paragraph (d) of this section. However, 
if we determine that the affected vehicles do not meet applicable 
requirements, we will notify you to cease production of the vehicles 
and may require you to recall the vehicles at no expense to the owner. 
Choosing to produce vehicles under this paragraph (e) is deemed to be 
consent to recall all vehicles that we determine do not meet applicable 
emission standards or other requirements and to remedy the 
nonconformity at no expense to the owner. If you do not provide 
information required under paragraph (c) of this section within 30 days 
after we request it, you must stop producing the new or modified 
vehicles.
    (f) You may ask us to approve a change to your FEL in certain cases 
after the start of production. The changed FEL may not apply to 
vehicles you have already introduced into U.S. commerce, except as 
described in this paragraph (f). You may ask us to approve a change to 
your FEL in the following cases:
    (1) You may ask to raise your FEL for your vehicle subfamily at any 
time. In your request, you must show that you will still be able to 
meet the emission standards as specified in subparts B and H of this 
part. Use the appropriate FELs with corresponding production volumes to 
calculate emission credits for the model year, as described in subpart 
H of this part.
    (2) Where testing applies, you may ask to lower the FEL for your 
vehicle subfamily only if you have test data from production vehicles 
showing that emissions are below the proposed lower FEL. Otherwise, you 
may ask to lower your FEL for your vehicle subfamily at any time. The 
lower FEL applies only to vehicles you produce after we approve the new 
FEL. Use the appropriate FELs with corresponding production volumes to 
calculate emission credits for the model year, as described in subpart 
H of this part.
    (3) You may ask to add an FEL for your vehicle family at any time.

Sec.  1037.230  Vehicle families, sub-families, and configurations.

    (a) For purposes of certifying your vehicles to greenhouse gas 
standards, divide your product line into families of vehicles based on 
regulatory subcategories as specified in this section. Subcategories 
are specified using terms defined in Sec.  1037.801. Your vehicle 
family is limited to a single model year.
    (1) Apply subcategories for vocational vehicles and vocational 
tractors as shown in Table 1 of this section. This involves 21 separate 
subcategories for Phase 2 vehicles to account for engine type, GVWR, 
and the vehicle characteristics corresponding to the duty cycles for 
vocational vehicles as specified in Sec.  1037.510; three separate 
subcategories apply for emergency vehicles as described in Sec.  
1037.105(b)(4). Divide Phase 1 vehicles into three GVWR-based vehicle 
classes as shown in Table 1 of this section, disregarding additional 
specified characteristics. Table 1 follows:

                          Table 1 of Sec.   1037.230--Vocational Vehicle Subcategories
----------------------------------------------------------------------------------------------------------------
             Engine type                      Class 2b-5               Class 6-7                 Class 8
----------------------------------------------------------------------------------------------------------------
Compression-ignition.................  Urban..................  Urban..................  Urban.
                                       Multi-Purpose..........  Multi-Purpose..........  Multi-Purpose.
                                       Regional...............  Regional...............  Regional.
Spark-ignition.......................  Urban..................  Urban..................  Urban.
                                       Multi-Purpose..........  Multi-Purpose..........  Multi-Purpose.
                                       Regional...............  Regional...............  Regional.
All..................................  Emergency..............  Emergency..............  Emergency.
----------------------------------------------------------------------------------------------------------------

[[Page 40620]]

    (2) Apply subcategories for tractors (other than vocational 
tractors) as shown in the following table:

                                Table 2 of Sec.   1037.230--Tractor Subcategories
----------------------------------------------------------------------------------------------------------------
 
                Class 7                                                  Class 8
                                        ------------------------------------------------------------------------
Low-roof tractors......................  Low-roof day cabs.........  Low-roof sleeper cabs.
Mid-roof tractors......................  Mid-roof day cabs.........  Mid-roof sleeper cabs.
High-roof tractors.....................  High-roof day cabs........  High-roof sleeper cabs.
                                        ------------------------------------------------------------------------
                                                       Heavy-haul tractors (starting with Phase 2)
----------------------------------------------------------------------------------------------------------------

    (3) Apply subcategories for trailers as shown in the following 
table:

                               Table 3 of Sec.   1037.230-- Trailer Subcategories
----------------------------------------------------------------------------------------------------------------
           Full-aero trailers             Partial-aero trailers \a\                 Other trailers
----------------------------------------------------------------------------------------------------------------
Long dry box vans......................  Long dry box vans.........  Non-aero trailers.
Short dry box vans.....................  Short dry box vans........  Non-box trailers.
Long refrigerated box vans.............  Long refrigerated box vans  ...........................................
Short refrigerated box vans............  Short refrigerated box      ...........................................
                                          vans.
----------------------------------------------------------------------------------------------------------------
\a\ The partial-aero subcategories do not apply before model year 2027.

    (b) If the vehicles in your family are being certified to more than 
one FEL, subdivide your greenhouse gas vehicle families into 
subfamilies that include vehicles with identical FELs. Note that you 
may add subfamilies at any time during the model year.
    (c) Group vehicles into configurations consistent with the 
definition of ``vehicle configuration'' in Sec.  1037.801. Note that 
vehicles with hardware or software differences that are related to 
measured or modeled emissions are considered to be different vehicle 
configurations even if they have the same modeling inputs and FEL. Note 
also, that you are not required to separately identify all 
configurations for certification. See paragraph (g) of this section for 
provisions allowing you to group certain hardware differences into the 
same configuration. Note that you are not required to identify all 
possible configurations for certification; also, you are required to 
include in your final report only those configurations you produced.
    (d) You may combine dissimilar vehicles into a single vehicle 
family in special circumstances as follows:
    (1) For a vehicle model that includes a range of GVWR values that 
straddle weight classes, you may include all the vehicles in the same 
vehicle family if you certify the vehicle family to the numerically 
lower CO2 emission standard from the affected weight 
classes. Vehicles that are optionally certified to a more stringent 
under this paragraph (d)(1) are subject to useful-life and all other 
provisions corresponding to the weight class with the numerically lower 
CO2 emission standard.
    (2) You may include refrigerated box vans in a vehicle family with 
dry box vans; if you do this, all the trailers in the family are 
subject to the standards that apply for dry box vans. Similarly, you 
may include short trailers in a vehicle family with long trailers; if 
you do this, all the trailers in the family are subject to the 
standards that apply for long vans. You may also include short 
refrigerated box vans in a vehicle family with long dry box vans; if 
you do this, all the trailers in the family are subject to the 
standards that apply for long dry box vans.
    (e) You may divide your families into more families than specified 
in this section.
    (f) You may ask us to allow you to group into the same 
configuration vehicles that have very small body hardware differences 
that do not significantly affect drag areas. Note that this allowance 
does not apply for substantial differences, even if the vehicles have 
the same measured drag areas.

Sec.  1037.231  Powertrain families.

    (a) If you choose to perform powertrain testing as specified in 
Sec.  1037.550, 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.
    (b) Except as specified in paragraph (c) of this section, group 
powertrains in the same powertrain family if they share all the 
following attributes:
    (1) Engine family.
    (2) The applicable simulated test vehicle category according to 
Sec.  1037.550(f): Either Class 2b through 7, heavy-haul or Class 8 
other than heavy-haul.
    (3) Number of clutches.
    (4) Type of clutch (e.g., wet or dry).
    (5) Presence and location of a fluid coupling such as a torque 
converter.
    (6) Gear configuration, as follows:
    (i) Planetary (e.g., simple, compound, meshed-planet, stepped-
planet, multi-stage).
    (ii) Countershaft (e.g., single, double, triple).
    (iii) Continuously variable (e.g., pulley, magnetic, torroidal).
    (7) Number of available forward gears, and transmission gear ratio 
for each available forward gear, if applicable.
    (8) Transmission oil sump configuration (e.g., conventional or 
dry).
    (9) The power transfer configuration of any hybrid technology 
(e.g., series or parallel).
    (10) The energy storage device and capacity of any hybrid 
technology (e.g., 10 MJ hydraulic accumulator, 10 kW[middot]hr Lithium-
ion battery pack, 10 MJ ultracapacitor bank).
    (11) The rated output of any hybrid mechanical power technology 
(e.g., 50 kW electric motor).
    (c) For powertrains that share all the attributes described in 
paragraph (b) of this section, divide them further into

[[Page 40621]]

separate powertrain families based on common calibration attributes. 
Group powertrains in the same powertrain family to the extent that 
powertrain test results and corresponding emission levels are expected 
to be similar throughout the useful life.
    (d) You may subdivide a group of powertrains with shared attributes 
under paragraph (b) of this section into different powertrain families.
    (e) In unusual circumstances, you may group powertrains into the 
same powertrain family even if they do not have shared attributes under 
in paragraph (b) of this section if you show that their emission 
characteristics throughout the useful life will be similar.
    (f) If you include the axle when performing powertrain testing for 
the family, you must limit the family to include only those axles 
represented by the test results. You may include multiple axle ratios 
in the family if you test with the axle expected to produce the highest 
emission results.

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. Sec.  1037.515 and 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), 1037.515, 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. In the case of powertrain testing 
under Sec.  1037.550, select a test engine and test transmission by 
considering the whole range of vehicle models covered by the powertrain 
family and the mix of duty cycles specified in Sec.  1037.510.
    (b) Test your emission-data vehicles (including emission-data 
components) using the procedures and equipment specified in subpart F 
of this part. Measure emissions (or other parameters, as applicable) 
using the specified procedures.
    (c) We may measure emissions (or other parameters, as applicable) 
from any of your emission-data vehicles.
    (1) We may decide to do the testing at your plant or any other 
facility. If we do this, you must deliver the vehicle or component to a 
test facility we designate. The vehicle or component you provide must 
be in a configuration that is suitable for testing. If we do the 
testing at your plant, you must schedule it as soon as possible and 
make available the instruments, personnel, and equipment we need.
    (2) If we measure emissions (or other parameters, as applicable) 
from your vehicle or component, the results of that testing become the 
official emission results for the vehicle or component. Note that 
changing the official emission result does not necessarily require a 
change in the declared modeling input value. Unless we later invalidate 
these data, we may decide not to consider your data in determining if 
your vehicle family meets applicable requirements. This applies equally 
to individual data points from powertrain testing under Sec.  1037.550 
or Sec.  1037.551, except that the results of our testing do not become 
the official emission result if our results are lower than your 
reported test results.
    (3) Before we test one of your vehicles or components, we may set 
its adjustable parameters to any point within the physically adjustable 
ranges, if applicable.
    (4) Before we test one of your vehicles or components, we may 
calibrate it within normal production tolerances for anything we do not 
consider an adjustable parameter. For example, this would apply for a 
vehicle parameter that is subject to production variability because it 
is adjustable during production, but is not considered an adjustable 
parameter (as defined in Sec.  1037.801) because it is permanently 
sealed. For parameters that relate to a level of performance that is 
itself subject to a specified range (such as maximum power output), we 
will generally perform any calibration under this paragraph (c)(4) in a 
way that keeps performance within the specified range.
    (d) You may ask to use carryover data for a vehicle or component 
from a previous model year instead of doing new tests if the applicable 
emission-data vehicle from the previous model year remains the 
appropriate emission-data vehicle under paragraph (b) of this section.
    (e) We may require you to test a second vehicle or component of the 
same configuration in addition to the vehicle or component tested under 
paragraph (a) of this section.
    (f) If you use an alternate test procedure under 40 CFR 1065.10 and 
later testing shows that such testing does not produce results that are 
equivalent to the procedures specified in subpart F of this part, we 
may reject data you generated using the alternate procedure.

Sec.  1037.241  Demonstrating compliance with exhaust emission 
standards for greenhouse gas pollutants.

    (a) For purposes of certification, your vehicle family is 
considered in compliance with the CO2 emission standards in 
Sec. Sec.  1037.105 through 1037.107 if all vehicle configurations in 
that family have calculated or modeled CO2 emission rates 
from Sec.  1037.515 or Sec.  1037.520 that are at or below the 
applicable standards. Note that FELs are considered to be the 
applicable emission standards with which you must comply if you 
participate in the ABT program in subpart H of this part. Your vehicle 
family is deemed not to comply if any vehicle configuration in that 
family has a calculated or modeled CO2 emission rate that is 
above the applicable standard.
    (b) In the case of trailer certification that does not rely on 
calculated CO2 emission rates, your vehicle family is 
considered in compliance with the emission standards if all vehicle 
configurations in that family meet specified design standards and have 
TRRL values at or below the specified standard. Your family is deemed 
not to comply for certification if any trailer does not meet specified 
design standards or if any vehicle configuration in that family has a 
measured TRRL value above the specified standard.
    (c) 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 electric 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.  1037.243  Demonstrating compliance with evaporative emission 
standards.

    (a) For purposes of certification, your vehicle family is 
considered in compliance with the evaporative emission standards in 
subpart B of this part if you prepare an engineering analysis showing 
that your vehicles in the family will comply with applicable standards 
throughout the useful life, and there are no test results from an 
emission-data vehicle representing the

[[Page 40622]]

family that exceed an emission standard.
    (b) Your evaporative emission family is deemed not to comply if 
your engineering analysis is not adequate to show that all the vehicles 
in the family will comply with applicable emission standards throughout 
the useful life, or if a test result from an emission-data vehicle 
representing the family exceeds an emission standard.
    (c) To compare emission levels with emission standards, apply 
deterioration factors to the measured emission levels. Establish an 
additive deterioration factor based on an engineering analysis that 
takes into account the expected aging from in-use vehicles.
    (d) Apply the deterioration factor to the official emission result, 
as described in paragraph (c) of this section, then round the adjusted 
figure to the same number of decimal places as the emission standard. 
Compare the rounded emission levels to the emission standard for each 
emission-data vehicle.
    (e) Your analysis to demonstrate compliance with emission standards 
must take into account your design strategy for vehicles that require 
testing. Specifically, vehicles above 14,000 pounds GVWR are presumed 
to need the same technologies that are required for heavy-duty vehicles 
at or below 14,000 pounds GVWR. Similarly, your analysis to establish a 
deterioration factor must take into account your testing to establish 
deterioration factors for smaller vehicles.

Sec.  1037.250  Reporting and recordkeeping.

    (a) Within 90 days after the end of the model year, send the 
Designated Compliance Officer a report including the total U.S.-
directed production volume of vehicles you produced in each vehicle 
family during the model year (based on information available at the 
time of the report). Report by vehicle identification number and 
vehicle configuration and identify the subfamily identifier. Report 
uncertified vehicles sold to secondary vehicle manufacturers. Small 
manufacturers may omit the reporting requirements of this paragraph 
(a).
    (b) Organize and maintain the following records:
    (1) A copy of all applications and any summary information you send 
us.
    (2) Any of the information we specify in Sec.  1037.205 that you 
were not required to include in your application.
    (3) A detailed history of each emission-data vehicle (including 
emission-related components), if applicable.
    (4) Production figures for each vehicle family divided by assembly 
plant.
    (5) Keep a list of vehicle identification numbers for all the 
vehicles you produce under each certificate of conformity. Also 
identify the technologies that make up the certified configuration for 
each vehicle your produce.
    (c) Keep required data from emission tests and all other 
information specified in this section for eight years after we issue 
your certificate. If you use the same emission data or other 
information for a later model year, the eight-year period restarts with 
each year that you continue to rely on the information.
    (d) Store these records in any format and on any media, as long as 
you can promptly send us organized, written records in English if we 
ask for them. You must keep these records readily available. We may 
review them at any time.
    (e) If you fail to properly keep records or to promptly send us 
information as required under this part, we may require that you submit 
the information specified in this section after each calendar quarter, 
and we may require that you routinely send us information that the 
regulation requires you to submit only if we request it. If we find 
that you are fraudulent or grossly negligent or otherwise act in bad 
faith regarding information reporting and recordkeeping, we may require 
that you send us a detailed description of the certified configuration 
for each vehicle before you produce it.

Sec.  1037.255  What decisions may EPA make regarding my certificate of 
conformity?

    (a) If we determine your application is complete and shows that the 
vehicle family meets all the requirements of this part and the Act, we 
will issue a certificate of conformity for your vehicle family for that 
model year. We may make the approval subject to additional conditions.
    (b) We may deny your application for certification if we determine 
that your vehicle family fails to comply with emission standards or 
other requirements of this part or the Clean Air Act. We will base our 
decision on all available information. If we deny your application, we 
will explain why in writing.
    (c) In addition, we may deny your application or suspend or revoke 
your certificate if you do any of the following:
    (1) Refuse to comply with any testing or reporting requirements.
    (2) Submit false or incomplete information (paragraph (e) of this 
section applies if this is fraudulent). This includes doing anything 
after submission of your application to render any of the submitted 
information false or incomplete.
    (3) Render any test data inaccurate.
    (4) Deny us from completing authorized activities (see 40 CFR 
1068.20). This includes a failure to provide reasonable assistance.
    (5) Produce vehicles for importation into the United States at a 
location where local law prohibits us from carrying out authorized 
activities.
    (6) Fail to supply requested information or amend your application 
to include all vehicles being produced.
    (7) Take any action that otherwise circumvents the intent of the 
Act or this part, with respect to your vehicle family.
    (d) We may void the certificate of conformity for a vehicle family 
if you fail to keep records, send reports, or give us information as 
required under this part or the Act. Note that these are also 
violations of 40 CFR 1068.101(a)(2).
    (e) We may void your certificate if we find that you intentionally 
submitted false or incomplete information. This includes rendering 
submitted information false or incomplete after submission.
    (f) If we deny your application or suspend, revoke, or void your 
certificate, you may ask for a hearing (see Sec.  1037.820).

Subpart D--Testing Production Vehicles and Engines

Sec.  1037.301  Measurements related to GEM inputs in a selective 
enforcement audit.

    (a) We may require you to perform selective enforcement audits 
under 40 CFR part 1068, subpart E, with respect to any GEM inputs in 
your application for certification. This section describes how this 
applies uniquely in certain circumstances.
    (b) A selective enforcement audit consist of performing 
measurements with production vehicles relative to one or more declared 
values for GEM inputs, and using those measured values in place of your 
declared values to run GEM. The vehicle is considered passing if the 
new modeled emission result is at or below the modeled emission result 
corresponding to the declared GEM inputs. If you have reported an FEL 
for the vehicle configuration prior to the start of the audit, we will 
instead consider the vehicle passing if the new cycle-weighted emission 
result is at or below the FEL.
    (c) For vehicles certified based on powertrain testing as specified 
in Sec.  1037.550, we may apply the selective enforcement audit 
requirements to the powertrain. If engine manufacturers perform the 
powertrain testing and

[[Page 40623]]

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.
    (1) A selective enforcement audit for powertrains would generally 
consist of performing a test with the complete powertrain (engine and 
transmission together). We may alternatively allow you to test the 
engine on a dynamometer with no installed transmission as described in 
Sec.  1037.551.
    (2) Recreate a set of test results for each of three separate 
powertrains. Generate weighted GEM results for each of ten separate 
configurations for each of the three selected powertrains. Each unique 
test run for a given configuration with a particular powertrain 
constitutes a separate test for purposes of evaluating whether the 
vehicle family meets the pass-fail criteria under 40 CFR 1068.420. The 
test result for a single test run in the audit is considered passing if 
it is at or below the value selected as an input for GEM. Perform 
testing with up to ten separate configurations for additional 
powertrains as needed to reach a pass-fail decision under 40 CFR 
1068.240. For example, testing three powertrains over each of ten 
separate test runs would represent 30 tests; the family would have a 
pass result if 13 or fewer of the 30 tests are failing, and the family 
would have a fail result if 19 or more of the 30 tests are failing, and 
testing with an additional powertrain would be required if 14-18 of the 
30 tests are failing. In the case of testing engines to simulate 
powertrain testing, apply the provisions of this paragraph (c)(2) based 
on separately simulated powertrains and vehicle configurations.
    (d) To perform a selective enforcement audit with respect to drag 
area, use the same method you used for certification; we may instead 
require you to use the reference method specified in Sec.  1037.525. 
For this paragraph (d), all measurements for tractors must include 
Falt-aero and adjustments to account for wind-averaged drag 
as applicable under Sec.  1037.525. The following provisions apply 
instead of 40 CFR 1068.420 for a selective enforcement audit with 
respect to drag area:
    (1) Determine whether or not a vehicle fails to meet standards as 
follows:
    (i) For tractors, a failed vehicle is one whose measured drag area 
exceeds the maximum drag area corresponding to the bin you identified 
in your application for certification.
    (ii) For trailers, a failed vehicle is a failed vehicle is one 
whose delta CDA based on measured values is less than the 
minimum drag area corresponding to the bin you identified in your 
application for certification.
    (2) Measure drag area for a minimum of two vehicles. If one of 
those vehicles fails, measure drag area for two additional vehicles 
from the vehicle family. If both of those vehicles fail, measure drag 
area for four additional vehicles from the vehicle family. You may 
perform testing on additional vehicles.
    (3) Determine whether a vehicle family passes or fails the audit as 
follows:
    (i) For tractors, you reach a pass decision for the audit if the 
arithmetic average value of the drag area for all tested vehicles is at 
or below the maximum value corresponding to the bin you identified in 
your application for certification. You reach a fail decision for the 
audit if this average value is above the maximum value corresponding to 
the bin you identified in your application for certification.
    (ii) For trailers, you reach a pass decision for the audit if the 
arithmetic average value of delta CDA is at or above the 
minimum value corresponding to the bin you identified in your 
application for certification. You reach a fail decision for the audit 
if this average value is below the minimum value corresponding to the 
bin you identified in your application for certification.
    (4) In the case of trailer certification that relies on data from a 
device manufacturer under Sec.  1037.211, we may require the device 
manufacturer to perform a selective enforcement audit as described in 
this paragraph (d). Our test order will establish the equivalent of a 
vehicle family for performing tests for the audit. If the audit leads 
to a fail result for the family, we may revoke our approval under Sec.  
1037.211 as that relates to any future application for certification.
    (5) If we test some of your vehicles in addition to your testing, 
we may decide not to include your test results as official data for 
those vehicles if there is substantial disagreement between your 
testing and our testing. We will reinstate your data as valid if you 
show us that we made an error and your data are correct. If we perform 
testing, we may choose to stop testing after any number of tests.
    (6) If we rely on our test data instead of yours, we will notify 
you in writing of our decision and the reasons we believe your facility 
is not appropriate for doing the tests we require under this paragraph 
(c). You may request in writing that we consider your test results from 
the same facility for future testing if you show us that you have made 
changes to resolve the problem.
    (7) We may allow you to perform additional replicate tests with a 
given vehicle to reduce measurement variability, consistent with good 
engineering judgment.
    (e) Selective enforcement audit provisions for fuel maps apply to 
engine manufacturers as specified in 40 CFR 1036.301.
    (f) We may suspend or revoke certificates, based on the outcome of 
a selective enforcement audit, for any appropriate configurations 
within one or more vehicle families.
    (g) We may apply selective enforcement audit provisions with 
respect to off-cycle technologies, with any necessary modifications, 
consistent with good engineering judgment.

Subpart E--In-Use Testing

Sec.  1037.401  General provisions.

    (a) We may perform in-use testing of any vehicle subject to the 
standards of this part. For example, we may test vehicles to verify 
drag areas or other GEM inputs as specified in paragraph (b) of this 
section.
    (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 
specified in Sec.  1037.525 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.

Subpart F--Test and Modeling Procedures

Sec.  1037.501  General testing and modeling provisions.

    This subpart specifies how to perform emission testing and emission 
modeling required elsewhere in this part.
    (a) You must demonstrate that you meet emission standards using 
emission modeling as described in Sec. Sec.  1037.515 and 1037.520. 
This modeling depends on several measured values as described in this 
subpart F. You may rely on fuel maps from the engine manufacturer as 
described in 40 CFR 1036.535, or you may instead use powertrain testing 
as described in Sec.  1037.550.
    (b) Where exhaust emission testing is required, use the equipment 
and procedures in 40 CFR part 1065 and/or part 1066, as applicable. 
Measure the emissions of all the exhaust constituents subject to 
emission standards as

[[Page 40624]]

specified in 40 CFR part 1065 and/or part 1066, as applicable. Use the 
applicable duty cycles specified in Sec.  1037.510.
    (c) See 40 CFR 86.101 and 86.1813 for measurement procedures that 
apply for evaporative and refueling emissions.
    (d) Use the applicable fuels specified 40 CFR part 1065 to perform 
valid tests.
    (1) For service accumulation, use the test fuel or any commercially 
available fuel that is representative of the fuel that in-use vehicles 
will use.
    (2) For diesel-fueled vehicles, use the appropriate diesel fuel 
specified for emission testing. Unless we specify otherwise, the 
appropriate diesel test fuel is ultra low-sulfur diesel fuel.
    (3) For gasoline-fueled vehicles, use the gasoline specified for 
``General Testing''.
    (e) You may use special or alternate procedures as specified in 40 
CFR 1065.10.
    (f) This subpart is addressed to you as a manufacturer, but it 
applies equally to anyone who does testing for you, and to us when we 
perform testing to determine if your vehicles meet emission standards.
    (g) Apply this paragraph (g) whenever we specify the use of 
standard trailers. Unless otherwise specified, a tolerance of 2 inches applies for all nominal trailer dimensions.
    (1) The standard trailer for high-roof tractors must meet the 
following criteria:
    (i) It is an unloaded two-axle dry van box trailer 53.0 feet long, 
102 inches wide, and 162 inches high (measured from the ground with the 
trailer level).
    (ii) It has a king pin located with its center 360.5 
inches from the front of the trailer and a minimized trailer gap (no 
greater than 45 inches).
    (iii) It has a simple orthogonal shape with smooth surfaces and 
nominally flush rivets. Except as specified in paragraph (g)(1)(v) of 
this section, the standard trailer does not include any aerodynamic 
features such as side fairings, rear fairings, or gap reducers. It may 
have a scuff band no more than 0.13 inches thick.
    (iv) It includes dual 22.5 inch wheels, standard tandem axle, 
standard mudflaps, and standard landing gear. The centerline of the 
tandem axle assembly must be 1464 inches from the rear of 
the trailer. The landing gear must be installed in a conventional 
configuration.
    (v) For the Phase 2 standards, include side skirts meeting the 
specifications of this paragraph (g)(1)(v). The side skirts must be 
mounted flush with the sides of the trailer and may extend as far 
forward as the centerline of the landing gear and as far rearward as 
the leading edge of the front wheel, with a height of 362 
inches. We may approve your request to use a skirt with different 
dimensions if these specified values are impractical or inappropriate 
for your test trailer, and you propose alternative dimensions that 
provide an equivalent or comparable degree of aerodynamic drag for your 
test configuration.
    (2) The standard trailer for mid-roof tractors is an empty two-axle 
tanker trailer 421 feet long by 140 inches high.
    (i) It has a 401 feet long cylindrical tank with a 
70007 gallon capacity, smooth surface, and rounded ends.
    (ii) The standard tanker trailer does not include any aerodynamic 
features such as side fairings, but does include a centered 20 inch 
manhole, side-centered ladder, and lengthwise walkway. It includes dual 
24.5 inch wheels.
    (3) The standard trailer for low-roof tractors is an unloaded two-
axle flat bed trailer 531 feet long and 102 inches wide.
    (i) The deck height is 60.00.5 inches in the front and 
55.00.5 inches in the rear. The standard trailer does not 
include any aerodynamic features such as side fairings.
    (ii) It includes an air suspension and dual 22.5 inch wheels on 
tandem axles spread up to 122 inches apart between axle centerlines, 
measured along the length of the trailer.
    (h) Use a standard tractor for measuring aerodynamic drag of 
trailers. Standard tractors must be certified at Bin III or better for 
Phase 1 or Phase 2 under Sec.  1037.520(b)(1) or (3). The standard 
tractor for long trailers is a Class 8 high-roof sleeper cab. The 
standard tractor for short trailers is a Class 8 high-roof day cab.

Sec.  1037.510  Duty-cycle exhaust testing.

    This section applies for Phase 2 powertrain testing, certain off-
cycle testing under Sec.  1037.610, and the Phase 1 advanced-technology 
provisions of Sec.  1037.615.
    (a) Measure emissions by testing the vehicle on a chassis 
dynamometer or 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 cruise tests. None of these cycles include vehicle 
starting or warmup.
    (1) Perform testing for Phase 1 vehicles as follows to generate 
credits or adjustment factors for off-cycle or advanced technologies:
    (i) Transient cycle. The transient cycle is specified in Appendix I 
of this part. Warm up the vehicle. Start the duty cycle within 30 
seconds after concluding the warm-up procedure. Start sampling 
emissions at the start of the duty cycle.
    (ii) Cruise cycle. For the 55 mph and 65 mph cruise cycles, warm up 
the vehicle at the test speed, then sample emissions for 300 seconds 
while maintaining vehicle speed within 1.0 mph of the speed 
setpoint; this speed tolerance applies instead of the approach 
specified in 40 CFR 1066.425(b)(1) and (2).
    (2) If you rely on powertrain testing under Sec.  1037.550 for 
demonstrating compliance with Phase 2 vehicle standards, perform 
testing as described in this paragraph (a)(2) to generate GEM inputs 
for each of the eight or nine test runs representing different vehicle 
configurations, and for each of the four test runs representing 
different idle speed settings. You may perform any number of these test 
runs directly in succession once the vehicle is warmed up. For these 
tests and other powertrain tests, perform testing as follows:
    (i) Transient cycle. The transient cycle is specified in Appendix I 
of this part. Warm up the vehicle by operating over one transient 
cycle. Within 60 seconds after concluding the warm up cycle, start 
emission sampling while the vehicle operates over the duty cycle.
    (ii) Cruise cycle. The grade portion of the route corresponding to 
the 55 mph and 65 mph cruise cycles is specified in Appendix IV of this 
part. Warm up the vehicle by operating it at the appropriate speed 
setpoint over the duty cycle. Within 60 seconds after concluding the 
warm-up cycle, start emission sampling while the vehicle operates over 
the duty cycle, maintaining vehicle speed within 1.0 mph of 
the speed setpoint; this speed tolerance applies instead of the 
approach specified in 40 CFR 1066.425(b)(1) and (2).
    (iii) Idle cycle. Perform testing with the idle cycle for Phase 2 
vocational vehicles. Warm up the vehicle by operating it at 65 mph for 
600 seconds. Within 60 seconds after concluding the warm-up cycle, set 
the engine to operate at idle speed for 600 seconds, with the brake 
applied and the transmission in drive (or clutch depressed for manual 
transmission).
    (3) For other testing of Phase 2 and later vehicles, perform 
testing on a chassis dynamometer as follows:
    (i) Transient cycle. The transient cycle is specified in Appendix I 
of this part. Warm up the vehicle by operating over one transient 
cycle. Within 60 seconds

[[Page 40625]]

after concluding the warm up cycle, start emission sampling while the 
vehicle operates over the duty cycle.
    (ii) Cruise cycle. The grade portion of the route corresponding to 
the 55 mph and 65 mph cruise cycles is specified in Appendix IV of this 
part. Warm up the vehicle by operating it at the appropriate speed 
setpoint over the duty cycle. Within 60 seconds after concluding the 
warm-up cycle, start emission sampling while the vehicle operates over 
the duty cycle, maintaining vehicle speed within 1.0 mph of 
the speed setpoint; this speed tolerance applies instead of the 
approach specified in 40 CFR 1066.425(b)(1) and (2).
    (b) Calculate the official emission result from the following 
equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.040

Where:
eCO2comp = total composite mass of CO2 
emissions in g/ton-mile, rounded to the nearest whole number.
PL = the standard payload, in tons, as specified in Sec.  1037.705.
vmoving = mean composite weighted driven vehicle speed, 
excluding idle operation, as shown in Table 1 of this section for 
Phase 2 vocational vehicles. For other vehicles, let 
vmoving = 1.
w[cycle] = weighting factor for the appropriate test 
cycle, as shown in Table 1 of this section.
m[cycle] = CO2 mass emissions over each test 
cycle (other than idle), in g/test.
D[cycle] = the total driving distance for the indicated 
drive cycle. Use 2.84 miles for the transient cycle, and use 12.5 
miles for both of the cruise cycles.
miidle= CO2 emission rate at idle, in g/hr.

    Example: Class 8 vocational vehicle meeting the Phase 2 
standards based on the Regional duty cycle.

PL = 7.5 tons
vmoving = 28.1 mph
wtransient = 50% = 0.50
w55 = 28% = 0.28
w65 = 22% = 0.22
widle = 10% = 0.10
mtransient = 6184.7 g
m55 = 5260.0 g
m65 = 7452.5 g
Dtransient = 2.84
D55 = 12.5
D65 = 12.5
miidle= 11707 g/hr
[GRAPHIC] [TIFF OMITTED] TP13JY15.041

    (c) Apply weighting factors specific to each type of vehicle and 
for each duty cycle as follows:
    (1) Apply weighting factors for tractors as shown in Table 1 of 
this section. Note that the weighting factors specified here are 
equivalent to weighting factors in GEM.
    (2) Apply weighting factors for vocational vehicles as shown in 
Table 1 of this section. For Phase 2 vocational vehicles, select the 
most appropriate duty cycle for modeling emission results with each 
vehicle configuration. The default is the Multi-Purpose Duty Cycle. You 
may need to instead select the Regional Duty Cycle or the Urban Duty 
Cycle as follows:
    (i) Except as specified in paragraph (c)(2)(iii) of this section, 
use the Regional Duty Cycle for each configuration meeting any of the 
following characteristics:
    (A) The vehicle configuration as modeled in GEM reaches a speed of 
65 miles per hour at less than 75% of maximum test speed for 
compression-ignition engines, and at less than 45% maximum test speed 
for spark-ignition engines, when operating in the highest available 
transmission gear. Maximum test speed is the highest speed from the 
engine's fuel map.
    (B) The vehicle is intended to be used as an intercity bus.
    (C) The vehicle is intended to be used for temporary housing, such 
as for camping.
    (D) The engine was certified based on testing only with the ramped-
modal cycle.
    (ii) Except as specified in paragraph (c)(2)(iii) of this section, 
use the Urban Duty Cycle for each configuration meeting any of the 
following characteristics:
    (A) The vehicle configuration as modeled in GEM does not reach a 
speed of 55 miles per hour before the engine is at or above 90% of 
maximum test speed for compression-ignition engines, and at or above 
50% maximum test speed for spark-ignition engines, when operating in 
the highest available transmission gear.
    (B) The vehicle has a hybrid powertrain.
    (iii) You may ask us to make a different determination with respect 
to the duty cycle than we specify in this paragraph (c)(2) if you can 
demonstrate that a different duty cycle is more appropriate for a 
certain vehicle configuration.
    (3) Use the values for weighting factors and average speed in the 
following table to properly simulate the appropriate duty cycle:

                                              Table 1 of Sec.   1037.510--Weighting Factors for Duty Cycles
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Distance-weighted                         Time-weighted
                                                         -------------------------------------------------------------------------------- Average  speed
                                                             Transient     55 mph cruise   65 mph cruise       Idle          Non-idle     while  moving,
                                                             (percent)       (percent)       (percent)       (percent)       (percent)         (mph)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Day Cabs................................................              19              17              64  ..............  ..............  ..............
Sleeper Cabs............................................               5               9              86  ..............  ..............  ..............
Heavy-haul tractors.....................................              19              17              64  ..............  ..............  ..............
Vocational--Multi-Purpose...............................              82              15               3              15              85            20.9
Vocational--Regional....................................              50              28              22              10              90            28.1
Vocational--Urban.......................................              94               6               0              20              80            19.2

[[Page 40626]]

 
Vocational with conventional powertrain (Phase 1 only)..              42              21              37  ..............  ..............  ..............
Vocational Hybrid Vehicles (Phase 1 only)...............              75               9              16  ..............  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (d) For 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 
1066.425. If the speeds do not conform to these criteria, the test is 
not valid and must be repeated.
    (e) Run test cycles as specified in 40 CFR part 1066. For cruise 
cycle testing of vehicles equipped with cruise control, use the 
vehicle's cruise control to control the vehicle speed. For vehicles 
equipped with adjustable vehicle speed limiters, test the vehicle with 
the vehicle speed limiter at its highest setting.
    (f) For Phase 1, test the vehicle using its adjusted loaded vehicle 
weight, unless we determine this would be unrepresentative of in-use 
operation as specified in 40 CFR 1065.10(c)(1).
    (g) For hybrid vehicles, correct for the net energy change of the 
energy storage device as described in 40 CFR 1066.501.

Sec.  1037.515  Determining CO2 emissions to show compliance 
for trailers.

    This section describes a compliance approach for trailers that is 
consistent with the modeling for vocational vehicles and tractors 
described in Sec.  1037.520, but is simplified consistent with the 
smaller number of trailer parameters that affect CO2 
emissions. Note that the calculated CO2 emission rate, 
eCO2, is equivalent to the value that would result from 
running GEM with the same input values.
    (a) Compliance equation. Calculate CO2 emissions for 
demonstrating compliance with emission standards for each trailer 
configuration using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.042

Where:
Ci = constant values for calculating CO2 
emissions from this regression equation derived from GEM, as shown 
in Table 1 of this section. Let C5 = 0.985 for trailers 
that have automatic tire inflation systems with all wheels; 
otherwise, let C5 = 1.
TRRL = tire rolling resistance level, in kg per metric ton, as 
specified in paragraph (b) of this section.
[Delta]CDA = the delta CDA value for the 
trailer, in m\2\, as specified in paragraph (c) of this section.
WR = weight reduction, in pounds, as specified in paragraph (d) of 
this section.

                Table 1 of Sec.   1037.515--Regression Coefficients for Calculating CO2 Emissions
----------------------------------------------------------------------------------------------------------------
                Trailer category                        C1              C2              C3              C4
----------------------------------------------------------------------------------------------------------------
Long dry box ban................................            77.4             1.7            -6.1          -0.001
Long refrigerated box van.......................            78.3             1.8            -6.0          -0.001
Short dry box van...............................           134.0             2.2           -10.5          -0.003
Short refrigerated box van......................           136.3             2.4           -10.3          -0.003
----------------------------------------------------------------------------------------------------------------

    (b) Tire rolling resistance. Use the procedure specified in Sec.  
1037.520(c) to determine the tire rolling resistance level for your 
tires. Note that you may base tire rolling resistance levels on 
measurements performed by tire manufacturers, as long as those 
measurements meet this part's specifications.
    (c) Drag area. You may use delta CDA values approved 
under Sec.  1037.211 for device manufacturers if your trailers are 
properly equipped with those devices. Determine delta CDA 
values for other trailers based on testing. Measure CDA and 
determine delta CDA values as described in Sec.  
1037.525(a). You may use delta CDA values from one trailer 
configuration to represent any number of additional trailers based on 
worst-case testing. This means that you may apply delta CDA 
values from your measurements to any trailer models of the same 
category with drag area at or below that of the tested configuration. 
For trailers in the ``short trailer'' subcategory that are not 28 feet 
long, apply the delta CDA value established for a comparable 
28-foot trailer model; you may use the same devices designed for 28-
foot trailers or you may adapt those devices as appropriate for the 
different trailer length, consistent with good engineering judgment. 
For example, 48-foot trailers may use longer side skirts than the 
skirts that were tested with a 28-foot trailer. Trailer and device 
manufacturers may seek preliminary approval for these adaptations. 
Determine bin levels based on delta CDA test results as 
described in the following table:

[[Page 40627]]

  Table 2 of Sec.   1037.515--Bin Determinations for Trailers Based on
                        Aerodynamic Test Results
                           [delta CDA in m\2\]
------------------------------------------------------------------------
                                                            and use the
 If a trailer's measured delta CDA     designated the        following
             is . . .                 trailer as . . .      values for
                                                             delta CDA
------------------------------------------------------------------------
<= 0.09...........................  Bin I...............             0.0
0.10-0.19.........................  Bin II..............             0.1
0.20-0.39.........................  Bin III.............             0.3
0.40-0.59.........................  Bin IV..............             0.5
0.60-0.79.........................  Bin V...............             0.7
0.80-1.19.........................  Bin VI..............             1.0
1.20-1.59.........................  Bin VII.............             1.4
[gteqt]1.60.......................  Bin VIII............             1.8
------------------------------------------------------------------------

    (d) Weight reduction. Determine weight reduction for a trailer 
configuration by summing all applicable values, as follows:
    (1) Determine weight reduction for using lightweight materials for 
wheels as described in Sec.  1037.520(e).
    (2) Apply weight reductions for other components made with light-
weight materials as shown in the following table:

       Table 3 of Sec.   1037.515--Weight Reductions for Trailers
                                [pounds]
------------------------------------------------------------------------
                                                              Weight
             Component                    Material           reduction
                                                             (pounds)
------------------------------------------------------------------------
Structure for Suspension Assembly   Aluminum............             280
 \1\.
Hub and Drum (per axle)...........  Aluminum............              80
Floor.............................  Aluminum............             375
Floor.............................  Composite (wood and              245
                                     plastic).
Floor Crossmembers................  Aluminum............             203
Landing Gear......................  Aluminum............              50
Rear Door.........................  Aluminum............             187
Rear Door Surround................  Aluminum............             150
Roof Bows.........................  Aluminum............             100
Side Posts........................  Aluminum............             300
Slider Box........................  Aluminum............             150
Upper Coupler Assembly............  Aluminum............             430
------------------------------------------------------------------------
\1\ For tandem-axle suspension sub-frames made of aluminum, apply a
  weight reduction of 280 pounds. Use good engineering judgment to
  estimate a weight reduction for using aluminum sub-frames with other
  axle configurations.

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) simulation tool (incorporated by reference in Sec.  
1037.810) 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 1.0 (``GEM_P2v1.0'') to demonstrate compliance 
with Phase 2 standards. Use good engineering judgment when 
demonstrating compliance using GEM. See Sec.  1037.515 for calculation 
procedures for demonstrating compliance with trailer standards.
    (a) General modeling provisions. To run GEM, enter all applicable 
inputs as specified by the model.
    (1) GEM inputs apply for Phase 1 and Phase 2 standards as follows:
    (i) Regulatory subcategory (see Sec.  1037.230).
    (ii) Coefficient of aerodynamic drag or drag area, as described in 
paragraph (b) of this section (tractors only).
    (iii) Steer tire rolling resistance, as described in paragraph (c) 
of this section.
    (iv) Drive tire rolling resistance, as described in paragraph (c) 
of this section.
    (v) Vehicle speed limit, as described in paragraph (d) of this 
section (tractors only).
    (vi) Vehicle weight reduction, as described in paragraph (e) of 
this section (tractors only for Phase 1).
    (vii) Credit for idle-reduction strategies, as described in 
paragraph (f) of this section (only for Class 8 sleeper cabs and Phase 
2 vocational vehicles).
    (2) Additional GEM inputs apply for Phase 2 standards as follows:
    (i) Transmission make, model, and type. Also identify the gear 
ratio for every available forward gear to two decimal places.
    (ii) Engine make, model, fuel type, engine family name, calibration 
identification. Also identify whether the engine is subject to spark-
ignition or compression-ignition standards under 40 CFR part 1036.
    (iii) Drive axle ratio, ka. If a vehicle is designed 
with two or more user-selectable axle ratios, use the drive axle ratio 
that is expected to be engaged for the greatest driving distance. If 
the vehicle does not have a drive axle, such as a hybrid vehicle with 
direct electric drive, let ka = 1.
    (iv) Various engine and vehicle operational characteristics, as 
described in paragraph (f) of this section.
    (v) Engine fuel map, as described in paragraph (g) of this section. 
Include fuel consumption at idle for vocational vehicles.

[[Page 40628]]

    (vi) Engine full-load torque curve and motoring torque curve, as 
described in paragraph (h) of this section.
    (vii) Loaded tire radius for drive tires, expressed to the nearest 
0.01 m, as described in paragraph (c) of this section.
    (viii) Vehicles with hybrid power take-off, as described in 
paragraph (j) of this section (vocational vehicles only).
    (ix) Declared engine idle speed at CITT. This is the engine's idle 
speed when the vehicle is in drive.
    (3) You may certify your vehicles based on powertrain testing as 
described in Sec.  1037.550, rather than fuel maps, to characterize 
fuel consumption rates at different speed and torque values as follows:
    (i) Compliance based on powertrain testing is required for hybrid 
electric vehicles and all vehicles with a transmission that is not 
automatic, automated manual, manual, or dual-clutch. Compliance based 
on powertrain testing is optional for all other vehicles.
    (ii) GEM inputs associated with powertrain testing include 
powertrain family, transmission calibration, test data from Sec.  
1037.550, 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 (a)(2) 
of this section.
    (iii) Fuel consumption at idle is still required for vocational 
vehicles.
    (4) If you certify emergency vehicles to the alternative standards 
specified in Sec.  1037.105(b)(4), run GEM by identifying the vehicle 
as an emergency vehicle and enter values for tire rolling resistance as 
specified in paragraph (c) of this section. GEM requires no additional 
data entry for qualifying emergency vehicles.
    (5) You may use a default fuel map for specialty vehicles using 
engines certified to alternate standards under Sec.  1037.605.
    (b) Coefficient of aerodynamic drag and drag area. Determine the 
appropriate drag area, CDA, for tractors as described in 
this paragraph (b). Use the recommended method or an alternate method 
to establish a value for CDA, expressed in m\2\ to one 
decimal place, as specified in Sec.  1037.525. Where we allow you to 
group multiple configurations together, measure CDA of the 
worst-case configuration.
    (1) Except as specified in paragraph (b)(2) of this section, 
determine the Phase 1 bin level for your vehicle based on measured 
CDA values as shown in the following tables:

                      Table 1 of Sec.   1037.520--CD Inputs for Phase 1 High-Roof Tractors
----------------------------------------------------------------------------------------------------------------
                                                                                      If your
                                                                                   measured CDA    Then your CD
                  Tractor type                              Bin level              (m\2\) is . .  input is . . .
                                                                                         .
----------------------------------------------------------------------------------------------------------------
High-Roof Day Cabs.............................  Bin I..........................          >= 8.0            0.79
                                                 Bin II.........................         7.1-7.9            0.72
                                                 Bin III........................         6.2-7.0            0.63
                                                 Bin IV.........................         5.6-6.1            0.56
                                                 Bin V..........................          <= 5.5            0.51
High-Roof Sleeper Cabs.........................  Bin I..........................          >= 7.6            0.75
                                                 Bin II.........................         6.8-7.5            0.68
                                                 Bin III........................         6.3-6.7            0.60
                                                 Bin IV.........................         5.6-6.2            0.52
                                                 Bin V..........................           <=5.5            0.47
----------------------------------------------------------------------------------------------------------------

                Table 2 of Sec.   1037.520--CD Inputs for Phase 1 Low-Roof and Mid-Roof Tractors
----------------------------------------------------------------------------------------------------------------
                                                                                      If your
                                                                                   measured CDA    Then your CD
                  Tractor type                              Bin level              (m\2\) is . .  input is . . .
                                                                                         .
----------------------------------------------------------------------------------------------------------------
Low-Roof Day and Sleeper Cabs..................  Bin I..........................          >= 5.1            0.77
                                                 Bin II.........................          <= 5.0            0.71
Mid-Roof Day and Sleeper Cabs..................  Bin I..........................          >= 5.6            0.87
                                                 Bin II.........................          <= 5.5            0.82
----------------------------------------------------------------------------------------------------------------

    (2) For Phase 1 low- and mid-roof tractors, you may instead 
determine your drag area bin based on the drag area bin of an 
equivalent high-roof tractor. If the high-roof tractor is in Bin I or 
Bin II, then you may assume your equivalent low- and mid-roof tractors 
are in Bin I. If the high-roof tractor is in Bin III, Bin IV, or Bin V, 
then you may assume your equivalent low- and mid-roof tractors are in 
Bin II.
    (3) For Phase 2 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 described in the following table:

                     Table 3 of Sec.   1037.520--Bin Determinations for Phase 2 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................................           >=7.5         6.8-7.4         6.2-6.7         5.6-6.1         5.1-5.5         4.7-5.0           <=4.6
Sleeper Cabs............................           >=7.3         6.6-7.2         6.0-6.5         5.4-5.9         4.9-5.3         4.5-4.8           <=4.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40629]]

    (ii) For low- and mid-roof tractors, you may determine your bin 
level based on aerodynamic test results as described in Table 4 of this 
section, or based on the bin level of an equivalent high-roof tractor 
as shown in Table 5 of this section.

 Table 4 of Sec.   1037.520--Bin Determinations for Phase 2 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
----------------------------------------------------------------------------------------------------------------
Low-Roof Cabs...................................           >=5.1         4.6-5.0         4.2-4.5           <=4.1
Mid-Roof Cabs...................................           >=6.5         6.0-6.4         5.6-5.9           <=5.5
----------------------------------------------------------------------------------------------------------------

Table 5 of Sec.   1037.520--Bin Determinations for Phase 2 Low- and Mid-
           Roof Tractors Based on Eqivalent High-Roof Tractors
------------------------------------------------------------------------
    If your equivalent high-roof     then the corresponding low- and mid-
          tractor is . . .                  roof tractors is . . .
------------------------------------------------------------------------
Bin I..............................  Bin I.
Bin II.............................  Bin I.
Bin III............................  Bin II.
Bin IV.............................  Bin II.
Bin V..............................  Bin III.
Bin VI.............................  Bin III.
Bin VII............................  Bin IV.
------------------------------------------------------------------------

    (iii) Determine the CDA input according to the tractor's 
bin level as described in the following table:

                                        Table 6 of Sec.   1037.520--Phase 2 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......................             7.6             7.1             6.5             5.8             5.3             4.9             4.5
High-Roof Sleeper Cabs..................             7.4             6.9             6.3             5.6             5.1             4.7             4.3
Low-Roof Cabs...........................             5.3             4.8             4.3             4.0  ..............  ..............  ..............
Mid-Roof Cabs...........................             6.7             6.2             5.7             5.4  ..............  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (c) Tire radius and rolling resistance. You must have a loaded 
radius and a tire rolling resistance level (TRRL) for each tire 
configuration. For purposes of this section, you may consider tires 
with the same SKU number to be the same configuration. Determine TRRL 
input values separately for drive and steer tires; determine tire 
radius only for drive tires.
    (1) Determine a tire's loaded radius as specified in ISO 28580 
(incorporated by reference in Sec.  1037.810).
    (2) Measure tire rolling resistance in kg per metric ton as 
specified in ISO 28580 (incorporated by reference in Sec.  1037.810), 
except as specified in this paragraph (c). Use good engineering 
judgment to ensure that your test results are not biased low. You may 
ask us to identify a reference test laboratory to which you may 
correlate your test results. Prior to beginning the test procedure in 
Section 7 of ISO 28580 for a new bias-ply tire, perform a break-in 
procedure by running the tire at the specified test speed, load, and 
pressure for 602 minutes.
    (3) For each tire design tested, measure rolling resistance of at 
least three different tires of that specific design and size. Perform 
the test at least once for each tire. Use the arithmetic mean of these 
results as your test result. You may use this value or any higher value 
as your GEM input for TRRL. You must test at least one tire size for 
each tire model, and may use engineering analysis to determine the 
rolling resistance of other tire sizes of that model. Note that for 
tire sizes that you do not test, we will treat your analytically 
derived rolling resistances the same as test results, and we may 
perform our own testing to verify your values. We may require you to 
test a small sub-sample of untested tire sizes that we select.
    (4) If you obtain your test results from the tire manufacturer or 
another third party, you must obtain a signed statement from the party 
supplying those test results to verify that tests were conducted 
according to the requirements of this part. Such statements are deemed 
to be submissions to EPA.
    (5) For tires marketed as light truck tires and that have load 
ranges C, D, or E, use as the GEM input TRRL multiplied by 0.87.
    (d) Vehicle speed limit. If the vehicles will be equipped with a 
vehicle speed limiter, input the maximum vehicle speed to which the 
vehicle will be limited (in miles per hour rounded to the nearest 0.1 
mile per hour) as specified in Sec.  1037.640. Otherwise leave this 
field blank. Use good engineering judgment to ensure the limiter is 
tamper resistant. We may require you to obtain preliminary approval for 
your designs.
    (e) Vehicle weight reduction. Develop a weight-reduction as a GEM 
input as described in this paragraph (e). For purposes of this 
paragraph (e), high-strength steel is steel with tensile strength at or 
above 350 MPa.
    (1) Vehicle weight reduction inputs for wheels are specified 
relative to dual-

[[Page 40630]]

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 7 of this section. For example, a tractor or vocational 
vehicle with aluminum steer wheels and eight (4x2) dual-wide aluminum 
drive wheels would have an input of 210 pounds (2x21 + 8x21).

       Table 7 of Sec.   1037.520--Wheel-Related Weight Reductions
------------------------------------------------------------------------
 
------------------------------------------------------------------------
             Weight-Reduction Technology                Weight Reduction
                                                         (lb per tire or
                                                                  wheel)
------------------------------------------------------------------------
Wide-Based Single Drive Tire or   Steel Wheel........                 84
 Wide-Based Single Trailer Tire
 with . . .
                                  Aluminum Wheel.....                139
                                  Light-Weight                       147
                                   Aluminum Alloy
                                   Wheel.
Steer Tire, Dual-wide Drive       High-Strength Steel                  8
 Tire, or Dual-wide Trailer Tire   Wheel.
 with . . .
                                  Aluminum Wheel.....                 21
                                  Light-Weight                        30
                                   Aluminum Alloy
                                   Wheel.
------------------------------------------------------------------------

    (2) Weight reduction inputs for tractor components other than 
wheels are specified in the following table:

     Table 8 of Sec.   1037.520--Nonwheel-Related Weight Reductions From Alternative Materials for Tractors
                                                    [pounds]
----------------------------------------------------------------------------------------------------------------
                                                                                High-strength
               Weight reduction technologies                    Aluminum            steel         Thermoplastic
----------------------------------------------------------------------------------------------------------------
Door......................................................                20                 6  ................
Roof......................................................                60                18  ................
Cab rear wall.............................................                49                16  ................
Cab floor.................................................                56                18  ................
Hood Support Structure System.............................                15                 3  ................
Hood and Front Fender.....................................  ................  ................                65
Day Cab Roof Fairing......................................  ................  ................                18
Sleeper Cab Roof Fairing..................................                75                20                40
Aerodynamic Side Extender.................................  ................  ................                10
Fairing Support Structure System..........................                35                 6  ................
Instrument Panel Support Structure........................                 5                 1  ................
Brake Drums--Drive (4)....................................               140                11  ................
Brake Drums--Non Drive (2)................................                60                 8  ................
Frame Rails...............................................               440                87  ................
Crossmember--Cab..........................................                15                 5  ................
Crossmember--Suspension...................................                25                 6  ................
Crossmember--Non Suspension (3)...........................                15                 5  ................
Fifth Wheel...............................................               100                25  ................
Radiator Support..........................................                20                 6  ................
Fuel Tank Support Structure...............................                40                12  ................
Steps.....................................................                35                 6  ................
Bumper....................................................                33                10  ................
Shackles..................................................                10                 3  ................
Front Axle................................................                60                15  ................
Suspension Brackets, Hangers..............................               100                30  ................
Transmission Case.........................................                50                12  ................
Clutch Housing............................................                40                10  ................
Fairing Support Structure System..........................                35                 6  ................
Drive Axle Hubs (per 4)...................................                80                20  ................
Non Drive Hubs (2)........................................                40                 5  ................
Driveshaft................................................                20                 5  ................
Transmission/Clutch Shift Levers..........................                20                 4  ................
----------------------------------------------------------------------------------------------------------------

    (3) Weight-reduction inputs for vocational-vehicle components other 
than wheels are specified in the following table:

[[Page 40631]]

Table 9 of Sec.   1037.520--Nonwheel-Related Weight Reductions From Alternative Materials for Phase 2 Vocational
                                                    Vehicles
                                                    [pounds]
----------------------------------------------------------------------------------------------------------------
                                                                                   Vehicle type
                                                                 -----------------------------------------------
               Component                        Material            Class 2b-5       Class 6-7        Class 8
                                                                    vocational      vocational      vocational
                                                                      vehicle         vehicle         vehicle
----------------------------------------------------------------------------------------------------------------
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.....                 8                             8
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.....                5.5                           11
Clutch Housing........................  Aluminum................                34                            40
Clutch Housing........................  High Strength Steel.....                 9                            10
Suspension Brackets, Hangers..........  Aluminum................                67                           100
Suspension Brackets, Hangers..........  High Strength Steel.....                20                            30
Transmission Case.....................  Aluminum................                45                            50
Transmission Case.....................  High Strength Steel.....                11                            12
----------------------------------------------------------------------------------------------------------------
Crossmember--Cab......................  Aluminum................              10              14              15
Crossmember--Cab......................  High Strength Steel.....               2               4               5
Crossmember--Non-Suspension...........  Aluminum................              15              18              21
Crossmember--Non-Suspension...........  High Strength Steel.....               5               6               7
Crossmember--Suspension...............  Aluminum................              15              20              25
Crossmember--Suspension...............  High Strength Steel.....               4               5               6
Driveshaft............................  Aluminum................              12              40              50
Driveshaft............................  High Strength Steel.....               5              10              12
Frame Rails...........................  Aluminum................             120             300             440
Frame Rails...........................  High Strength Steel.....              24              40              87
----------------------------------------------------------------------------------------------------------------

    (4) Apply vehicle weight inputs for changing technology 
configurations as follows:
    (i) For Class 8 tractors or Class 8 vocational vehicles with a 
permanent 6x2 axle configuration, apply a weight reduction input of 300 
pounds.
    (ii) For Class 8 tractors with 4x2 axle configuration, apply a 
weight reduction input of 400 pounds.
    (iii) For tractors with installed engines with displacement below 
14.0 liters, apply a weight reduction of 300 pounds.
    (iv) GEM accounts for increased vehicle weight for vehicles that 
use natural gas. For vehicles that use a fuel other than diesel fuel, 
gasoline, or natural gas, use good engineering judgment to determine an 
appropriate weight adjustment relative to a comparable vehicle fueled 
by gasoline or diesel fuel. This may require a negative value.
    (5) You may ask to apply the off-cycle technology provisions of 
Sec.  1037.610 for weight reductions not covered by this paragraph (e).
    (f) Additional vehicle characteristics. GEM accounts for 
CO2 emission reductions for certain technologies and vehicle 
configurations as noted in this paragraph (f) for Phase 2 vehicles. 
Because these adjustments are made internal to GEM, you need to 
identify the features as GEM inputs rather than separately applying 
these adjustments to GEM results. These adjustments (as applicable for 
GEM 3.0) are summarized for informational purposes only.
    (1) GEM applies a 2.5% emission reduction for single drive axles 
with the following Class 8 vehicles:
    (i) Tractors in a 4x2 configuration.
    (ii) Vocational vehicles and tractors with a permanent 6x2 
configuration. The same emission reduction applies for part-time 6x2 
configurations, but only for the cruise cycles specified in Sec.  
1037.510.
    (2) GEM applies a 0.5% emission reduction for vehicles that use a 
low-friction drive axle lubricant, as follows:
    (i) A lubricant qualifies if it meets the specifications for BASF 
Emgard FE 2986 as described in ``Emgard[supreg] FE 75W-90 Fuel 
Efficient Synthetic Gear Lubricant'' (incorporated by reference in 
Sec.  1037.810).
    (ii) You may use A to B testing using the procedures in Sec.  
1037.560 to show that a lubricant performs at an equivalent or superior 
level relative to a lubricant specified in paragraph (f)(2)(i) of this 
section. Testing must show equivalent or superior performance at every 
specified speed and torque value.
    (3) GEM applies a 2% emission reduction for tractors if they have 
an automatic transmission, an automated manual transmission, or a dual-
clutch transmission. Similarly, GEM applies a 2.3% emission reduction 
for Class 8 vocational vehicles certified with the Regional duty cycle 
if they have an automated manual transmission or a dual-clutch 
transmission.
    (4) GEM applies a 2% emission reduction for tractors with 
predictive cruise control. This includes any cruise control system that 
incorporates satellite-based global-positioning data for controlling 
operator demand.
    (5) GEM applies a 0.5% emission reduction for tractors with a high-
efficiency air conditioning compressor. This includes mechanically 
powered compressors meeting the specifications described in 40 CFR 
86.1868-12(h)(5), and all electrically powered compressors.
    (6) GEM applies a 1% emission reduction for tractors with 
electrically powered pumps for steering and engine cooling.
    (7) GEM applies a 1% emission reduction for tractors with automatic 
tire inflation systems.

[[Page 40632]]

    (8) GEM accounts for emission reductions for reduced idle for the 
following technologies:
    (i) Stop-start technology for vocational vehicles. Phase 2 
vocational vehicles qualify for reduced emissions in GEM modeling if 
the engine shuts down no more than 30 seconds after the onset of any of 
the following conditions:
    (A) The vehicle's brake is depressed at a zero-speed condition.
    (B) A vehicle with automatic transmission goes into ``Park''.
    (ii) Neutral-idle technology for vocational vehicles. A Phase 2 
vocational vehicle with an automatic transmission qualifies for reduced 
emissions in GEM modeling if the vehicle goes into neutral (or reduces 
torque equivalent to being in neutral) at a zero-speed condition.
    (iii) Extended-idle reduction. If your sleeper cab is equipped with 
idle reduction technology meeting the requirements of Sec.  1037.660 
that will automatically shut off the main engine after 300 seconds or 
less, GEM applies a 5 percent emission reduction for Phase 2 vehicles. 
For Phase 1, enter 5.0 g/ton-mile as the input (or a lesser value 
specified in Sec.  1037.660); otherwise leave this field blank.
    (g) Engine fuel mapping and fuel consumption at idle. Use the fuel 
map and fuel consumption at idle from the engine manufacturer to 
characterize the engine's specific fuel consumption, or create a new 
fuel map and determine fuel consumption at idle as described in 40 CFR 
1036.535.
    (h) Engine full-load torque curve and motoring torque curve. Use 
the full-load torque curve and the motoring torque map from the engine 
manufacturer or create new maps as described in 40 CFR 1065.510(b) and 
(c)(2).
    (i) Vehicles with hybrid power take-off. Determine the delta PTO 
emission result of your engine and hybrid power take-off system as 
described in Sec.  1037.540.
    (j) Alternate fuels. For fuels other than those identified in GEM, 
perform the simulation by identifying the vehicle as being diesel-
fueled, but use a fuel map based on the mass flow rates of the 
alternate fuel.

Sec.  1037.525  Aerodynamic measurements.

    This section describes a methodology for determining aerodynamic 
drag area, CDA for use in determining input values for 
Sec. Sec.  1037.515 and 1037.520.
    (a) General provisions for trailers. A trailer's aerodynamic 
performance for demonstrating compliance with standards is based on a 
delta CDA value relative to a baseline trailer. Determine 
these delta CDA values by performing A to B testing, as 
follows:
    (1) The default method for measuring CDA is a coastdown 
procedure as specified in Sec.  1037.527. If we approve it in advance, 
you may instead use one of the alternative methods specified in 
Sec. Sec.  1037.529 through 1037.533, consistent with good engineering 
judgment. If you request our approval to determine drag area using an 
alternative method, you must submit additional information as described 
in paragraph (c) of this section.
    (2) Determine a baseline CDA value for a standard 
tractor pulling a test trailer representing a production configuration; 
use a 53-foot test trailer to represent long trailers and a 28-foot 
test trailer to represent short trailers. Repeat this testing with the 
same tractor and a baseline trailer. For testing long trailers, the 
baseline trailer is a trailer meeting the specifications for a Phase 1 
standard trailer in Sec.  1037.501(g)(1); for testing refrigerated box 
vans, install an HVAC unit on the baseline trailer that properly 
represents a baseline configuration. For testing short trailers, use a 
28-foot baseline trailer with a single axle that meets the same 
specifications as the Phase 1 standard trailer, except as needed to 
accommodate the reduced trailer length. Use good engineering judgment 
to perform paired tests that accurately demonstrate the reduction in 
aerodynamic drag associated with the improved design. Measure 
CDA in m\2\ to two decimal places. Calculate delta 
CDA by subtracting the drag area for the test trailer from 
the drag area for the baseline trailer.
    (b) General provisions for tractors. The GEM input for a tractor's 
aerodynamic performance is an absolute CDA value that is 
measured or calculated for a tractor in a test configuration. Test 
high-roof tractors with a standard box trailer. Note that the standard 
box trailer for Phase 1 tractors is different from that of later model 
years. Test low-roof and mid-roof tractors without a trailer; however, 
you may test low-roof and mid-roof tractors with a trailer to evaluate 
off-cycle technologies. The default method for determining 
CDA values is a coastdown procedure as specified in Sec.  
1037.527. If we approve it in advance, you may instead use one of the 
alternative methods specified in Sec. Sec.  1037.529 through 1037.533, 
or some other method, based on a correlation to coastdown testing, 
consistent with good engineering judgment. Submit information 
describing how you determined CDA values from coastdown 
testing whether or not you use an alternative method. If you request 
our approval to determine drag area using an alternative method, 
CDAalt, you must submit additional information as 
described in paragraph (c) of this section and adjust the 
CDA values to be equivalent to the corresponding values from 
coastdown measurements as follows:
    (1) Unless good engineering judgment requires otherwise, assume 
that coastdown drag areas are proportional to drag areas measured using 
alternative methods. This means you may apply a single constant 
adjustment factor, Falt-aero, for a given alternate drag 
area method using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.043

    (2) Determine Falt-aero by performing coastdown testing 
and applying your alternate method on the same vehicle. Unless we 
approve another vehicle, the vehicle must be a Class 8, high-roof, 
sleeper cab with a full aerodynamics package, pulling a standard 
trailer. Where you have more than one tractor model meeting these 
criteria, use the tractor model with the highest projected sales. If 
you do not have such a tractor model, you may use your most comparable 
tractor model with our prior approval. In the case of alternate methods 
other than those specified in this subpart, good engineering judgment 
may require you to determine your adjustment factor based on results 
from more than one vehicle.
    (3) For Phase 2 testing, determine separate values of 
Falt-aero for a high-roof day cab and a high-roof sleeper 
cab corresponding to each major tractor model based on testing as 
described in paragraph (b)(2) of this section. Perform this testing on 
each major tractor model. You may ask us to approve aggregating 
separate product lines into a single major tractor model if you show 
that the product lines are different only in ways that are unrelated to 
aerodynamic characteristics. If you have more than six major tractor 
models, you may limit

[[Page 40633]]

your testing in a given year to a maximum of six major tractor models 
until you have performed testing for your whole product line. 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)(3) 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, CDAcoast, by 
CDAalt.
    (4) Calculate Falt-aero to at least three decimal 
places. For example, if your coastdown testing results in a drag area 
of 6.430, but your wind tunnel method results in a drag area of 6.200, 
Falt-aero would be 1.037.
    (c) Approval of alternative methods. You must obtain preliminary 
approval before using any method other than coastdown testing to 
determine drag coefficients. We will approve your request if you show 
that your procedures produce data that are the same as or better than 
coastdown testing with respect to repeatability and unbiased 
correlation. Note that the correlation is not considered to be biased 
if there a bias before correction, but you remove the bias using 
Falt-aero. Send your request for approval to the Designated 
Compliance Officer. Keep records of the information specified in this 
paragraph (c). Unless we specify otherwise, include this information 
with your request. You must provide any information we require to 
evaluate whether you may apply the provisions of this section, 
consistent with good engineering judgment. Include additional 
information related to your alternative method as described in 
Sec. Sec.  1037.529 through 1037.533. If you use a method other than 
those specified in this subpart, include all the following information, 
as applicable:
    (1) Official name/title of the procedure.
    (2) Description of the procedure.
    (3) Cited sources for any standardized procedures that the method 
is based on.
    (4) Description and rationale for any modifications/deviations from 
the standardized procedures.
    (5) Data comparing the procedure to the coastdown reference 
procedure.
    (6) Additional information specified for the alternative methods 
described in Sec. Sec.  1037.529 through 1037.533 as applicable to this 
method (e.g., source location/address, background/history).
    (d) Yaw sweep corrections. Aerodynamic features can be more 
effective at reducing wind-averaged drag than is predicted by zero-yaw 
drag. The following procedures describe how to adjust a tractor's 
CDA values to account for wind-averaged drag:
    (1) For Phase 2 testing, apply the following method based on SAE 
J1252 (incorporated by reference in Sec.  1037.810):
    (i) Determine the zero-yaw drag area, 
CDAzero-yaw, and the yaw-sweep drag area for your 
vehicle using the same alternate method. For the yaw sweep drag area, 
measure the drag area, at a minimum, at yaw angles of 0[deg], 1[deg], 3[deg], 6[deg], and 9[deg], where 0[deg] represents the direction of travel. 
Alternatively, using good engineering judgment with demonstration of 
equivalency and our prior approval, you may measure the drag area using 
different or fewer yaw angles than those specified above, provided they 
satisfy the requirements for SAE J1252, unless otherwise demonstrated.
    (ii) Calculate the wind-averaged coefficient of drag according to 
SAE J1252 based on a vehicle speed of 55 mph and a wind speed of 7 mph.
    (iii) For the tractor used to determine Falt-aero, 
determine your wind-averaged drag area, CDAwa, 
using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.044

    (iv) For additional tractors using an alternative method and 
predetermined Falt-aero, use the following equation to 
determine CDAwa:
[GRAPHIC] [TIFF OMITTED] TP13JY15.045

    (v) You may calculate CDAwa without 
additional testing by adding 0.80 m\2\ to 
CDAzero-coastdown or using the following equation 
if you use an alternative method:
[GRAPHIC] [TIFF OMITTED] TP13JY15.046

    (2) For Phase 1 testing, you may correct your zero-yaw drag area as 
follows if the ratio of the zero-yaw drag area divided by yaw-sweep 
drag area for your vehicle is greater than 0.8065 for 6[deg] yaw angle or 0.8330 for wind-averaged drag (which 
represents the ratios expected for a typical Class 8 high-roof sleeper 
cab):

[[Page 40634]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.047

    (iii) You may instead calculate the wind-averaged drag area 
according to SAE J1252 (incorporated by reference in Sec.  1037.810) 
and substitute this value into Equation 1037.525-4 for the 6[deg] yaw-averaged drag area. If you choose to calculate the 
wind-averaged drag area according to SAE J1252, you may calculate your 
yaw-sweep correction factor, CFys, using Equation 1037.525-5 
through model year 2017; otherwise use the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.048

    (iv) Calculate your corrected drag area for determining the 
aerodynamic bin by multiplying the measured zero-yaw drag area by 
CFys as determined using Equation 1037.525-5 or 1037.525-6, 
as applicable. You may apply the correction factor to drag areas 
measured using other procedures. For example, apply CFys to 
drag areas measured using the coastdown method. If you use an 
alternative method, apply an alternative correction, 
Falt-aero, and calculate the final drag area using the 
following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.049

    (v) You may ask us to apply CFys to similar vehicles 
incorporating the same design features.

Sec.  1037.527  Coastdown procedures for calculating drag area 
(CDA).

    The coastdown procedures in this section describe how to calculate 
drag area, CDA, for Phase 2 tractors and trailers, subject 
to the provisions of Sec.  1037.525. Follow the provisions of Sections 
1 through 9 of SAE J2263 (incorporated by reference in Sec.  1037.810), 
with the following clarifications and exceptions:
    (a) The terms and variables identified in this section have the 
meaning given in SAE J1263 (incorporated by reference in Sec.  
1037.810) and J2263 unless specified otherwise.
    (b) To determine CDA values for a tractor, perform 
coastdown testing with a tractor-trailer combination using the 
manufacturer's tractor and a standard trailer. To determine 
CDA values for a trailer, perform coastdown testing with a 
tractor-trailer combination using a standard tractor. Prepare tractors 
and trailers for testing as follows:
    (1) Install instrumentation for peforming the specified 
measurements.
    (2) After adding vehicle instrumentation, verify that there is no 
brake drag or other condition that prevents the wheels from rotating 
freely. Do not apply the parking brake at any point between this 
inspection and the end of the measurement procedure.
    (3) Install tires mounted on steel rims in a dual configuration 
(except for steer tires). The tires must--
    (i) Be SmartWay-Verified or have a coefficient of rolling 
resistance at or below 5.1 kg/metric ton.
    (ii) Have accumulated at least 2,175 miles but have no less than 50 
percent of their original tread depth, as specified for truck cabs in 
SAE J1263 (incorporated by reference in Sec.  1037.810).
    (iii) Not be retreads or have any apparent signs of chunking or 
uneven wear.
    (iv) Be size 295/75R22.5 or 275/80R22.5.
    (v) Be inflated to the proper tire pressure as specified in 
Sections 6.6 and 8.1 of SAE J2263.
    (4) Perform an inspection or wheel alignment for both the tractor 
and the trailer to ensure that wheel position is within the 
manufacturer's specifications.
    (c) The test condition specifications described in Sections 7.1 
through 7.4 of SAE J1263 apply, with the following exceptions and 
additional provisions:
    (1) We recommend that you not perform coastdown testing if winds 
are expected to exceed 6.0 mph.
    (2) Road grade may exceed 0.5%; however, the road grade for testing 
must not be excessive, considering factors such as coastdown effects 
and road safety standards.
    (3) If road grade is greater than 0.02% over the length of the test 
surface, you must determine road grade as a function of distance along 
the length of the test surface and incorporate this into the

[[Page 40635]]

analysis. Use Section 11.5 of SAE J2263 to calculate the force due to 
grade.
    (4) The road surface temperature must be at or below 50 [deg]C. Use 
good engineering judgment to measure road surface temperature.
    (d) CDA calculations are based on measured speed values 
while the vehicles coasts down through a high-speed range from 70 down 
to 60 mph, and through a low-speed range from 25 down to 15 mph. 
Disable any vehicle speed limiters that prevent travel above 72 mph. If 
a vehicle cannot exceed 72 mph, adjust the high-speed range to include 
the highest achievable speed range as described in paragraph (g)(2) of 
this section. Measure vehicle speed at a minimum recording frequency of 
10 Hz, in conjunction with time-of-day data. Determine vehicle speed 
using either of the following methods:
    (1) Complete coastdown runs. Operate the vehicle at a top speed 
above 72 mph and allow the vehicle to coast down to 13 mph or lower. 
Collect data for the high-speed range over a test segment that includes 
speeds from 72 down to 58 mph, and collect data for the low-speed range 
over a test segment that includes speeds from 27 down to 13 mph. 
Perform a minimum of sixteen valid coastdown runs, eight in each 
direction.
    (2) Split coastdown runs. Collect data during a high-speed 
coastdown while the vehicle coasts through a test segment that includes 
speeds from 72 mph down to 58 mph. Similarly, collect data during a 
low-speed coastdown while the vehicle coasts through a test segment 
that includes speeds from 27 mph down to 13 mph. Perform two to four 
high-speed coastdowns consecutively in one direction followed by the 
same number of low-speed coastdowns in the same direction, then perform 
that same number of measurements in the opposite direction. Repeat this 
process until you have performed twelve valid high-speed coastdowns and 
twelve valid low-speed coastdowns in each direction. You may not split 
runs as described in Section 9.3.1 of SAE J2263 except as allowed under 
this paragraph (d)(2).
    (e) Measure wind speed, wind direction, air temperature, and air 
pressure at a minimum recording frequency of 1 Hz, in conjunction with 
time-of-day data. Use at least one stationary electro-mechanical 
anemometer and suitable data loggers meeting SAE J1263 specifications, 
subject to the following additional specifications for the anemometer 
placed along the test surface:
    (1) You must start a coastdown measurement within 24 hours after 
running zero-wind and zero-angle calibrations.
    (2) Place the anemometer at least 50 feet from the nearest tree and 
at least 25 feet from the nearest bush (or equivalent features). 
Position the anemometer adjacent to the test surface, near the midpoint 
of the length of the track, between 2.5 and 3.0 body widths from the 
expected location of the test vehicle's centerline as it passes the 
anemometer. Record the location of the anemometer along the test track, 
to the nearest 10 feet.
    (3) Mount the anemometer at a height that is within 6 inches of 
half the test vehicle's body height.
    (4) The height of vegetation surrounding the anemometer may not 
exceed 10% of the anemometer's mounted height, within a radius equal to 
the anemometer's mounted height.
    (f) Measure air speed and air direction onboard the vehicle at a 
minimum recording frequency of 10 Hz, in conjunction with time-of-day 
data, using an anemometer and suitable data loggers that meet the 
requirements of Sections 5.4 and 5.5 of SAE J2263. Mount the anemometer 
1 meter above the top of the leading edge of the trailer. Correct 
anemometer measurements using the wind speed and wind direction 
measurements described in paragraph (e) of this section as follows:
    (1) Calculate arithmetic mean values for vehicle speed, air speed, 
wind speed, and wind direction in 5-mph vehicle speed increments for 
each coastdown. Include data from vehicle speeds between 60 and 25 mph 
if you collect data from complete coastdown runs. You may disregard 
data from an increment at the start or end of the coastdown run if it 
is less than 5 minutes.
    (2) Calculate the theoretical air speed, vair,th, for 
each 5-mph increment using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.050

Where:

w = the mean wind speed over each 5-mph increment.
v = the mean vehicle speed over each 5-mph increment.
[thgr]w = the mean wind direction over each 5-mph 
increment. Let [thgr]w = 0 for air flow in the first 
travel direction, with values increasing counterclockwise. For 
example, if the vehicle starts by traveling eastbound, then 
[thgr]w = 270[deg] means a wind from the south.
[thgr]veh = the vehicle direction. Use 
[thgr]veh = 0[deg] for travel in the first direction, and 
use [thgr]veh = 180[deg] for travel in the opposite 
direction.

    (3) Perform a linear regression using paired values of 
vair,th and measured air speed, vair,mess, from 
all 5-mph increments to determine the air-speed correction 
coefficients, [alpha]0 and [alpha]1, based on the 
following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.051

    (4) Correct each measured value of air speed using the following 
equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.052

[[Page 40636]]

    (g) Determine drag area, CDA, using the following 
procedure instead of what is specified in Section 10 of SAE J1263:
    (1) Calculate the vehicle's effective mass, Me, to 
account for rotational inertia by adding 56.7 kg to the measured 
vehicle mass, M, (in kg) for each tire making road contact.
    (2) Operate the vehicle and collect data over the high-speed range 
and low-speed range as specified in paragraph (d)(1) or (d)(2) of this 
section. If a vehicle cannot exceed a maximum speed of 72 mph, 
establish an alternate high-speed range by fixing the high end of the 
high-speed range at 2 mph less than the vehicle's maximum speed, and 
fixing the low end of the high-speed range such that the high-speed 
range spans 10 mph; adjust the testing and calculation instructions in 
this paragraph (g) as needed to account for this alternate high-speed 
range.
    (3) Calculate mean vehicle speed at each speed endpoint (70, 60, 
25, and 15 mph) as follows:
    (i) Calculate the mean vehicle speed (in m/s) to represent the 
starting point of each speed range as the arithmetic average of 
measured speeds throughout the speed interval defined as 2.00 mph above 
the nominal starting speed point to 2.00 mph below the nominal starting 
speed point, expressed to at least two decimal places. Determine the 
timestamp corresponding to the starting point of each speed range as 
the time midpoint of the 2.00 mph speed interval.
    (ii) Repeat the calculations described in paragraph (g)(3)(i) of 
this section corresponding to the endpoint speed (60 or 15 mph) to 
determine the time at which the vehicle reaches the ending speed, and 
the mean vehicle speed representing the endpoint of each speed range.
    (iii) If you incorporate grade into your calculations, use the 
average values for the elevation and distance traveled over each 
interval.
    (4) Calculate the road-load force, F, for each speed range using 
the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.053

Where:

Me = the vehicle's effective mass, in kg, expressed to at 
least one decimal place.
v = average vehicle speed, in m/s, at the start or end of each speed 
range, as described in paragraph (g)(3) of this section.
t = timestamp at which the vehicle reaches the starting or ending 
speed, in seconds, expressed to at least one decimal place.
M = the vehicle's measured mass, in kg, expressed to at least one 
decimal place.
h = average elevation at the start or end of each speed range, in m, 
expressed to at least two decimal places.
D = distance traveled on the road surface from a fixed reference 
location along the road to the start or end of each speed range, in 
m, expressed to at least one decimal place.
Faxle = an estimate of rear-axle losses. Use 200 N for 
the high-speed range and 100 N for the low-speed range.
ag = acceleration of Earth's gravity, as described in 40 
CFR 1065.630.

    (5) If you perform high-speed and low-speed coastdowns as described 
in paragraph (d)(2) of this section, average the F values for each set 
of consecutive low-speed runs. Use this value as Flo in the 
calculations in this paragraph (g) to apply to each of the high-speed 
runs in a set of consecutive high-speed runs that immediately precede a 
set of consecutive low-speed runs. Otherwise, determine the 
Flo and Fhi values in the calculations in this 
paragraph (g) from the same run.
    (6) Calculate average air temperature T and air pressure 
pact during each high-speed run.
    (7) Calculate average air speed during each speed range for each 
run, vair,hi and vair,lo.
    (8) Perform an iterative calculation to determine aerodynamic and 
mechanical forces as follows:
    (i) Assume initially that aerodynamic forces for the low-speed 
range are zero: Faero,lo = 0.
    (ii) Estimate high-speed aerodynamic forces by subtracting 
mechanical forces from the road-load force corresponding to the high-
speed coastdown, Fhi, as follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.054

    (iii) Calculate a new value for Faero,lo by adjusting 
the high-speed aerodynamic forces to account for speed, as follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.055

    (iv) Repeat the steps in paragraphs (g)(8)(ii) and (iii) of this 
section until Faero,hi changes less than 1.0%.
    (9) Calculate drag area, CDA, in m\2\ for each high-
speed segment using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.056

[[Page 40637]]

Where:

R = specific gas constant = 287.058 J/(kg[middot]K).
T = mean air temperature in K, expressed to at least one decimal 
place.
Pact = mean absolute air pressure in Pa, expressed to at 
least one decimal place.

    (10) Calculate an arithmetic mean CDA value from all the 
high-speed segments to determine the drag area for the test.
    (h) Include the following information in your application for 
certification:
    (1) The name, location, and description of your test facilities, 
including background/history, equipment and capability, and track and 
facility elevation, along with the grade and size/length of the track.
    (2) Test conditions for each test result, including date and time, 
wind speed and direction, ambient temperature and humidity, vehicle 
speed, driving distance, manufacturer name, test vehicle/model type, 
model year, applicable family, tire type and rolling resistance, weight 
of tractor-trailer (as tested), and driver identifier(s).
    (3) Average CDA result and all the individual run 
results (including voided or invalid runs).

Sec.  1037.529  Wind-tunnel procedures for calculating drag area 
(CDA).

    (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.  1037.525. If your wind tunnel does not meet the 
specifications described in this section, you may ask us to approve it 
as an alternative method under Sec.  1037.525(b). All wind tunnels must 
meet the specifications described in SAE J1252 (incorporated by 
reference in Sec.  1037.810), with the following exceptions and 
additional provisions:
[GRAPHIC] [TIFF OMITTED] TP13JY15.057

    (2) For full-scale wind tunnel testing, use good engineering 
judgment to select a tractor and trailer that is a reasonable 
representation of the tractor and trailer used for eference coastdown 
testing. For example, where your wind tunnel is not long enough to test 
the tractor with a standard 53 foot trailer, it may be appropriate to 
use a shorter box trailer. In such a case, the correlation developed 
using the shorter trailer would only be valid for testing with the 
shorter trailer.
    (3) For reduced-scale wind tunnel testing, use a one-eighth or 
larger scale model of a tractor and trailer that is sufficient to 
simulate airflow through the radiator inlet grill and across an engine 
geometry that represents engines commonly used in your test vehicle.
    (b) Open-throat wind tunnels must also meet the specifications of 
SAE J2071 (incorporated by reference in Sec.  1037.810).
    (c) To determine CDA values for a tractor, perform wind-
tunnel testing with a tractor-trailer combination using the 
manufacturer's tractor and a standard trailer. To determine 
CDA values for a trailer, perform wind-tunnel testing with a 
tractor-trailer combination using a standard tractor. The wind tunnel 
tests performed under this section must simulate a vehicle speed of 55 
mph. For Phase 1 vehicles, conduct the wind tunnel tests at a zero yaw 
angle and, if so equipped, utilizing the moving/rolling floor to 
simulate driving the vehicle for comparison to the coastdown procedure, 
which corrects to a zero yaw angle for the oncoming wind. For Phase 2 
vehicles, conduct the wind tunnel tests by measuring the drag area 
according to Sec.  1037.525(d)(1) and, if so equipped, utilizing the 
moving/rolling floor for comparison to the coastdown procedure.
    (d) In your request to use wind-tunnel testing, describe how you 
meet all the specifications that apply under this section, using 
terminology consistent with SAE J1594 (incorporated by reference in 
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 alternative 
method under Sec.  1037.525(c) and include all the following 
information:
    (1) Identify the name and location of the test facilities for your 
wind tunnel method.
    (2) Background and history of the wind tunnel.
    (3) The wind tunnel's layout (with diagram), type, and construction 
(structural and material).
    (4) The wind tunnel's design details: The type and material for 
corner turning vanes, air settling specification, mesh screen 
specification, air straightening method, tunnel volume, surface area, 
average duct area, and circuit length.
    (5) Specifications related to the wind tunnel's flow quality: 
Temperature control and uniformity, airflow quality, minimum airflow 
velocity, flow uniformity, angularity and stability, static pressure 
variation, turbulence intensity, airflow acceleration and deceleration 
times, test duration flow quality, and overall airflow quality 
achievement.
    (6) Test/working section information: Test section type (e.g., 
open, closed, adaptive wall) and shape (e.g., circular, square, oval), 
length, contraction ratio, maximum air velocity, maximum dynamic 
pressure, nozzle width and height, plenum dimensions and net volume, 
maximum allowed model scale, maximum model height above road, strut 
movement rate (if applicable), model support, primary boundary layer 
slot, boundary layer elimination method, and photos and diagrams of the 
test section.
    (7) Fan section description: Fan type, diameter, power, maximum 
rotational speed, maximum speed, support type, mechanical drive, and 
sectional total weight.
    (8) Data acquisition and control (where applicable): Acquisition 
type, motor control, tunnel control, model balance, model pressure 
measurement, wheel drag balances, wing/body panel balances, and model 
exhaust simulation.
    (9) Moving ground plane or rolling road (if applicable): 
Construction and material, yaw table and range, moving ground length 
and width, belt type,

[[Page 40638]]

maximum belt speed, belt suction mechanism, platen instrumentation, 
temperature control, and steering.
    (10) Facility correction factors and purpose.

Sec.  1037.531  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.  1037.525.
    (a) To determine CDA values for a tractor, perform CFD 
modeling based on a tractor-trailer combination using the 
manufacturer's tractor and a standard trailer. To determine 
CDA values for a trailer, perform CFD modeling based on a 
tractor-trailer combination using a standard tractor. Perform all CFD 
modeling as follows:
    (1) Except as described in paragraph (a)(9) of this section, 
specify a blockage ratio at or below 0.2 percent to simulate open-road 
conditions.
    (2) Specify yaw angles according to Sec.  1037.525(d)(1) for Phase 
2 vehicles; assume zero yaw angle for Phase 1 vehicles.
    (4) Model the tractor with an open grill and representative back 
pressures based on available data describing the tractor's pressure 
characteristics.
    (5) Enable the turbulence model and mesh deformation.
    (6) Model tires and ground plane in motion to simulate a vehicle 
moving forward in the direction of travel.
    (7) Apply the smallest cell size to local regions on the tractor 
and trailer in areas of high flow gradients and smaller-geometry 
features (e.g., the A-pillar, mirror, visor, grille and accessories, 
trailer-leading edge, trailer-trailing edge, rear bogey, tires, and 
tractor-trailer gap).
    (8) Simulate a vehicle speed of 55 mph.
    (b) Take the following steps for CFD code with a Navier-Stokes 
formula solver:
    (1) Perform an unstructured, time-accurate analysis using a mesh 
grid size with a total volume element count of at least 50 million 
cells of hexahedral and/or polyhedral mesh cell shape, surface elements 
representing the geometry consisting of no less than 6 million 
elements, and a near-wall cell size corresponding to a y+ value of less 
than 300.
    (2) Perform the analysis with a turbulence model and mesh 
deformation enabled (if applicable) with boundary layer resolution of 
95 percent. Once the results reach this resolution, 
demonstrate the convergence by supplying multiple, successive 
convergence values for the analysis. The turbulence model may use k-
epsilon (k-[egr]), shear stress transport k-omega (SST k-[omega]), or 
other commercially accepted methods.
    (c) For Lattice-Boltzman based CFD code, perform an unstructured, 
time-accurate analysis using a mesh grid size with total surface 
elements of at least 50 million cells using cubic volume elements and 
triangular and/or quadrilateral surface elements with a near-wall cell 
size of no greater than 6 mm on local regions of the tractor and 
trailer in areas of high flow gradients and smaller geometry features, 
with cell sizes in other areas of the mesh grid starting at twelve 
millimeters and increasing in size from this value as the distance from 
the tractor and trailer increases.
    (d) You may ask us to allow you to perform CFD analysis using 
parameters and criteria other than those specified in this section, 
consistent with good engineering judgment. In your request, you must 
demonstrate that you are unable to perform modeling based on the 
specified conditions (for example, you may have insufficient computing 
power, or the computations may require inordinate time), or you must 
demonstrate that different criteria (such as a different mesh cell 
shape and size) will yield better results. In your request, you must 
also describe your recommended alternative parameters and criteria, and 
describe how this approach will produce results that adequately 
represent a vehicle's in-use performance. We may require that you 
supply data demonstrating that your selected parameters and criteria 
will provide a sufficient level of detail to yield an accurate 
analysis. If you request an alternative approach because it will yield 
better results, we may require that you perform CFD analysis using both 
your recommended criteria and parameters and the criteria and 
parameters specified in this section to compare the resulting key 
aerodynamic characteristics, such as pressure profiles, drag build-up, 
and turbulent/laminar flow at key points around the tractor-trailer 
combination.
    (e) Include the following information in your request to determine 
CDA values using CFD for tractors:
    (1) The name of the software.
    (2) The date and version number of the software.
    (3) The name of the company producing the software and the 
corresponding address, phone number, and Web site.
    (4) Identify whether the software uses Navier-Stokes or Lattice-
Boltzmann equations.
    (5) Describe the input values you will use to simulate the 
vehicle's aerodynamic performance for comparing to coastdown results.

Sec.  1037.533  Constant-speed procedure for calculating drag area 
(CDA).

    This section describes how to use constant-speed aerodynamic drag 
testing to determine CDA values, subject to the provisions 
of Sec.  1037.525.
    (a) Test track. Select a test track that meets the specifications 
described in Sec.  1037.527(c)(2).
    (b) Ambient conditions. Ambient conditions must remain within the 
specifications described in Sec.  1037.527(c) throughout the 
preconditioning and measurement procedure.
    (c) Vehicle preparation. To determine CDA values for a 
tractor, perform coastdown testing with a tractor-trailer combination 
using the manufacturer's tractor and a standard trailer. To determine 
CDA values for a trailer, perform coastdown testing with a 
tractor-trailer combination using a standard tractor. Prepare tractors 
and trailers for testing as described in Sec.  1037.527(b). Install 
measurement instruments meeting the requirements of 40 CFR part 1065, 
subpart C, that have been calibrated as described in 40 CFR part 1065, 
subpart D, as follows:
    (1) Install a torque meter to measure torque at the vehicle's 
driveshaft, or measure torque from both sides of each drive axle using 
a half-shaft torque meter, a hub torque meter, or a rim torque meter. 
Set up instruments to read engine rpm for calculating rotational speed 
at the point of the torque measurements, or install instruments for 
measuring the rotational speed of the driveshaft, axles, or wheels 
directly.
    (2) Install instrumentation to measure vehicle speed at 10 Hz, with 
an accuracy and resolution of 0.2 kph. Also install instrumentation for 
reading engine rpm from the engine's onboard computer.
    (3) Mount an anemometer on the trailer as described in Sec.  
1037.527(f). For air speeds in the range of 65-130 kps and yaw angles 
in the range of 07[deg], the anemometer must have an 
accuracy that is 1.5% of measured air speed and is 0.5[deg] of measured yaw angle.
    (4) Fill the vehicle's fuel tanks to be at maximum capacity at the 
start of the measurement procedure.
    (5) Measure total vehicle mass to the nearest 20 kg, with a full 
fuel tank, including the driver and any passengers that will be in the 
vehicle during the measurement procedure.
    (d) Measurement procedure. The measurement sequence consists of 
vehicle preconditioning followed by

[[Page 40639]]

stabilization and measurement over five consecutive constant-speed test 
segments with three different speed setpoints (16, 80, and 113 kph). 
Each test segment is divided into smaller increments for data analysis.
    (1) Precondition the vehicle and zero the torque meters as follows:
    (i) If you are using rim torque meters, zero the torque meters by 
lifting each instrumented axle and recording torque signals for at 
least 30 seconds, and then drive the vehicle at 80 kph for at least 30 
minutes.
    (ii) If you are using any other kind of torque meter, drive the 
vehicle at 80 kph for at least 30 minutes, and then allow the vehicle 
to coast down from full speed to a complete standstill while the clutch 
is disengaged or the transmission is in neutral, without braking. Zero 
the torque meters within 60 seconds after the vehicle stops moving by 
recording the torque signals for at least 30 seconds, and directly 
resume vehicle preconditioning at 80 kph for at least 2 km.
    (iii) You may calibrate instruments during the preconditioning 
drive.
    (2) Perform testing as described in paragraph (d)(3) of this 
section over a sequence of test segments at constant vehicle speed as 
follows:
    (i) 30030 seconds in each direction at 16 kph.
    (ii) 45030 seconds in each direction at 80 kph.
    (iii) 90030 seconds in each direction at 113 kph.
    (iv) 45030 seconds in each direction at 80 kph.
    (v) 30030 seconds in each direction at 16 kph.
    (3) When the vehicle preconditioning described in paragraph (d)(1) 
of this section is complete, stabilize the vehicle at the specified 
speed for at least 200 meters and start taking measurements. The test 
segment starts when you start taking measurements for all parameters.
    (4) During the test segment, continue to operate the vehicle at the 
speed setpoint, maintaining constant speed and torque within the ranges 
specified in paragraph (e) of this section. Drive the vehicle straight 
with minimal steering; do not change gears. Perform measurements as 
follows during the test segment:
    (i) Measure the rotational speed of the driveshaft, axle, or wheel 
where the torque is measured, or calculate it from engine rpm in 
conjunction with gear and axle ratios, as applicable.
    (ii) Measure vehicle speed in conjunction with time-of-day data.
    (iii) Measure ambient conditions, air speed, and air direction as 
described in Sec.  1037.527(e) and (f). Correct air speed and air 
direction as described in paragraphs (f)(1) and (2) of this section.
    (5) You may divide a test segment into multiple passes by 
suspending and resuming measurements. Stabilize vehicle speed before 
resuming measurements for each pass as described in paragraph (d)(3) of 
this section. Analyze the data from multiple passes by combining them 
into a single sequence of measurements for each test segment.
    (6) Divide measured values into even 10-second increments. If the 
last increment for each test segment is less than 10 seconds, disregard 
measured values from that increment for all calculations under this 
section.
    (e) Validation criteria. Analyze measurements to confirm that the 
test is valid. Analyze vehicle speed and drive torque by calculating 
the mean speed and torque values for each successive 1-second 
increment, for each successive 10-second increment, and for each test 
segment. The test is valid if the data conform to all the following 
specifications:
    (1) Vehicle speed. The mean vehicle speed for the test segment must 
be within 2.0 kph of the speed setpoint. In addition, for testing at 80 
kph and 113 kph, all ten of the 1-second mean vehicle speeds used to 
calculate a corresponding 10-second mean vehicle speed must be within 
 0.3 kph of that 10-second mean vehicle speed. Perform the 
same data analysis for testing at 16 kph, but apply a validation 
threshold of 0.15 kph.
    (2) Drive torque. All ten of the 1-second mean torque values used 
to calculate a corresponding 10-second mean torque value must be within 
10% of that 10-second mean torque value.
    (3) Torque drift. Torque meter drift may not exceed 1%. 
Determine torque meter drift by repeating the procedure described in 
paragraph (d)(1) of this section after testing is complete, except that 
driving the vehicle is necessary only to get the vehicle up to 80 kph 
as part of coasting to standstill.
    (f) Calculations. Analyze measured data for each time segment after 
time-aligning all the data. Use the following calculations to determine 
CDA:
    (1) Onboard air speed. Correct onboard anemometer measurements for 
air speed using onboard measurements and measured ambient conditions as 
described in Sec.  1037.527(f), except that you must divide the test 
segment into consecutive 10-second increments rather than 5-mph 
increments. Disregard data from the final increment of the test segment 
if it is less than 10 seconds. This analysis results in the following 
equation for correcting air speed measurements:
[GRAPHIC] [TIFF OMITTED] TP13JY15.058

    (2) Yaw angle. Correct the onboard anemometer measurements for air 
direction for each test segment as follows:
    (i) Calculate arithmetic mean values for air speed,vair, 
wind speed,[thgr]w = 0, and wind direction,w, over each 10-
second increment for each test segment. Disregard data from the final 
increment of the test segment if it is less than 10 seconds.
    (ii) Calculate the theoretical air direction, 
[thgr]air,th, for each 10-second increment using the 
following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.059

Where:
[thgr]veh = the vehicle direction, as described in Sec.  
1037.527(f)(2).

    (iii) Perform a linear regression using paired values of 
[thgr]air,th and measured air direction, 
[thgr]air,meas, from each 10-second increment for all 80 kph 
and 113 kph test segments to determine the air-

[[Page 40640]]

direction correction coefficients, [beta]0 and 
[beta]1, based on the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.060

    (iv) For all 80 kph and 113 kph test segments, correct each 
measured value of air direction using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.061

    (3) Traction force. (i) Calculate a traction force in N for each 
measurement using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.062

Where:

Ttotal = the sum of all corrected torques at a point in 
time, in N[middot]m.
vveh = vehicle speed in m/s (full precision).
neng = mean engine speed in rpm (full precision).
kg = transmission gear ratio of the engaged gear.
ka = drive axle ratio.
M = the measured vehicle mass, in kg
ag = acceleration of Earth's gravity, as described in 40 
CFR 1065.630.
G = instantaneous road grade, in percent (increase in elevation per 
100 units horizontal length).

    (ii) Calculate a mean traction force, Ftrac, in N for 
each 10-second increment by averaging all the calculated traction 
forces in each 10-second increment.
    (4) Determination of drag area. Calculate a vehicle's drag area as 
follows:
    (i) Use Equation 1037.533-5 to calculate a single mean traction 
force for the two 16-kph test segments, Ftrac16. This value 
represents the mechanical drag force acting on the vehicle.
    (ii) Calculate the mean aerodynamic force for each 10-second 
increment, Faero, from the 80 kph and 113 kph test segments 
by subtracting Ftrac16 from Ftrac.
    (iii) Average the corrected air speed and corrected yaw angle over 
every 10-second segment from the 80 kph and 113 kph test segments to 
determine vair and [theta]air.
    (iv) Calculate CDA for each 10-second increment from the 
80 kph and 113 kph test segments using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.063

Where:

CDAi = the mean drag area for each 10-second 
increment, i.
Faero = mean aerodynamic force over a given 10-second 
increment.
 V2air[speed] = mean aerodynamic force over a 
given 10-second increment
R = specific gas constant = 287.058 J/(kg[middot]K).
T = mean air temperature in K.
Pact = mean absolute air pressure in Pa.

    (v) Determine whether at least 75 percent of the 10-second 
increments from the 80 kph and 113 kph test segments have a corrected 
yaw angle, [theta]air, that is within the range of 
[verbar][theta]air[verbar]<=2[deg]. If so, this is 
considered a low-yaw test. If not, this is considered a high-yaw test.
    (vi) For low-yaw tests, calculate a vehicle's characteristic zero-
yaw drag area as the arithmetic mean of the drag areas representing all 
the 10-second increments for both 80 kph and 113 kph test segments that 
had.
    (vii) For high-yaw tests, calculate a vehicle's characteristic 
zero-yaw drag area as follows:
    (A) Plot all the CDA values from the 80 kph and 113 kph 
test segments against the corresponding values for corrected yaw angle 
for each 10-second increment. Create a regression based on a fourth-
order polynomial regression equation of the following form:
[GRAPHIC] [TIFF OMITTED] TP13JY15.064

    (B) Determine CDAzero-yaw as the y-intercept 
from the regression equation.
    (g) Documentation. Keep the following records related to the 
constant-speed procedure for calculating drag area:
    (1) The measurement data for calculating CDA as 
described in this section.
    (2) A general description and pictures of the vehicle tested.
    (3) The vehicle's maximum height and width.
    (4) The measured vehicle mass.

[[Page 40641]]

    (5) Mileage at the start of the first test segment and at the end 
of the last test segment.
    (6) The date of the test, the starting time for the first test 
segment, and the ending time for the last test segment.
    (7) The transmission gear used for each test segment.
    (8) The data describing how the test was valid relative to the 
specifications and criteria described in paragraphs (b) and (e) of this 
section.
    (9) A description of any unusual events, such as a vehicle passing 
the test vehicle, or any technical or human errors that may have 
affected the CDA determination without invalidating the 
test.

Sec.  1037.540  Special procedures for testing vehicles with hybrid 
power take-off.

    This section describes the procedure 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. 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. The 
full test for the hybrid vehicle is from a fully charged renewable 
energy storage system (RESS) to a depleted RESS and then back to a 
fully charged RESS. The procedures in paragraphs (a) though (e) of this 
section may be used for Phase 1 testing of any hybrid PTO architecture 
for which you are requesting a vehicle certificate using either chassis 
testing or powertrain testing. 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 other than electric-battery hybrids, 
consistent with good engineering judgment. Phase 2 PTO greenhouse gas 
emission reductions are quantified using GEM and are described in 
paragraph (f) of this section.
    (a) Select two vehicles for testing as follows:
    (1) Select a vehicle with a hybrid energy delivery system to 
represent the vehicle family. If your vehicle family includes more than 
one vehicle model, use good engineering judgment to select the vehicle 
type with the maximum number of PTO circuits that has the smallest 
potential reduction in greenhouse gas emissions.
    (2) Select an equivalent conventional vehicle as specified in Sec.  
1037.615.
    (b) Measure PTO emissions from the fully warmed-up conventional 
vehicle as follows:
    (1) Without adding a restriction, instrument the vehicle with 
pressure transducers at the outlet of the hydraulic pump for each 
circuit. Perform pressure measurements with a frequency of at least 1 
Hz.
    (2) Operate the PTO system with no load for at least 15 seconds. 
Measure gauge pressure and record the average value over the last 10 
seconds (Pmin). Apply maximum operator demand to the PTO 
system until the pressure relief valve opens and pressure stabilizes; 
measure gauge pressure and record the average value over the last 10 
seconds (Pmax).
    (3) Denormalize the PTO duty cycle in Appendix II of this part 
using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.065

Where:
prefi = the reference pressure at each point i in the PTO 
cycle.
pi = the normalized pressure at each point i in the PTO 
cycle (relative to pmax).
pmax = the mean maximum pressure measured in paragraph 
(b)(2) of this section.
pmin = the mean minimum pressure measured in paragraph 
(b)(2) of this section.

    (4) If the PTO system has two circuits, repeat paragraph (b)(2) and 
(3) of this section for the second PTO circuit.
    (5) Install a system to control pressures in the PTO system during 
the cycle.
    (6) Start the engine.
    (7) Operate the vehicle over one or both of the denormalized PTO 
duty cycles in Appendix II of this part, as applicable. Measure 
emissions during operation over each duty cycle using the provisions of 
40 CFR part 1066.
    (8) Measured pressures must meet the cycle-validation 
specifications in the following table for each test run over the duty 
cycle:

  Table 1 of Sec.   1037.540--Statistical Criteria for Validating Each
                      Test Run Over the Duty Cycle
------------------------------------------------------------------------
               Parameter \a\                          Pressure
------------------------------------------------------------------------
Slope, a1.................................  0.950 <=a1 <= 1.030
Absolute value of intercept,                 <=2.0% of maximum mapped
 [verbarlm]a0[verbarlm].                     pressure
Standard error of estimate, SEE...........  <=10% of maximum mapped
                                             pressure
Coefficient of determination, r\2\........  [gteqt] 0.970
------------------------------------------------------------------------
\a\ Determine values for specified parameters as described in 40 CFR
  1065.514(e) by comparing measured values to denormalized pressure
  values from the duty cycle in Appendix II of this part.

    (c) Measure PTO emissions from the fully warmed-up hybrid vehicle 
as follows:
    (1) Perform the steps in paragraphs (b)(1) through (5) of this 
section.
    (2) Prepare the vehicle for testing by operating it as needed to 
stabilize the battery at a full state of charge. For electric hybrid 
vehicles, we recommend running back-to-back PTO tests until engine 
operation is initiated to charge the battery. The battery should be 
fully charged once engine operation stops. The ignition should remain 
in the ``on'' position.
    (3) Turn the vehicle and PTO system off while the sampling system 
is being prepared.
    (4) Turn the vehicle and PTO system on such that the PTO system is 
functional, whether it draws power from the engine or a battery.
    (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. The test cycle is completed once the engine shuts 
down. 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.
    (6) Apply cycle-validation criteria as described in paragraph 
(b)(8) of this section.
    (d) Calculate the equivalent distance driven based on operating 
time for the PTO portion of the test by determining the time of the 
test and applying the conversion factor in paragraph (d)(4) of this 
section. For testing where fractions of a cycle were run (for example, 
where three cycles are completed and the halfway point of a fourth PTO 
cycle is reached before the engine starts and shuts down again), 
calculate the time of the test, ttest, as follows:

[[Page 40642]]

    (1) Add up the time run for all complete tests.
    (2) For fractions of a test, use the following equation to 
calculate the time:
[GRAPHIC] [TIFF OMITTED] TP13JY15.066

Where:

i = an indexing variable that represents one recorded value.
N = number of measurement intervals.
pcircuit-1 = normalized pressure command from circuit 1 
of the PTO cycle for each point, i, starting from i = 1.
pcircuit-2 = normalized pressure command from circuit 2 
of the PTO cycle for each point, i, starting from i = 1. Let 
pcircuit-2 = 0 if there is only one circuit.
Pcircuit-1 = the mean normalized pressure command from 
circuit 1 over the entire PTO cycle.
Pcircuit-2 = the mean normalized pressure command from 
circuit 2 over the entire PTO cycle. Let Pcircuit-2 = 0 
if there is only one circuit.
[Delta]t = the time interval between measurements. For example, at 
100 Hz, [Delta]t = 0.0100 seconds.

    (3) Sum the time from the complete cycles and from the partial 
cycle.
    (4) Divide the total PTO operating time from paragraph (d)(3) of 
this section by a conversion factor of 0.0144 hr/mi to determine the 
equivalent distance driven. This is based on an assumed fraction of 
engine operating time during which the PTO is operating of 28 percent, 
and an assumed average vehicle speed while driving of 27.1 mph, as 
follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.067

    (e) For Phase 1, calculate combined cycle-weighted emissions of the 
four duty cycles for vocational vehicles, for both the conventional and 
hybrid PTO vehicle tests, as follows:
    (1) Calculate the CO2 emission rates in grams per test 
without rounding.
    (2) Divide the CO2 mass from the PTO cycle by the 
distance determined in paragraph (d)(4) of this section and the 
standard payload to get the CO2 emission rate in g/ton-mile.
    (3) Calculate the g/ton-mile emission rate for the driving portion 
of the test specified in Sec.  1037.510 and add this to the 
CO2 g/ton-mile emission rate for the PTO portion of the 
test.
    (4) Follow the provisions of Sec.  1037.615 to calculate 
improvement factors and benefits for advanced technologies.
    (f) For Phase 2, calculate the delta PTO fuel results for input 
into GEM during vehicle certification as follows:
    (1) Calculate fuel consumption in grams per test, 
mfuelPTO, without rounding, as described in Sec.  
1037.550(k)(1).
    (2) Divide the fuel mass by the distance determined in paragraph 
(d)(4) of this section and the standard payload to determine the fuel 
rate in g/ton-mile.
    (3) Calculate the difference between the conventional PTO emissions 
result and the hybrid PTO emissions result for input into GEM.
    (g) If the PTO system has more than two circuits, apply to 
provisions of this section using good engineering judgment.

Sec.  1037.550  Powertrain testing.

    This section describes the procedure for simulating a chassis test 
for both conventional and hybrid powertrains. This testing is an 
optional approach that replaces the fuel map in GEM for certifying 
Phase 2 vehicles. It applies for vehicle manufacturers, but engine 
manufacturers may perform testing under this section as specified in 40 
CFR 1036.630 and Sec.  1037.551. While this section includes the 
detailed equations, you need to develop your own driver model and 
vehicle model; we recommend that you use the MATLAB/Simulink code 
provided at www.epa.gov/otaq/climate/gem.htm.
    (a) Perform the powertrain test to establish measured fuel-
consumption rates at a range of engine speed and load settings. Also 
measure NOX emissions during each of the specified sampling 
periods consistent with the data requirements 40 CFR part 86, subpart 
T. You may use emission-measurement systems meeting the specifications 
of 40 CFR part 1065, subpart J, to measure NOx emissions. This section 
uses engine parameters and variables that are consistent with 40 CFR 
part 1065. For molar mass values, see 40 CFR 1065.1005(f)(2).
    (b) Select fuel-consumption rates (g/cycle) to characterize the 
powertrain emissions at each setting. These declared values may not be 
lower than any corresponding measured values determined in this 
section. You may select any value that is at or above the corresponding 
measured value. These declared fuel-consumption rates serve as worst-
case values for certification.
    (c) Select a test engine and powertrain as described in Sec.  
1037.235.
    (d) Set up the engine according to 40 CFR 1065.110. The default 
test configuration involves connecting the powertrain's transmission 
output shaft directly to the dynamometer. You may instead set up the 
dynamometer to connect at the wheel hubs if your powertrain 
configuration requires it, such as for hybrid powertrains, or if you 
want to represent the axle performance with powertrain test results. If 
you connect at the wheel hubs, input your test results into GEM to 
reflect this.
    (e) Cool the powertrain during testing so temperatures for intake-
air, oil, coolant, block, head, transmission, battery, and power 
electronics are within their expected ranges for normal operation. You 
may use auxiliary coolers and fans.
    (f) Set the dynamometer to operate in speed control. Record data as 
described in 40 CFR 1065.202. Design a vehicle model to measure torque 
and calculate the dynamometer speed setpoint at a rate of at least 100 
Hz, as follows:
    (1) Calculate the dynamometer's angular speed target, 
fnref,dyno, based on the simulated linear speed of the 
tires:

[[Page 40643]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.068

Where:
[GRAPHIC] [TIFF OMITTED] TP13JY15.069

ka = drive axle ratio. Set ka = 4.0 for all 
calculations in this paragraph (f).
ktopgear = transmission gear ratio in the highest 
available gear.
    v65 = reference speed. Use 65 mph = 29.05 m/s.
    fn[speed] = engine's angular speed determined in 
paragraph (h) of this section.
[GRAPHIC] [TIFF OMITTED] TP13JY15.070

Where:
vrefi = simulated vehicle reference speed. Use the 
unrounded result for calculating fnrefi,dyno.
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.
Effaxle = axle efficiency. Use Effaxle = 0.955 
for T > 0, and use Effaxle = 1/0.955 for T < 0. To 
calculate fnrefi,dyno for a dynamometer connected at the 
wheel hubs, as described in paragraph (f)(2) of this section, use 
Effaxle = 1.0.
M = vehicle mass for a vehicle class as determined in paragraph (h) 
of this section.
g = gravitational constant = 9.81 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 IV corresponding to 
measurement (i-1).
[GRAPHIC] [TIFF OMITTED] TP13JY15.071

[rho] = air density at reference conditions. Use [rho] = 1.17 kg/
m\3\.
CDA = drag area for a vehicle class as determined in 
paragraph (h) of this section.
Fbrake = instantaneous braking force applied by the 
driver model.
[GRAPHIC] [TIFF OMITTED] TP13JY15.072

[Delta]t = the time interval between measurements. For example, at 
100 Hz, [Delta]t = 0.0100 seconds.
Mrotating = inertial mass of rotating components as 
determined in paragraph (h) of this section.

    Example: Example is for Class 2b to 7 vocational vehicles with 6 
speed automatic transmission at B speed (Test 4 in Table 1 of Sec.  
1037.550).

ka = 4.0
ktopgear = 0.6716
fnrefB = 1870 rpm = 31.16 r/s
v65 = 65 mph = 29.05 m/s
T1000-1 = 500.0 N[middot]m
Crr = 6.9 kg/ton = 6.9[middot]10\-3\ kg/kg
M = 11408 kg
CDA = 5.4 m\2\
G1000-1 = 1.0% = 0.018
[GRAPHIC] [TIFF OMITTED] TP13JY15.073

Fbrake10001 = 0 N
Vref10001 = 20.0 m/s
Fgrade10001 = 11408[middot]9.81[middot]sin (atan (0.018)) = 
2014. N
[rho] [Delta]t = 0.0100 s
Mrotating = 454 kg

[[Page 40644]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.074

    (2) For testing with the dynamometer connected at the wheel hubs, 
calculate fnref,dyno using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.075

    (g) Design a driver model to mimic a human driver modulating the 
throttle and brake pedals to follow the test cycle as closely as 
possible. The driver model must meet the speed requirements for 
operation over the cruise cycles as described in Sec.  1037.510 and for 
operation over the transient cycle as described in 40 CFR 1066.425(b). 
Design the driver model to meet the following specifications:
    (1) Send a brake signal when throttle position 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.
    (2) Allow braking only if throttle position is zero.
    (3) 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] TP13JY15.076

Where:
vvehicle = measured vehicle speed.
vcycle = reference speed from the test cycle. If 
vcycle,i-1 < 1.0 m/s, set vcycle,i-1 = 
vvehicle,i-1.

    (h) Set up the driver model and the vehicle model in the test cell 
to test the powertrain, as follows:
    (1) For Class 2b through Class 7 vocational vehicles, test the 
powertrain over eight different test runs. For all test runs, set 
Mrotating to 454 kg, CDA to 5.4, ka to 
4.0, and Effaxle to 0.955. Set the tire radius, r, for each 
test run based on the vehicle configuration corresponding to the 
designated engine speed (A, B, C, or fntest, all from 40 CFR 
part 1065) at 65 mph. These engine speeds apply equally for spark-
ignition engines. Use the following settings specific to each test run:

                   Table 1 of Sec.   1037.550--Vehicle Settings for Powertrain Testing of Class 2b through Class 7 Vocational Vehicles
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Test 1     Test 2     Test 3     Test 4     Test 5     Test 6            Test 7                   Test 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
M (kg)..............................      7,257     11,408      7,257     11,408      7,257     11,408  7,257..................  11,408.
Crr (kg/metric ton).................        6.7        6.9        6.7        6.9        6.7        6.9  6.7....................  6.9.
r at engine speed...................          A          A          B          B          C          C  Maximum test speed.....  Maximum test speed.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (2) For tractors and Class 8 vocational vehicles, test the 
powertrain over nine different test runs. For all test runs, set 
Crr to 6.9, ka to 4.0, and Effaxle to 
0.955. Set the tire radius, r, for each test run based on the vehicle 
configuration corresponding to the designated engine speed (the minimum 
NTE exclusion speed as determined in 40 CFR 86.1370(b)(1), B, or 
fntest from 40 CFR part 1065) at 65 mph. Use the settings 
specific to each test run from Table 2 of this section for general 
purpose vehicles, and from Table 3 of this section for heavy-haul 
tractors. Tables 2 and 3 follow:

[[Page 40645]]

                            Table 2 of Sec.   1037.550--Vehicle Settings for Powertrain Testing of Tractors and Class 8 Vocational Vehicles--General Purpose Vehicles
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Test 1            Test 2            Test 3            Test 4            Test 5            Test 6            Test 7            Test 8            Test 9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
M (kg)........................  31,978..........  22,679..........  19,051..........  31,978..........  22,679..........  19,051..........  31,978..........  22,679..........  19,051.
CDA...........................  5.4.............  4.7.............  4.0.............  5.4.............  4.7.............  4.0.............  5.4.............  4.7.............  4.0.
Mrotating (kg)................  1,134...........  907.............  680.............  1,134...........  907.............  680.............  1,134...........  907.............  680.
r at engine speed.............  Minimum NTE       Minimum NTE       Minimum NTE       B...............  B...............  B...............  Maximum test      Maximum test      Maximum test
                                 exclusion speed.  exclusion speed.  exclusion speed.                                                        speed.            speed.            speed.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                   Table 3 of Sec.   1037.550--Vehicle Settings for Powertrain Testing of Heavy-Haul Tractors
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Test 1            Test 2            Test 3            Test 4            Test 5            Test 6            Test 7            Test 8            Test 9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
M (kg)........................  40,895..........  31,978..........  22,679..........  40,895..........  31,978..........  22,679..........  40,895..........  31,978..........  22,679.
CDA...........................  6.1.............  5.4.............  4.7.............  6.1.............  5.4.............  4.7.............  6.1.............  5.4.............  4.7.
Mrotating (kg)................  1,134...........  907.............  680.............  1,134...........  907.............  680.............  1,134...........  907.............  680.
r at engine speed.............  Minimum NTE       Minimum NTE       Minimum NTE       B...............  B...............  B...............  Maximum test      Maximum test      Maximum test
                                 exclusion speed.  exclusion speed.  exclusion speed.                                                        speed.            speed.            speed.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    (i) Operate the powertrain over each of the duty cycles specified 
in Sec.  1037.510(a)(2).
    (j) Collect and measure emissions as described in 40 CFR part 1065. 
For hybrid powertrains, correct for the net energy change of the energy 
storage device as described in 40 CFR 1066.501.
    (k) For each test point, validate the measured output speed with 
the corresponding reference values. You may delete points when the 
vehicle is stopped. Apply cycle-validation criteria for each separate 
transient or cruise cycle based on the following parameters:

  Table 4 of Sec.   1037.550--Statistical Criteria for Validating Duty
                                 Cycles
------------------------------------------------------------------------
               Parameter \a\                        Speed control
------------------------------------------------------------------------
Slope, a1.................................  0.990 <= a1 <= 1.010.
Absolute value of intercept, [verbarlm]a0    <=2.0% of maximum test
 [verbarlm].                                 speed.
Standard error of estimate, SEE...........   <=2.0% of maximum test
                                             speed.
Coefficient of determination, r \2\.......  = 0.990.
------------------------------------------------------------------------
\a\ Determine values for specified parameters as described in 40 CFR
  1065.514(e) by comparing measured and reference values for
  [fnof]nref,dyno.

    (l) [Reserved]
    (m) Calculate mass of fuel consumed for all duty cycles except idle 
as follows:
    (1) For measurements involving measured fuel mass flow rate, 
calculate the mass of fuel for each duty cycle, 
mfuel[cycle], as follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.077

Where:

N = total number of measurements over the duty cycle. For batch fuel 
mass measurements, set N = 1.
i = an indexing variable that represents one recorded value.
mfueli = the fuel mass flow rate, for each point, i, 
starting from i = 1.
[Delta]t = 1/[fnof]record
[fnof]record = the data recording frequency.

    Example: 
N = 6680
mfuel1 = 1.856 g/s
mfuel2 = 1.962 g/s
[fnof]record = 10 Hz
[Delta]t = 1/10 = 0.1 s
mfueltransient = (1.856 + 1.962 + ... + 
mfuel6680) [middot] 0.1
mfueltransient = 111.95 g

    (2) For tests using emission measurements (CO2, CO, and 
THC) rather than measured fuel mass flow rate, calculate the mass of 
fuel for each duty cycle, mfuel[cycle], as follows:
    (i) For calculations that use continuous measurement of emissions, 
calculate mfuel[cycle] using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.078

Where:

N[event] = total number of measurements over the duty 
cycle.
i = an indexing variable that represents one recorded emission 
value.
wCmeas = carbon mass fraction of fuel as determined by 40 
CFR 1065.655(d), except that you may not use the default properties 
in Table 1 of 40 CFR 1065.655 to determine [alpha], [beta], and 
wC for liquid fuels.

[[Page 40646]]

nexh = exhaust molar flow rate from which you measured 
emissions.
[khgr]Ccombdry = amount of carbon from fuel in the 
exhaust per mole of dry exhaust.
[khgr]H2Oexhdry = amount of H2O in exhaust per 
mole of exhaust.
j = an indexing variable that represents one recorded mass emission 
rate of CO2 from urea value.
mCO2ureaj = mass emission rate of CO2 from the 
contribution of urea decomposition over the duty cycle as determined 
from 40 CFR 1036.535(a)(8). If your engine does not utilize urea SCR 
for emission control, or if you choose not to perform this 
correction, set this value equal to 0.

    Example: 
MC = 12.0107 g/mol
wCmeas = 0.867
Nemission = 6680
NCO2urea = 668
nexh1 = 2.876 mol/s
nexh2= 2.224 mol/s
[khgr]Ccombdry1 = 2.61[middot]10-\3\ mol/mol
[khgr]Ccombdry2 = 1.91[middot]10-\3\ mol/mol
[khgr]H2Oexh1 = 3.53[middot]10-\2\ mol/mol
[khgr]H2Oexh2= 3.13[middot]10-\2\ mol/mol
[fnof]record-emission = 10 Hz
[Delta]temission = 1/10 = 0.1 s
MCO2 = 44.0095 g/mol
[fnof]record-CO2urea = 1 Hz
[Delta]tCO2urea = 1/1 = 1.0 s
mCO2urea1 = 0.0726 g/s
mCO2urea2 = 0.0751 g/s
[GRAPHIC] [TIFF OMITTED] TP13JY15.079

mCO2transient = 1619.6 g
(ii) If you measure batch emissions, calculate mfuel[cycle] 
using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.080

(iii) If you measure continuous emissions and batch CO2 from 
urea, calculate mfuel[cycle] using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.081

(iv) If you measure batch emissions and batch CO2 from urea, 
calculate mfuel[cycle] using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.082

    (n) Determine the mass of fuel consumed at idle as follows:
    (1) Measure fuel consumption with a fuel flow meter and report the 
mean fuel mass flow rate for each duty cycle, mifuelidle.
    (2) For measurements that do not involve measured fuel mass flow 
rate, calculate the fuel mass flow rate for each duty cycle, 
mifuelidle, for each set of vehicle settings, as follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.083

Where:

niexh = the mean raw exhaust molar flow rate from which 
you measured emissions.
mCO2urea = mass emission rate of CO2 from the 
contribution of urea decomposition over

[[Page 40647]]

the duty cycle as determined from 40 CFR 1036.535(a)(8), for each 
point, i, starting from i = 1. If your engine does not utilize urea 
SCR for emission control, or if you choose not to perform this 
correction, set this value equal to 0.
MC = molar mass of carbon.
wCmeas = carbon mass fraction of fuel as determined by 40 
CFR 1065.655(d), except that you may not use the default properties 
in Table 1 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.
[khgr]Ccombdry = the mean concentration of carbon from 
fuel in the exhaust per mole of dry exhaust.
[khgr]H2Oexhdry = the mean concentration of 
H2O in exhaust per mole of dry exhaust.
miCO2urea = the mean CO2 mass emission rate 
from urea decomposition as described in paragraph (c)(9) of this 
section. If your engine does not utilize urea SCR for emission 
control, or if you choose not to perform this correction, set 
miCO2urea equal to 0.
MCO2 = molar mass of carbon dioxide.

    Example: 
    [GRAPHIC] [TIFF OMITTED] TP13JY15.084
    
    (o) Use the results of powertrain testing to determine GEM inputs 
as described in this paragraph (o). Declare a fuel mass consumption 
rate at idle mifuelidle, as described in paragraph (b) of 
this section. Include additional parameters for each of the eight or 
nine simulated vehicle configurations as follows:
    (1) Your declared fuel mass consumption for both cruise cycles and 
for the transient cycle, mfuel[cycle], as described in 
paragraph (b) of this section.
    (2) Powertrain output speed per unit of vehicle speed. If the test 
is done with the dynamometer connected at the wheel hubs set 
ka to the axle ratio of the rear axle that was used in the 
test. If the vehicle does not have a drive axle, such as hybrid 
vehicles with direct electric drive, let ka = 1.
[GRAPHIC] [TIFF OMITTED] TP13JY15.173

    (3) Positive work, W[cycle]powertrain, over the duty 
cycle at the transmission output or wheel hubs from the powertrain 
test.
    (4) The following table illustrates the GEM data inputs 
corresponding to the different vehicle configurations:

[[Page 40648]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.174

    (p) Correct each fuel-consumption result from paragraph (o) of this 
section for the test fuel's mass-specific net energy content as 
described in 40 CFR 1036.530.
    (q) For each test run, record the 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, such as for a selective enforcement audit as described in 
Sec.  1037.301.

Sec.  1037.551  Engine-based simulation of powertrain testing.

    Section 1037.550 describes how to measure fuel consumption over 
specific duty cycles with an engine coupled to a transmission; Sec.  
1037.550(q) 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 
confirmatory testing as described in Sec.  1037.235, or 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.
    (a) Use the procedures of 40 CFR part 1065 to set up the engine, 
measure emissions, and record data. Measure individual parameters and 
emission constituents as described in this section. Measure 
NOX emissions during each of the specified sampling periods 
consistent with the data requirements 40 CFR part 86, subpart T. You 
may use emission-measurement systems meeting the specifications of 40 
CFR part 1065, subpart J, to measure NOX emissions. For 
hybrid powertrains, correct for the net energy change of the energy 
storage device as described in 40 CFR 1066.501.
    (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 Sec.  1037.550(h). Warm up the engine to prepare for the 
transient test or one of the 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-mph 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 Sec.  
1037.550(m) and (n). Correct each measured value for the test fuel's 
mass-specific net energy content as described in 40 CFR 1036.530. Use 
these corrected values to determine whether the engine's emission 
levels conform to the declared fuel-consumption rates from the 
powertrain test.

Sec.  1037.555  Special procedures for testing Phase 1 post-
transmission hybrid systems.

    This section describes the procedure for simulating a chassis test 
with a pre-transmission or post-transmission hybrid system for 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 Sec.  1037.550 for 
Phase 2 hybrid systems.
    (a) Set up the engine according to 40 CFR 1065.110 to account for 
work inputs and outputs and accessory work.
    (b) Collect CO2 emissions while operating the system 
over the test cycles specified in Sec.  1037.510(a)(1).
    (c) Collect and measure emissions as described in 40 CFR part 1066. 
Calculate emission rates in grams per ton-mile without rounding. 
Determine values for A, B, C, and M for the vehicle being simulated as 
specified in 40 CFR part 1066. If you will apply an improvement factor 
or test results to multiple vehicle configurations, use values of A, B, 
C, M, ka, and r that represent the vehicle configuration 
with the smallest potential reduction in greenhouse gas emissions as a 
result of the hybrid capability.
    (d) Calculate the transmission output shaft's angular speed target 
for the driver model, fnref,driver, from the linear speed 
associated with the vehicle cycle using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.085

Where:
vcyclei = vehicle speed of the test cycle for each point, 
i, starting from i=1.
ka = drive axle ratio, as declared by the manufacturer.
r = radius of the loaded tires, as declared by the manufacturer.

    (e) Use speed control with a loop rate of at least 100 Hz to 
program the dynamometer to follow the test cycle, as follows:
    (1) Calculate the transmission output shaft's angular speed target 
for the dynamometer, fnref,dyno, from the measured linear 
speed at the dynamometer rolls using the following equation:

[[Page 40649]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.086

Where:
[GRAPHIC] [TIFF OMITTED] TP13JY15.087

T = instantaneous measured torque at the transmission output shaft.
Fbrake = instantaneous brake force applied by the driver 
model to add force to slow down the vehicle.
t = elapsed time in the driving schedule as measured by the 
dynamometer, in seconds.

    (2) For each test, validate the measured transmission output 
shaft's speed with the corresponding reference values according to 40 
CFR 1065.514(e). You may delete points when the vehicle is stopped. 
Perform the validation based on speed values at the transmission output 
shaft. For steady-state tests (55 mph and 65 mph cruise), apply cycle-
validation criteria by treating the sampling periods from the two tests 
as a continuous sampling period. Perform this validation based on the 
following parameters:

  Table 1 of Sec.   1037.555--Statistical Criteria for Validating Duty
                                 Cycles
------------------------------------------------------------------------
                 Parameter                          Speed control
------------------------------------------------------------------------
Slope, a1.................................  0.950 <=a1 <= 1.030.
Absolute value of intercept,                <=2.0% of maximum test
 a0.                       speed.
Standard error of estimate, SEE...........  <=5% of maximum test speed.
Coefficient of determination, r\2\........  >=0.970.
------------------------------------------------------------------------

    (f) Send a brake signal when throttle position is equal to zero and 
vehicle speed is greater than the reference vehicle speed from the test 
cycle. Set a delay before changing the brake state to prevent the brake 
signal from dithering, consistent with good engineering judgment.
    (g) The driver model should be designed to follow the cycle as 
closely as possible and must meet the requirements of Sec.  1037.510 
for steady-state testing and 40 CFR 1066.430(e) for transient testing. 
The driver model should be designed so that the brake and throttle are 
not applied at the same time.
    (h) Correct for the net energy change of the energy storage device 
as described in 40 CFR 1066.501.
    (i) Follow the provisions of Sec.  1037.510 to weight the cycle 
results and Sec.  1037.615 to calculate improvement factors and 
benefits for advanced technologies for Phase 1 vehicles.

Sec.  1037.560  Rear-axle efficiency test.

    This section describes a procedure for mapping rear-axle 
efficiency.
    (a) Prepare an axle assembly for testing as follows:
    (1) Select a newly manufactured axle assembly housing.
    (2) If you have a family of axle assemblies with different axle 
ratios, you may test multiple configurations using a common axle 
housing.
    (3) Install the axle with an input shaft angle perpendicular to the 
axle.
    (i) If the axle assembly has a locking differential, lock the main 
differential and test it with one electric motor on the input shaft and 
a second electric motor on the output side of the output shaft that has 
the speed-reduction gear attached to it.
    (ii) If an axle assembly has an open differential, use an alternate 
method to lock the differential for testing.
    (iii) For drive-through tandem-axle setups, lock the longitudinal 
and inter-wheel differentials.
    (4) Add gear lubricant according to the axle manufacturer's 
instructions. Use gear lubricant meeting the specification for BASF 
Emgard FE 2986 as described in ``Emgard[supreg] FE 75W-90 Fuel 
Efficient Synthetic Gear Lubricant'' (incorporated by reference in 
Sec.  1037.810). Use this gear lubricant for all axle operation under 
this section.
    (5) Install equipment for measuring the bulk temperature of the 
gear lubricant in the oil sump or a similar location.
    (6) Break in the axle assembly by warming it up until the gear 
lubricant is as least 85 [deg]C, and then operating it for 77 minutes 
at an angular wheel speed of 246 rpm at each of three differential 
torque settings, 25%, 50%, and 75%, in sequence, where differential 
torque is expressed as a percentage of the axle manufacturer's torque 
rating. Maintain gear lubricant temperature at 905 [deg]C 
throughout the warm-up period.
    (7) Drain and refill the gear lubricant following the break-in 
procedure.
    (b) Measure input and output speeds and torques as described in 40 
CFR 1065.210(b). Calibrate and verify measurement instruments according 
to 40 CFR part 1065, subpart C. Record all data, including bulk oil 
temperature, at a minimum of 256 Hz.
    (c) The test matrix consists of torque and wheel speed values 
meeting the following specifications:
    (1) Input torque values range from 1,000 to 4,000 N[middot]m in 
1,000 N[middot]m increments; also include a test point with an output 
torque of 0 N[middot]m.
    (2) Determine maximum wheel speed corresponding to a vehicle speed 
of 65 mph based on the smallest tire that will be used with the axle. 
Use wheel speeds for testing that include maximum wheel speed, 50 rpm, 
and intermediate speeds in 100-rpm increments up to maximum wheel speed 
(150, 250, etc.). You may omit the last 100-rpm increment if it is 
within 10 rpm of the maximum wheel speed, and instead test at maximum 
wheel speed for the last test point.
    (3) The average of measured values corresponding to each separate 
torque-measurement point must be within 1 N[middot]m of the 
setpoint for input torque, and within 1 rpm of the setpoint 
for output speed.
    (d) Determine rear-axle efficiency using the following procedure:
    (1) Maintain ambient temperature between (20 and 30) [deg]C 
throughout testing. Measure ambient temperature within 1.0 m of the 
axle assembly.
    (2) Maintain gear lubricant temperature at 821 [deg]C. 
You may use external heating and cooling as needed.
    (3) Warm up the axle by operating it at maximum wheel speed and at 
zero output torque until the gear lubricant is within the specified 
temperature range.
    (4) Continue operating at maximum wheel speed and zero output 
torque for at least 300 seconds, then measure the input torque, output 
torque, and wheel speed for at least 300 seconds, recording the average 
values for all three parameters. Repeat this stabilization and 
measurement sequence sequentially for higher torque setpoints from the 
test

[[Page 40650]]

matrix while holding wheel speed constant. Repeat the stabilization and 
measurement sequence at the same wheel speed from highest to lowest 
torque. This results in two measurements at each torque setting. 
Perform the stabilization and measurement sequence again in a sequence 
from low to high torque values, then from high to low torque values, 
all at the same wheel speed, resulting in four measurements at each 
torque setting. Calculate an arithmetic average value for input torque, 
output torque, and wheel speed at each torque setting.
    (5) Decrease wheel speed to the next lower speed setting and repeat 
the torque sweep described in paragraph (d)(4) of this section to 
determine input torque, output torque, and wheel speed results for all 
the torque settings at the new wheel speed. Repeat this process in 
order of decreasing wheel speed until the mapping is complete for all 
points in the test matrix. If the test is aborted before completing the 
map, invalidate all the measurements made at that wheel speed. Once the 
problem has been resolved, warm up the axle as described in paragraph 
(d)(3) of this section and continue with measurements from the wheel 
speed where you stopped testing.
    (e) Calculate the torque loss, Tloss, at each point from 
the test matrix using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.088

Where:
Tin = input torque.
ka = drive axle ratio, expressed to at least the nearest 
0.001.
Tout = the output torque.
    Example:

Tin = 1000.0 N[middot]m
ka = 3.731
Tout = 3695.1 N[middot]m
Tloss = 1000.0 [middot] 3.731-3695.1 = 35.9 N[middot]m

Subpart G--Special Compliance Provisions

Sec.  1037.601  General compliance provisions.

    (a) Engine and vehicle manufacturers, as well as owners and 
operators of vehicles subject to the requirements of this part, and all 
other persons, must observe the provisions of this part, the provisions 
of 40 CFR part 1068, and the provisions of the Clean Air Act. The 
provisions of 40 CFR part 1068 apply for heavy-duty vehicles as 
specified in that part, subject to the following provisions:
    (1) Except as specifically allowed by this part or 40 CFR part 
1068, it is a violation of Sec.  1068.101(a)(1) to introduce into U.S. 
commerce a tractor or vocational vehicle containing an engine not 
certified to the requirements of this part and 40 CFR part 86 
corresponding to the calendar year for date of manufacture of the 
tractor or vocational vehicle. Similarly, it is a violation to 
introduce into U.S. commerce a Phase 1 tractor containing an engine not 
certified for use in tractors; or to introduce into U.S. commerce a 
vocational vehicle containing a light heavy-duty or medium heavy-duty 
engine not certified for use in vocational vehicles. These prohibitions 
apply especially to the vehicle manufacturer. Note that this paragraph 
(a)(1) allows the use of Class 8 tractor engines in vocational 
vehicles.
    (2) The provisions of 40 CFR 1068.105(a) apply for vehicle 
manufacturers installing engines certified under 40 CFR part 1036 as 
further limited by this paragraph (a)(2). If new engine emission 
standards apply in a given model year, you may install engines built 
before the date of the new or changed standards under the provisions of 
40 CFR 1068.105(a) through March 31 of that year without our approval; 
you may not install such engines after March 31 of that year unless we 
approve it in advance. Installing such engines after March 31 without 
our prior approval is considered to be prohibited stockpiling of 
engines. In a written request for our approval, you must describe how 
your circumstances led you and your engine supplier to have normal 
inventories of engines that were not used up in the specified time 
frame. We will approve your request for up to three additional months 
to install up to 50 engines under this paragraph (a)(2) if we determine 
that the excess inventory is a result of unforeseeable circumstances 
and should not be considered circumvention of emission standards.
    (3) The provisions of 40 CFR 1068.235 that allow for modifying 
certified vehicles and engines for competition do not apply for heavy-
duty vehicles or heavy-duty engines. Certified motor vehicles and motor 
vehicle engines and their emission control devices must remain in their 
certified configuration even if they are used solely for competition or 
if they become nonroad vehicles or engines; anyone modifying a 
certified motor vehicle or motor vehicle engine for any reason is 
subject to the tampering and defeat device prohibitions of 40 CFR 
1068.101(b) and 42 U.S.C. 7522(a)(3). Note that a new vehicle that will 
be used solely for competition may be excluded from the requirements of 
this part based on a determination that the vehicle is not a motor 
vehicle under 40 CFR 85.1703.
    (4) The tampering prohibition in 40 CFR 1068.101(b)(1) applies for 
alternative fuel conversions as specified in 40 CFR part 85, subpart F.
    (5) The warranty-related prohibitions in section 203(a)(4) of the 
Act (42 U.S.C. 7522(a)(4)) apply to manufacturers of new heavy-duty 
highway vehicles in addition to the prohibitions described in 40 CFR 
1068.101(b)(6). We may assess a civil penalty up to $37,500 for each 
engine or vehicle in violation.
    (6) The hardship exemption provisions of 40 CFR 1068.245, 1068.250, 
and 1068.255 do not apply for heavy-duty vehicles.
    (7) A vehicle manufacturer that completes assembly of a vehicle at 
two or more facilities may ask to use as the date of manufacture for 
that vehicle the date on which manufacturing is completed at the place 
of main assembly, consistent with provisions of 49 CFR 567.4. Note that 
such staged assembly is subject to the corresponding provisions of 40 
CFR 1068.260. Include your request in your application for 
certification, along with a summary of your staged-assembly process. 
You may ask to apply this allowance to some or all of the vehicles in 
your vehicle family. Our approval is effective when we grant your 
certificate. We will not approve your request if we determine that you 
intend to use this allowance to circumvent the intent of this part.
    (8) The provisions for selective enforcement audits apply as 
described in 40 CFR part 1068, subpart E, and Sec.  1037.301.
    (b) Vehicles exempted from the applicable standards of 40 CFR part 
86 are exempt from the standards of this part without request. 
Similarly, vehicles are exempt without request if the installed engine 
is exempted from the applicable standards in 40 CFR part 86.
    (c) The prohibitions of 40 CFR 1068.101 apply for vehicles subject 
to the requirements of this part. The actions prohibited under this 
provision include the introduction into U.S.

[[Page 40651]]

commerce of a complete or incomplete vehicle subject to the standards 
of this part where the vehicle is not covered by a valid certificate of 
conformity or exemption.
    (d) The emergency vehicle field modification provisions of 40 CFR 
85.1716 apply with respect to the standards of this part.
    (e) Under Sec.  1037.801, certain vehicles are considered to be new 
vehicles when they are imported into the United States, even if they 
have previously been used outside the country. Independent Commercial 
Importers may use the provisions of 40 CFR part 85, subpart P, and 40 
CFR 85.1706(b) to receive a certificate of conformity for engines and 
vehicles meeting all the requirements of 40 CFR part 1036 and this part 
1037.
    (f) Standards apply to multi-fuel vehicles as described for engines 
in 40 CFR 1036.601(d).

Sec.  1037.605  Installing engines certified to alternate standards for 
specialty vehicles.

    (a) General provisions. This section allows vehicle manufacturers 
to introduce into U.S. commerce certain new motor vehicles if the 
engines are certified to alternate emission standards that are 
equivalent to standards that apply for nonroad engines under 40 CFR 
part 1039 or 1048. See 40 CFR 86.007-11(g) and 40 CFR 86.008-10(g). The 
provisions of this section apply for the following types of vehicles:
    (1) Vehicles with a hybrid powertrain in which the engine provides 
energy for the Rechargeable Energy Storage System.
    (2) Amphibious vehicles.
    (3) Vehicles with maximum speed at or below 45 miles per hour. If 
your vehicle is speed-limited to meet this specification by reducing 
maximum speed below what is otherwise possible, this speed limitation 
must be programmed into the engine or vehicle's electronic control 
module in a way that is tamper-proof. If your vehicles are not 
inherently limited to a maximum speed at or below 45 miles per hour, 
they may qualify under this paragraph (a)(3) only if we approve your 
design to limit maximum speed as being tamper-proof in advance.
    (b) Notification and reporting requirements. Send the Designated 
Compliance Officer written notification describing your plans before 
using the provisions of this section. In addition, by February 28 of 
each calendar year (or less often if we tell you), send the Designated 
Compliance Officer a report with all the following information:
    (1) Identify your full corporate name, address, and telephone 
number.
    (2) List the vehicle and engine models for which you used this 
exemption in the previous year and identify the total number of 
vehicles.
    (c) Production limits. You may produce up to 1,000 hybrid vehicles, 
up to 200 amphibious vehicles, and up to 200 speed-limited vehicles 
under this section in a given model year. This includes vehicles 
produced by affiliated companies. If you exceed this limit, the 
exemption is void for the number of vehicles that exceed the limit for 
the model year. For the purpose of this paragraph (c), we will include 
all vehicles labeled or otherwise identified as exempt under this 
section.
    (d) Vehicle standards. Hybrid vehicles using the provisions of this 
section remain subject to all other requirements of this part 1037. For 
example, you must use GEM in conjunction with powertrain testing to 
demonstrate compliance with emission standards under subpart B of this 
part. Vehicles qualifying under paragraph (a)(2) or (a)(3) of this 
section are exempt from the requirements of this part, except as 
specified in this section; these vehicles must include a label as 
specified in Sec.  1037.135(a) with the information from Sec.  
1037.135(c)(1) and (2) and the following statement: ``THIS [amphibious 
vehicle or speed-limited vehicle] IS EXEMPT FROM GREENHOUSE GAS 
STANDARDS UNDER 40 CFR 1037.605.''

Sec.  1037.610  Vehicles with off-cycle technologies.

    (a) You may ask us to apply the provisions of this section for 
CO2 emission reductions resulting from vehicle technologies 
that were not in common use with heavy-duty vehicles before model year 
2010 that are not reflected in GEM. These may be described as off-cycle 
or innovative technologies. These provisions may be applied for 
CO2 emission reductions reflected using the specified test 
procedures, provided they are not reflected in GEM. We will apply these 
provisions only for technologies that will result in measurable, 
demonstrable, and verifiable real-world CO2 emission 
reductions. This section does not apply for trailers.
    (b) The provisions of this section may be applied as either an 
improvement factor or as a separate credit within the vehicle family, 
consistent with good engineering judgment. Note that the term 
``credit'' in this section describes an additive adjustment to emission 
rates and is not equivalent to an emission credit in the ABT program of 
subpart H of this part. We recommend that you base your credit/
adjustment on A to B testing of pairs of vehicles differing only with 
respect to the technology in question.
    (1) Calculate improvement factors as the ratio of in-use emissions 
with the technology divided by the in-use emissions without the 
technology. Use the improvement-factor approach where good engineering 
judgment indicates that the actual benefit will be proportional to 
emissions measured over the test procedures specified in this part.
    (2) Calculate separate credits (g/ton-mile) based on the difference 
between the in-use emission rate with the technology and the in-use 
emission rate without the technology. Subtract this value from your GEM 
result and use this adjusted value to determine your FEL. Use the 
separate-credit approach where good engineering judgment indicates that 
the actual benefit will be not be proportional to emissions measured 
over the test procedures specified in this part.
    (3) We may require you to discount or otherwise adjust your 
improvement factor or credit to account for uncertainty or other 
relevant factors.
    (c) You may perform A to B testing by measuring emissions from the 
vehicles during chassis testing or from in-use on-road testing. We 
recommend that you perform on-road testing according to SAE J1321, Fuel 
Consumption Test Procedure--Type II, revised February 2012, or SAE 
J1526, Joint TMC/SAE Fuel Consumption In-Service Test Procedure Type 
III, Issued June 1987 (see Sec.  1037.810 for information on 
availability of SAE standards), subject to the following provisions:
    (1) The minimum route distance is 100 miles.
    (2) The route selected must be representative in terms of grade. We 
will take into account published and relevant research in determining 
whether the grade is representative.
    (3) Control vehicle speed over the route to be representative of 
the drive-cycle weighting adopted for each regulatory subcategory, as 
specified in Sec.  1037.510(c), or apply a correction to account for 
the appropriate weighting. For example, if the route selected for an 
evaluation of a combination tractor with a sleeper cab contains only 
interstate driving at 65 mph, the improvement factor would apply only 
to 86 percent of the weighted result.
    (4) The ambient air temperature must be between (5 and 35) [deg]C, 
unless the technology requires other temperatures for demonstration.
    (5) We may allow you to use a Portable Emissions Measurement System 
(PEMS) device for measuring

[[Page 40652]]

CO2 emissions during the on-road testing.
    (d) Send your request to the Designated Compliance Officer. We 
recommend that you do not begin collecting test data (for submission to 
EPA) before contacting us. For technologies for which the engine 
manufacturer could also claim credits (such as transmissions in certain 
circumstances), we may require you to include a letter from the engine 
manufacturer stating that it will not seek credits for the same 
technology. Your request must contain the following items:
    (1) A detailed description of the off-cycle technology and how it 
functions to reduce CO2 emissions under conditions not 
represented on the duty cycles required for certification.
    (2) A list of the vehicle configurations that will be equipped with 
the technology.
    (3) A detailed description and justification of the selected test 
vehicles.
    (4) All testing and simulation data required under this section, 
plus any other data you have considered in your analysis. You may ask 
for our preliminary approval of your test plan under Sec.  1037.210.
    (5) A complete description of the methodology used to estimate the 
off-cycle benefit of the technology and all supporting data, including 
vehicle testing and in-use activity data. Also include a statement 
regarding your recommendation for applying the provisions of this 
section for the given technology as an improvement factor or a credit.
    (6) An estimate of the off-cycle benefit by vehicle model, and the 
fleetwide benefit based on projected sales of vehicle models equipped 
with the technology.
    (7) A demonstration of the in-use durability of the off-cycle 
technology, based on any available engineering analysis or durability 
testing data (either by testing components or whole vehicles).
    (8) A recommended method for auditing production vehicles 
consistent with the intent of 40 CFR part 1068, subpart E. We may 
approve your recommended method or specify a different method.
    (e) We may seek public comment on your request, consistent with the 
provisions of 40 CFR 86.1866. However, we will generally not seek 
public comment on credits or adjustments based on A to B chassis 
testing performed according to the duty-cycle testing requirements of 
this part or in-use testing performed according to paragraph (c) of 
this section.
    (f) We may approve an improvement factor or credit for any vehicle 
family that is properly represented by your testing. You may similarly 
continue to use an approved improvement factor or credit for any 
appropriate vehicle families in future model years through 2020. 
Starting in model year 2021, you must request our approval before 
applying an improvement factor or credit under this section for any 
kind of technology, even if we approved an improvement factor or credit 
for similar vehicle models before model year 2021.

Sec.  1037.615  Hybrid vehicles and other advanced technologies.

    (a) This section applies for Phase 1 hybrid vehicles with 
regenerative braking, vehicles equipped with Rankine-cycle engines, 
electric vehicles, and fuel cell vehicles. You may not generate credits 
for engine features for which the engines generate credits under 40 CFR 
part 1036. Note that Phase 2 and later hybrid vehicles may be 
powertrain tested under Sec.  1037.550 to demonstrate the performance 
of hybrid powertrains.
    (b) Generate advanced technology emission credits for hybrid 
vehicles that include regenerative braking (or the equivalent) and 
energy storage systems, fuel cell vehicles, and vehicles equipped with 
Rankine-cycle engines as follows:
    (1) Measure the effectiveness of the advanced system by chassis 
testing a vehicle equipped with the advanced system and an equivalent 
conventional vehicle, or by testing the hybrid systems and the 
equivalent non-hybrid systems as described in Sec.  1037.555. Test the 
vehicles as specified in subpart F of this part. For purposes of this 
paragraph (b), a conventional vehicle is considered to be equivalent if 
it has the same footprint (as defined in 40 CFR 86.1803), vehicle 
service class, aerodynamic drag, and other relevant factors not 
directly related to the hybrid powertrain. If you use Sec.  1037.540 to 
quantify the benefits of a hybrid system for PTO operation, the 
conventional vehicle must have the same number of PTO circuits and have 
equivalent PTO power. If you do not produce an equivalent vehicle, you 
may create and test a prototype equivalent vehicle. The conventional 
vehicle is considered Vehicle A and the advanced vehicle is considered 
Vehicle B. We may specify an alternate cycle if your vehicle includes a 
power take-off.
    (2) Calculate an improvement factor and g/ton-mile benefit using 
the following equations and parameters:
    (i) Improvement Factor = [(Emission Rate A)-(Emission Rate B)]/
(Emission Rate A).
    (ii) g/ton-mile benefit = Improvement Factor x (GEM Result B).
    (iii) Emission Rates A and B are the g/ton-mile CO2 
emission rates of the conventional and advanced vehicles, respectively, 
as measured under the test procedures specified in this section. GEM 
Result B is the g/ton-mile CO2 emission rate resulting from 
emission modeling of the advanced vehicle as specified in Sec.  
1037.520.
    (3) If you apply an improvement factor to multiple vehicle 
configurations using the same advanced technology, use the vehicle 
configuration with the smallest potential reduction in greenhouse gas 
emissions resulting from the hybrid capability.
    (4) Use the equations of Sec.  1037.705 to convert the g/ton-mile 
benefit to emission credits (in Mg). Use the g/ton-mile benefit in 
place of the (Std-FEL) term.
    (c) See Sec.  1037.540 for special testing provisions related to 
vehicles equipped with hybrid power take-off units.
    (d) You may use an engineering analysis to calculate an improvement 
factor for fuel cell vehicles based on measured emissions from the fuel 
cell vehicle.
    (e) For electric vehicles, calculate CO2 credits using 
an FEL of 0 g/ton-mile.
    (f) As specified in subpart H of this part, credits generated under 
this section may be used under this part 1037 outside of the averaging 
set in which they were generated or used under 40 CFR part 1036.
    (g) You may certify using both provisions of this section and the 
off-cycle technology provisions of Sec.  1037.610, provided you do not 
double count emission benefits.

Sec.  1037.620  Responsibilities for multiple manufacturers.

    This section describes certain circumstances in which multiple 
manufacturers share responsibilities for vehicle they produce together. 
This section does limit responsibilities that apply under the Act or 
these regulations for anyone meeting the definition of ``manufacturer'' 
in Sec.  1037.801.
    (a) The delegated assembly provisions of Sec.  1037.621 apply for 
certifying manufacturers that rely on other manufacturers to finish 
assembly in a certified configuration. The provisions of Sec.  1037.622 
apply for manufacturers that ship vehicles subject to the requirements 
of this part to a certifying secondary vehicle manufacturer. The 
provisions of Sec.  1037.622 also apply to the secondary manufacturer.
    (b) Manufacturers of aerodynamic devices may perform the 
aerodynamic testing described in Sec.  1037.525 to

[[Page 40653]]

quantify CDA values for trailers and submit that data to EPA 
verification under Sec.  1037.211. Trailer manufacturers may use such 
verified data to establish modeling inputs for certifying their 
trailers. Both device manufacturers and trailer manufacturers are 
subject to the recall provisions described in 40 CFR part 1068, subpart 
F.
    (c) Tire manufacturers must comply with the provisions of Sec.  
1037.650.

Sec.  1037.621  Delegated assembly.

    (a) This section describes an exemption that allows certificate 
holders to sell or ship vehicles that are missing certain emission-
related components if those components will be installed by a secondary 
vehicle manufacturer. (Note: See Sec.  1037.622 for provisions related 
to manufacturers introducing into U.S. commerce partially complete 
vehicles for which a secondary vehicle manufacturer holds the 
certificate of conformity.) This exemption is temporary as described in 
40 CFR 1068(f).
    (b) The provisions of 40 CFR 1068.261 apply for vehicles subject to 
GHG standards under this part, with the following exceptions and 
clarifications:
    (1) Understand references to ``engines'' to refer to vehicles.
    (2) Understand references to ``aftertreatment components'' to refer 
to any emission-related components needed for complying with GHG 
standards under this part.
    (3) Understand ``equipment manufacturers'' to be secondary vehicle 
manufacturers.
    (4) The provisions of 40 CFR 1068.261(b), (c)(7), (d), and (e) do 
not apply. Accordingly, the provisions of 40 CFR 1068.261(c) apply 
regardless of pricing arrangements.

Sec.  1037.622  Shipment of incomplete vehicles to secondary vehicle 
manufacturers.

    This section specifies how manufacturers may introduce partially 
complete vehicles into U.S. commerce. The provisions of this section do 
not apply for trailers, except in unusual circumstances. You may not 
use the provisions of this section to circumvent the intent of this 
part.
    (a) The provisions of this section allow manufacturers to ship 
partially complete vehicles to secondary vehicle manufacturers or 
otherwise introduce them into U.S. commerce in the following 
circumstances:
    (1) Tractors. Manufacturers may introduce partially complete 
tractors into U.S. commerce if they are covered by a certificate of 
conformity for tractors and will be in their certified tractor 
configuration before they reach the ultimate purchasers. For example, 
this would apply for sleepers initially shipped without the sleeper 
compartments attached. Note that delegated assembly provisions may 
apply (see Sec.  1037.621).
    (2) Small businesses modifying certified tractors. Small businesses 
that build custom sleeper cabs may modify complete or incomplete 
vehicles certified as tractors, as long as they do not increase the 
effective frontal area of the certified configuration.
    (3) Vocational vehicles. Manufacturers may introduce partially 
complete vocational vehicles into U.S. commerce if they are covered by 
a certificate of conformity for vocational vehicles and will be in 
their certified vocational configuration before they reach the ultimate 
purchasers. Note that delegated assembly provisions may apply (see 
Sec.  1037.621).
    (4) Uncertified vehicles that will be certified by secondary 
vehicle manufacturers. Manufacturers may introduce into U.S. commerce 
partially complete vehicles for which they do not hold a certificate of 
conformity only as allowed by paragraph (b) of this section; however, 
the requirements of this section do not apply for tractors or 
vocational vehicles built before January 1, 2022, that are produced by 
a secondary vehicle manufacturer if they are excluded from the 
standards of this part under Sec.  1037.150(c).
    (b) The provisions of this paragraph (b) generally apply where the 
secondary vehicle manufacturer has substantial control over the design 
and assembly of emission controls. In unusual circumstances we may 
allow other secondary vehicle manufacturers to use these provisions. In 
determining whether a manufacturer has substantial control over the 
design and assembly of emission controls, we would consider the degree 
to which the secondary manufacturer would be able to ensure that the 
engine and vehicle will conform to the regulations in their final 
configurations.
    (1) A secondary manufacturer may finish assembly of partially 
complete vehicles in the following cases:
    (i) It obtains a vehicle that is not fully assembled with the 
intent to manufacture a complete vehicle in a certified configuration.
    (ii) It obtains a vehicle with the intent to modify it to a 
certified configuration before it reaches the ultimate purchaser. For 
example, this may apply for converting a gasoline-fueled vehicle to 
operate on natural gas under the terms of a valid certificate.
    (2) Manufacturers may introduce partially complete vehicles into 
U.S. commerce as described in this paragraph (b) if they have a written 
request for such vehicles from a secondary vehicle manufacturer that 
will finish the vehicle assembly and has certified the vehicle (or the 
vehicle has been exempted or excluded from the requirements of this 
part). The written request must include a statement that the secondary 
manufacturer has a certificate of conformity (or exemption/exclusion) 
for the vehicle and identify a valid vehicle family name associated 
with each vehicle model ordered (or the basis for an exemption/
exclusion). The original vehicle manufacturer must apply a removable 
label meeting the requirements of 40 CFR 1068.45 that identifies the 
corporate name of the original manufacturer and states that the vehicle 
is exempt under the provisions of Sec.  1037.622. The name of the 
certifying manufacturer must also be on the label or, alternatively, on 
the bill of lading that accompanies the vehicles during shipment. The 
original manufacturer may not apply a permanent emission control 
information label identifying the vehicle's eventual status as a 
certified vehicle.
    (3) If you are the secondary manufacturer and you will hold the 
certificate, you must include the following information in your 
application for certification:
    (i) Identify the original manufacturer of the partially complete 
vehicle or of the complete vehicle you will modify.
    (ii) Describe briefly how and where final assembly will be 
completed. Specify how you have the ability to ensure that the vehicles 
will conform to the regulations in their final configuration. (Note: 
This section prohibits using the provisions of this paragraph (b) 
unless you have substantial control over the design and assembly of 
emission controls.)
    (iii) State unconditionally that you will not distribute the 
vehicles without conforming to all applicable regulations.
    (4) If you are a secondary manufacturer and you are already a 
certificate holder for other families, you may receive shipment of 
partially complete vehicles after you apply for a certificate of 
conformity but before the certificate's effective date. This exemption 
allows the original manufacturer to ship vehicles after you have 
applied for a certificate of conformity. Manufacturers may introduce 
partially complete vehicles into U.S. commerce as described in this 
paragraph (b)(4) if they have a written request for such vehicles from 
a secondary manufacturer stating that the

[[Page 40654]]

application for certification has been submitted (instead of the 
information we specify in paragraph (b)(2) of this section). We may set 
additional conditions under this paragraph (b)(4) to prevent 
circumvention of regulatory requirements.
    (5) The provisions of this section also apply for shipping 
partially complete vehicles if the vehicle is covered by a valid 
exemption and there is no valid family name that could be used to 
represent the vehicle model. Unless we approve otherwise in advance, 
you may do this only when shipping engines to secondary manufacturers 
that are certificate holders. In this case, the secondary manufacturer 
must identify the regulatory cite identifying the applicable exemption 
instead of a valid family name when ordering engines from the original 
vehicle manufacturer.
    (6) Both original and secondary manufacturers must keep the records 
described in this section for at least five years, including the 
written request for exempted vehicles and the bill of lading for each 
shipment (if applicable). The written request is deemed to be a 
submission to EPA.
    (7) These provisions are intended only to allow secondary 
manufacturers to obtain or transport vehicles in the specific 
circumstances identified in this section so any exemption under this 
section expires when the vehicle reaches the point of final assembly 
identified in paragraph (b)(3)(ii) of this section.
    (8) For purposes of this section, an allowance to introduce 
partially complete vehicles into U.S. commerce includes a conditional 
allowance to sell, introduce, or deliver such vehicles into commerce in 
the United States or import them into the United States. It does not 
include a general allowance to offer such vehicles for sale because 
this exemption is intended to apply only for cases in which the 
certificate holder already has an arrangement to purchase the vehicles 
from the original manufacturer. This exemption does not allow the 
original manufacturer to subsequently offer the vehicles for sale to a 
different manufacturer who will hold the certificate unless that second 
manufacturer has also complied with the requirements of this part. The 
exemption does not apply for any individual vehicles that are not 
labeled as specified in this section or which are shipped to someone 
who is not a certificate holder.
    (9) We may suspend, revoke, or void an exemption under this 
section, as follows:
    (i) We may suspend or revoke your exemption if you fail to meet the 
requirements of this section. We may suspend or revoke an exemption 
related to a specific secondary manufacturer if that manufacturer sells 
vehicles that are in not in a certified configuration in violation of 
the regulations. We may disallow this exemption for future shipments to 
the affected secondary manufacturer or set additional conditions to 
ensure that vehicles will be assembled in the certified configuration.
    (ii) We may void an exemption for all the affected vehicles if you 
intentionally submit false or incomplete information or fail to keep 
and provide to EPA the records required by this section.
    (iii) The exemption is void for a vehicle that is shipped to a 
company that is not a certificate holder or for a vehicle that is 
shipped to a secondary manufacturer that is not in compliance with the 
requirements of this section.
    (iv) The secondary manufacturer may be liable for penalties for 
causing a prohibited act where the exemption is voided due to actions 
on the part of the secondary manufacturer.
    (c) Provide instructions along with partially complete vehicles 
including all information necessary to ensure that an engine will be 
installed in its certified configuration.

Sec.  1037.630  Special purpose tractors.

    (a) General provisions. This section allows a vehicle manufacturer 
to reclassify certain tractors as vocational tractors. Vocational 
tractors are treated as vocational vehicles and are exempt from the 
standards of Sec.  1037.106. Note that references to ``tractors'' 
outside of this section mean non-vocational tractors.
    (1) This allowance is intended only for vehicles that do not 
typically operate at highway speeds, or would otherwise not benefit 
from efficiency improvements designed for line-haul tractors. This 
allowance is limited to the following vehicle and application types:
    (i) Low-roof tractors intended for intra-city pickup and delivery, 
such as those that deliver bottled beverages to retail stores.
    (ii) Tractors intended for off-road operation (including mixed 
service operation), such as those with reinforced frames and increased 
ground clearance.
    (iii) Model year 2020 and earlier tractors with a gross combination 
weight rating (GCWR) over 120,000 pounds. Note that tractors meeting 
the definition of ``heavy-haul'' in Sec.  1037.801 may be certified to 
the heavy-haul standards in Sec.  1037.106.
    (2) Where we determine that a manufacturer is not applying this 
allowance in good faith, we may require the manufacturer to obtain 
preliminary approval before using this allowance.
    (b) Requirements. The following requirements apply with respect to 
tractors reclassified under this section:
    (1) The vehicle must fully conform to all requirements applicable 
to vocational vehicles under this part.
    (2) Vehicles reclassified under this section must be certified as a 
separate vehicle family. However, they remain part of the vocational 
regulatory subcategory and averaging set that applies for their weight 
class.
    (3) You must include the following additional statement on the 
vehicle's emission control information label under Sec.  1037.135: 
``THIS VEHICLE WAS CERTIFIED AS A VOCATIONAL TRACTOR UNDER 40 CFR 
1037.630.''
    (4) You must keep records for three years to document your basis 
for believing the vehicles will be used as described in paragraph 
(a)(1) of this section. Include in your application for certification a 
brief description of your basis.
    (c) Production limit. No manufacturer may produce more than 21,000 
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 tractors 
certified or exempted as vocational tractors. Note that in most cases, 
the provisions of paragraph (a) of this section will limit the 
allowable number of vehicles to be a number lower than the production 
limit of this paragraph (c).
    (d) Off-road exemption. All the provisions of this section apply 
for vocational tractors exempted under Sec.  1037.631, except as 
follows:
    (1) The vehicles are required to comply with the requirements of 
Sec.  1037.631 instead of the requirements that would otherwise apply 
to vocational vehicles. Vehicles complying with the requirements of 
Sec.  1037.631 and using an engine certified to the standards of 40 CFR 
part 1036 are deemed to fully conform to all requirements applicable to 
vocational vehicles under this part.
    (2) The vehicles must be labeled as specified under Sec.  1037.631 
instead of as specified in paragraph (b)(3) of this section.

Sec.  1037.631  Exemption for vocational vehicles intended for off-road 
use.

    This section provides an exemption from the greenhouse gas 
standards of this part for certain vocational vehicles intended to be 
used extensively in off-

[[Page 40655]]

road environments such as forests, oil fields, and construction sites. 
This section does not exempt engines used in vocational vehicles from 
the standards of 40 CFR part 86 or part 1036. Note that you may not 
include these exempted vehicles in any credit calculations under this 
part. Note also that trailers designed specifically for off-road use 
are generally excluded from the requirements of this part under Sec.  
1037.5.
    (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.
    (1) The vehicle must have affixed components designed to work in an 
off-road environment (i.e., 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.
    (2) The vehicle must meet one of the following criteria:
    (i) Have an axle that has a gross axle weight rating (GAWR) at or 
above 29,000 pounds.
    (ii) Have a speed attainable in 2.0 miles of not more than 33 mph.
    (iii) Have a speed attainable in 2.0 miles of not more than 45 mph, 
an unloaded vehicle weight that is not less than 95 percent of its 
gross vehicle weight rating, and no capacity to carry occupants other 
than the driver and operating crew.
    (b) Tractors. The provisions of this section may apply for tractors 
only if each tractor qualifies as a vocational tractor under Sec.  
1037.630.
    (c) Recordkeeping and reporting. (1) You must keep records to 
document that your exempted vehicle configurations meet all applicable 
requirements of this section. Keep these records for at least eight 
years after you stop producing the exempted vehicle model. We may 
review these records at any time.
    (2) You must also keep records of the individual exempted vehicles 
you produce, including the vehicle identification number and a 
description of the vehicle configuration.
    (3) Within 90 days after the end of each model year, you must send 
to the Designated Compliance Officer a report with the following 
information:
    (i) A description of each exempted vehicle configuration, including 
an explanation of why it qualifies for this exemption.
    (ii) The number of vehicles exempted for each vehicle 
configuration.
    (d) Labeling. You must include the following additional statement 
on the vehicle's emission control information label under Sec.  
1037.135: ``THIS VEHICLE WAS EXEMPTED UNDER 40 CFR 1037.631.''

Sec.  1037.635  Glider kits.

    Section 1037.601(a)(1) generally disallows the introduction into 
U.S. commerce of a new tractor or vocational vehicle (including a 
vehicle assembled from a glider kit) unless it has an engine that is 
certified to the standards that apply for the engine model year 
corresponding to the vehicle's date of manufacture. For example, for a 
vehicle with a 2020 date of manufacture, the engine must meet the 
standards that apply for model year 2020. Note that the engine may be 
from an earlier model year if the standards were identical. This 
section describes an exemption from the certification requirement that 
applies for qualifying manufacturers. Note that the Clean Air Act 
definition of ``manufacturer'' includes anyone who assembles motor 
vehicles, including entities that install engines in or otherwise 
complete assembly of glider kits.
    (a) Vehicles conforming to the requirements in paragraphs (b) 
through (g) of this section are exempt from the emission standards of 
this part. Engines in such vehicles remain subject to the requirements 
of 40 CFR part 86 applicable for the engines' original model year, but 
are exempt from the standards of 40 CFR part 1036.
    (b) You are eligible for an exemption under this section if you are 
a small manufacturer and you sold vehicles in 2014 under the provisions 
of Sec.  1037.150(j). You must notify us of your plans to use this 
exemption before you introduce exempt vehicles into U.S. commerce. In 
your notification, you must identify your annual sales of such vehicles 
for calendar years 2010 through 2014. Vehicles you produce before 
notifying us, are not exempt under this section.
    (c) In a given calendar year, you may sell up to 300 exempt 
vehicles under this section, or up to the highest annual sales volume 
you identify in paragraph (b) of this section, whichever is less.
    (d) Identify the number of exempt vehicles you sold under this 
section for the prior calendar year in your annual report under Sec.  
1037.250,
    (e) Include the following statement on the label required under 
Sec.  1037.135: ``THIS VEHICLE AND ITS ENGINE ARE EXEMPT UNDER 40 CFR 
1037.635.''
    (f) This exemption is valid for a given vehicle only if you meet 
all the requirements and conditions of this section that apply with 
respect to that vehicle. Introducing such a vehicle into U.S. commerce 
without meeting all applicable requirements and conditions violates 40 
CFR 1068.101(a)(1).
    (g) Companies that are not small manufacturers may sell uncertified 
incomplete vehicles without engines to small manufacturers for the 
purpose of producing exempt vehicles under this section, subject to the 
provisions of Sec.  1037.622.

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.
    (a) General. The regulations of this part do not constrain how you 
may design VSLs for your vehicles. For example, you may design your VSL 
to have a single fixed speed limit or a soft-top speed limit. You may 
also design your VSL to expire after accumulation of a predetermined 
number of miles. However, designs with soft tops or expiration features 
are subject to proration provisions under this section that do not 
apply to fixed VSLs that do not expire.
    (b) Definitions. The following definitions apply for purposes of 
this section:
    (1) Default speed limit means the speed limit that normally applies 
for the vehicle, except as follows:
    (i) The default speed limit for adjustable VSLs must represent the 
speed limit that applies when the VSL is adjusted to its highest 
setting under paragraph (c) of this section.
    (ii) For VSLs with soft tops, the default speed does not include 
speeds possible only during soft-top operation.
    (iii) For expiring VSLs, the default does not include speeds that 
are possible only after expiration.
    (2) Soft-top speed limit means the highest speed limit that applies 
during soft-top operation.
    (3) Maximum soft-top duration means the maximum amount of time that 
a vehicle could operate above the default speed limit.
    (4) Certified VSL means a VSL configuration that applies when a 
vehicle is new and until it expires.
    (5) Expiration point means the mileage at which a vehicle's 
certified VSL expires (or the point at which tamper protections 
expire).
    (6) Effective speed limit has the meaning given in paragraph (d) of 
this section.

[[Page 40656]]

    (c) Adjustments. You may design your VSL to be adjustable; however, 
this may affect the value you use in GEM.
    (1) Except as specified in paragraph (c)(2) of this section, any 
adjustments that can be made to the engine, vehicle, or their controls 
that change the VSL's actual speed limit are considered to be 
adjustable operating parameters. Compliance is based on the vehicle 
being adjusted to the highest speed limit within this range.
    (2) The following adjustments are not adjustable parameters:
    (i) Adjustments made only to account for changing tire size or 
final drive ratio.
    (ii) Adjustments protected by encrypted controls or passwords.
    (iii) Adjustments possible only after the VSL's expiration point.
    (d) Effective speed limit. (1) For VSLs without soft tops or 
expiration points that expire before 1,259,000 miles, the effective 
speed limit is the highest speed limit that results by adjusting the 
VSL or other vehicle parameters consistent with the provisions of 
paragraph (c) of this section.
    (2) For VSLs with soft tops and/or expiration points, the effective 
speed limit is calculated as specified in this paragraph (d)(2), which 
is based on 10 hours of operation per day (394 miles per day for day 
cabs and 551 miles per day for sleeper cabs). Note that this 
calculation assumes that a fraction of this operation is speed limited 
(3.9 hours and 252 miles for day cabs, and 7.3 hours and 474 miles for 
sleeper cabs). Use the following equation to calculate the effective 
speed limit, rounded to the nearest 0.1 mph:

Effective speed = ExF [middot] [STF [middot] STSL + (1-STF) [middot] 
DSL] + (1-ExF) [middot] 65 mph

Where:

ExF = expiration point miles/1,259,000 miles.
STF = the maximum number of allowable soft top operation hours per 
day/3.9 hours for day cabs (or maximum miles per day/252), or the 
maximum number of allowable soft top operation hours per day/7.3 
hours for sleeper cabs (or maximum miles per day/474).
STSL = the soft top speed limit.
DSL = the default speed limit.

Sec.  1037.645  In-use compliance with family emission limits (FELs).

    Section 1037.225 describes how to change the FEL for a vehicle 
family during the model year. This section, which describes how you may 
ask us to increase a vehicle family's FEL after the end of the model 
year, is intended to address circumstances in which it is in the public 
interest to apply a higher in-use FEL based on forfeiting an 
appropriate number of emission credits.
    (a) You may ask us to increase a vehicle family's FEL after the end 
of the model year if you believe some of your in-use vehicles exceed 
the CO2 FEL that applied during the model year (or the 
CO2 emission standard if the family did not generate or use 
emission credits). We may consider any available information in making 
our decision to approve or deny your request.
    (b) If we approve your request under this section, you must apply 
emission credits to cover the increased FEL for all affected vehicles. 
Apply the emission credits as part of your credit demonstration for the 
current production year. Include the appropriate calculations in your 
final report under Sec.  1037.730.
    (c) Submit your request to the Designated Compliance Officer. 
Include the following in your request:
    (1) Identify the names of each vehicle family that is the subject 
of your request. Include separate family names for different model 
years.
    (2) Describe why your request does not apply for similar vehicle 
models or additional model years, as applicable.
    (3) Identify the FEL that applied during the model year for each 
configuration and recommend replacement FELs for in-use vehicles; 
include a supporting rationale to describe how you determined the 
recommended replacement FELs.
    (4) Describe whether the needed emission credits will come from 
averaging, banking, or trading.
    (d) If we approve your request, we will identify one or more 
replacement FELs, as follows:
    (1) Where your vehicle family includes more than one sub-family 
with different FELs, we may apply a higher FEL within the family than 
was applied to the vehicle's configuration in your final ABT report. 
For example, if your vehicle family included three sub-families, with 
FELs of 200 g/ton-mile, 210 g/ton-mile, and 220 g/ton-mile, we may 
apply a 220 g/ton-mile in-use FEL to vehicles that were originally 
designated as part of the 200 g/ton-mile or 210 g/ton-mile sub-
families.
    (2) Without regard to the number of sub-families in your certified 
vehicle family, we may specify one or more new sub-families with higher 
FELs than you included in your final ABT report. We may apply these 
higher FELs as in-use FELs for your vehicles. For example, if your 
vehicle family included three sub-families, with FELs of 200 g/ton-
mile, 210 g/ton-mile, and 220 g/ton-mile, we may specify a new 230 g/
ton-mile sub-family.
    (3) Our selected values for the replacement FEL will reflect our 
best judgment to accurately reflect the actual in-use performance of 
your vehicles, consistent with the testing provisions specified in this 
part.
    (4) We may apply the higher FELs to other vehicle families from the 
same or different model years to the extent they used equivalent 
emission controls. We may include any appropriate conditions with our 
approval.
    (e) If we order a recall for a vehicle family under 40 CFR 
1068.505, we will no longer approve a replacement FEL under this 
section for any of your vehicles from that vehicle family, or from any 
other vehicle family that relies on equivalent emission controls.

Sec.  1037.650  Tire manufacturers.

    This section describes how the requirements of this part apply with 
respect to tire manufacturers that choose to provide test data or 
emission warranties for purposes of this part.
    (a) Testing. You are responsible as follows for test tires and 
emission test results that you provide to vehicle manufacturers for the 
purpose of the manufacturer submitting them to EPA for certification 
under this part:
    (1) Such test results are deemed under Sec.  1037.825 to be 
submissions to EPA. This means that you may be subject to criminal 
penalties under 18 U.S.C. 1001 if you knowingly submit false test 
results to the manufacturer.
    (2) You may not cause a vehicle manufacturer to violate the 
regulations by rendering inaccurate emission test results you provide 
(or emission test results from testing of test tires you provide) to 
the vehicle manufacturer.
    (3) Your provision of test tires and emission test results to 
vehicle manufacturers for the purpose of certifying under this part is 
deemed to be an agreement to provide tires to EPA for confirmatory 
testing under Sec.  1037.201.
    (b) Warranty. You may contractually agree to process emission 
warranty claims on behalf of the manufacturer certifying the vehicle 
with respect to tires you produce.
    (1) Your fulfillment of the warranty requirements of this part is 
deemed to fulfill the vehicle manufacturer's warranty obligations under 
this part with respect to tires you warrant.
    (2) You may not cause a vehicle manufacturer to violate the 
regulations by failing to fulfill the emission warranty requirements 
that you contractually agreed to fulfill.

Sec.  1037.655  Post-useful life vehicle modifications.

    This section specifies vehicle modifications that may occur in 
certain

[[Page 40657]]

circumstances after a vehicle reaches the end of its regulatory useful 
life. It does not apply with respect to modifications that occur within 
the useful life period. It also does not apply with respect to engine 
modifications or recalibrations. Note that many such modifications to 
the vehicle during the useful life and to the engine at any time are 
presumed to violate 42 U.S.C. 7522(a)(3)(A).
    (a) General. Except as allowed by this section, it is prohibited 
for any person to remove or render inoperative any emission control 
device installed to comply with the requirements of this part 1037.
    (b) Allowable modifications. You may modify a vehicle for the 
purpose of reducing emissions, provided you have a reasonable technical 
basis for knowing that such modification will not increase emissions of 
any other pollutant. Reasonable technical basis has the meaning given 
in 40 CFR 1068.30. This generally requires you to have information that 
would lead an engineer or other person familiar with engine and vehicle 
design and function to reasonably believe that the modifications will 
not increase emissions of any regulated pollutant.
    (c) Examples of allowable modifications. The following are examples 
of allowable modifications:
    (1) It is generally allowable to remove tractor roof fairings after 
the end of the vehicle's useful life if the vehicle will no longer be 
used primarily to pull box trailers.
    (2) Other fairings may be removed after the end of the vehicle's 
useful life if the vehicle will no longer be used significantly on 
highways with vehicle speed of 55 miles per hour or higher.
    (d) Examples of prohibited modifications. The following are 
examples of modifications that are not allowable:
    (1) No person may disable a vehicle speed limiter prior to its 
expiration point.
    (2) No person may remove aerodynamic fairings from tractors that 
are used primarily to pull box trailers on highways.

Sec.  1037.660  Automatic engine shutdown systems.

    This section specifies requirements that apply for certified 
automatic engine shutdown (AES) systems modeled under Sec.  1037.520. 
It does not apply for AES systems you do not model under Sec.  
1037.520.
    (a) Minimum requirements. Your AES system must meet all of the 
requirements of this paragraph (a) to be modeled under Sec.  1037.520. 
The system must shut down the engine within 300 seconds when all the 
following conditions are met:
    (1) The transmission is set in neutral with the parking brake 
engaged (or the transmission is set to park if so equipped).
    (2) The operator has not reset the system timer within the 300 
seconds by changing the position of the accelerator, brake, or clutch 
pedal; or by some other mechanism we approve.
    (3) None of the override conditions of paragraph (b) of this 
section are met.
    (b) Override conditions. The system may delay shutting the engine 
down while any of the conditions of this paragraph (b) apply. Engines 
equipped with auto restart may restart during override conditions. Note 
that these conditions allow the system to delay shutdown or restart, 
but do not allow it to reset the timer. The system may delay shutdown--
    (1) While an exhaust emission control device is regenerating. The 
period considered to be regeneration for purposes of this allowance 
must be consistent with good engineering judgment and may differ in 
length from the period considered to be regeneration for other 
purposes. For example, in some cases it may be appropriate to include a 
cool down period for this purpose but not for infrequent regeneration 
adjustment factors.
    (2) If necessary while servicing the vehicle, provided the 
deactivation of the AES system is accomplished using a diagnostic scan 
tool. The system must be automatically reactivated when the engine is 
shutdown for more than 60 minutes.
    (3) If the vehicle's main battery state-of-charge is not sufficient 
to allow the main engine to be restarted.
    (4) If the external ambient temperature reaches a level below which 
or above which the cabin temperature cannot be maintained within 
reasonable heat or cold exposure threshold limit values for the health 
and safety of the operator (not merely comfort).
    (5) If the vehicle's engine coolant temperature is too low 
according to the manufacturer's engine protection guidance. This may 
also apply for fuel or oil temperatures. This allows the engine to 
continue operating until it reaches a predefined temperature at which 
the shutdown sequence of paragraph (a) of this section would resume.
    (6) The system may delay shutdown while the vehicle's main engine 
is operating in power take-off (PTO) mode. For purposes of this 
paragraph (b)(6), an engine is considered to be in PTO mode when a 
switch or setting designating PTO mode is enabled.
    (c) Adjustments to AES systems. (1) The AES system may include an 
expiration point (in miles) after which the AES system may be disabled. 
If your vehicle is equipped with an AES system that expires before 
1,259,000 miles, adjust the model input as follows, rounded to the 
nearest 0.1 g/ton-mile: AES Input = 5 g CO2/ton-mile x 
(miles at expiration/1,259,000 miles).
    (2) For AES systems designed to limit idling to a specific number 
of hours less than 1,800 hours over any 12-month period, calculate an 
adjusted AES input using the following equation, rounded to the nearest 
0.1 g/ton-mile: AES Input = 5 g CO2/ton-mile x (1 - (maximum 
allowable number of idling hours per year/1,800 hours)). This is an 
annual allowance that starts when the vehicle is new and resets every 
12 months after that. Manufacturers may propose an alternative method 
based on operating hours or miles instead of years.
    (d) Adjustable parameters. Provisions that apply generally with 
respect to adjustable parameters also apply to the AES system operating 
parameters, except the following are not considered to be adjustable 
parameters:
    (1) Accelerator, brake, and clutch pedals, with respect to 
resetting the idle timer. Parameters associated with other timer reset 
mechanisms we approve are also not adjustable parameters.
    (2) Bypass parameters allowed for vehicle service under paragraph 
(b)(2) of this section.
    (3) Parameters that are adjustable only after the expiration point.

Sec.  1037.665  In-use tractor testing.

    Manufacturers with U.S.-directed production volumes of greater than 
20,000 tractors must perform in-use testing as described in this 
section.
    (a) The following test requirements apply beginning in model year 
2021:
    (1) Each year, select for testing three sleeper cabs and two day 
cabs certified to Phase 1 or Phase 2 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.
    (2) Set up the tractors on a chassis dynamometer and operate them 
over all applicable duty cycles from Sec.  1037.510(a). You may use 
emission-measurement systems meeting the specifications of 40 CFR part 
1065, subpart J. Calculate coefficients for the road-load force 
equation as described in Section 10 of SAE J1263 or Section 11 of SAE 
J2263 (both incorporated by reference in Sec.  1037.810). Use standard

[[Page 40658]]

payload. Measure emissions of NOX, PM, CO, NMHC, 
CO2, CH4, and N2O. Determine emission 
levels in g/hour for the idle test and g/ton-mile for other duty 
cycles.
    (b) Send us an annual report with your test results for each duty 
cycle and the corresponding GEM results. We may make your test data 
publicly available.

Subpart H--Averaging, Banking, and Trading for Certification

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 
through 1037.107. Participation in this program is voluntary.
    (b) The definitions of Subpart I of this part apply to this 
subpart. The following definitions also apply:
    (1) Actual emission credits means emission credits you have 
generated that we have verified by reviewing your final report.
    (2) Averaging set means a set of vehicles in which emission credits 
may be exchanged. Credits generated by one vehicle may only be used by 
other vehicles in the same averaging set. Note that an averaging set 
may comprise more than one regulatory subcategory. See Sec.  1037.740.
    (3) Broker means any entity that facilitates a trade of emission 
credits between a buyer and seller.
    (4) Buyer means the entity that receives emission credits as a 
result of a trade.
    (5) Reserved emission credits means emission credits you have 
generated that we have not yet verified by reviewing your final report.
    (6) Seller means the entity that provides emission credits during a 
trade.
    (7) Standard means the emission standard that applies under subpart 
B of this part for vehicles not participating in the ABT program of 
this subpart.
    (8) Trade means to exchange emission credits, either as a buyer or 
seller.
    (c) Emission credits may be exchanged only within an averaging set 
as specified in Sec.  1037.740.
    (d) You may not use emission credits generated under this subpart 
to offset any emissions that exceed an FEL or standard, except as 
allowed by Sec.  1037.645.
    (e) You may use either of the following approaches to retire or 
forego emission credits:
    (1) You may trade emission credits generated from any number of 
your vehicles to the vehicle purchasers or other parties to retire the 
credits. Identify any such credits in the reports described in Sec.  
1037.730. Vehicles must comply with the applicable FELs even if you 
donate or sell the corresponding emission credits under this paragraph 
(e). Those credits may no longer be used by anyone to demonstrate 
compliance with any EPA emission standards.
    (2) You may certify a family using an FEL below the emission 
standard as described in this part and choose not to generate emission 
credits for that family. If you do this, you do not need to calculate 
emission credits for those families and you do not need to submit or 
keep the associated records described in this subpart for that family.
    (f) Emission credits may be used in the model year they are 
generated. Surplus emission credits may be banked for future model 
years. Surplus emission credits may sometimes be used for past model 
years, as described in Sec.  1037.745.
    (g) You may increase or decrease an FEL during the model year by 
amending your application for certification under Sec.  1037.225. The 
new FEL may apply only to vehicles you have not already introduced into 
commerce.
    (h) See Sec.  1037.740 for special credit provisions that apply for 
credits generated under Sec.  1037.104(d)(7), Sec.  1037.615 or 40 CFR 
1036.615.
    (i) Unless the regulations explicitly allow it, you may not 
calculate credits more than once for any emission reduction. For 
example, if you generate CO2 emission credits for a given 
hybrid vehicle under this part, no one may generate CO2 
emission credits for the hybrid engine under 40 CFR part 1036. However, 
credits could be generated for identical engine used in vehicles that 
did not generate credits under this part.
    (j) You may use emission credits generated under the Phase 1 
standards when certifying vehicles to Phase 2 standards. No credit 
adjustments are required other than corrections for different useful 
lives.

Sec.  1037.705  Generating and calculating emission credits.

    (a) The provisions of this section apply separately for calculating 
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).
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. 
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.  
1037.105 and Sec.  1037.106. Use 250,000 miles for trailers.

    (c) As described in Sec.  1037.730, compliance with the 
requirements of this subpart is determined at the end of the model year 
based on actual U.S.-directed production volumes. Keep appropriate 
records to document these production volumes. Do not include any of the 
following vehicles to calculate emission credits:
    (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.
    (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.

Sec.  1037.710  Averaging.

    (a) Averaging is the exchange of emission credits among your 
vehicle families. You may average emission credits only within the same 
averaging set.
    (b) You may certify one or more vehicle families (or subfamilies) 
to an FEL above the applicable standard, subject to any applicable FEL 
caps and other provisions in subpart B of this part, if you show in 
your application for certification that your projected balance of all 
emission-credit transactions in that model year is greater than or 
equal to zero or that a negative balance is allowed under Sec.  
1037.745.
    (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

[[Page 40659]]

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. Note that the option for using banked or traded credits does 
not apply for trailers.

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. Note that Sec.  1037.107 does not allow 
banking for trailers.
    (b) You may designate any emission credits you plan to bank in the 
reports you submit under Sec.  1037.730 as reserved credits. During the 
model year and before the due date for the final report, you may 
designate your reserved emission credits for averaging or trading.
    (c) Reserved credits become actual emission credits when you submit 
your final report. However, we may revoke these emission credits if we 
are unable to verify them after reviewing your reports or auditing your 
records.
    (d) Banked credits retain the designation of the averaging set in 
which they were generated.

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. Note that Sec.  1037.107 does not allow trading for 
trailers.
    (b) You may trade actual emission credits as described in this 
subpart. You may also trade reserved emission credits, but we may 
revoke these emission credits based on our review of your records or 
reports or those of the company with which you traded emission credits. 
You may trade banked credits within an averaging set to any certifying 
manufacturer.
    (c) If a negative emission credit balance results from a 
transaction, both the buyer and seller are liable, except in cases we 
deem to involve fraud. See Sec.  1037.255(e) for cases involving fraud. 
We may void the certificates of all vehicle families participating in a 
trade that results in a manufacturer having a negative balance of 
emission credits. See Sec.  1037.745.

Sec.  1037.725  What must I include in my application for 
certification?

    (a) You must declare in your application for certification your 
intent to use the provisions of this subpart for each vehicle family 
that will be certified using the ABT program. You must also declare the 
FELs you select for the vehicle family or subfamily for each pollutant 
for which you are using the ABT program. Your FELs must comply with the 
specifications of subpart B of this part, including the FEL caps. FELs 
must be expressed to the same number of decimal places as the 
applicable standards.
    (b) Include the following in your application for certification:
    (1) A statement that, to the best of your belief, you will not have 
a negative balance of emission credits for any averaging set when all 
emission credits are calculated at the end of the year; or a statement 
that you will have a negative balance of emission credits for one or 
more averaging sets but that it is allowed under Sec.  1037.745.
    (2) Calculations of projected emission credits (positive or 
negative) based on projected U.S.-directed production volumes. We may 
require you to include similar calculations from your other vehicle 
families to project your net credit balances for the model year. If you 
project negative emission credits for a family or subfamily, state the 
source of positive emission credits you expect to use to offset the 
negative emission credits.

Sec.  1037.730  ABT reports.

    (a) If any of your vehicle families are certified using the ABT 
provisions of this subpart, you must send a final report by March 31 
following the end of the model year. You may ask us to extend the 
deadline for the final report to April 30.
    (b) Your final report must include the following information for 
each vehicle family participating in the ABT program:
    (1) Vehicle-family and subfamily designations, and averaging set.
    (2) The regulatory subcategory and emission standards that would 
otherwise apply to the vehicle family.
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the vehicle identification number for the first vehicle 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits as specified in 
Sec.  1037.225.
    (4) The projected and actual U.S.-directed production volumes for 
the model year. If you changed an FEL during the model year, identify 
the actual U.S.-directed production volume associated with each FEL.
    (5) Useful life.
    (6) Calculated positive or negative emission credits for the whole 
vehicle family. Identify any emission credits that you traded, as 
described in paragraph (d)(1) of this section.
    (7) If you have a negative credit balance for the averaging set in 
the given model year, specify whether the vehicle family (or certain 
subfamilies with the vehicle family) have a credit deficit for the 
year. Consider for example, a manufacturer with three vehicle families 
(``A'', ``B'', and ``C'') in a given averaging set. If family A 
generates enough credits to offset the negative credits of family B but 
not enough to also offset the negative credits of family C (and the 
manufacturer has no banked credits in the averaging set), the 
manufacturer may designate families A and B as having no deficit for 
the model year, provided it designates family C as having a deficit for 
the model year.
    (c) Your final report must include the following additional 
information:
    (1) Show that your net balance of emission credits from all your 
participating vehicle families in each averaging set in the applicable 
model year is not negative, except as allowed under Sec.  1037.745. 
Your credit tracking must account for the limitation on credit life 
under Sec.  1037.40(c).
    (2) State whether you will retain any emission credits for banking. 
If you choose to retire emission credits that would otherwise be 
eligible for banking, identify the families that generated the emission 
credits, including the number of emission credits from each family.
    (3) State that the report's contents are accurate.
    (4) Identify the technologies that make up the certified 
configuration associated with each vehicle identification number. You 
may identify this as a range of identification numbers for vehicles 
involving a single, identical certified configuration.
    (d) If you trade emission credits, you must send us a report within 
90 days after the transaction, as follows:
    (1) As the seller, you must include the following information in 
your report:
    (i) The corporate names of the buyer and any brokers.
    (ii) A copy of any contracts related to the trade.

[[Page 40660]]

    (iii) The vehicle families that generated emission credits for the 
trade, including the number of emission credits from each family.
    (2) As the buyer, you must include the following information in 
your report:
    (i) The corporate names of the seller and any brokers.
    (ii) A copy of any contracts related to the trade.
    (iii) How you intend to use the emission credits, including the 
number of emission credits you intend to apply to each vehicle family 
(if known).
    (e) Send your reports electronically to the Designated Compliance 
Officer using an approved information format. If you want to use a 
different format, send us a written request with justification for a 
waiver.
    (f) Correct errors in your final report as follows:
    (1) If you or we determine before the due date for the final report 
that errors mistakenly decreased your balance of emission credits, you 
may correct the errors and recalculate the balance of emission credits. 
You may not make these corrections for errors that are determined after 
the due date for the final report. If you report a negative balance of 
emission credits, we may disallow corrections under this paragraph 
(f)(1).
    (2) If you or we determine anytime that errors mistakenly increased 
your balance of emission credits, you must correct the errors and 
recalculate the balance of emission credits.

Sec.  1037.735  Recordkeeping.

    (a) You must organize and maintain your records as described in 
this section.
    (b) Keep the records required by this section for at least eight 
years after the due date for the final report. You may not use emission 
credits for any vehicles if you do not keep all the records required 
under this section. You must therefore keep these records to continue 
to bank valid credits.
    (c) Keep a copy of the reports we require in Sec. Sec.  1037.725 
and 1037.730.
    (d) Keep records of the vehicle identification number for each 
vehicle you produce. You may identify these numbers as a range. If you 
change the FEL after the start of production, identify the date you 
started using each FEL and the range of vehicle identification numbers 
associated with each FEL. You must also identify the purchaser and 
destination for each vehicle you produce to the extent this information 
is available.
    (e) We may require you to keep additional records or to send us 
relevant information not required by this section in accordance with 
the Clean Air Act.

Sec.  1037.740  Restrictions for using emission credits.

    The following restrictions apply for using emission credits:
    (a) Averaging sets. Except as specified in paragraph (b) of this 
section, emission credits may be exchanged only within an averaging 
set. The following principal averaging sets apply for vehicles subject 
to this subpart:
    (1) Class 2b through 5 vehicles that are subject to the standards 
of Sec.  1037.105.
    (2) Class 6 and 7 vehicles.
    (3) Class 8 vehicles.
    (4) Long box van trailers.
    (5) Short box van trailers.
    (6) Long refrigerated box van trailers.
    (7) Short refrigerated box van trailers.
    (8) 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 86.1819 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) Credits from hybrid vehicles and other advanced technologies. 
Credits you generate under Sec.  1037.615 in Phase 1 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 86.1819 and 40 CFR part 
1036. Similarly, you may use 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.
    (1) The maximum amount of credits you may bring into the following 
service class groups is 60,000 Mg per model year:
    (i) Spark-ignition engines, light heavy-duty compression-ignition 
engines, and light heavy-duty vehicles. This group comprises the 
averaging set listed in paragraphs (a)(1) of this section and the 
averaging set listed in 40 CFR 1036.740(a)(1) and (2).
    (ii) Medium heavy-duty compression-ignition engines and medium 
heavy-duty vehicles. This group comprises the averaging sets listed in 
paragraph (a)(2) of this section and 40 CFR 1036.740(a)(3).
    (iii) Heavy heavy-duty compression-ignition engines and heavy 
heavy-duty vehicles. This group comprises the averaging sets listed in 
paragraph (a)(3) of this section and 40 CFR 1036.740(a)(4).
    (2) Paragraph (b)(1) of this section does not limit the advanced 
technology credits that can be used within a service class group if 
they were generated in that same service class group.
    (c) Credit life. Banked credits may be used only for five model 
years after the year in which they are generated. For example, credits 
you generate in model year 2018 may be used to demonstrate compliance 
with emission standards only through model year 2023.
    (d) Other restrictions. Other sections of this part specify 
additional restrictions for using emission credits under certain 
special provisions.

Sec.  1037.745  End-of-year CO2 credit deficits.

    Except as allowed by this section, we may void the certificate of 
any vehicle family certified to an FEL above the applicable standard 
for which you do not have sufficient credits by the deadline for 
submitting the final report.
    (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, trailers, 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.
    (b) You may not bank or trade away CO2 credits in the 
averaging set in any model year in which you have a deficit.
    (c) You may apply only surplus credits to your deficit. You may not 
apply credits to a deficit from an earlier model year if they were 
generated in a model year for which any of your vehicle families for 
that averaging set had an end-of-year credit deficit.
    (d) If you do not remedy the deficit with surplus credits within 
three model years, we may void your certificate for that vehicle 
family. Note that voiding a certificate applies ab initio. Where the 
net deficit is less than the total amount of negative credits 
originally generated by the family, we will void the certificate only 
with respect to the number of vehicles needed to reach the amount of 
the net deficit. For example, if the original vehicle family generated 
500 Mg of negative credits, and the manufacturer's net deficit after 
three years was 250 Mg, we would void the certificate with respect to 
half of the vehicles in the family.
    (e) For purposes of calculating the statute of limitations, the 
following actions are all considered to occur at the expiration of the 
deadline for offsetting a deficit as specified in paragraph (a) of this 
section:
    (1) Failing to meet the requirements of paragraph (a) of this 
section.

[[Page 40661]]

    (2) Failing to satisfy the conditions upon which a certificate was 
issued relative to offsetting a deficit.
    (3) Selling, offering for sale, introducing or delivering into U.S. 
commerce, or importing vehicles that are found not to be covered by a 
certificate as a result of failing to offset a deficit.

Sec.  1037.750  What can happen if I do not comply with the provisions 
of this subpart?

    (a) For each vehicle family participating in the ABT program, the 
certificate of conformity is conditioned upon full compliance with the 
provisions of this subpart during and after the model year. You are 
responsible to establish to our satisfaction that you fully comply with 
applicable requirements. We may void the certificate of conformity for 
a vehicle family if you fail to comply with any provisions of this 
subpart.
    (b) You may certify your vehicle family or subfamily to an FEL 
above an applicable standard based on a projection that you will have 
enough emission credits to offset the deficit for the vehicle family. 
See Sec.  1037.745 for provisions specifying what happens if you cannot 
show in your final report that you have enough actual emission credits 
to offset a deficit for any pollutant in a vehicle family.
    (c) We may void the certificate of conformity for a vehicle family 
if you fail to keep records, send reports, or give us information we 
request. Note that failing to keep records, send reports, or give us 
information we request is also a violation of 42 U.S.C. 7522(a)(2).
    (d) You may ask for a hearing if we void your certificate under 
this section (see Sec.  1037.820).

Sec.  1037.755  Information provided to the Department of 
Transportation.

    After receipt of each manufacturer's final report as specified in 
Sec.  1037.730 and completion of any verification testing required to 
validate the manufacturer's submitted final data, we will issue a 
report to the Department of Transportation with CO2 emission 
information and will verify the accuracy of each manufacturer's 
equivalent fuel consumption data required by NHTSA under 49 CFR 535.8. 
We will send a report to DOT for each vehicle manufacturer based on 
each regulatory category and subcategory, including sufficient 
information for NHTSA to determine fuel consumption and associated 
credit values. See 49 CFR 535.8 to determine if NHTSA deems submission 
of this information to EPA to also be a submission to NHTSA.

Subpart I--Definitions and Other Reference Information

Sec.  1037.801  Definitions.

    The following definitions apply to this part. The definitions apply 
to all subparts unless we note otherwise. All undefined terms have the 
meaning the Act gives to them. The definitions follow:
    Act means the Clean Air Act, as amended, 42 U.S.C. 7401-7671q.
    Adjustable parameter means any device, system, or element of design 
that someone can adjust (including those which are difficult to access) 
and that, if adjusted, may affect measured or modeled emissions (as 
applicable). You may ask us to exclude a parameter that is difficult to 
access if it cannot be adjusted to affect emissions without 
significantly degrading vehicle performance, or if you otherwise show 
us that it will not be adjusted in a way that affects emissions during 
in-use operation.
    Adjusted Loaded Vehicle Weight means the numerical average of 
vehicle curb weight and GVWR.
    Advanced technology means vehicle technology certified under 40 CFR 
86.1819-14(k)(7), 40 CFR 1036.615, or Sec.  1037.615.
    Aftertreatment means relating to a catalytic converter, particulate 
filter, or any other system, component, or technology mounted 
downstream of the exhaust valve (or exhaust port) whose design function 
is to decrease emissions in the vehicle exhaust before it is exhausted 
to the environment. Exhaust-gas recirculation (EGR) and turbochargers 
are not aftertreatment.
    Aircraft means any vehicle capable of sustained air travel more 
than 100 feet off the ground.
    Alcohol-fueled vehicle means a vehicle that is designed to run 
using an alcohol fuel. For purposes of this definition, alcohol fuels 
do not include fuels with a nominal alcohol content below 25 percent by 
volume.
    Alternative fuel conversion has the meaning given for clean 
alternative fuel conversion in 40 CFR 85.502.
    Ambulance has the meaning given in 40 CFR 86.1803.
    Amphibious vehicle means a motor vehicle that is also designed for 
operation on water.
    A to B testing means testing performed in pairs to allow comparison 
of two vehicles or other test articles. Back-to-back tests are 
performed on Article A and Article B, changing only the variable(s) of 
interest for the two tests.
    Automatic tire inflation system means a system installed on a 
vehicle to keep each tire inflated to within 10 percent of the target 
value with no operator input.
    Auxiliary emission control device means any element of design that 
senses temperature, motive speed, engine rpm, transmission gear, or any 
other parameter for the purpose of activating, modulating, delaying, or 
deactivating the operation of any part of the emission control system.
    Averaging set has the meaning given in Sec.  1037.701.
    Axle ratio or Drive axle ratio, ka, means the 
dimensionless number representing the angular speed of the transmission 
output shaft divided by the angular speed of the drive axle.
    Basic vehicle frontal area means the area enclosed by the geometric 
projection of the basic vehicle along the longitudinal axis onto a 
plane perpendicular to the longitudinal axis of the vehicle, including 
tires but excluding mirrors and air deflectors.
    Calibration means the set of specifications and tolerances specific 
to a particular design, version, or application of a component or 
assembly capable of functionally describing its operation over its 
working range.
    Carryover means relating to certification based on emission data 
generated from an earlier model year.
    Certification means relating to the process of obtaining a 
certificate of conformity for a vehicle family that complies with the 
emission standards and requirements in this part.
    Certified emission level means the highest deteriorated emission 
level in a vehicle subfamily for a given pollutant from either 
transient or steady-state testing.
    Class means relating to GVWR classes for vehicles other than 
trailers, as follows:
    (1) Class 2b means heavy-duty motor vehicles at or below 10,000 
pounds GVWR.
    (2) Class 3 means heavy-duty motor vehicles above 10,000 pounds 
GVWR but at or below 14,000 pounds GVWR.
    (3) Class 4 means heavy-duty motor vehicles above 14,000 pounds 
GVWR but at or below 16,000 pounds GVWR.
    (4) Class 5 means heavy-duty motor vehicles above 16,000 pounds 
GVWR but at or below 19,500 pounds GVWR.
    (5) Class 6 means heavy-duty motor vehicles above 19,500 pounds 
GVWR but at or below 26,000 pounds GVWR.
    (6) Class 7 means heavy-duty motor vehicles above 26,000 pounds 
GVWR but at or below 33,000 pounds GVWR.
    (7) Class 8 means heavy-duty motor vehicles above 33,000 pounds 
GVWR.
    Complete vehicle has the meaning given in the definition of vehicle 
in this section.

[[Page 40662]]

    Compression-ignition has the meaning given in Sec.  1037.101.
    Date of manufacture means the date on which the certifying vehicle 
manufacturer completes its manufacturing operations, except as follows:
    (1) Where the certificate holder is an engine manufacturer that 
does not manufacture the chassis, the date of manufacture of the 
vehicle is based on the date assembly of the vehicle is completed.
    (2) We may approve an alternate date of manufacture based on the 
date on which the certifying (or primary) manufacturer completes 
assembly at the place of main assembly, consistent with the provisions 
of Sec.  1037.601 and 49 CFR 567.4.
    Day cab means a type of tractor cab that is not a sleeper cab or a 
heavy-haul tractor cab.
    Designated Compliance Officer means one of the following:
    (1) For compression-ignition engines, Designated Compliance Officer 
means Director, Diesel Engine Compliance Center, U.S. Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; 
complianceinfo@epa.gov; epa.gov/otaq/verify.
    (2) For spark-ignition engines, Designated Compliance Officer means 
Director, Gasoline Engine Compliance Center, U.S. Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; nonroad-si-cert@epa.gov.
    Deteriorated emission level means the emission level that results 
from applying the appropriate deterioration factor to the official 
emission result of the emission-data vehicle. Note that where no 
deterioration factor applies, references in this part to the 
deteriorated emission level mean the official emission result.
    Deterioration factor means the relationship between the highest 
emissions during the useful life and emissions at the low-hour test 
point, expressed in one of the following ways:
    (1) For multiplicative deterioration factors, the ratio of the 
highest emissions to emissions at the low-hour test point.
    (2) For additive deterioration factors, the difference between the 
highest emissions and emissions at the low-hour test point.
    Driver model means an automated controller that simulates a person 
driving a vehicle.
    Dual-fuel means relating to a vehicle or engine designed for 
operation on two different fuels but not on a continuous mixture of 
those fuels. For purposes of this part, such a vehicle or engine 
remains a dual-fuel vehicle or engine even if it is designed for 
operation on three or more different fuels.
    Electric vehicle means a vehicle that does not include an engine, 
and is powered solely by an external source of electricity and/or solar 
power. Note that this does not include electric hybrid or fuel-cell 
vehicles that use a chemical fuel such as gasoline, diesel fuel, or 
hydrogen. Electric vehicles may also be referred to as all-electric 
vehicles to distinguish them from hybrid vehicles.
    Emergency vehicle means a vehicle that is an ambulance or a fire 
truck.
    Emission control system means any device, system, or element of 
design that controls or reduces the emissions of regulated pollutants 
from a vehicle.
    Emission-data component means a vehicle component that is tested 
for certification. This includes vehicle components tested to establish 
deterioration factors.
    Emission-data vehicle means a vehicle (or vehicle component) that 
is tested for certification. This includes vehicles tested to establish 
deterioration factors.
    Emission-related maintenance means maintenance that substantially 
affects emissions or is likely to substantially affect emission 
deterioration.
    Excluded means relating to vehicles that are not subject to some or 
all of the requirements of this part as follows:
    (1) A vehicle that has been determined not to be a ``motor 
vehicle'' is excluded from this part.
    (2) Certain vehicles are excluded from the requirements of this 
part under Sec.  1037.5.
    (3) Specific regulatory provisions of this part may exclude a 
vehicle generally subject to this part from one or more specific 
standards or requirements of this part.
    Exempted has the meaning given in 40 CFR 1068.30.
    Family emission limit (FEL) means an emission level declared by the 
manufacturer to serve in place of an otherwise applicable emission 
standard under the ABT program in subpart H of this part. The family 
emission limit must be expressed to the same number of decimal places 
as the emission standard it replaces. Note that an FEL may apply as a 
``subfamily'' emission limit.
    Final drive ratio, kd, means the dimensionless number 
representing the angular speed of the transmission input shaft divided 
by the angular speed of the drive axle when the vehicle is operating in 
its highest available gear. The final drive ratio is the transmission 
gear ratio (in the highest available gear) multiplied by the drive axle 
ratio.
    Fire truck has the meaning given in 40 CFR 86.1803.
    Flexible-fuel means relating to an engine designed for operation on 
any mixture of two or more different fuels.
    Fuel system means all components involved in transporting, 
metering, and mixing the fuel from the fuel tank to the combustion 
chamber(s), including the fuel tank, fuel pump, fuel filters, fuel 
lines, carburetor or fuel-injection components, and all fuel-system 
vents. It also includes components for controlling evaporative 
emissions, such as fuel caps, purge valves, and carbon canisters.
    Fuel type means a general category of fuels such as diesel fuel or 
natural gas. There can be multiple grades within a single fuel type, 
such as high-sulfur or low-sulfur diesel fuel.
    Gaseous fuel means a fuel that has a boiling point below 20 [deg]C.
    Gear ratio or Transmission gear ratio, kg, means the 
dimensionless number representing the angular velocity of the 
transmission's input shaft divided by the angular velocity of the 
transmission's output shaft when the transmission is operating in a 
specific gear.
    Glider kit means any of the following:
    (1) A new vehicle that is incomplete because it lacks an engine, 
transmission, or axle.
    (2) A new vehicle produced with a used engine (including a rebuilt 
or remanufactured engine).
    (3) Any other new equipment that is intended to become a motor 
vehicle with a previously used engine (including a rebuilt or 
remanufactured engine).
    Glider vehicle means a new vehicle produced with a used engine.
    Good engineering judgment has the meaning given in 40 CFR 1068.30. 
See 40 CFR 1068.5 for the administrative process we use to evaluate 
good engineering judgment.
    Gross axle weight rating (GAWR) means the value specified by the 
vehicle manufacturer as the maximum weight of a loaded axle or set of 
axles, consistent with good engineering judgment.
    Gross combination weight rating (GCWR) means the value specified by 
the vehicle manufacturer as the maximum weight of a loaded vehicle and 
trailer, consistent with good engineering judgment. For example, 
compliance with SAE J2807 is generally considered to be consistent with 
good engineering judgment, especially for Class 3 and smaller vehicles.
    Gross vehicle weight rating (GVWR) means the value specified by the 
vehicle manufacturer as the maximum design loaded weight of a single 
vehicle,

[[Page 40663]]

consistent with good engineering judgment.
    Heavy-duty engine means any engine used for (or for which the 
engine manufacturer could reasonably expect to be used for) motive 
power in a heavy-duty vehicle.
    Heavy-duty vehicle means any trailer and any other motor vehicle 
that has a GVWR above 8,500 pounds, 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 above 120,000 pounds, 
a total gear reduction at or above 57, and a frame Resisting Bending 
Moment at or above 2,000,000 in-lbs per rail, or per rail and liner 
combination. Total gear reduction is the transmission gear ratio in the 
lowest gear multiplied by the drive axle ratio. A heavy-haul tractor is 
not a vocational tractor.
    Hybrid engine or hybrid powertrain means an engine or powertrain 
that includes energy storage features other than a conventional battery 
system or conventional flywheel. Supplemental electrical batteries and 
hydraulic accumulators are examples of hybrid energy storage systems. 
Note that certain provisions in this part treat hybrid engines and 
powertrains intended for vehicles that include regenerative braking 
different than those intended for vehicles that do not include 
regenerative braking.
    Hybrid vehicle means a vehicle that includes energy storage 
features (other than a conventional battery system or conventional 
flywheel) in addition to an internal combustion engine or other engine 
using consumable chemical fuel. Supplemental electrical batteries and 
hydraulic accumulators are examples of hybrid energy storage systems 
Note that certain provisions in this part treat hybrid vehicles that 
include regenerative braking different than those that do not include 
regenerative braking.
    Hydrocarbon (HC) means the hydrocarbon group on which the emission 
standards are based for each fuel type. For alcohol-fueled vehicles, HC 
means nonmethane hydrocarbon equivalent (NMHCE) for exhaust emissions 
and total hydrocarbon equivalent (THCE) for evaporative emissions. For 
all other vehicles, HC means nonmethane hydrocarbon (NMHC) for exhaust 
emissions and total hydrocarbon (THC) for evaporative emissions.
    Identification number means a unique specification (for example, a 
model number/serial number combination) that allows someone to 
distinguish a particular vehicle from other similar vehicles.
    Incomplete vehicle has the meaning given in the definition of 
vehicle in this section.
    Innovative technology means technology certified under Sec.  
1037.610.
    Light-duty truck means any motor vehicle rated at or below 8,500 
pounds GVWR with a curb weight at or below 6,000 pounds and basic 
vehicle frontal area at or below 45 square feet, which is:
    (1) Designed primarily for purposes of transportation of property 
or is a derivation of such a vehicle; or
    (2) Designed primarily for transportation of persons and has a 
capacity of more than 12 persons; or
    (3) Available with special features enabling off-street or off-
highway operation and use.
    Light-duty vehicle means a passenger car or passenger car 
derivative capable of seating 12 or fewer passengers.
    Low-mileage means relating to a vehicle with stabilized emissions 
and represents the undeteriorated emission level. This would generally 
involve approximately 4000 miles of operation.
    Low rolling resistance tire means a tire on a vocational vehicle 
with a TRRL at or below of 7.7 kg/metric ton, a steer tire on a tractor 
with a TRRL at or below 7.7 kg/metric ton, or a drive tire on a tractor 
with a TRRL at or below 8.1 kg/metric ton.
    Manufacture means the physical and engineering process of 
designing, constructing, and/or assembling a vehicle.
    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 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 or vehicles for resale and entities that 
assemble glider kits.
    Medium-duty passenger vehicle (MDPV) has the meaning given in 40 
CFR 86.1803.
    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.
    (1) 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 earlier, 
provided it does not affect which regulatory requirements will apply.
    (2) Unless a vehicle is being shipped to a secondary 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.
    Motor vehicle has the meaning given in 40 CFR 85.1703.
    Multi-Purpose Duty Cycle has the meaning given in Sec.  1037.510.
    New motor vehicle has the meaning given in the Act. It generally 
means a motor vehicle meeting the criteria of either paragraph (1) or 
(2) of this definition. New motor vehicles may be complete or 
incomplete.
    (1) A motor vehicle for which the ultimate purchaser has never 
received the equitable or legal title is a new motor vehicle. This kind 
of vehicle might commonly be thought of as ``brand new'' although a new 
motor vehicle may include previously used parts. For example, vehicles 
commonly known as ``glider kits'' or ``gliders'' are new motor 
vehicles. Under this definition, the vehicle is new from the time it is 
produced until the ultimate purchaser receives the title or places it 
into service, whichever comes first.
    (2) An imported heavy-duty motor vehicle originally produced after 
the 1969 model year is a new motor vehicle.
    Noncompliant vehicle means a vehicle that was originally covered by 
a certificate of conformity, but is not in the certified configuration 
or otherwise does not comply with the conditions of the certificate.
    Nonconforming vehicle means a vehicle not covered by a certificate 
of conformity that would otherwise be subject to emission standards.
    Nonmethane hydrocarbon (NMHC) means the sum of all hydrocarbon 
species except methane, as measured according to 40 CFR part 1065.
    Nonmethane hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001.
    Off-cycle technology means technology certified under Sec.  
1037.610.
    Official emission result means the measured emission rate for an 
emission-

[[Page 40664]]

data vehicle on a given duty cycle before the application of any 
required deterioration factor, but after the applicability of 
regeneration adjustment factors.
    Owners manual means a document or collection of documents prepared 
by the vehicle manufacturer for the owners or operators to describe 
appropriate vehicle maintenance, applicable warranties, and any other 
information related to operating or keeping the vehicle. The owners 
manual is typically provided to the ultimate purchaser at the time of 
sale.
    Oxides of nitrogen has the meaning given in 40 CFR 1065.1001.
    Particulate trap means a filtering device that is designed to 
physically trap all particulate matter above a certain size.
    Percent has the meaning given in 40 CFR 1065.1001. Note that this 
means percentages identified in this part are assumed to be infinitely 
precise without regard to the number of significant figures. For 
example, one percent of 1,493 is 14.93.
    Phase 1 means relating to the Phase 1 standards specified in 
Sec. Sec.  1037.105 and 1037.106. Note that there are no Phase 1 
standards for trailers. 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 through 1037.107.
    Placed into service means put into initial use for its intended 
purpose, excluding incidental use by the manufacturer or a dealer.
    Power take-off (PTO) means a secondary engine shaft (or equivalent) 
that provides substantial auxiliary power for purposes unrelated to 
vehicle propulsion or normal vehicle accessories such as air 
conditioning, power steering, and basic electrical accessories. A 
typical PTO uses a secondary shaft on the engine to transmit power to a 
hydraulic pump that powers auxiliary equipment, such as a boom on a 
bucket truck. You may ask us to consider other equivalent auxiliary 
power configurations (such as those with hybrid vehicles) as power 
take-off systems.
    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.
    Rechargeable Energy Storage System (RESS) means the component(s) of 
a hybrid engine or vehicle that store recovered energy for later use, 
such as the battery system in an electric hybrid vehicle.
    Regional Duty Cycle has the meaning given in Sec.  1037.510.
    Regulatory subcategory has the meaning given in Sec.  1037.230.
    Relating to as used in this section means relating to something in 
a specific, direct manner. This expression is used in this section only 
to define terms as adjectives and not to broaden the meaning of the 
terms.
    Revoke has the meaning given in 40 CFR 1068.30.
    Roof height means the maximum height of a vehicle (rounded to the 
nearest inch), excluding narrow accessories such as exhaust pipes and 
antennas, but including any wide accessories such as roof fairings. 
Measure roof height of the vehicle configured to have its maximum 
height that will occur during actual use, with properly inflated tires 
and no driver, passengers, or cargo onboard. Roof height may also refer 
to the following categories:
    (1) Low-roof means relating to a vehicle with a roof height of 120 
inches or less.
    (2) Mid-roof means relating to a vehicle with a roof height of 121 
to 147 inches.
    (3) High-roof means relating to a vehicle with a roof height of 148 
inches or more.
    Round has the meaning given in 40 CFR 1065.1001.
    Scheduled maintenance means adjusting, repairing, removing, 
disassembling, cleaning, or replacing components or systems 
periodically to keep a part or system from failing, malfunctioning, or 
wearing prematurely. It also may mean actions you expect are necessary 
to correct an overt indication of failure or malfunction for which 
periodic maintenance is not appropriate.
    Secondary vehicle manufacturer anyone that produces a vehicle by 
modifying a complete or partially complete vehicle. For the purpose of 
this definition, ``modifying'' does not include making changes that do 
not remove a vehicle from its original certified configuration. This 
definition applies whether the production involves a complete or 
partially complete vehicle and whether the vehicle was previously 
certified to emission standards or not. Manufacturers controlled by the 
manufacturer of the base vehicle (or by an entity that also controls 
the manufacturer of the base vehicle) are not secondary vehicle 
manufacturers; rather, both entities are considered to be one 
manufacturer for purposes of this part.
    Sleeper cab means a type of tractor cab that has a compartment 
behind the driver's seat intended to be used by the driver for 
sleeping, and is not a heavy-haul tractor cab. This includes cabs 
accessible from the driver's compartment and those accessible from 
outside the vehicle.
    Small manufacturer means a manufacturer meeting the criteria 
specified in 13 CFR 121.201. The employee and revenue limits apply to 
the total number employees and total revenue together for affiliated 
companies.
    Spark-ignition has the meaning given in Sec.  1037.101.
    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 heavy-duty vehicles.
    (ii) 5.6 tons for medium heavy-duty vehicles.
    (iii) 7.5 tons for heavy heavy-duty vehicles.
    (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.
    (3) For trailers:
    (i) 10 tons for short box vans.
    (ii) 19 tons for other trailers.
    Standard tractor has the meaning given in Sec.  1037.501.
    Standard trailer has the meaning given in Sec.  1037.501.
    Suspend has the meaning given in 40 CFR 1068.30.
    Test sample means the collection of vehicles or components selected 
from the population of a vehicle family for emission testing. This may 
include testing for certification, production-line testing, or in-use 
testing.
    Test vehicle means a vehicle in a test sample.
    Test weight means the vehicle weight used or represented during 
testing.
    Tire rolling resistance level (TRRL) means a value with units of 
kg/metric ton that represents the rolling resistance of a tire 
configuration. TRRLs are used as modeling inputs under Sec. Sec.  
1037.515 and 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.
    Total hydrocarbon has the meaning given in 40 CFR 1065.1001. This 
generally means the combined mass of organic compounds measured by the 
specified procedure for measuring total hydrocarbon, expressed as a 
hydrocarbon with an atomic hydrogen-to-carbon ratio of 1.85:1.
    Total hydrocarbon equivalent has the meaning given in 40 CFR 
1065.1001.

[[Page 40665]]

This generally means the sum of the carbon mass contributions of non-
oxygenated hydrocarbons, alcohols and aldehydes, or other organic 
compounds that are measured separately as contained in a gas sample, 
expressed as exhaust hydrocarbon from petroleum-fueled vehicles. The 
atomic hydrogen-to-carbon ratio of the equivalent hydrocarbon is 
1.85:1.
    Tractor has the meaning given for ``truck tractor'' in 49 CFR 
571.3. This includes most heavy-duty vehicles specifically designed for 
the primary purpose of pulling trailers, but does not include vehicles 
designed to carry other loads. For purposes of this definition ``other 
loads'' would not include loads carried in the cab, sleeper 
compartment, or toolboxes. Examples of vehicles that are similar to 
tractors but that are not tractors under this part include dromedary 
tractors, automobile haulers, straight trucks with trailers hitches, 
and tow trucks. Note that the provisions of this part that apply for 
tractors do not apply for tractors that are classified as vocational 
tractors under Sec.  1037.630.
    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. 
Trailers may be divided into different types and categories as 
described in paragraphs (1) through (4) of this definition. The types 
of equipment identified in paragraph (5) of this definition are not 
trailers for purposes of this part.
    (1) Box vans are trailers with an enclosed cargo space that is 
permanently attached to the chassis, with fixed sides, nose, and roof 
and is designed to carry a wide range of freight. Tankers are not box 
vans.
    (2) Box vans with front-mounted, self-contained HVAC systems are 
refrigerated vans. Note that this includes systems that provide 
cooling, heating, or both. All other box vans are dry vans.
    (3) Trailers that are not box vans are non-box trailers. This 
includes chassis that are designed only for temporarily mounted 
containers.
    (4) Box trailers with length greater than 50 feet are long box 
trailers. Other box trailers are short box trailers.
    (5) The following types of equipment are not trailers:
    (i) Containers that are not permanently mounted on chassis.
    (ii) [Reserved]
    Urban Duty Cycle has the meaning given in Sec.  1037.510.
    Ultimate purchaser means, with respect to any new vehicle, the 
first person who in good faith purchases such new vehicle for purposes 
other than resale.
    United States has the meaning given in 40 CFR 1068.30.
    Upcoming model year means for a vehicle family the model year after 
the one currently in production.
    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. This does not 
include vehicles certified to state emission standards that are 
different than the emission standards in this part.
    Useful life means the period during which a vehicle is required to 
comply with all applicable emission standards.
    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 axles.
    (iii) Trailers. A trailer becomes a vehicle when it has a frame 
with axles attached.
    (2) Vehicles other than trailers 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. 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) The primary use of the terms ``complete vehicle'' and 
``incomplete vehicle'' are to distinguish whether a vehicle is complete 
when it is first sold as a vehicle.
    (iv) 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.
    Vehicle configuration means a unique combination of vehicle 
hardware and calibration (related to measured or modeled emissions) 
within a vehicle family. Vehicles with hardware or software 
differences, but that have no hardware or software differences related 
to measured or modeled emissions may be included in the same vehicle 
configuration. Note that vehicles with hardware or software differences 
related to measured or modeled emissions are considered to be different 
configurations even if they have the same GEM inputs and FEL. Vehicles 
within a vehicle configuration differ only with respect to normal 
production variability or factors unrelated to measured or modeled 
emissions.
    Vehicle family has the meaning given in Sec.  1037.230.
    Vehicle service class means a vehicle's weight class as specified 
in this definition. Note that, while vehicle service class is similar 
to primary intended service class for engines, they are not necessarily 
the same. For example, a medium heavy-duty vehicle may include a light 
heavy-duty engine.
    (1) Light heavy-duty vehicles are those vehicles with GVWR below 
19,500 pounds. Vehicles In this class include heavy-duty pickup trucks 
and vans, motor homes and other recreational vehicles, and some 
straight trucks with a single rear axle. Typical applications would 
include personal transportation, light-load commercial delivery, 
passenger service, agriculture, and construction.
    (2) Medium heavy-duty vehicles are those vehicles with GVWR from 
19,500 to 33,000 pounds. Vehicles in this class include school buses, 
straight trucks with a single rear axle, city tractors, and a variety 
of special purpose vehicles such as small dump trucks, and refuse 
trucks. Typical applications would include commercial short haul and 
intra-city delivery and pickup.
    (3) Heavy heavy-duty vehicles are those vehicles with GVWR above 
33,000 pounds. Vehicles in this class include tractors, urban buses, 
and other heavy trucks.
    Vehicle subfamily or subfamily means a subset of a vehicle family 
including vehicles subject to the same FEL(s).
    Vocational tractor means a vehicle classified as a vocational 
tractor under Sec.  1037.630.
    Vocational vehicle means relating to a vehicle subject to the 
standards of Sec.  1037.105 (including vocational tractors).

[[Page 40666]]

    Void has the meaning given in 40 CFR 1068.30.
    Volatile liquid fuel means any fuel other than diesel or biodiesel 
that is a liquid at atmospheric pressure and has a Reid Vapor Pressure 
higher than 2.0 pounds per square inch.
    We (us, our) means the Administrator of the Environmental 
Protection Agency and any authorized representatives.

Sec.  1037.805  Symbols, abbreviations, and acronyms.

    The procedures in this part generally follow either the 
International System of Units (SI) or the United States customary 
units, as detailed in NIST Special Publication 811, which we 
incorporate by reference in Sec.  1037.810. See 40 CFR 1065.20 for 
specific provisions related to these conventions. This section 
summarizes the way we use symbols, units of measure, and other 
abbreviations.
    (a) Symbols for chemical species. This part uses the following 
symbols for chemical species and exhaust constituents:

------------------------------------------------------------------------
               Symbol                               Species
------------------------------------------------------------------------
C...................................  carbon.
CH4.................................  methane.
CO..................................  carbon monoxide.
CO2.................................  carbon dioxide.
H2O.................................  water.
HC..................................  hydrocarbon.
NMHC................................  nonmethane hydrocarbon.
NMHCE...............................  nonmethane hydrocarbon equivalent.
NO..................................  nitric oxide.
NO2.................................  nitrogen dioxide.
NOX.................................  oxides of nitrogen.
N2O.................................  nitrous oxide.
PM..................................  particulate matter.
THC.................................  total hydrocarbon.
THCE................................  total hydrocarbon equivalent.
------------------------------------------------------------------------

    (b) Symbols for quantities. This part uses the following symbols 
and units of measure for various quantities:

----------------------------------------------------------------------------------------------------------------
                                                                                        Unit in terms of SI base
        Symbol               Quantity                Unit              Unit symbol                units
----------------------------------------------------------------------------------------------------------------
[alpha]..............  atomic hydrogen-to-   mole per mole.......  mol/mol............  1
                        carbon ratio.
[alpha]0.............  intercept of air
                        speed correction.
[alpha]1.............  slope of air speed
                        correction.
A....................  vehicle frictional    pound force or        lbf or N...........  kg[middot]m[middot]s-2
                        load.                 newton.
ag...................  acceleration of       meters per second     m/s\2\.............  m[middot]s-2
                        Earth's gravity.      squared.
a0...................  intercept of least
                        squares regression.
a1...................  slope of least
                        squares regression.
B....................  vehicle load from     pound force per mile  lbf/mph\2\ or        kg[middot]s-1
                        drag and rolling      per hour or newton    N[middot]s\2\/m\2\.
                        resistance.           second per meter.
[beta]...............  atomic oxygen-to-     mole per mole.......  mol/mol............  1
                        carbon ratio.
[beta]0..............  intercept of air
                        direction
                        correction.
[beta]1..............  slope of air
                        direction
                        correction.
C....................  vehicle-specific      pound force per mile  lbf/mph\2\ or        kg[middot]m-1
                        aerodynamic effects.  per hour squared or   N[middot]s\2\/m\2\.
                                              newton-second
                                              squared per meter
                                              squared.
Ci...................  constant............
CDA..................  drag area...........  meter squared.......  m\2\...............  m\2\
CD...................  drag coefficient....
CF...................  correction factor...
Crr..................  coefficient of        kilogram per metric   kg/tonne...........  10-3
                        rolling resistance.   ton.
D....................  distance............  miles or meters.....  mi or m............  m
e....................  mass-weighted         grams/ton-mile......  g/ton-mi...........  g/kg-km
                        emission result.
Eff..................  efficiency..........
F....................  adjustment factor...
F....................  force...............  pound force or        lbf or N...........  kg[middot]m[middot]s-2
                                              newton.
fn...................  angular speed         revolutions per       r/min..............  [pi][middot]30[middot]s-
                        (shaft).              minute.                                    1
G....................  road grade..........  percent.............  %..................  10-2
g....................  gravitational         meters per second     m/s\2\.............  m[middot]s-2
                        acceleration.         squared.
h....................  elevation or height.  meters..............  m..................  m
i....................  indexing variable...
ka...................  drive axle ratio....
kd...................  transmission gear
                        ratio.
ktopgear.............  highest available
                        transmission gear.
m....................  mass................  pound mass or         lbm or kg..........  kg
                                              kilogram.
M....................  molar mass..........  gram per mole.......  g/mol..............  10-
                                                                                         3[middot]kg[middot]mol-
                                                                                         1
M....................  vehicle mass........  kilogram............  kg.................  kg
Me...................  vehicle effective     kilogram............  kg.................  kg
                        mass.

[[Page 40667]]

 
Mrotating............  inertial mass of      kilogram............  kg.................  kg
                        rotating components.
N....................  total number in
                        series.
n....................  amount of substance   mole per second.....  mol/s..............  mol[middot]s-\1\
                        rate.
p....................  pressure............  pascal..............  Pa.................  kg[middot]m-\1\[middot]s-
                                                                                         \2\
[rho]................  mass density........  kilogram per cubic    kg/m\3\............  kg[middot]m-\3\
                                              meter.
PL...................  payload.............  tons................  ton................  kg
r....................  tire radius.........  meter...............  m..................  m
r\2\.................  coefficient of
                        determination.
Re#..................  Reynolds number.....
SEE..................  standard estimate of
                        error.
TRRL.................  tire rolling          kilogram per metric   kg/tonne...........  10-\3\
                        resistance level.     ton.
[thgr]...............  wind direction......  degrees.............  [deg]..............  [deg]
T....................  absolute temperature  kelvin..............  K..................  K
T....................  Celsius temperature.  degree Celsius......  [deg]C.............  K--273.15
T....................  torque (moment of     newton meter........  N[middot]m.........  m\2\[middot]kg[middot]s-
                        force).                                                          \2\
t....................  time................  second..............  s..................  s
[Delta]t.............  time interval,        second..............  s..................  s
                        period, 1/frequency.
v....................  speed...............  miles per hour or     mph or m/s.........  m[middot]s-\1\
                                              meters per second.
w....................  weighting factor....
w....................  wind speed..........  miles per hour......  mph................  m[middot]s-\1\
W....................  work................  kilowatt-hour.......  kW[middot]hr.......  3.6[middot]m\2\[middot]k
                                                                                         g[middot]s-1
wC...................  carbon mass fraction  gram/gram...........  g/g................  1
WR...................  weight reduction....  pound mass..........  lbm................  kg
x....................  amount of substance   mole per mole.......  mol/mol............  1
                        mole fraction.
----------------------------------------------------------------------------------------------------------------

    (c) Superscripts. This part uses the following superscripts to 
define a quantity:

------------------------------------------------------------------------
                Superscript                           Quantity
------------------------------------------------------------------------
overbar (such as y).......................  arithmetic mean.
overdot (such as y).......................  quantity per unit time.
------------------------------------------------------------------------

    (d) Subscripts. This part uses the following subscripts to define a 
quantity:

------------------------------------------------------------------------
              Subscript                             Quantity
------------------------------------------------------------------------
6........................  6[deg] yaw angle sweep.
aero.................................  aerodynamic.
air..................................  air.
alt..................................  alternative.
act..................................  actual or measured condition.
air..................................  air.
axle.................................  axle.
brake................................  brake.
Ccombdry.............................  carbon from fuel per mole of dry
                                        exhaust.
circuit..............................  circuit.
coastdown............................  coastdown.
CO2PTO...............................  CO2 emissions for PTO cycle.
CO2urea..............................  CO2 from urea decomposition.
comp.................................  composite.
cycle................................  test cycle.
driver...............................  driver.
dyno.................................  dynamometer.
event................................  event.
end..................................  end.
fuel.................................  fuel.
full.................................  full.
grade................................  grade.
H2Oexhaustdry........................  H2O in exhaust per mole of
                                        exhaust.
hi...................................  high.
in...................................  inlet.
idle.................................  idle.
lo...................................  low.
max..................................  maximum.
meas.................................  measured quantity.
min..................................  minimum.
moving...............................  moving.
out..................................  outlet.
powertrain...........................  powertrain.
record...............................  record.
ref..................................  reference quantity.
speed................................  speed.
start................................  start.
th...................................  theoretical.
total................................  total.
trac.................................  traction.
transient............................  transient.
urea.................................  urea.
veh..................................  vehicle.
w....................................  wind.
wa...................................  wind average.
yaw..................................  yaw angle.
ys...................................  yaw sweep.
zero.................................  zero quantity.
------------------------------------------------------------------------

    (e) Other acronyms and abbreviations. This part uses the following 
additional abbreviations and acronyms:

ABT averaging, banking, and trading
AECD auxiliary emission control device
AES automatic engine shutdown
CFD computational fluid dynamics
CFR Code of Federal Regulations
CITT curb idle transmission torque
DOT Department of Transportation
EPA Environmental Protection Agency
FE fuel economy
FEL Family Emission Limit
GAWR gross axle weight rating
GCWR gross combination weight rating
GEM greenhouse gas emission model
GVWR gross vehicle weight rating
HVAC heating, ventilating, and air conditioning
ISO International Organization for Standardization
NARA National Archives and Records Administration
NHTSA National Highway Transportation Safety Administration
PTO power take-off
RESS rechargeable energy storage system
rpm revolutions per minute
SAE Society of Automotive Engineers
SKU stock-keeping unit
TRRL tire rolling resistance level

[[Page 40668]]

U.S.C United States Code
VSL vehicle speed limiter

    (f) Constants. This part uses the following constants:

------------------------------------------------------------------------
      Symbol               Quantity                    Value
------------------------------------------------------------------------
g.................  gravitational          9.81 m[middot]s -2
                     constant.
R.................  specific gas constant  287.058 J/(kg[middot]K)
------------------------------------------------------------------------

    (g) Prefixes. This part uses the following prefixes to define a 
quantity:

------------------------------------------------------------------------
           Symbol                         Quantity               Value
------------------------------------------------------------------------
[mu]........................  micro..........................       10-6
m...........................  milli..........................       10-3
c...........................  centi..........................       10-2
k...........................  kilo...........................        103
M...........................  mega...........................        106
------------------------------------------------------------------------

Sec.  1037.810  Incorporation by reference.

    (a) Certain material is incorporated by reference into this part 
with the approval of the Director of the Federal Register under 5 
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, the Environmental Protection Agency must 
publish a notice of the change in the Federal Register and the material 
must be available to the public. All approved material is available for 
inspection at U.S. EPA, Air and Radiation Docket and Information 
Center, 1301 Constitution Ave. NW., Room B102, EPA West Building, 
Washington, DC 20460, (202) 202-1744, and is available from the sources 
listed below. It is also available for inspection at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030, or go to 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. (b) International Organization for Standardization, 
Case Postale 56, CH-1211 Geneva 20, Switzerland, (41) 22749 0111, 
www.iso.org, or central@iso.org.
    (1) ISO 28580:2009(E) ``Passenger car, truck and bus tyres--Methods 
of measuring rolling resistance--Single point test and correlation of 
measurement results'', First Edition, July 1, 2009, (``ISO 28580''), 
IBR approved for Sec.  1037.520(c).
    (2) [Reserved]
    (c) U.S. EPA, Office of Air and Radiation, 2565 Plymouth Road, Ann 
Arbor, MI 48105, www.epa.gov.
    (1) Greenhouse gas Emissions Model (GEM) simulation tool, Version 
2.0.1, September 2012 (``GEM version 2.0.1''), IBR approved for Sec.  
1037.520. The computer code for this model is available as noted in 
paragraph (a) of this section. A working version of this software is 
also available for download at http://www.epa.gov/otaq/climate/gem.htm.
    (2) Greenhouse gas Emissions Model (GEM) Phase 2 simulation tool, 
Version 1.0, June 2015 (``GEM Phase 2 version 1.0'', or 
``GEM_P2v1.0''); IBR approved for Sec.  1037.520. The computer code for 
this model is available as noted in paragraph (a) of this section. A 
working version of this software is also available for download at 
http://www.epa.gov/otaq/climate/gem.htm.
    (d) SAE International, 400 Commonwealth Dr., Warrendale, PA 15096-
0001, (877) 606-7323 (U.S. and Canada) or (724) 776-4970 (outside the 
U.S. and Canada), http://www.sae.org.
    (1) SAE J1252, SAE Wind Tunnel Test Procedure for Trucks and Buses, 
Revised July 2012, (``SAE J1252''), IBR approved for Sec. Sec.  
1037.525(d), 1037.529(a), and 1037.531(a).
    (2) SAE J1263, Road Load Measurement and Dynamometer Simulation 
Using Coastdown Techniques, revised March 2010, (``SAE J1263''), IBR 
approved for Sec. Sec.  1037.527 and 1037.665(a).
    (3) SAE J1594, Vehicle Aerodynamics Terminology, Revised July 2010, 
(``SAE J1594''), IBR approved for Sec.  1037.529(d).
    (4) SAE J2071, Aerodynamic Testing of Road Vehicles--Open Throat 
Wind Tunnel Adjustment, Revised June 1994, (``SAE J2071''), IBR 
approved for Sec.  1037.529(b).
    (5) SAE J2263, Road Load Measurement Using Onboard Anemometry and 
Coastdown Techniques, revised December 2008, (``SAE J2263''), IBR 
approved for Sec. Sec.  1037.527 and 1037.665(a).
    (6) SAE J2343, Recommended Practice for LNG Medium and Heavy-Duty 
Powered Vehicles, Revised July 2008, (``SAE J2343''), IBR approved for 
Sec.  1037.103(e).
    (e) BASF Corporation, 100 Park Avenue, Florham Park, NJ 07932, 
(973) 245-6000, http://www.basf.com.
    (1) BASF TI/EVO 0137 e, Emgard[supreg] FE 75W-90 Fuel Efficient 
Synthetic Gear Lubricant, April 2012, IBR approved for Sec.  
1037.560(a).
    (2) [Reserved]
    (f) National Institute of Standards and Technology, 100 Bureau 
Drive, Stop 1070, Gaithersburg, MD 20899-1070, (301) 975-6478, or 
www.nist.gov.
    (1) NIST Special Publication 811, 2008 Edition, Guide for the Use 
of the International System of Units (SI), March 2008, IBR approved for 
Sec.  1037.805.
    (2) [Reserved]

Sec.  1037.815  Confidential information.

    The provisions of 40 CFR 1068.10 apply for information you consider 
confidential.

Sec.  1037.820  Requesting a hearing.

    (a) You may request a hearing under certain circumstances, as 
described elsewhere in this part. To do this, you must file a written 
request, including a description of your objection and any supporting 
data, within 30 days after we make a decision.
    (b) For a hearing you request under the provisions of this part, we 
will approve your request if we find that your request raises a 
substantial factual issue.
    (c) If we agree to hold a hearing, we will use the procedures 
specified in 40 CFR part 1068, subpart G.

Sec.  1037.825  Reporting and recordkeeping requirements.

    (a) This part includes various requirements to submit and record 
data or other information. Unless we specify otherwise, store required 
records in any format and on any media and keep them readily available 
for eight years after you send an associated application for 
certification, or eight years after you generate the data if they do 
not support an application for certification. You may not rely on 
anyone else to meet recordkeeping requirements on your behalf unless we 
specifically authorize it. We may review these records at any time. You 
must promptly send us organized, written records in English if we ask 
for them. We may require you to submit written records in an electronic 
format.
    (b) The regulations in Sec.  1037.255 and 40 CFR 1068.25 and 
1068.101 describe your obligation to report truthful and complete 
information. This includes information not related to certification. 
Failing to properly report information and keep the records we specify 
violates 40 CFR 1068.101(a)(2), which may involve civil or criminal 
penalties.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1037.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. Keep 
these records for eight years unless the regulations specify a 
different period. We may require you to send us these records whether 
or not you are a certificate holder.
    (e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves

[[Page 40669]]

the reporting and recordkeeping specified in the applicable 
regulations. The following items illustrate the kind of reporting and 
recordkeeping we require for vehicles regulated under this part:
    (1) We specify the following requirements related to vehicle 
certification in this part 1037:
    (i) In subpart C of this part we identify a wide range of 
information required to certify vehicles.
    (ii) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (iii) In Sec.  1037.725, 1037.730, and 1037.735 we specify certain 
records related to averaging, banking, and trading.
    (2) We specify the following requirements related to testing in 40 
CFR part 1066:
    (i) In 40 CFR 1066.2 we give an overview of principles for 
reporting information.
    (ii) In 40 CFR 1066.25 we establish basic guidelines for storing 
test information.
    (iii) In 40 CFR 1066.695 we identify the specific information and 
data items to record when measuring emissions.
    (3) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (i) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (ii) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (iii) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (iv) In 40 CFR 1068.105 we require vehicle manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (v) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (vi) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (vii) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (viii) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (ix) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (x) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.

Appendix I to Part 1037--Heavy-Duty Transient Test Cycle

------------------------------------------------------------------------
                                                      Speed    Speed  (m/
                    Time  (sec)                       (mph)        s)
------------------------------------------------------------------------
1.................................................       0.00       0.00
2.................................................       0.00       0.00
3.................................................       0.00       0.00
4.................................................       0.00       0.00
5.................................................       0.00       0.00
6.................................................       0.00       0.00
7.................................................       0.41       0.18
8.................................................       1.18       0.53
9.................................................       2.26       1.01
10................................................       3.19       1.43
11................................................       3.97       1.77
12................................................       4.66       2.08
13................................................       5.32       2.38
14................................................       5.94       2.66
15................................................       6.48       2.90
16................................................       6.91       3.09
17................................................       7.28       3.25
18................................................       7.64       3.42
19................................................       8.02       3.59
20................................................       8.36       3.74
21................................................       8.60       3.84
22................................................       8.74       3.91
23................................................       8.82       3.94
24................................................       8.82       3.94
25................................................       8.76       3.92
26................................................       8.66       3.87
27................................................       8.58       3.84
28................................................       8.52       3.81
29................................................       8.46       3.78
30................................................       8.38       3.75
31................................................       8.31       3.71
32................................................       8.21       3.67
33................................................       8.11       3.63
34................................................       8.00       3.58
35................................................       7.94       3.55
36................................................       7.94       3.55
37................................................       7.80       3.49
38................................................       7.43       3.32
39................................................       6.79       3.04
40................................................       5.81       2.60
41................................................       4.65       2.08
42................................................       3.03       1.35
43................................................       1.88       0.84
44................................................       1.15       0.51
45................................................       1.14       0.51
46................................................       1.12       0.50
47................................................       1.11       0.50
48................................................       1.19       0.53
49................................................       1.57       0.70
50................................................       2.31       1.03
51................................................       3.37       1.51
52................................................       4.51       2.02
53................................................       5.56       2.49
54................................................       6.41       2.87
55................................................       7.09       3.17
56................................................       7.59       3.39
57................................................       7.99       3.57
58................................................       8.32       3.72
59................................................       8.64       3.86
60................................................       8.91       3.98
61................................................       9.13       4.08
62................................................       9.29       4.15
63................................................       9.40       4.20
64................................................       9.39       4.20
65................................................       9.20       4.11
66................................................       8.84       3.95
67................................................       8.35       3.73
68................................................       7.81       3.49
69................................................       7.22       3.23
70................................................       6.65       2.97
71................................................       6.13       2.74
72................................................       5.75       2.57
73................................................       5.61       2.51
74................................................       5.65       2.53
75................................................       5.80       2.59
76................................................       5.95       2.66
77................................................       6.09       2.72
78................................................       6.21       2.78
79................................................       6.31       2.82
80................................................       6.34       2.83
81................................................       6.47       2.89
82................................................       6.65       2.97
83................................................       6.88       3.08
84................................................       7.04       3.15
85................................................       7.05       3.15
86................................................       7.01       3.13
87................................................       6.90       3.08
88................................................       6.88       3.08
89................................................       6.89       3.08
90................................................       6.96       3.11
91................................................       7.04       3.15
92................................................       7.17       3.21
93................................................       7.29       3.26
94................................................       7.39       3.30
95................................................       7.48       3.34
96................................................       7.57       3.38
97................................................       7.61       3.40
98................................................       7.59       3.39
99................................................       7.53       3.37
100...............................................       7.46       3.33
101...............................................       7.40       3.31
102...............................................       7.39       3.30
103...............................................       7.38       3.30
104...............................................       7.37       3.29
105...............................................       7.37       3.29
106...............................................       7.39       3.30
107...............................................       7.42       3.32
108...............................................       7.43       3.32
109...............................................       7.40       3.31
110...............................................       7.39       3.30
111...............................................       7.42       3.32
112...............................................       7.50       3.35
113...............................................       7.57       3.38
114...............................................       7.60       3.40
115...............................................       7.60       3.40
116...............................................       7.61       3.40
117...............................................       7.64       3.42
118...............................................       7.68       3.43
119...............................................       7.74       3.46
120...............................................       7.82       3.50
121...............................................       7.90       3.53
122...............................................       7.96       3.56
123...............................................       7.99       3.57
124...............................................       8.02       3.59
125...............................................       8.01       3.58
126...............................................       7.87       3.52
127...............................................       7.59       3.39
128...............................................       7.20       3.22
129...............................................       6.52       2.91
130...............................................       5.53       2.47
131...............................................       4.36       1.95
132...............................................       3.30       1.48
133...............................................       2.50       1.12
134...............................................       1.94       0.87

[[Page 40670]]

 
135...............................................       1.56       0.70
136...............................................       0.95       0.42
137...............................................       0.42       0.19
138...............................................       0.00       0.00
139...............................................       0.00       0.00
140...............................................       0.00       0.00
141...............................................       0.00       0.00
142...............................................       0.00       0.00
143...............................................       0.00       0.00
144...............................................       0.00       0.00
145...............................................       0.00       0.00
146...............................................       0.00       0.00
147...............................................       0.00       0.00
148...............................................       0.00       0.00
149...............................................       0.00       0.00
150...............................................       0.00       0.00
151...............................................       0.00       0.00
152...............................................       0.00       0.00
153...............................................       0.00       0.00
154...............................................       0.00       0.00
155...............................................       0.00       0.00
156...............................................       0.00       0.00
157...............................................       0.00       0.00
158...............................................       0.00       0.00
159...............................................       0.00       0.00
160...............................................       0.00       0.00
161...............................................       0.00       0.00
162...............................................       0.00       0.00
163...............................................       0.00       0.00
164...............................................       0.00       0.00
165...............................................       0.00       0.00
166...............................................       0.00       0.00
167...............................................       0.00       0.00
168...............................................       0.00       0.00
169...............................................       0.00       0.00
170...............................................       0.00       0.00
171...............................................       0.00       0.00
172...............................................       1.11       0.50
173...............................................       2.65       1.18
174...............................................       4.45       1.99
175...............................................       5.68       2.54
176...............................................       6.75       3.02
177...............................................       7.59       3.39
178...............................................       7.75       3.46
179...............................................       7.63       3.41
180...............................................       7.67       3.43
181...............................................       8.70       3.89
182...............................................      10.20       4.56
183...............................................      11.92       5.33
184...............................................      12.84       5.74
185...............................................      13.27       5.93
186...............................................      13.38       5.98
187...............................................      13.61       6.08
188...............................................      14.15       6.33
189...............................................      14.84       6.63
190...............................................      16.49       7.37
191...............................................      18.33       8.19
192...............................................      20.36       9.10
193...............................................      21.47       9.60
194...............................................      22.35       9.99
195...............................................      22.96      10.26
196...............................................      23.46      10.49
197...............................................      23.92      10.69
198...............................................      24.42      10.92
199...............................................      24.99      11.17
200...............................................      25.91      11.58
201...............................................      26.26      11.74
202...............................................      26.38      11.79
203...............................................      26.26      11.74
204...............................................      26.49      11.84
205...............................................      26.76      11.96
206...............................................      27.07      12.10
207...............................................      26.64      11.91
208...............................................      25.99      11.62
209...............................................      24.77      11.07
210...............................................      24.04      10.75
211...............................................      23.39      10.46
212...............................................      22.73      10.16
213...............................................      22.16       9.91
214...............................................      21.66       9.68
215...............................................      21.39       9.56
216...............................................      21.43       9.58
217...............................................      20.67       9.24
218...............................................      17.98       8.04
219...............................................      13.15       5.88
220...............................................       7.71       3.45
221...............................................       3.30       1.48
222...............................................       0.88       0.39
223...............................................       0.00       0.00
224...............................................       0.00       0.00
225...............................................       0.00       0.00
226...............................................       0.00       0.00
227...............................................       0.00       0.00
228...............................................       0.00       0.00
229...............................................       0.00       0.00
230...............................................       0.00       0.00
231...............................................       0.00       0.00
232...............................................       0.00       0.00
233...............................................       0.00       0.00
234...............................................       0.00       0.00
235...............................................       0.00       0.00
236...............................................       0.00       0.00
237...............................................       0.00       0.00
238...............................................       0.00       0.00
239...............................................       0.00       0.00
240...............................................       0.00       0.00
241...............................................       0.00       0.00
242...............................................       0.00       0.00
243...............................................       0.00       0.00
244...............................................       0.00       0.00
245...............................................       0.00       0.00
246...............................................       0.00       0.00
247...............................................       0.00       0.00
248...............................................       0.00       0.00
249...............................................       0.00       0.00
250...............................................       0.00       0.00
251...............................................       0.00       0.00
252...............................................       0.00       0.00
253...............................................       0.00       0.00
254...............................................       0.00       0.00
255...............................................       0.00       0.00
256...............................................       0.00       0.00
257...............................................       0.00       0.00
258...............................................       0.00       0.00
259...............................................       0.50       0.22
260...............................................       1.57       0.70
261...............................................       3.07       1.37
262...............................................       4.57       2.04
263...............................................       5.65       2.53
264...............................................       6.95       3.11
265...............................................       8.05       3.60
266...............................................       9.13       4.08
267...............................................      10.05       4.49
268...............................................      11.62       5.19
269...............................................      12.92       5.78
270...............................................      13.84       6.19
271...............................................      14.38       6.43
272...............................................      15.64       6.99
273...............................................      17.14       7.66
274...............................................      18.21       8.14
275...............................................      18.90       8.45
276...............................................      19.44       8.69
277...............................................      20.09       8.98
278...............................................      21.89       9.79
279...............................................      24.15      10.80
280...............................................      26.26      11.74
281...............................................      26.95      12.05
282...............................................      27.03      12.08
283...............................................      27.30      12.20
284...............................................      28.10      12.56
285...............................................      29.44      13.16
286...............................................      30.78      13.76
287...............................................      32.09      14.35
288...............................................      33.24      14.86
289...............................................      34.46      15.40
290...............................................      35.42      15.83
291...............................................      35.88      16.04
292...............................................      36.03      16.11
293...............................................      35.84      16.02
294...............................................      35.65      15.94
295...............................................      35.31      15.78
296...............................................      35.19      15.73
297...............................................      35.12      15.70
298...............................................      35.12      15.70
299...............................................      35.04      15.66
300...............................................      35.08      15.68
301...............................................      35.04      15.66
302...............................................      35.34      15.80
303...............................................      35.50      15.87
304...............................................      35.77      15.99
305...............................................      35.81      16.01
306...............................................      35.92      16.06
307...............................................      36.23      16.20
308...............................................      36.42      16.28
309...............................................      36.65      16.38
310...............................................      36.26      16.21
311...............................................      36.07      16.12
312...............................................      35.84      16.02
313...............................................      35.96      16.08
314...............................................      36.00      16.09
315...............................................      35.57      15.90
316...............................................      35.00      15.65
317...............................................      34.08      15.24
318...............................................      33.39      14.93
319...............................................      32.20      14.39
320...............................................      30.32      13.55
321...............................................      28.48      12.73
322...............................................      26.95      12.05
323...............................................      26.18      11.70
324...............................................      25.38      11.35
325...............................................      24.77      11.07
326...............................................      23.46      10.49
327...............................................      22.39      10.01
328...............................................      20.97       9.37
329...............................................      20.09       8.98
330...............................................      18.90       8.45
331...............................................      18.17       8.12
332...............................................      16.48       7.37
333...............................................      15.07       6.74
334...............................................      12.23       5.47
335...............................................      10.08       4.51
336...............................................       7.71       3.45
337...............................................       7.32       3.27
338...............................................       8.63       3.86
339...............................................      10.77       4.81
340...............................................      12.65       5.66
341...............................................      13.88       6.20
342...............................................      15.03       6.72
343...............................................      15.64       6.99
344...............................................      16.99       7.60
345...............................................      17.98       8.04
346...............................................      19.13       8.55
347...............................................      18.67       8.35
348...............................................      18.25       8.16
349...............................................      18.17       8.12
350...............................................      18.40       8.23
351...............................................      19.63       8.78
352...............................................      20.32       9.08
353...............................................      21.43       9.58

[[Page 40671]]

 
354...............................................      21.47       9.60
355...............................................      21.97       9.82
356...............................................      22.27       9.96
357...............................................      22.69      10.14
358...............................................      23.15      10.35
359...............................................      23.69      10.59
360...............................................      23.96      10.71
361...............................................      24.27      10.85
362...............................................      24.34      10.88
363...............................................      24.50      10.95
364...............................................      24.42      10.92
365...............................................      24.38      10.90
366...............................................      24.31      10.87
367...............................................      24.23      10.83
368...............................................      24.69      11.04
369...............................................      25.11      11.23
370...............................................      25.53      11.41
371...............................................      25.38      11.35
372...............................................      24.58      10.99
373...............................................      23.77      10.63
374...............................................      23.54      10.52
375...............................................      23.50      10.51
376...............................................      24.15      10.80
377...............................................      24.30      10.86
378...............................................      24.15      10.80
379...............................................      23.19      10.37
380...............................................      22.50      10.06
381...............................................      21.93       9.80
382...............................................      21.85       9.77
383...............................................      21.55       9.63
384...............................................      21.89       9.79
385...............................................      21.97       9.82
386...............................................      21.97       9.82
387...............................................      22.01       9.84
388...............................................      21.85       9.77
389...............................................      21.62       9.67
390...............................................      21.62       9.67
391...............................................      22.01       9.84
392...............................................      22.81      10.20
393...............................................      23.54      10.52
394...............................................      24.38      10.90
395...............................................      24.80      11.09
396...............................................      24.61      11.00
397...............................................      23.12      10.34
398...............................................      21.62       9.67
399...............................................      19.90       8.90
400...............................................      18.86       8.43
401...............................................      17.79       7.95
402...............................................      17.25       7.71
403...............................................      16.91       7.56
404...............................................      16.75       7.49
405...............................................      16.75       7.49
406...............................................      16.87       7.54
407...............................................      16.37       7.32
408...............................................      16.37       7.32
409...............................................      16.49       7.37
410...............................................      17.21       7.69
411...............................................      17.41       7.78
412...............................................      17.37       7.77
413...............................................      16.87       7.54
414...............................................      16.72       7.47
415...............................................      16.22       7.25
416...............................................      15.76       7.05
417...............................................      14.72       6.58
418...............................................      13.69       6.12
419...............................................      12.00       5.36
420...............................................      10.43       4.66
421...............................................       8.71       3.89
422...............................................       7.44       3.33
423...............................................       5.71       2.55
424...............................................       4.22       1.89
425...............................................       2.30       1.03
426...............................................       1.00       0.45
427...............................................       0.00       0.00
428...............................................       0.61       0.27
429...............................................       1.19       0.53
430...............................................       1.61       0.72
431...............................................       1.53       0.68
432...............................................       2.34       1.05
433...............................................       4.29       1.92
434...............................................       7.25       3.24
435...............................................      10.20       4.56
436...............................................      12.46       5.57
437...............................................      14.53       6.50
438...............................................      16.22       7.25
439...............................................      17.87       7.99
440...............................................      19.74       8.82
441...............................................      21.01       9.39
442...............................................      22.23       9.94
443...............................................      22.62      10.11
444...............................................      23.61      10.55
445...............................................      24.88      11.12
446...............................................      26.15      11.69
447...............................................      26.99      12.07
448...............................................      27.56      12.32
449...............................................      28.18      12.60
450...............................................      28.94      12.94
451...............................................      29.83      13.34
452...............................................      30.78      13.76
453...............................................      31.82      14.22
454...............................................      32.78      14.65
455...............................................      33.24      14.86
456...............................................      33.47      14.96
457...............................................      33.31      14.89
458...............................................      33.08      14.79
459...............................................      32.78      14.65
460...............................................      32.39      14.48
461...............................................      32.13      14.36
462...............................................      31.82      14.22
463...............................................      31.55      14.10
464...............................................      31.25      13.97
465...............................................      30.94      13.83
466...............................................      30.71      13.73
467...............................................      30.56      13.66
468...............................................      30.79      13.76
469...............................................      31.13      13.92
470...............................................      31.55      14.10
471...............................................      31.51      14.09
472...............................................      31.47      14.07
473...............................................      31.44      14.05
474...............................................      31.51      14.09
475...............................................      31.59      14.12
476...............................................      31.67      14.16
477...............................................      32.01      14.31
478...............................................      32.63      14.59
479...............................................      33.39      14.93
480...............................................      34.31      15.34
481...............................................      34.81      15.56
482...............................................      34.20      15.29
483...............................................      32.39      14.48
484...............................................      30.29      13.54
485...............................................      28.56      12.77
486...............................................      26.45      11.82
487...............................................      24.79      11.08
488...............................................      23.12      10.34
489...............................................      20.73       9.27
490...............................................      18.33       8.19
491...............................................      15.72       7.03
492...............................................      13.11       5.86
493...............................................      10.47       4.68
494...............................................       7.82       3.50
495...............................................       5.70       2.55
496...............................................       3.57       1.60
497...............................................       0.92       0.41
498...............................................       0.00       0.00
499...............................................       0.00       0.00
500...............................................       0.00       0.00
501...............................................       0.00       0.00
502...............................................       0.00       0.00
503...............................................       0.00       0.00
504...............................................       0.00       0.00
505...............................................       0.00       0.00
506...............................................       0.00       0.00
507...............................................       0.00       0.00
508...............................................       0.00       0.00
509...............................................       0.00       0.00
510...............................................       0.00       0.00
511...............................................       0.00       0.00
512...............................................       0.00       0.00
513...............................................       0.00       0.00
514...............................................       0.00       0.00
515...............................................       0.00       0.00
516...............................................       0.00       0.00
517...............................................       0.00       0.00
518...............................................       0.00       0.00
519...............................................       0.00       0.00
520...............................................       0.00       0.00
521...............................................       0.00       0.00
522...............................................       0.50       0.22
523...............................................       1.50       0.67
524...............................................       3.00       1.34
525...............................................       4.50       2.01
526...............................................       5.80       2.59
527...............................................       6.52       2.91
528...............................................       6.75       3.02
529...............................................       6.44       2.88
530...............................................       6.17       2.76
531...............................................       6.33       2.83
532...............................................       6.71       3.00
533...............................................       7.40       3.31
534...............................................       7.67       3.43
535...............................................       7.33       3.28
536...............................................       6.71       3.00
537...............................................       6.41       2.87
538...............................................       6.60       2.95
539...............................................       6.56       2.93
540...............................................       5.94       2.66
541...............................................       5.45       2.44
542...............................................       5.87       2.62
543...............................................       6.71       3.00
544...............................................       7.56       3.38
545...............................................       7.59       3.39
546...............................................       7.63       3.41
547...............................................       7.67       3.43
548...............................................       7.67       3.43
549...............................................       7.48       3.34
550...............................................       7.29       3.26
551...............................................       7.29       3.26
552...............................................       7.40       3.31
553...............................................       7.48       3.34
554...............................................       7.52       3.36
555...............................................       7.52       3.36
556...............................................       7.48       3.34
557...............................................       7.44       3.33
558...............................................       7.28       3.25
559...............................................       7.21       3.22
560...............................................       7.09       3.17
561...............................................       7.06       3.16
562...............................................       7.29       3.26
563...............................................       7.75       3.46
564...............................................       8.55       3.82
565...............................................       9.09       4.06
566...............................................      10.04       4.49
567...............................................      11.12       4.97
568...............................................      12.46       5.57
569...............................................      13.00       5.81
570...............................................      14.26       6.37
571...............................................      15.37       6.87
572...............................................      17.02       7.61

[[Page 40672]]

 
573...............................................      18.17       8.12
574...............................................      19.21       8.59
575...............................................      20.17       9.02
576...............................................      20.66       9.24
577...............................................      21.12       9.44
578...............................................      21.43       9.58
579...............................................      22.66      10.13
580...............................................      23.92      10.69
581...............................................      25.42      11.36
582...............................................      25.53      11.41
583...............................................      26.68      11.93
584...............................................      28.14      12.58
585...............................................      30.06      13.44
586...............................................      30.94      13.83
587...............................................      31.63      14.14
588...............................................      32.36      14.47
589...............................................      33.24      14.86
590...............................................      33.66      15.05
591...............................................      34.12      15.25
592...............................................      35.92      16.06
593...............................................      37.72      16.86
594...............................................      39.26      17.55
595...............................................      39.45      17.64
596...............................................      39.83      17.81
597...............................................      40.18      17.96
598...............................................      40.48      18.10
599...............................................      40.75      18.22
600...............................................      41.02      18.34
601...............................................      41.36      18.49
602...............................................      41.79      18.68
603...............................................      42.40      18.95
604...............................................      42.82      19.14
605...............................................      43.05      19.25
606...............................................      43.09      19.26
607...............................................      43.24      19.33
608...............................................      43.59      19.49
609...............................................      44.01      19.67
610...............................................      44.35      19.83
611...............................................      44.55      19.92
612...............................................      44.82      20.04
613...............................................      45.05      20.14
614...............................................      45.31      20.26
615...............................................      45.58      20.38
616...............................................      46.00      20.56
617...............................................      46.31      20.70
618...............................................      46.54      20.81
619...............................................      46.61      20.84
620...............................................      46.92      20.98
621...............................................      47.19      21.10
622...............................................      47.46      21.22
623...............................................      47.54      21.25
624...............................................      47.54      21.25
625...............................................      47.54      21.25
626...............................................      47.50      21.23
627...............................................      47.50      21.23
628...............................................      47.50      21.23
629...............................................      47.31      21.15
630...............................................      47.04      21.03
631...............................................      46.77      20.91
632...............................................      45.54      20.36
633...............................................      43.24      19.33
634...............................................      41.52      18.56
635...............................................      39.79      17.79
636...............................................      38.07      17.02
637...............................................      36.34      16.25
638...............................................      34.04      15.22
639...............................................      32.45      14.51
640...............................................      30.86      13.80
641...............................................      28.83      12.89
642...............................................      26.45      11.82
643...............................................      24.27      10.85
644...............................................      22.04       9.85
645...............................................      19.82       8.86
646...............................................      17.04       7.62
647...............................................      14.26       6.37
648...............................................      11.52       5.15
649...............................................       8.78       3.93
650...............................................       7.17       3.21
651...............................................       5.56       2.49
652...............................................       3.72       1.66
653...............................................       3.38       1.51
654...............................................       3.11       1.39
655...............................................       2.58       1.15
656...............................................       1.66       0.74
657...............................................       0.67       0.30
658...............................................       0.00       0.00
659...............................................       0.00       0.00
660...............................................       0.00       0.00
661...............................................       0.00       0.00
662...............................................       0.00       0.00
663...............................................       0.00       0.00
664...............................................       0.00       0.00
665...............................................       0.00       0.00
666...............................................       0.00       0.00
667...............................................       0.00       0.00
668...............................................       0.00       0.00
------------------------------------------------------------------------

Appendix II to Part 1037--Power Take-Off Test Cycle

----------------------------------------------------------------------------------------------------------------
                                                                                Normalized         Normalized
          Cycle simulation                   Mode          Start time of    pressure, circuit  pressure, circuit
                                                                mode              1 (%)              2 (%)
----------------------------------------------------------------------------------------------------------------
Utility.............................                  0                  0                0.0                0.0
Utility.............................                  1                 33               80.5                0.0
Utility.............................                  2                 40                0.0                0.0
Utility.............................                  3                145               83.5                0.0
Utility.............................                  4                289                0.0                0.0
Refuse..............................                  5                361                0.0               13.0
Refuse..............................                  6                363                0.0               38.0
Refuse..............................                  7                373                0.0               53.0
Refuse..............................                  8                384                0.0               73.0
Refuse..............................                  9                388                0.0                0.0
Refuse..............................                 10                401                0.0               13.0
Refuse..............................                 11                403                0.0               38.0
Refuse..............................                 12                413                0.0               53.0
Refuse..............................                 13                424                0.0               73.0
Refuse..............................                 14                442               11.2                0.0
Refuse..............................                 15                468               29.3                0.0
Refuse..............................                 16                473                0.0                0.0
Refuse..............................                 17                486               11.2                0.0
Refuse..............................                 18                512               29.3                0.0
Refuse..............................                 19                517                0.0                0.0
Refuse..............................                 20                530               12.8               11.1
Refuse..............................                 21                532               12.8               38.2
Refuse..............................                 22                541               12.8               53.4
Refuse..............................                 23                550               12.8               73.5
Refuse..............................                 24                553                0.0                0.0
Refuse..............................                 25                566               12.8               11.1
Refuse..............................                 26                568               12.8               38.2
Refuse..............................                 27                577               12.8               53.4
Refuse..............................                 28                586               12.8               73.5
Refuse..............................                 29                589                0.0                0.0
Refuse..............................                 30                600                0.0                0.0
----------------------------------------------------------------------------------------------------------------

[[Page 40673]]

Appendix III to 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)
--TGRT--Gap reducing trailer fairing (tractor to trailer gap)
--TATS--Trailer aerodynamic side skirt
--TARF--Trailer aerodynamic rear fairing
--TAUD--Trailer aerodynamic underbody device

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
--WRTW--Weight-reducing trailer wheels
--WRTC--Weight-reducing trailer upper coupler plate
--WRTS--Weight-reducing trailer axle sub-frames
--WBSW--Wide-based single trailer tires with steel wheel
--WBAW--Wide-based single trailer tires with aluminum wheel
--WBLW--Wide-based single trailer tires with light-weight aluminum 
alloy wheel
--DWSW--Dual-wide trailer tires with steel wheel
--DWAW--Dual-wide trailer tires with aluminum wheel
--DWLW--Dual-wide trailer tires with light-weight aluminum alloy 
wheel

Appendix IV to Part 1037--Heavy-Duty Grade Profile for Phase 2 Steady-
State Test Cycles

------------------------------------------------------------------------
                         Distance (m)                          Grade (%)
------------------------------------------------------------------------
0............................................................          0
2............................................................          0
5............................................................          0
7............................................................      -0.01
10...........................................................      -0.03
12...........................................................      -0.04
15...........................................................      -0.04
17...........................................................      -0.07
20...........................................................      -0.09
22...........................................................       -0.1
25...........................................................      -0.12
27...........................................................      -0.12
29...........................................................      -0.13
32...........................................................      -0.15
145..........................................................      -0.15
148..........................................................      -0.16
256..........................................................      -0.16
258..........................................................      -0.17
263..........................................................      -0.17
266..........................................................      -0.18
273..........................................................      -0.18
275..........................................................      -0.19
354..........................................................      -0.19
357..........................................................      -0.18
374..........................................................      -0.18
376..........................................................      -0.17
391..........................................................      -0.17
394..........................................................      -0.16
455..........................................................      -0.16
457..........................................................      -0.15
470..........................................................      -0.15
472..........................................................      -0.14
602..........................................................      -0.14
605..........................................................      -0.15
720..........................................................      -0.15
723..........................................................      -0.14
770..........................................................      -0.14
772..........................................................      -0.15
782..........................................................      -0.15
784..........................................................      -0.16
794..........................................................      -0.16
797..........................................................      -0.17
807..........................................................      -0.17
809..........................................................      -0.18
917..........................................................      -0.18
920..........................................................      -0.17
922..........................................................      -0.17
925..........................................................      -0.16
927..........................................................      -0.15
930..........................................................      -0.15
932..........................................................      -0.14
934..........................................................      -0.14
937..........................................................      -0.13
939..........................................................      -0.12
942..........................................................      -0.12
944..........................................................      -0.11
947..........................................................      -0.11
949..........................................................       -0.1
952..........................................................       -0.1
954..........................................................      -0.09
957..........................................................      -0.08
959..........................................................      -0.08
962..........................................................      -0.07
1038.........................................................      -0.07
1040.........................................................          0
1043.........................................................       0.06
1045.........................................................       0.13
1048.........................................................       0.19
1050.........................................................       0.26
1052.........................................................       0.32
1055.........................................................       0.38
1057.........................................................       0.45
1060.........................................................       0.51
1062.........................................................       0.58
1111.........................................................       0.58
1114.........................................................       0.62
1116.........................................................       0.67
1119.........................................................       0.71
1121.........................................................       0.71
1124.........................................................        0.8
1126.........................................................       0.85
1128.........................................................       0.89
1131.........................................................       0.94
1133.........................................................       0.99
1136.........................................................       1.03
1163.........................................................       1.03
1165.........................................................       1.17
1168.........................................................       1.24
1170.........................................................       1.24
1172.........................................................       1.38
1175.........................................................       1.45
1177.........................................................       1.52
1180.........................................................       1.59
1182.........................................................       1.66
1185.........................................................       1.73
1258.........................................................       1.73
1260.........................................................       1.74
1262.........................................................       1.75
1265.........................................................       1.76
1267.........................................................       1.76
1270.........................................................       1.77
1272.........................................................       1.78
1275.........................................................       1.79
1277.........................................................        1.8
1279.........................................................       1.81
1282.........................................................       1.82
1357.........................................................       1.82
1360.........................................................       1.81
1364.........................................................       1.81
1367.........................................................        1.8
1372.........................................................        1.8
1374.........................................................       1.79
1377.........................................................       1.79
1379.........................................................       1.78
1384.........................................................       1.78
1386.........................................................       1.77
1394.........................................................       1.77
1396.........................................................       1.76
1401.........................................................       1.76
1403.........................................................       1.75
1486.........................................................       1.75
1488.........................................................       1.76
1561.........................................................       1.76
1564.........................................................       1.77
1598.........................................................       1.77
1600.........................................................       1.78
1695.........................................................       1.78
1698.........................................................       1.77
1703.........................................................       1.77
1705.........................................................       1.76
1710.........................................................       1.76
1713.........................................................       1.75
1717.........................................................       1.75
1720.........................................................       1.74
1725.........................................................       1.74
1727.........................................................       1.73
1735.........................................................       1.73
1737.........................................................       1.72
1742.........................................................       1.72
1744.........................................................       1.71
1769.........................................................       1.71
1771.........................................................        1.7
1774.........................................................       1.69
1776.........................................................       1.68
1778.........................................................       1.67
1781.........................................................       1.66
1783.........................................................       1.65
1786.........................................................       1.64
1788.........................................................       1.63
1791.........................................................       1.62
1793.........................................................       1.61

[[Page 40674]]

 
1818.........................................................       1.61
1820.........................................................       1.58
1822.........................................................       1.55
1825.........................................................       1.52
1827.........................................................       1.49
1830.........................................................       1.46
1832.........................................................       1.43
1835.........................................................       1.41
1837.........................................................       1.38
1840.........................................................       1.35
1842.........................................................       1.32
1940.........................................................       1.32
1943.........................................................       1.27
1945.........................................................       1.21
1947.........................................................       1.16
1950.........................................................       1.11
1952.........................................................       1.06
1955.........................................................       1.01
1957.........................................................       0.96
1960.........................................................       0.91
1962.........................................................       0.85
1965.........................................................        0.8
1989.........................................................        0.8
1992.........................................................       0.77
1994.........................................................       0.74
1997.........................................................       0.71
1999.........................................................       0.71
2002.........................................................       0.65
2004.........................................................       0.61
2006.........................................................       0.58
2009.........................................................       0.55
2011.........................................................       0.52
2014.........................................................       0.49
2016.........................................................       0.44
2019.........................................................       0.38
2021.........................................................       0.33
2024.........................................................       0.28
2026.........................................................       0.23
2029.........................................................       0.18
2031.........................................................       0.12
2034.........................................................       0.07
2036.........................................................       0.02
2038.........................................................      -0.03
2165.........................................................      -0.03
2167.........................................................      -0.09
2170.........................................................      -0.12
2172.........................................................      -0.15
2175.........................................................      -0.18
2177.........................................................       -0.2
2180.........................................................      -0.23
2182.........................................................      -0.26
2185.........................................................      -0.26
2187.........................................................      -0.32
2190.........................................................      -0.33
2192.........................................................      -0.34
2194.........................................................      -0.36
2197.........................................................      -0.37
2199.........................................................      -0.38
2202.........................................................      -0.39
2204.........................................................      -0.41
2207.........................................................      -0.42
2209.........................................................      -0.43
2212.........................................................      -0.45
2269.........................................................      -0.45
2271.........................................................      -0.46
2278.........................................................      -0.46
2281.........................................................      -0.47
2288.........................................................      -0.47
2291.........................................................      -0.48
2298.........................................................      -0.48
2301.........................................................      -0.49
2308.........................................................      -0.49
2311.........................................................       -0.5
2360.........................................................       -0.5
2362.........................................................      -0.49
2367.........................................................      -0.49
2370.........................................................      -0.48
2377.........................................................      -0.48
2380.........................................................      -0.47
2436.........................................................      -0.47
2439.........................................................      -0.46
2483.........................................................      -0.46
2485.........................................................      -0.45
2508.........................................................      -0.45
2510.........................................................      -0.44
2530.........................................................      -0.44
2532.........................................................      -0.43
2672.........................................................      -0.43
2675.........................................................      -0.44
2694.........................................................      -0.44
2697.........................................................      -0.45
2717.........................................................      -0.45
2719.........................................................      -0.46
2817.........................................................      -0.46
2820.........................................................      -0.47
2881.........................................................      -0.47
2884.........................................................      -0.46
2899.........................................................      -0.46
2901.........................................................      -0.45
2916.........................................................      -0.45
2918.........................................................      -0.44
3034.........................................................      -0.44
3036.........................................................      -0.43
3157.........................................................      -0.43
3159.........................................................      -0.42
3233.........................................................      -0.42
3236.........................................................      -0.43
3398.........................................................      -0.43
3401.........................................................      -0.42
3570.........................................................      -0.42
3573.........................................................      -0.43
3580.........................................................      -0.43
3583.........................................................      -0.44
3588.........................................................      -0.44
3590.........................................................      -0.45
3789.........................................................      -0.45
3792.........................................................      -0.44
3802.........................................................      -0.44
3804.........................................................      -0.43
3861.........................................................      -0.43
3863.........................................................      -0.45
3866.........................................................      -0.47
3868.........................................................      -0.49
3871.........................................................      -0.51
3873.........................................................      -0.53
3875.........................................................      -0.55
3878.........................................................      -0.57
3880.........................................................      -0.59
3883.........................................................      -0.59
3885.........................................................      -0.63
3984.........................................................      -0.63
3986.........................................................      -0.65
3989.........................................................      -0.66
3991.........................................................      -0.68
3994.........................................................      -0.69
3996.........................................................      -0.71
3999.........................................................      -0.72
4001.........................................................      -0.74
4004.........................................................      -0.75
4006.........................................................      -0.75
4008.........................................................      -0.78
4011.........................................................       -0.8
4013.........................................................      -0.81
4016.........................................................      -0.83
4018.........................................................      -0.84
4021.........................................................      -0.84
4023.........................................................      -0.87
4026.........................................................      -0.89
4028.........................................................       -0.9
4031.........................................................      -0.92
4033.........................................................      -0.93
4110.........................................................      -0.93
4112.........................................................      -0.95
4115.........................................................      -0.99
4117.........................................................         -1
4119.........................................................      -1.02
4122.........................................................      -1.04
4124.........................................................      -1.06
4127.........................................................      -1.07
4129.........................................................      -1.09
4132.........................................................      -1.11
4233.........................................................      -1.11
4236.........................................................       -1.1
4243.........................................................       -1.1
4246.........................................................      -1.09
4288.........................................................      -1.09
4290.........................................................      -1.08
4385.........................................................      -1.08
4387.........................................................      -1.07
4399.........................................................      -1.07
4402.........................................................      -1.06
4429.........................................................      -1.06
4432.........................................................      -1.04
4434.........................................................      -1.03
4437.........................................................      -1.01
4439.........................................................      -0.99
4442.........................................................      -0.97
4444.........................................................      -0.97
4447.........................................................      -0.93
4449.........................................................      -0.91
4452.........................................................       -0.9
4454.........................................................      -0.88
4553.........................................................      -0.88
4556.........................................................      -0.83
4558.........................................................      -0.83
4561.........................................................      -0.74
4563.........................................................      -0.74
4566.........................................................      -0.64
4568.........................................................      -0.59
4571.........................................................      -0.55
4573.........................................................       -0.5
4576.........................................................      -0.45
4578.........................................................      -0.41
4603.........................................................      -0.41
4605.........................................................      -0.39
4608.........................................................      -0.37
4610.........................................................      -0.35
4613.........................................................      -0.33
4615.........................................................      -0.32
4618.........................................................       -0.3
4620.........................................................      -0.28
4623.........................................................      -0.26
4625.........................................................      -0.24
4628.........................................................      -0.23
4652.........................................................      -0.23
4655.........................................................       -0.2
4657.........................................................       -0.2
4660.........................................................      -0.16
4662.........................................................      -0.14
4665.........................................................      -0.11
4667.........................................................      -0.09
4670.........................................................      -0.07
4672.........................................................      -0.05
4675.........................................................      -0.02
4677.........................................................          0
4751.........................................................          0
4753.........................................................      -0.01
4756.........................................................      -0.01
4758.........................................................      -0.02

[[Page 40675]]

 
4760.........................................................      -0.02
4763.........................................................      -0.03
4765.........................................................      -0.03
4768.........................................................      -0.04
4770.........................................................      -0.04
4773.........................................................      -0.05
4873.........................................................      -0.05
4875.........................................................      -0.06
4880.........................................................      -0.06
4883.........................................................      -0.07
4885.........................................................      -0.07
4888.........................................................      -0.08
4893.........................................................      -0.08
4895.........................................................      -0.09
4976.........................................................      -0.09
4979.........................................................      -0.08
4981.........................................................      -0.08
4984.........................................................      -0.07
4991.........................................................      -0.07
4993.........................................................      -0.06
5072.........................................................      -0.06
5075.........................................................      -0.05
5084.........................................................      -0.05
5087.........................................................      -0.04
5094.........................................................      -0.04
5097.........................................................      -0.03
5107.........................................................      -0.03
5109.........................................................      -0.02
5200.........................................................      -0.02
5202.........................................................      -0.03
5210.........................................................      -0.03
5212.........................................................      -0.04
5340.........................................................      -0.04
5343.........................................................      -0.03
5345.........................................................      -0.03
5347.........................................................      -0.02
5352.........................................................      -0.02
5355.........................................................      -0.01
5357.........................................................          0
5360.........................................................          0
5362.........................................................       0.01
5414.........................................................       0.01
5416.........................................................       0.05
5419.........................................................       0.05
5421.........................................................       0.12
5424.........................................................       0.15
5426.........................................................       0.19
5429.........................................................       0.22
5431.........................................................       0.26
5434.........................................................       0.29
5436.........................................................       0.33
5438.........................................................       0.36
5512.........................................................       0.36
5515.........................................................       0.41
5517.........................................................       0.47
5519.........................................................       0.52
5522.........................................................       0.57
5524.........................................................       0.62
5527.........................................................       0.68
5529.........................................................       0.73
5532.........................................................       0.78
5534.........................................................       0.84
5537.........................................................       0.89
5561.........................................................       0.89
5564.........................................................        0.9
5566.........................................................       0.91
5568.........................................................       0.92
5571.........................................................       0.92
5573.........................................................       0.93
5576.........................................................       0.94
5578.........................................................       0.95
5581.........................................................       0.96
5583.........................................................       0.97
5586.........................................................       0.98
5588.........................................................          1
5590.........................................................       1.02
5593.........................................................       1.03
5595.........................................................       1.05
5598.........................................................       1.07
5600.........................................................       1.09
5603.........................................................       1.11
5605.........................................................       1.13
5608.........................................................       1.15
5610.........................................................       1.17
5612.........................................................       1.18
5615.........................................................       1.19
5617.........................................................        1.2
5620.........................................................       1.21
5622.........................................................       1.21
5625.........................................................       1.23
5627.........................................................       1.24
5630.........................................................       1.25
5632.........................................................       1.26
5634.........................................................       1.27
5732.........................................................       1.27
5734.........................................................       1.26
5739.........................................................       1.26
5742.........................................................       1.25
5749.........................................................       1.25
5752.........................................................       1.24
5759.........................................................       1.24
5761.........................................................       1.23
5769.........................................................       1.23
5771.........................................................       1.22
5776.........................................................       1.22
5779.........................................................       1.21
5810.........................................................       1.21
5813.........................................................        1.2
5825.........................................................        1.2
5828.........................................................       1.19
5977.........................................................       1.19
5980.........................................................        1.2
5997.........................................................        1.2
5999.........................................................       1.21
6102.........................................................       1.21
6105.........................................................        1.2
6122.........................................................        1.2
6124.........................................................       1.19
6166.........................................................       1.19
6169.........................................................        1.2
6205.........................................................        1.2
6208.........................................................       1.21
6215.........................................................       1.21
6218.........................................................       1.22
6299.........................................................       1.22
6301.........................................................       1.21
6306.........................................................       1.21
6308.........................................................       1.19
6311.........................................................       1.19
6313.........................................................       1.18
6316.........................................................       1.18
6318.........................................................       1.17
6370.........................................................       1.17
6372.........................................................       1.16
6375.........................................................       1.15
6377.........................................................       1.15
6380.........................................................       1.14
6382.........................................................       1.14
6385.........................................................       1.13
6387.........................................................       1.13
6389.........................................................       1.12
6392.........................................................       1.11
6419.........................................................       1.11
6421.........................................................       1.07
6424.........................................................       1.04
6426.........................................................       1.04
6429.........................................................       0.97
6431.........................................................       0.94
6434.........................................................       0.91
6436.........................................................       0.87
6439.........................................................       0.84
6441.........................................................       0.84
6443.........................................................       0.77
6517.........................................................       0.77
6520.........................................................       0.73
6522.........................................................        0.7
6525.........................................................       0.66
6527.........................................................       0.62
6529.........................................................       0.58
6532.........................................................       0.55
6534.........................................................       0.51
6537.........................................................       0.47
6539.........................................................       0.43
6542.........................................................        0.4
6566.........................................................        0.4
6569.........................................................       0.34
6571.........................................................       0.29
6574.........................................................       0.24
6576.........................................................       0.19
6579.........................................................       0.14
6581.........................................................       0.08
6584.........................................................       0.03
6586.........................................................      -0.02
6589.........................................................      -0.07
6591.........................................................      -0.12
6665.........................................................      -0.12
6668.........................................................      -0.15
6670.........................................................      -0.17
6673.........................................................       -0.2
6675.........................................................      -0.22
6678.........................................................      -0.24
6680.........................................................      -0.27
6683.........................................................      -0.29
6685.........................................................      -0.31
6687.........................................................      -0.31
6690.........................................................      -0.36
6692.........................................................      -0.36
6695.........................................................      -0.44
6697.........................................................       -0.6
6700.........................................................       -0.6
6702.........................................................      -0.75
6705.........................................................      -0.75
6707.........................................................      -0.91
6710.........................................................      -0.99
6712.........................................................      -1.07
6715.........................................................      -1.14
6839.........................................................      -1.14
6841.........................................................      -1.21
6844.........................................................      -1.28
6846.........................................................      -1.35
6849.........................................................      -1.42
6851.........................................................      -1.49
6854.........................................................      -1.56
6856.........................................................      -1.63
6859.........................................................       -1.7
6861.........................................................      -1.77
6864.........................................................      -1.84
6866.........................................................      -1.85
6964.........................................................      -1.85
6966.........................................................      -1.86
6969.........................................................      -1.87
6971.........................................................      -1.88
6974.........................................................       -1.9
6976.........................................................      -1.91
6979.........................................................      -1.92
6981.........................................................      -1.94
6984.........................................................      -1.95
6986.........................................................      -1.96
6989.........................................................      -1.98

[[Page 40676]]

 
7115.........................................................      -1.98
7117.........................................................      -1.97
7128.........................................................      -1.97
7130.........................................................      -1.96
7138.........................................................      -1.96
7140.........................................................      -1.95
7295.........................................................      -1.95
7298.........................................................      -1.94
7323.........................................................      -1.94
7326.........................................................      -1.95
7336.........................................................      -1.95
7339.........................................................      -1.96
7451.........................................................      -1.96
7454.........................................................      -1.94
7456.........................................................      -1.94
7459.........................................................      -1.93
7461.........................................................      -1.93
7464.........................................................      -1.92
7466.........................................................      -1.92
7469.........................................................      -1.91
7471.........................................................       -1.9
7474.........................................................       -1.9
7477.........................................................      -1.89
7479.........................................................      -1.88
7482.........................................................      -1.87
7484.........................................................      -1.87
7487.........................................................      -1.86
7489.........................................................      -1.85
7492.........................................................      -1.84
7494.........................................................      -1.83
7574.........................................................      -1.83
7576.........................................................      -1.78
7579.........................................................      -1.72
7581.........................................................      -1.67
7584.........................................................      -1.62
7587.........................................................      -1.57
7589.........................................................      -1.52
7592.........................................................      -1.47
7594.........................................................      -1.42
7597.........................................................      -1.37
7599.........................................................      -1.32
7651.........................................................      -1.32
7653.........................................................      -1.26
7656.........................................................       -1.2
7658.........................................................      -1.14
7661.........................................................      -1.08
7663.........................................................      -1.02
7666.........................................................      -0.96
7668.........................................................       -0.9
7671.........................................................      -0.84
7673.........................................................      -0.78
7676.........................................................      -0.72
7679.........................................................      -0.64
7681.........................................................      -0.56
7684.........................................................      -0.47
7686.........................................................      -0.39
7689.........................................................      -0.31
7691.........................................................      -0.22
7694.........................................................      -0.14
7696.........................................................      -0.06
7699.........................................................       0.03
7701.........................................................       0.11
7827.........................................................       0.11
7829.........................................................       0.17
7832.........................................................       0.24
7834.........................................................        0.3
7837.........................................................        0.3
7839.........................................................       0.43
7841.........................................................       0.49
7844.........................................................       0.56
7846.........................................................       0.62
7849.........................................................       0.69
7851.........................................................       0.75
7949.........................................................       0.75
7952.........................................................       0.74
7954.........................................................       0.72
7956.........................................................       0.72
7959.........................................................        0.7
7961.........................................................       0.68
7964.........................................................       0.67
7966.........................................................       0.66
7969.........................................................       0.64
7971.........................................................       0.63
7973.........................................................       0.62
7976.........................................................       0.61
7983.........................................................       0.61
7986.........................................................        0.6
7988.........................................................       0.59
7993.........................................................       0.59
7995.........................................................       0.58
8051.........................................................       0.58
8054.........................................................       0.57
8144.........................................................       0.57
8147.........................................................       0.58
8149.........................................................       0.58
8152.........................................................       0.59
8154.........................................................        0.6
8157.........................................................        0.6
8159.........................................................       0.61
8162.........................................................       0.62
8164.........................................................       0.63
8167.........................................................       0.63
8169.........................................................       0.64
8248.........................................................       0.64
8250.........................................................       0.65
8265.........................................................       0.65
8267.........................................................       0.66
8270.........................................................       0.65
8272.........................................................       0.64
8275.........................................................       0.63
8277.........................................................       0.63
8280.........................................................       0.62
8282.........................................................       0.61
8285.........................................................       0.61
8287.........................................................        0.6
8290.........................................................       0.59
8393.........................................................       0.59
8395.........................................................        0.6
8398.........................................................       0.61
8400.........................................................       0.61
8403.........................................................       0.62
8405.........................................................       0.63
8408.........................................................       0.64
8410.........................................................       0.65
8413.........................................................       0.66
8440.........................................................       0.66
8442.........................................................       0.67
8444.........................................................       0.68
8447.........................................................       0.69
8449.........................................................        0.7
8452.........................................................       0.71
8454.........................................................       0.72
8457.........................................................       0.72
8459.........................................................       0.73
8462.........................................................       0.73
8464.........................................................       0.75
8467.........................................................       0.76
8469.........................................................       0.77
8472.........................................................       0.78
8474.........................................................       0.79
8476.........................................................       0.79
8479.........................................................        0.8
8481.........................................................       0.81
8484.........................................................       0.82
8486.........................................................       0.83
8489.........................................................       0.84
8491.........................................................       0.87
8494.........................................................       0.91
8496.........................................................       0.95
8499.........................................................       0.98
8501.........................................................       1.02
8503.........................................................       1.06
8506.........................................................        1.1
8508.........................................................       1.13
8511.........................................................       1.13
8513.........................................................        1.2
8516.........................................................        1.2
8518.........................................................       1.24
8521.........................................................       1.31
8523.........................................................       1.35
8526.........................................................       1.39
8528.........................................................       1.42
8530.........................................................       1.46
8533.........................................................        1.5
8535.........................................................       1.53
8538.........................................................       1.57
8611.........................................................       1.57
8614.........................................................       1.64
8616.........................................................        1.7
8618.........................................................       1.77
8621.........................................................       1.83
8623.........................................................        1.9
8626.........................................................       1.97
8628.........................................................       2.03
8631.........................................................        2.1
8633.........................................................       2.16
8635.........................................................       2.23
8662.........................................................       2.23
8665.........................................................       2.25
8667.........................................................       2.27
8670.........................................................        2.3
8672.........................................................       2.32
8674.........................................................       2.34
8677.........................................................       2.36
8679.........................................................       2.37
8682.........................................................       2.39
8684.........................................................       2.41
8711.........................................................       2.41
8713.........................................................       2.39
8716.........................................................       2.35
8718.........................................................       2.34
8721.........................................................       2.32
8723.........................................................        2.3
8725.........................................................       2.28
8728.........................................................       2.26
8730.........................................................       2.26
8733.........................................................       2.24
8735.........................................................       2.22
8805.........................................................       2.22
8808.........................................................       2.16
8810.........................................................       2.16
8812.........................................................       2.05
8815.........................................................       2.05
8817.........................................................       1.93
8820.........................................................       1.87
8822.........................................................       1.81
8824.........................................................       1.75
8827.........................................................       1.69
8829.........................................................       1.69
8831.........................................................       1.64
8901.........................................................       1.64
8903.........................................................       1.62
8905.........................................................       1.62
8908.........................................................       1.57
8910.........................................................       1.55
8913.........................................................       1.53
8915.........................................................       1.51
8917.........................................................       1.49
8920.........................................................       1.47

[[Page 40677]]

 
8922.........................................................       1.45
8925.........................................................       1.43
8927.........................................................       1.43
8930.........................................................       1.41
8932.........................................................       1.39
8934.........................................................       1.36
8937.........................................................       1.36
8939.........................................................       1.32
8942.........................................................       1.32
8944.........................................................       1.29
8946.........................................................       1.27
8949.........................................................       1.25
8951.........................................................       1.23
8954.........................................................       1.22
8956.........................................................        1.2
8959.........................................................       1.18
8961.........................................................       1.16
8963.........................................................       1.15
8966.........................................................       1.13
8968.........................................................       1.11
8971.........................................................       1.09
8973.........................................................       1.07
9056.........................................................       1.07
9059.........................................................       1.06
9066.........................................................       1.06
9069.........................................................       1.05
9076.........................................................       1.05
9079.........................................................       1.04
9086.........................................................       1.04
9088.........................................................       1.03
9093.........................................................       1.03
9096.........................................................       1.02
9304.........................................................       1.02
9306.........................................................       1.01
9348.........................................................       1.01
9350.........................................................          1
9487.........................................................          1
9490.........................................................       0.99
9500.........................................................       0.99
9502.........................................................       0.98
9547.........................................................       0.98
9549.........................................................       0.97
9610.........................................................       0.97
9613.........................................................       0.96
9706.........................................................       0.96
9709.........................................................       0.97
9711.........................................................       0.98
9714.........................................................       0.99
9716.........................................................          1
9719.........................................................          1
9721.........................................................       1.01
9723.........................................................       1.02
9726.........................................................       1.03
9728.........................................................       1.04
9731.........................................................       1.05
9765.........................................................       1.05
9768.........................................................       1.06
9773.........................................................       1.06
9775.........................................................       1.07
9927.........................................................       1.07
9930.........................................................       1.06
9932.........................................................       1.05
9934.........................................................       1.04
9937.........................................................       1.03
9939.........................................................       1.02
9942.........................................................          1
9944.........................................................       0.99
9947.........................................................       0.98
9949.........................................................       0.98
9952.........................................................       0.96
10006........................................................       0.96
10008........................................................       0.95
10011........................................................       0.95
10013........................................................       0.94
10015........................................................       0.93
10018........................................................       0.93
10020........................................................       0.92
10025........................................................       0.92
10028........................................................       0.91
10050........................................................       0.91
10052........................................................        0.9
10055........................................................       0.89
10057........................................................       0.89
10060........................................................       0.88
10062........................................................       0.87
10065........................................................       0.86
10067........................................................       0.85
10070........................................................       0.84
10072........................................................       0.83
10074........................................................       0.82
10148........................................................       0.82
10151........................................................       0.81
10153........................................................       0.79
10156........................................................       0.77
10158........................................................       0.76
10161........................................................       0.74
10163........................................................       0.72
10165........................................................       0.71
10168........................................................       0.69
10170........................................................       0.68
10173........................................................       0.66
10175........................................................       0.66
10178........................................................       0.63
10180........................................................       0.61
10183........................................................       0.59
10185........................................................       0.58
10188........................................................       0.56
10190........................................................       0.55
10192........................................................       0.53
10195........................................................       0.51
10197........................................................        0.5
10200........................................................       0.49
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10210........................................................       0.44
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10215........................................................       0.41
10217........................................................        0.4
10220........................................................       0.39
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10224........................................................       0.38
10227........................................................       0.35
10229........................................................       0.34
10232........................................................       0.33
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10237........................................................        0.3
10239........................................................       0.29
10242........................................................       0.28
10244........................................................       0.27
10247........................................................       0.26
10249........................................................       0.21
10252........................................................       0.21
10254........................................................        0.1
10256........................................................       0.05
10259........................................................          0
10261........................................................      -0.05
10264........................................................       -0.1
10266........................................................      -0.15
10269........................................................       -0.2
10271........................................................      -0.25
10370........................................................      -0.25
10373........................................................      -0.27
10375........................................................      -0.29
10378........................................................       -0.3
10380........................................................       -0.3
10383........................................................      -0.34
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10387........................................................      -0.38
10390........................................................      -0.39
10392........................................................      -0.39
10395........................................................      -0.43
10397........................................................      -0.45
10400........................................................      -0.48
10402........................................................       -0.5
10405........................................................       -0.5
10407........................................................      -0.55
10410........................................................      -0.58
10412........................................................       -0.6
10415........................................................      -0.63
10417........................................................      -0.65
10420........................................................      -0.68
10422........................................................      -0.68
10425........................................................      -0.69
10427........................................................       -0.7
10429........................................................       -0.7
10432........................................................      -0.71
10434........................................................      -0.72
10437........................................................      -0.72
10439........................................................      -0.73
10442........................................................      -0.73
10444........................................................      -0.74
10494........................................................      -0.74
10496........................................................      -0.75
10499........................................................      -0.76
10501........................................................      -0.77
10504........................................................      -0.78
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10509........................................................       -0.8
10511........................................................       -0.8
10514........................................................      -0.81
10516........................................................      -0.81
10519........................................................      -0.82
10521........................................................      -0.83
10583........................................................      -0.83
10585........................................................      -0.82
10605........................................................      -0.82
10608........................................................      -0.81
10667........................................................      -0.81
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10679........................................................      -0.84
10682........................................................      -0.84
10684........................................................      -0.85
10687........................................................      -0.86
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10716........................................................      -0.87
10719........................................................       -0.9
10721........................................................      -0.92
10724........................................................      -0.95
10726........................................................      -0.98
10729........................................................         -1
10731........................................................         -1
10734........................................................      -1.06
10736........................................................      -1.08
10739........................................................      -1.11
10741........................................................      -1.11
10744........................................................      -1.14
10840........................................................      -1.14
10843........................................................      -1.18
10845........................................................      -1.18
10848........................................................      -1.28
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10853........................................................      -1.38
10855........................................................      -1.43
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[[Page 40678]]

 
10860........................................................      -1.52
10863........................................................      -1.57
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10890........................................................      -1.62
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10897........................................................      -1.68
10900........................................................       -1.7
10902........................................................      -1.72
10905........................................................      -1.74
10907........................................................      -1.76
10910........................................................      -1.78
10912........................................................       -1.8
10915........................................................      -1.82
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10925........................................................      -1.89
10927........................................................      -1.91
10930........................................................      -1.93
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10935........................................................      -1.97
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10940........................................................      -2.01
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11043........................................................         -2
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11050........................................................      -1.98
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11472........................................................       -1.8
11475........................................................      -1.77
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11480........................................................      -1.72
11482........................................................      -1.72
11485........................................................      -1.66
11488........................................................      -1.63
11490........................................................       -1.6
11493........................................................      -1.58
11495........................................................      -1.55
11498........................................................      -1.52
11549........................................................      -1.52
11551........................................................       -1.5
11554........................................................      -1.49
11556........................................................      -1.47
11559........................................................      -1.45
11561........................................................      -1.43
11564........................................................      -1.42
11567........................................................       -1.4
11569........................................................      -1.38
11572........................................................      -1.36
11574........................................................      -1.35
11625........................................................      -1.35
11628........................................................      -1.34
11630........................................................      -1.34
11633........................................................      -1.33
11635........................................................      -1.33
11638........................................................      -1.32
11643........................................................      -1.32
11645........................................................      -1.31
11648........................................................      -1.31
11650........................................................       -1.3
11653........................................................       -1.3
11655........................................................      -1.29
11658........................................................      -1.29
11660........................................................      -1.28
11666........................................................      -1.28
11668........................................................      -1.27
11671........................................................      -1.27
11673........................................................      -1.26
11746........................................................      -1.26
11749........................................................      -1.27
11779........................................................      -1.27
11782........................................................      -1.28
11880........................................................      -1.28
11882........................................................      -1.29
11887........................................................      -1.29
11890........................................................       -1.3
11895........................................................       -1.3
11897........................................................      -1.31
11902........................................................      -1.31
11905........................................................      -1.32
11908........................................................      -1.33
11910........................................................      -1.33
11913........................................................      -1.34
11915........................................................      -1.35
11918........................................................      -1.35
11920........................................................      -1.36
11923........................................................      -1.36
11925........................................................      -1.37
11928........................................................      -1.38
11933........................................................      -1.38
11935........................................................      -1.39
11943........................................................      -1.39
11945........................................................       -1.4
11950........................................................       -1.4
11953........................................................      -1.41
12003........................................................      -1.41
12006........................................................      -1.43
12008........................................................      -1.45
12011........................................................      -1.48
12013........................................................       -1.5
12016........................................................      -1.52
12018........................................................      -1.55
12021........................................................      -1.57
12023........................................................      -1.59
12026........................................................      -1.61
12028........................................................      -1.64
12078........................................................      -1.64
12081........................................................      -1.65
12083........................................................      -1.67
12086........................................................      -1.68
12088........................................................      -1.68
12091........................................................      -1.71
12094........................................................      -1.73
12096........................................................      -1.74
12099........................................................      -1.76
12101........................................................      -1.77
12104........................................................      -1.79
12129........................................................      -1.79
12131........................................................       -1.8
12134........................................................       -1.8
12136........................................................      -1.81
12139........................................................      -1.81
12141........................................................      -1.82
12144........................................................      -1.82
12146........................................................      -1.83
12149........................................................      -1.84
12151........................................................      -1.84
12154........................................................      -1.85
12157........................................................      -1.85
12159........................................................      -1.86
12162........................................................      -1.86
12164........................................................      -1.87
12167........................................................      -1.88
12169........................................................      -1.88
12172........................................................      -1.89
12174........................................................      -1.89
12177........................................................       -1.9
12179........................................................      -1.91
12281........................................................      -1.91
12283........................................................       -1.9
12286........................................................       -1.9
12288........................................................      -1.89
12293........................................................      -1.89
12296........................................................      -1.88
12298........................................................      -1.88
12301........................................................      -1.87
12303........................................................      -1.87
12306........................................................      -1.86
12380........................................................      -1.86
12382........................................................      -1.87
12390........................................................      -1.87
12392........................................................      -1.88
12397........................................................      -1.88
12400........................................................      -1.89
12408........................................................      -1.89
12410........................................................       -1.9
12418........................................................       -1.9
12420........................................................      -1.91
12425........................................................      -1.91
12428........................................................      -1.92
12435........................................................      -1.92
12438........................................................      -1.93
12446........................................................      -1.93
12448........................................................      -1.94
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12456........................................................      -1.95
12463........................................................      -1.95
12466........................................................      -1.96
12474........................................................      -1.96
12476........................................................      -1.97
12481........................................................      -1.97
12484........................................................      -1.98
12509........................................................      -1.98
12512........................................................      -1.96
12514........................................................      -1.95
12517........................................................      -1.93
12519........................................................      -1.92
12522........................................................       -1.9
12525........................................................      -1.89
12527........................................................      -1.87
12530........................................................      -1.86
12532........................................................      -1.84
12535........................................................      -1.83
12611........................................................      -1.83
12614........................................................       -1.8
12616........................................................      -1.77
12619........................................................      -1.75
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[[Page 40679]]

 
12626........................................................      -1.66
12629........................................................      -1.63
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12634........................................................      -1.58
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12642........................................................      -1.49
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12660........................................................       -1.3
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12670........................................................      -0.99
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12796........................................................      -0.06
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12801........................................................       0.13
12803........................................................       0.22
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12811........................................................        0.5
12813........................................................        0.6
12816........................................................       0.66
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12821........................................................       0.79
12823........................................................       0.85
12826........................................................       0.91
12828........................................................       0.97
12831........................................................       1.04
12833........................................................        1.1
12836........................................................        1.1
12838........................................................       1.22
12888........................................................       1.22
12890........................................................       1.25
12893........................................................       1.27
12895........................................................       1.29
12898........................................................       1.31
12900........................................................       1.33
12902........................................................       1.35
12905........................................................       1.37
12907........................................................       1.39
12910........................................................       1.41
12912........................................................       1.43
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13001........................................................       1.42
13032........................................................       1.42
13035........................................................       1.41
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13042........................................................        1.4
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13047........................................................       1.39
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13158........................................................       1.38
13160........................................................       1.39
13163........................................................       1.39
13165........................................................        1.4
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13170........................................................       1.41
13175........................................................       1.41
13177........................................................       1.42
13295........................................................       1.42
13297........................................................       1.43
13332........................................................       1.43
13334........................................................       1.42
13408........................................................       1.42
13410........................................................       1.41
13504........................................................       1.41
13506........................................................        1.4
13759........................................................        1.4
13761........................................................       1.41
13864........................................................       1.41
13867........................................................       1.42
13882........................................................       1.42
13884........................................................       1.43
13896........................................................       1.43
13899........................................................       1.44
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13911........................................................       1.45
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14036........................................................       1.44
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14061........................................................       1.48
14159........................................................       1.48
14161........................................................       1.46
14164........................................................       1.44
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14169........................................................        1.4
14171........................................................       1.38
14174........................................................       1.36
14176........................................................       1.34
14178........................................................       1.33
14181........................................................       1.31
14183........................................................       1.29
14208........................................................       1.29
14210........................................................       1.26
14213........................................................       1.23
14215........................................................       1.19
14218........................................................       1.16
14220........................................................       1.13
14223........................................................        1.1
14225........................................................       1.07
14228........................................................       1.04
14230........................................................          1
14232........................................................       0.97
14257........................................................       0.97
14259........................................................       0.91
14262........................................................       0.85
14264........................................................       0.78
14267........................................................       0.72
14269........................................................       0.66
14272........................................................       0.59
14274........................................................       0.53
14277........................................................       0.47
14279........................................................        0.4
14282........................................................       0.34
14379........................................................       0.34
14381........................................................       0.21
14384........................................................       0.08
14386........................................................      -0.04
14389........................................................      -0.17
14391........................................................       -0.3
14393........................................................      -0.43
14396........................................................      -0.56
14398........................................................      -0.68
14401........................................................      -0.81
14403........................................................      -0.94
14526........................................................      -0.94
14528........................................................      -0.98
14531........................................................      -1.03
14533........................................................      -1.07
14536........................................................      -1.12
14538........................................................      -1.16
14541........................................................      -1.21
14543........................................................      -1.25
14546........................................................       -1.3
14548........................................................      -1.34
14551........................................................      -1.39
14678........................................................      -1.39
14680........................................................      -1.38
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14687........................................................      -1.37
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14810........................................................      -1.34
14815........................................................      -1.34
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14820........................................................      -1.33
14823........................................................      -1.32
14828........................................................      -1.32
14830........................................................      -1.31
14835........................................................      -1.31
14838........................................................       -1.3
14843........................................................       -1.3
14845........................................................      -1.29
15028........................................................      -1.29
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15038........................................................       -1.3
15041........................................................      -1.31
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15076........................................................      -1.32
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15083........................................................      -1.34
15086........................................................      -1.35
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15091........................................................      -1.37
15093........................................................      -1.38
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15226........................................................       -1.4
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15231........................................................      -1.36
15234........................................................      -1.34
15236........................................................      -1.32
15239........................................................       -1.3
15241........................................................      -1.27
15244........................................................      -1.25
15246........................................................      -1.23
15249........................................................      -1.21
15251........................................................      -1.19
15352........................................................      -1.19
15354........................................................       -1.1
15357........................................................         -1
15359........................................................      -0.91
15362........................................................      -0.82
15364........................................................      -0.73
15367........................................................      -0.64
15369........................................................      -0.55
15372........................................................      -0.46
15374........................................................      -0.37
15377........................................................      -0.28
15379........................................................       -0.2
15382........................................................      -0.12
15384........................................................      -0.04
15387........................................................       0.03

[[Page 40680]]

 
15389........................................................       0.11
15392........................................................       0.19
15394........................................................       0.26
15397........................................................       0.34
15399........................................................       0.42
15402........................................................       0.49
15501........................................................       0.49
15503........................................................       0.59
15506........................................................       0.69
15508........................................................       0.79
15511........................................................       0.89
15513........................................................       0.99
15516........................................................       1.08
15518........................................................       1.18
15521........................................................       1.28
15523........................................................       1.38
15525........................................................       1.48
15598........................................................       1.48
15601........................................................       1.51
15603........................................................       1.55
15606........................................................       1.58
15608........................................................       1.62
15610........................................................       1.65
15613........................................................       1.68
15615........................................................       1.72
15618........................................................       1.75
15620........................................................       1.79
15623........................................................       1.82
15625........................................................       1.83
15627........................................................       1.85
15630........................................................       1.85
15632........................................................       1.87
15635........................................................       1.88
15637........................................................       1.89
15639........................................................       1.91
15642........................................................       1.92
15644........................................................       1.93
15647........................................................       1.94
15721........................................................       1.94
15723........................................................       1.93
15726........................................................       1.93
15728........................................................       1.92
15730........................................................       1.92
15733........................................................       1.91
15738........................................................       1.91
15740........................................................        1.9
15742........................................................        1.9
15745........................................................       1.89
15747........................................................       1.89
15749........................................................       1.88
15752........................................................       1.88
15754........................................................       1.87
15757........................................................       1.87
15759........................................................       1.86
15761........................................................       1.86
15764........................................................       1.85
15773........................................................       1.85
15776........................................................       1.84
15783........................................................       1.84
15785........................................................       1.83
15867........................................................       1.83
15870........................................................       1.84
15877........................................................       1.84
15879........................................................       1.85
15962........................................................       1.85
15965........................................................       1.86
15977........................................................       1.86
15979........................................................       1.87
16141........................................................       1.87
16144........................................................       1.88
16259........................................................       1.88
16262........................................................       1.89
16266........................................................       1.89
16269........................................................        1.9
16276........................................................        1.9
16279........................................................       1.91
16328........................................................       1.91
16330........................................................        1.9
16333........................................................       1.89
16335........................................................       1.88
16338........................................................       1.87
16340........................................................       1.86
16342........................................................       1.85
16345........................................................       1.85
16347........................................................       1.84
16350........................................................       1.83
16352........................................................       1.82
16377........................................................       1.82
16379........................................................       1.79
16382........................................................       1.77
16384........................................................       1.75
16387........................................................       1.72
16389........................................................        1.7
16392........................................................       1.68
16394........................................................       1.65
16396........................................................       1.63
16399........................................................       1.61
16401........................................................       1.58
16500........................................................       1.58
16502........................................................       1.54
16504........................................................        1.5
16507........................................................       1.45
16509........................................................       1.41
16512........................................................       1.36
16514........................................................       1.32
16517........................................................       1.27
16519........................................................       1.23
16522........................................................       1.19
16524........................................................       1.14
16527........................................................       1.11
16529........................................................       1.08
16531........................................................       1.05
16534........................................................       1.02
16536........................................................          1
16539........................................................       0.97
16541........................................................       0.94
16544........................................................       0.91
16546........................................................       0.88
16549........................................................       0.85
16625........................................................       0.85
16627........................................................       0.84
16630........................................................       0.83
16632........................................................       0.81
16634........................................................       0.79
16637........................................................       0.79
16639........................................................       0.77
16642........................................................       0.75
16644........................................................       0.74
16649........................................................       0.74
16651........................................................       0.73
16678........................................................       0.73
16680........................................................       0.74
16692........................................................       0.74
16695........................................................       0.75
16772........................................................       0.75
16774........................................................       0.76
16777........................................................       0.76
16779........................................................       0.77
16782........................................................       0.77
16784........................................................       0.78
16789........................................................       0.78
16791........................................................       0.79
16897........................................................       0.79
16899........................................................       0.78
16919........................................................       0.78
16921........................................................       0.77
16936........................................................       0.77
16939........................................................       0.76
17012........................................................       0.76
17015........................................................       0.77
17062........................................................       0.77
17064........................................................       0.78
17081........................................................       0.78
17084........................................................       0.79
17103........................................................       0.79
17106........................................................        0.8
17153........................................................        0.8
17155........................................................       0.81
17177........................................................       0.81
17180........................................................       0.82
17266........................................................       0.82
17268........................................................       0.81
17278........................................................       0.81
17280........................................................        0.8
17293........................................................        0.8
17295........................................................       0.79
17408........................................................       0.79
17410........................................................       0.77
17413........................................................       0.76
17415........................................................       0.75
17418........................................................       0.74
17420........................................................       0.74
17423........................................................       0.73
17425........................................................       0.72
17428........................................................       0.71
17430........................................................        0.7
17455........................................................        0.7
17457........................................................       0.68
17460........................................................       0.66
17462........................................................       0.64
17464........................................................       0.62
17467........................................................       0.59
17469........................................................       0.57
17472........................................................       0.55
17474........................................................       0.53
17477........................................................       0.51
17479........................................................       0.49
17528........................................................       0.49
17531........................................................       0.43
17533........................................................       0.37
17536........................................................       0.31
17538........................................................       0.31
17541........................................................       0.18
17543........................................................       0.12
17546........................................................       0.06
17548........................................................          0
17551........................................................      -0.06
17553........................................................      -0.12
17649........................................................      -0.12
17652........................................................      -0.13
17654........................................................      -0.27
17657........................................................      -0.42
17659........................................................      -0.42
17662........................................................      -0.71
17664........................................................      -0.86
17667........................................................         -1
17669........................................................      -1.15
17672........................................................      -1.29
17674........................................................      -1.44
17677........................................................      -1.58
17801........................................................      -1.58
17803........................................................      -1.61
17806........................................................      -1.64
17808........................................................      -1.67
17811........................................................      -1.69
17813........................................................      -1.72
17816........................................................      -1.75
17818........................................................      -1.78
17821........................................................      -1.81

[[Page 40681]]

 
17823........................................................      -1.83
17826........................................................      -1.86
17851........................................................      -1.86
17854........................................................      -1.87
17856........................................................      -1.88
17859........................................................      -1.89
17861........................................................      -1.89
17864........................................................       -1.9
17866........................................................      -1.91
17869........................................................      -1.92
17871........................................................      -1.92
17874........................................................      -1.93
17876........................................................      -1.94
17879........................................................      -1.93
17884........................................................      -1.93
17886........................................................      -1.91
17889........................................................      -1.91
17891........................................................       -1.9
17894........................................................      -1.89
17896........................................................      -1.88
17899........................................................      -1.88
17901........................................................      -1.87
18028........................................................      -1.87
18030........................................................      -1.85
18033........................................................      -1.83
18035........................................................      -1.83
18038........................................................      -1.79
18040........................................................      -1.77
18043........................................................      -1.75
18045........................................................      -1.73
18048........................................................      -1.71
18051........................................................      -1.69
18053........................................................      -1.67
18180........................................................      -1.67
18182........................................................      -1.69
18185........................................................       -1.7
18188........................................................      -1.71
18190........................................................      -1.72
18193........................................................      -1.74
18195........................................................      -1.75
18198........................................................      -1.76
18200........................................................      -1.78
18203........................................................      -1.79
18205........................................................       -1.8
18231........................................................       -1.8
18233........................................................      -1.81
18236........................................................      -1.83
18238........................................................      -1.84
18241........................................................      -1.85
18243........................................................      -1.87
18246........................................................      -1.88
18248........................................................      -1.89
18251........................................................      -1.91
18254........................................................      -1.92
18256........................................................      -1.93
18307........................................................      -1.93
18309........................................................      -1.95
18312........................................................      -1.96
18315........................................................      -1.98
18317........................................................      -1.99
18320........................................................         -2
18322........................................................      -2.02
18325........................................................      -2.03
18327........................................................      -2.05
18330........................................................      -2.06
18332........................................................      -2.08
18411........................................................      -2.08
18414........................................................      -2.07
18416........................................................      -2.07
18419........................................................      -2.06
18424........................................................      -2.06
18427........................................................      -2.05
18432........................................................      -2.05
18434........................................................      -2.04
18437........................................................      -2.04
18439........................................................      -2.03
18442........................................................      -2.02
18445........................................................      -2.02
18447........................................................      -2.01
18450........................................................      -2.01
18452........................................................         -2
18455........................................................      -1.99
18457........................................................      -1.99
18460........................................................      -1.98
18463........................................................      -1.98
18465........................................................      -1.97
18468........................................................      -1.96
18470........................................................      -1.96
18473........................................................      -1.95
18475........................................................      -1.94
18478........................................................      -1.94
18480........................................................      -1.93
18483........................................................      -1.93
18486........................................................      -1.92
18591........................................................      -1.92
18593........................................................      -1.91
18596........................................................      -1.91
18598........................................................       -1.9
18603........................................................       -1.9
18606........................................................      -1.89
18609........................................................      -1.89
18611........................................................      -1.88
18724........................................................      -1.88
18727........................................................      -1.89
18737........................................................      -1.89
18739........................................................       -1.9
18768........................................................       -1.9
18770........................................................      -1.89
18775........................................................      -1.89
18778........................................................      -1.88
18783........................................................      -1.88
18786........................................................      -1.87
18791........................................................      -1.87
18793........................................................      -1.86
18801........................................................      -1.86
18804........................................................      -1.85
18809........................................................      -1.85
18811........................................................      -1.84
18816........................................................      -1.84
18819........................................................      -1.83
18845........................................................      -1.83
18847........................................................      -1.78
18850........................................................      -1.72
18852........................................................      -1.67
18855........................................................      -1.61
18858........................................................      -1.55
18860........................................................       -1.5
18863........................................................      -1.44
18865........................................................      -1.39
18868........................................................      -1.33
18870........................................................      -1.28
18978........................................................      -1.28
18980........................................................      -1.17
18983........................................................      -1.05
18985........................................................         -1
18988........................................................      -0.94
18991........................................................      -0.89
18993........................................................      -0.83
18996........................................................      -0.78
18998........................................................      -0.72
19001........................................................      -0.72
19003........................................................      -0.64
19006........................................................      -0.49
19008........................................................      -0.41
19011........................................................      -0.33
19013........................................................      -0.25
19016........................................................      -0.18
19019........................................................       -0.1
19021........................................................      -0.02
19024........................................................       0.06
19124........................................................       0.06
19127........................................................       0.08
19129........................................................        0.1
19132........................................................       0.13
19134........................................................       0.15
19137........................................................       0.17
19139........................................................       0.19
19142........................................................       0.22
19144........................................................       0.24
19146........................................................       0.26
19149........................................................       0.28
19198........................................................       0.28
19201........................................................       0.29
19203........................................................       0.29
19206........................................................        0.3
19211........................................................        0.3
19213........................................................       0.31
19218........................................................       0.31
19220........................................................       0.32
19267........................................................       0.32
19269........................................................       0.33
19345........................................................       0.33
19348........................................................       0.32
19357........................................................       0.32
19360........................................................       0.31
19372........................................................       0.31
19374........................................................        0.3
19384........................................................        0.3
19387........................................................       0.29
19423........................................................       0.29
19426........................................................       0.28
19473........................................................       0.28
19475........................................................       0.29
19492........................................................       0.29
19495........................................................        0.3
19615........................................................        0.3
19618........................................................       0.31
19620........................................................       0.32
19623........................................................       0.33
19625........................................................       0.34
19628........................................................       0.35
19630........................................................       0.35
19632........................................................       0.36
19635........................................................       0.37
19637........................................................       0.38
19640........................................................       0.39
19682........................................................       0.39
19684........................................................        0.4
19704........................................................        0.4
19706........................................................       0.41
19731........................................................       0.41
19733........................................................       0.42
19817........................................................       0.42
19819........................................................       0.41
19822........................................................       0.41
19824........................................................        0.4
19827........................................................        0.4
19829........................................................       0.39
19832........................................................       0.39
19834........................................................       0.38
19937........................................................       0.38
19940........................................................       0.39
19942........................................................       0.39
19945........................................................        0.4
19947........................................................        0.4
19949........................................................       0.41
19954........................................................       0.41
19957........................................................       0.42
20058........................................................       0.42

[[Page 40682]]

 
20060........................................................       0.41
20063........................................................       0.39
20065........................................................       0.38
20067........................................................       0.37
20070........................................................       0.35
20072........................................................       0.34
20075........................................................       0.32
20077........................................................       0.31
20080........................................................        0.3
20082........................................................       0.28
20156........................................................       0.28
20158........................................................          0
20193........................................................          0
------------------------------------------------------------------------

PART 1039--CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD 
COMPRESSION-IGNITION ENGINES

0
117. The authority citation for part 1039 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart A--Overview and Applicability

0
118. Section 1039.2 is revised to read as follows:

Sec.  1039.2  Who is responsible for compliance?

    The regulations in this part 1039 contain provisions that affect 
both manufacturers and others. However, the requirements of this part 
are generally addressed to the manufacturer. The term ``you'' generally 
means the manufacturer, as defined in Sec.  1039.801, especially for 
issues related to certification. Note that for engines that become new 
after being placed into service (such as engines converted from highway 
or stationary use), the requirements that normally apply for 
manufacturers of freshly manufactured engines apply to the importer or 
any other entity we allow to obtain a certificate of conformity.
0
119. Section 1039.5 is amended by revising the introductory text, 
adding paragraph (a)(2)(iii), and revising paragraph (e) to read as 
follows:

Sec.  1039.5  Which engines are excluded from this part's requirements?

    This part does not apply to certain nonroad engines, as follows:
    (a) * * *
    (2) * * *
    (iii) Locomotive engines produced under the provisions of 40 CFR 
1033.625.
* * * * *
    (e) Engines used in recreational vehicles. Engines certified to 
meet the requirements of 40 CFR part 1051 are not subject to the 
provisions of this part 1039.
0
120. Section 1039.30 is revised to read as follows:

Sec.  1039.30  Submission of information.

    Unless we specify otherwise, send all reports and requests for 
approval to the Designated Compliance Officer (see Sec.  1039.801). See 
Sec.  1039.825 for additional reporting and recordkeeping provisions.

Subpart B--Emission Standards and Related Requirements

0
121. Section 1039.102 is amended by revising paragraph (e)(3) to read 
as follows:

Sec.  1039.102  What exhaust emission standards and phase-in allowances 
apply for my engines in model year 2014 and earlier?

* * * * *
    (e) * * *
    (3) You may use NOX +NMHC emission credits to certify an 
engine family to the alternate NOX +NMHC standards in this 
paragraph (e)(3) instead of the otherwise applicable alternate 
NOX and NMHC standards. Calculate the alternate 
NOX +NMHC standard by adding 0.1 g/kW-hr to the numerical 
value of the applicable alternate NOX standard of paragraph 
(e)(1) or (2) of this section. Engines certified to the NOX 
+NMHC standards of this paragraph (e)(3) may not generate emission 
credits. The FEL caps for engine families certified under this 
paragraph (e)(3) are the previously applicable NOX +NMHC 
standards of 40 CFR 89.112 (generally the Tier 3 standards).
* * * * *
0
122. Section 1039.104 is amended by revising paragraph (g)(5) and 
adding paragraph (i) to read as follows:

Sec.  1039.104  Are there interim provisions that apply only for a 
limited time?

* * * * *
    (g) * * *
    (5) You may certify engines under this paragraph (g) in any model 
year provided for in Table 1 of this section without regard to whether 
or not the engine family's FEL is at or below the otherwise applicable 
FEL cap. For example, a 200 kW engine certified to the NOX + 
NMHC standard of Sec.  1039.102(e)(3) with an FEL equal to the FEL cap 
of 4.0 g/kW-hr may nevertheless be certified under this paragraph (g).
* * * * *
    (i) Lead time for diagnostic controls. Model year 2017 and earlier 
engines are not subject to the requirements for diagnostic controls 
specified in Sec.  1039.110.
* * * * *
0
123. Section 1039.107 is amended by revising paragraph (b)(2) to read 
as follows:

Sec.  1039.107  What evaporative emission standards and requirements 
apply?

* * * * *
    (b) * * *
    (2) Present test data to show that equipment using your engines 
meets the evaporative emission standards we specify in this section if 
you do not use design-based certification under 40 CFR 1048.245.
0
124. Section 1039.110 is added to subpart B to read as follows:

Sec.  1039.110  Recording reductant use and other diagnostic functions.

    (a) Engines equipped with SCR systems using a reductant other than 
the engine's fuel must have a diagnostic system that monitors reductant 
quality and tank levels and alert operators to the need to refill the 
reductant tank before it is empty, or to replace the reductant if it 
does not meet your concentration specifications. Unless we approve 
other alerts, use a warning lamp or an audible alarm. You do not need 
to separately monitor reductant quality if you include an exhaust 
NOX sensor (or other sensor) that allows you to determine 
inadequate reductant quality. However, tank level must be monitored in 
all cases.
    (b) You may equip your engine with other diagnostic features. If 
you do, they must be designed to allow us to read and interpret the 
codes. Note that Sec.  1039.205 requires you to provide us any 
information needed to read, record, and interpret all the information 
broadcast by an engine's onboard computers and electronic control 
units.
0
125. Section 1039.120 is amended by revising paragraph (b) introductory 
text to read as follows:

Sec.  1039.120  What emission-related warranty requirements apply to 
me?

* * * * *
    (b) Warranty period. Your emission-related warranty must be valid 
for at least as long as the minimum warranty periods listed in this 
paragraph (b) in hours of operation and years, whichever comes first. 
You may offer an emission-related warranty more generous than we 
require. The emission-related warranty for the engine may not be 
shorter than any basic mechanical warranty you provide without charge 
for the engine. Similarly, the emission-related warranty for any 
component may not be shorter than any warranty you provide without 
charge for that component. This means that your warranty may not treat 
emission-related and nonemission-related defects differently for any

[[Page 40683]]

component. If an engine has no hour meter, we base the warranty periods 
in this paragraph (b) only on the engine's age (in years). The warranty 
period begins when the engine is placed into service. The minimum 
warranty periods are shown in the following table:
* * * * *
0
126. Section 1039.125 is amended by revising paragraphs (a)(2)(i), 
(a)(3)(i), (c), and (e) to read as follows:

Sec.  1039.125  What maintenance instructions must I give to buyers?

* * * * *
    (a) * * *
    (2) * * *
    (i) For EGR-related filters and coolers, DEF filters, PCV valves, 
crankcase vent filters, and fuel injector tips (cleaning only), the 
minimum interval is 1,500 hours.
* * * * *
    (3) * * *
    (i) For EGR-related filters and coolers, DEF filters, PCV valves, 
crankcase vent filters, and fuel injector tips (cleaning only), the 
minimum interval is 1,500 hours.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. You may also address maintenance of low-use engines (such 
as recreational or stand-by engines) by specifying the maintenance 
interval in terms of calendar months or years in addition to your 
specifications in terms of engine operating hours. All special 
maintenance instructions must be consistent with good engineering 
judgment. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
maintenance that is unlikely to occur in use, or engine operation that 
is not atypical. For example, this paragraph (c) does not allow you to 
design engines that require special maintenance for a certain type of 
expected operation. If we determine that certain maintenance items do 
not qualify as special maintenance under this paragraph (c), you may 
identify this as recommended additional maintenance under paragraph (b) 
of this section.
* * * * *
    (e) Maintenance that is not emission-related. For maintenance 
unrelated to emission controls, you may schedule any amount of 
inspection or maintenance. You may also take these inspection or 
maintenance steps during service accumulation on your emission-data 
engines, as long as they are reasonable and technologically necessary. 
This might include adding engine oil, changing air, fuel, or oil 
filters, servicing engine-cooling systems or fuel-water separator 
cartridges or elements, and adjusting idle speed, governor, engine bolt 
torque, valve lash, or injector lash. You may not perform this 
nonemission-related maintenance on emission-data engines more often 
than the least frequent intervals that you recommend to the ultimate 
purchaser.
* * * * *
0
127. Section 1039.130 is amended by adding paragraph (b)(4) and 
revising paragraph (b)(5) to read as follows:

Sec.  1039.130  What installation instructions must I give to equipment 
manufacturers?

* * * * *
    (b) * * *
    (4) Describe any necessary steps for installing the diagnostic 
system described in Sec.  1039.110.
    (5) Describe how your certification is limited for any type of 
application. For example, if your engines are certified only for 
constant-speed operation, tell equipment manufacturers not to install 
the engines in variable-speed applications.
* * * * *
0
128. Section 1039.135 is amended by revising paragraphs (c)(2) and (d) 
to read as follows:

Sec.  1039.135  How must I label and identify the engines I produce?

* * * * *
    (c) * * *
    (2) Include your full corporate name and trademark. You may 
identify another company and use its trademark instead of yours if you 
comply with the branding provisions of 40 CFR 1068.45.
* * * * *
    (d) You may add information to the emission control information 
label as follows:
    (1) If your emission control information label includes all the 
information described in paragraphs (c)(5) through (10) of this 
section, you may identify other emission standards that the engine 
meets or does not meet (such as international standards). You may 
include this information by adding it to the statement we specify or by 
including a separate statement.
    (2) You may add other information to ensure that the engine will be 
properly maintained and used.
    (3) You may add appropriate features to prevent counterfeit labels. 
For example, you may include the engine's unique identification number 
on the label.
* * * * *

Subpart C--Certifying Engine Families

0
129. Section 1039.201 is amended by revising paragraphs (a) and (g) to 
read as follows:

Sec.  1039.201  What are the general requirements for obtaining a 
certificate of conformity?

    (a) You must send us a separate application for a certificate of 
conformity for each engine family. A certificate of conformity is valid 
for new production from the indicated effective date until the end of 
the model year for which it is issued, which may not extend beyond 
December 31 of that year. No new certificate will be issued after 
December 31 of the model year. You may amend your application for 
certification after the end of the model year in certain circumstances 
as described in Sec. Sec.  1039.220 and 1039.225. You must renew your 
certification annually for any engines you continue to produce.
* * * * *
    (g) We may require you to deliver your test engines to a facility 
we designate for our testing (see Sec.  1039.235(c)). Alternatively, 
you may choose to deliver another engine that is identical in all 
material respects to the test engine, or another engine that we 
determine can appropriately serve as an emission-data engine for the 
engine family.
* * * * *
0
130. Section 1039.205 is amended by revising paragraph (r)(1) and 
adding paragraph (bb) to read as follows:

Sec.  1039.205  What must I include in my application?

* * * * *
    (r) * * *
    (1) Report all valid test results involving measurement of 
pollutants for which emission standards apply. Also indicate whether 
there are test results from invalid tests or from any other tests of 
the emission-data engine, whether or not they were conducted according 
to the test procedures of subpart F of this part. We may require you to 
report these additional test results. We may ask you to send other 
information to confirm that your tests were valid under the 
requirements of this part and 40 CFR part 1065.
* * * * *
    (bb) For imported engines or equipment, identify the following:
    (1) Describe your normal practice for importing engines. For 
example, this

[[Page 40684]]

may include identifying the names and addresses of any agents you have 
authorized to import your engines.
    (2) For engines below 560 kW, identify a test facility in the 
United States where you can test your engines if we select them for 
testing under a selective enforcement audit, as specified in 40 CFR 
part 1068, subpart E.
0
131. Section 1039.220 is amended by revising the section heading as to 
read as follows:

Sec.  1039.220  How do I amend my maintenance instructions?

* * * * *
0
132. Section 1039.225 is amended by revising the introductory text and 
adding paragraph (b)(4) to read as follows:

Sec.  1039.225  How do I amend my application for certification?

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified engine configurations, subject 
to the provisions of this section. After we have issued your 
certificate of conformity, but before the end of the model year, you 
may send us an amended application requesting that we include new or 
modified engine configurations within the scope of the certificate, 
subject to the provisions of this section. Before the end of the model 
year, you must amend your application if any changes occur with respect 
to any information that is included or should be included in your 
application. After the end of the model year, you may amend your 
application only to update maintenance instructions as described in 
Sec.  1039.220 or to modify an FEL as described in paragraph (f) of 
this section.
* * * * *
    (b) * * *
    (4) Include any other information needed to make your application 
correct and complete.
* * * * *
0
133. Section 1039.230 is amended by revising paragraph (b)(1) to read 
as follows:

Sec.  1039.230  How do I select engine families?

* * * * *
    (b) * * *
    (1) The combustion cycle and fuel. However, you do not need to 
separate dual-fuel and flexible-fuel engines into separate engine 
families.
* * * * *
0
134. Section 1039.235 is amended by revising paragraphs (a), (b), 
(c)(4), and (d)(1) to read as follows:

Sec.  1039.235  What testing requirements apply for certification?

* * * * *
    (a) Select an emission-data engine from each engine family for 
testing. Select the engine configuration with the highest volume of 
fuel injected per cylinder per combustion cycle at the point of maximum 
torque--unless good engineering judgment indicates that a different 
engine configuration is more likely to exceed (or have emissions nearer 
to) an applicable emission standard or FEL. If two or more engines have 
the same fueling rate at maximum torque, select the one with the 
highest fueling rate at rated speed. In making this selection, consider 
all factors expected to affect emission-control performance and 
compliance with the standards, including emission levels of all exhaust 
constituents, especially NOX and PM.
    (b) Test your emission-data engines using the procedures and 
equipment specified in subpart F of this part. In the case of dual-fuel 
engines, measure emissions when operating with each type of fuel for 
which you intend to certify the engine. In the case of flexible-fuel 
engines, measure emissions when operating with the fuel mixture that 
best represents in-use operation or is most likely to have the highest 
NOX emissions (or NOX+NMHC emissions for engines 
subject to NOX+NMHC standards), though you may ask us 
instead to perform tests with both fuels separately if you can show 
that intermediate mixtures are not likely to occur in use.
* * * * *
    (c) * * *
    (4) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply for an engine 
parameter that is subject to production variability because it is 
adjustable during production, but is not considered an adjustable 
parameter (as defined in Sec.  1039.801) because it is permanently 
sealed. For parameters that relate to a level of performance that is 
itself subject to a specified range (such as maximum power output), we 
will generally perform any calibration under this paragraph (c)(4) in a 
way that keeps performance within the specified range.
    (d) * * *
    (1) The engine family from the previous model year differs from the 
current engine family only with respect to model year, items identified 
in Sec.  1039.225(a), or other characteristics unrelated to emissions. 
We may waive this criterion for differences we determine not to be 
relevant.
* * * * *
0
135. Section 1039.240 is amended by revising paragraphs (c) and (d) and 
removing paragraph (e).
    The revisions read as follows:

Sec.  1039.240  How do I demonstrate that my engine family complies 
with exhaust emission standards?

* * * * *
    (c) To compare emission levels from the emission-data engine with 
the applicable emission standards, apply deterioration factors to the 
measured emission levels for each pollutant. Section 1039.245 specifies 
how to test your engine to develop deterioration factors that represent 
the deterioration expected in emissions over your engines' full useful 
life. Your deterioration factors must take into account any available 
data from in-use testing with similar engines. Small-volume engine 
manufacturers may use assigned deterioration factors that we establish. 
Apply deterioration factors as follows:
    (1) Additive deterioration factor for exhaust emissions. Except as 
specified in paragraph (c)(2) of this section, use an additive 
deterioration factor for exhaust emissions. An additive deterioration 
factor is the difference between exhaust emissions at the end of the 
useful life and exhaust emissions at the low-hour test point. In these 
cases, adjust the official emission results for each tested engine at 
the selected test point by adding the factor to the measured emissions. 
If the factor is less than zero, use zero. Additive deterioration 
factors must be specified to one more decimal place than the applicable 
standard.
    (2) Multiplicative deterioration factor for exhaust emissions. Use 
a multiplicative deterioration factor if good engineering judgment 
calls for the deterioration factor for a pollutant to be the ratio of 
exhaust emissions at the end of the useful life to exhaust emissions at 
the low-hour test point. For example, if you use aftertreatment 
technology that controls emissions of a pollutant proportionally to 
engine-out emissions, it is often appropriate to use a multiplicative 
deterioration factor. Adjust the official emission results for each 
tested engine at the selected test point by multiplying the measured 
emissions by the deterioration factor. If the factor is less than one, 
use one. A multiplicative deterioration factor may not be appropriate 
in cases where testing variability is significantly greater than 
engine-to-engine variability. Multiplicative deterioration factors must

[[Page 40685]]

be specified to one more significant figure than the applicable 
standard.
    (3) Sawtooth 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 
emissions over the useful life 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. Base deterioration factors 
for engines with such emission patterns on the difference between (or 
ratio of) the point of the sawtooth 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.
    (4) Deterioration factor for smoke. Deterioration factors for smoke 
are always additive, as described in paragraph (c)(1) of this section.
    (5) Deterioration factor for crankcase emissions. If your engine 
vents crankcase emissions to the exhaust or to the atmosphere, you must 
account for crankcase emission deterioration, using good engineering 
judgment. You may use separate deterioration factors for crankcase 
emissions of each pollutant (either multiplicative or additive) or 
include the effects in combined deterioration factors that include 
exhaust and crankcase emissions together for each pollutant.
    (6) Dual-fuel and flexible-fuel engines. In the case of dual-fuel 
and flexible-fuel engines, apply deterioration factors separately for 
each fuel type. You may accumulate service hours on a single emission-
data engine using the type of fuel or the fuel mixture expected to have 
the highest combustion and exhaust temperatures; you may ask us to 
approve a different fuel mixture if you demonstrate that a different 
criterion is more appropriate.
    (d) Determine the official emission result for each pollutant to at 
least one more decimal place than the applicable standard. Apply the 
deterioration factor to the official emission result, as described in 
paragraph (c) of this section, then round the adjusted figure to the 
same number of decimal places as the emission standard. Compare the 
rounded emission levels to the emission standard for each emission-data 
engine. In the case of NOX+NMHC standards, apply the 
deterioration factor to each pollutant and then add the results before 
rounding.
* * * * *
0
136. Section 1039.250 is amended by revising paragraphs (b)(3)(iv) and 
(c) to read as follows:

Sec.  1039.250  What records must I keep and what reports must I send 
to EPA?

* * * * *
    (b) * * *
    (3) * * *
    (iv) All your emission tests, including the date and purpose of 
each test and documentation of test parameters as specified in part 40 
CFR part 1065.
* * * * *
    (c) Keep required data from emission tests and all other 
information specified in this section for eight years after we issue 
your certificate. If you use the same emission data or other 
information for a later model year, the eight-year period restarts with 
each year that you continue to rely on the information.
* * * * *
0
137. Section 1039.255 is amended by revising paragraphs (c)(2), (c)(4), 
(d), and (e) to read as follows:

Sec.  1039.255  What decisions may EPA make regarding my certificate of 
conformity?

* * * * *
    (c) * * *
    (2) Submit false or incomplete information (paragraph (e) of this 
section applies if this is fraudulent). This includes doing anything 
after submission of your application to render any of the submitted 
information false or incomplete.
* * * * *
    (4) Deny us from completing authorized activities (see 40 CFR 
1068.20). This includes a failure to provide reasonable assistance.
* * * * *
    (d) We may void the certificate of conformity for an engine family 
if you fail to keep records, send reports, or give us information as 
required under this part or the Act. Note that these are also 
violations of 40 CFR 1068.101(a)(2).
    (e) We may void your certificate if we find that you intentionally 
submitted false or incomplete information. This includes rendering 
submitted information false or incomplete after submission.
* * * * *

Subpart F--Test Procedures

0
138. Section 1039.501 is amended by revising paragraphs (e), (f), and 
(g) and adding paragraph (h) to read as follows:

Sec.  1039.501  How do I run a valid emission test?

* * * * *
    (e) The following provisions apply for engines using aftertreatment 
technology with infrequent regeneration events that may occur during 
testing:
    (1) Adjust measured emissions to account for aftertreatment 
technology with infrequent regeneration as described in Sec.  1039.525.
    (2) If your engine family includes engines with one or more 
emergency AECDs approved under Sec.  1039.115(g)(4) or (5), do not 
consider additional regenerations resulting from those AECDs when 
developing adjustments to measured values under this paragraph (e).
    (3) Invalidate a smoke test if active regeneration starts to occur 
during the test.
    (f) You may disable any AECDs that have been approved solely for 
emergency equipment applications under Sec.  1039.115(g)(4). Note that 
the emission standards do not apply when any of these AECDs are active.
    (g) You may use special or alternate procedures to the extent we 
allow them under 40 CFR 1065.10.
    (h) This subpart is addressed to you as a manufacturer, but it 
applies equally to anyone who does testing for you, and to us when we 
perform testing to determine if your engines meet emission standards.
0
139. Section 1039.505 is amended by revising paragraph (b)(2) to read 
as follows:

Sec.  1039.505  How do I test engines using steady-state duty cycles, 
including ramped-modal testing?

* * * * *
    (b) * * *
    (2) Use the 6-mode duty cycle or the corresponding ramped-modal 
cycle described in paragraph (b) of Appendix II of this part for 
variable-speed engines below 19 kW. You may instead use the 8-mode duty 
cycle or the corresponding ramped-modal cycle described in paragraph 
(c) of Appendix II of this part if some engines from your engine family 
will be used in applications that do not involve governing to maintain 
engine operation around rated speed.
* * * * *
0
140. Section 1039.515 is amended by revising paragraph (a) to read as 
follows:

Sec.  1039.515  What are the test procedures related to not-to-exceed 
standards?

    (a) General provisions. The provisions in 40 CFR 86.1370 apply for 
determining whether an engine meets the not-to-exceed emission 
standards in Sec.  1039.101(e), except as noted in this section. 
Interpret references to vehicles

[[Page 40686]]

and vehicle operation to mean equipment and equipment operation.
* * * * *
0
141. Section 1039.525 is revised to read as follows:

Sec.  1039.525  How do I adjust emission levels to account for 
infrequently regenerating aftertreatment devices?

    For engines using aftertreatment technology with infrequent 
regeneration events that may occur during testing, take one of the 
following approaches to account for the emission impact of 
regeneration:
    (a) You may use the calculation methodology described in 40 CFR 
1065.680 to adjust measured emission results. Do this by developing an 
upward adjustment factor and a downward adjustment factor for each 
pollutant based on measured emission data and observed regeneration 
frequency as follows:
    (1) Adjustment factors should generally apply to an entire engine 
family, but you may develop separate adjustment factors for different 
configurations within an engine family. Use the adjustment factors from 
this section for all testing for the engine family.
    (2) You may use carryover or carry-across data to establish 
adjustment factors for an engine family as described in Sec.  1039.235, 
consistent with good engineering judgment.
    (3) For engines that are required to certify to both transient and 
steady-state duty cycles, calculate a separate adjustment factor for 
steady-state and transient operation.
    (b) You may ask us to approve an alternate methodology to account 
for regeneration events. We will generally limit approval to cases 
where your engines use aftertreatment technology with extremely 
infrequent regeneration and you are unable to apply the provisions of 
this section.
    (c) You may choose to make no adjustments to measured emission 
results if you determine that regeneration does not significantly 
affect emission levels for an engine family (or configuration) or if it 
is not practical to identify when regeneration occurs. If you choose 
not to make adjustments under paragraph (a) or (b) of this section, 
your engines must meet emission standards for all testing, without 
regard to regeneration.

Subpart G--Special Compliance Provisions

0
142. Section 1039.601 is revised to read as follows:

Sec.  1039.601  What compliance provisions apply?

    (a) Engine and equipment manufacturers, as well as owners, 
operators, and rebuilders of engines subject to the requirements of 
this part, and all other persons, must observe the provisions of this 
part, the requirements and prohibitions in 40 CFR part 1068, and the 
provisions of the Act.
    (b) Subpart C of this part describes how to test and certify dual-
fuel and flexible-fuel engines. Some multi-fuel engines may not fit 
either of those defined terms. For such engines, we will determine 
whether it is most appropriate to treat them as single-fuel engines, 
dual-fuel engines, or flexible-fuel engines based on the range of 
possible and expected fuel mixtures. For example, an engine might burn 
natural gas but initiate combustion with a pilot injection of diesel 
fuel. If the engine is designed to operate with a single fueling 
algorithm (i.e., fueling rates are fixed at a given engine speed and 
load condition), we would generally treat it as a single-fuel engine, 
In this context, the combination of diesel fuel and natural gas would 
be its own fuel type. If the engine is designed to also operate on 
diesel fuel alone, we would generally treat it as a dual-fueled engine. 
If the engine is designed to operate on varying mixtures of the two 
fuels, we would generally treat it as a flexible-fueled engine. To the 
extent that requirements vary for the different fuels or fuel mixtures, 
we may apply the more stringent requirements.
0
143. Section 1039.605 is amended by revising paragraphs (b), (d)(5), 
and (d)(8) to read as follows:

Sec.  1039.605  What provisions apply to engines certified under the 
motor-vehicle program?

* * * * *
    (b) Equipment-manufacturer provisions. If you are not an engine 
manufacturer, you may install motor-vehicle engines certified for the 
appropriate model year under 40 CFR part 86 in nonroad equipment as 
long as you meet all the requirements and conditions specified in 
paragraph (d) of this section. You must also add the fuel-inlet label 
we specify in Sec.  1039.135(e). If you modify the motor-vehicle engine 
in any of the ways described in paragraph (d)(2) of this section, we 
will consider you a manufacturer of a new nonroad engine. Such engine 
modifications prevent you from using the provisions of this section.
* * * * *
    (d) * * *
    (5) You must add a permanent supplemental label to the engine in a 
position where it will remain clearly visible after installation in the 
equipment. In the supplemental label, do the following:
    (i) Include the heading: ``NONROAD ENGINE EMISSION CONTROL 
INFORMATION''.
    (ii) Include your full corporate name and trademark. You may 
identify another company and use its trademark instead of yours if you 
comply with the branding provisions of 40 CFR 1068.45.
    (iii) State: ``THIS ENGINE WAS ADAPTED FOR NONROAD USE WITHOUT 
AFFECTING ITS EMISSION CONTROLS. THE EMISSION-CONTROL SYSTEM DEPENDS ON 
THE USE OF FUEL MEETING SPECIFICATIONS THAT APPLY FOR MOTOR-VEHICLE 
APPLICATIONS. OPERATING THE ENGINE ON OTHER FUELS MAY BE A VIOLATION OF 
FEDERAL LAW.''
    (iv) State the date you finished modifying the engine (month and 
year), if applicable.
* * * * *
    (8) Send the Designated Compliance Officer written notification 
describing your plans before using the provisions of this section. In 
addition, by February 28 of each calendar year (or less often if we 
tell you), send the Designated Compliance Officer a signed letter with 
all the following information:
    (i) Identify your full corporate name, address, and telephone 
number.
    (ii) List the engine or equipment models for which you used this 
exemption in the previous year and describe your basis for meeting the 
sales restrictions of paragraph (d)(3) of this section.
    (iii) State: ``We prepared each listed [engine or equipment] model 
for nonroad application without making any changes that could increase 
its certified emission levels, as described in 40 CFR 1039.605.''
* * * * *
    144. Section 1039.610 is amended by revising paragraphs (d)(5)(ii) 
and (d)(7) to read as follows:

Sec.  1039.610  What provisions apply to vehicles certified under the 
motor-vehicle program?

* * * * *
    (d) * * *
    (5) * * *
    (ii) Include your full corporate name and trademark. You may 
identify another company and use its trademark instead of yours if you 
comply with the branding provisions of 40 CFR 1068.45.
* * * * *
    (7) Send the Designated Compliance Officer written notification 
describing

[[Page 40687]]

your plans before using the provisions of this section. In addition, by 
February 28 of each calendar year (or less often if we tell you), send 
the Designated Compliance Officer a signed letter with all the 
following information:
    (i) Identify your full corporate name, address, and telephone 
number.
    (ii) List the equipment models for which you used this exemption in 
the previous year and describe your basis for meeting the sales 
restrictions of paragraph (d)(3) of this section.
    (iii) State: ``We prepared each listed engine or equipment model 
for nonroad application without making any changes that could increase 
its certified emission levels, as described in 40 CFR 1039.610.''
* * * * *
    Remove Sec.  1039.640--[Removed]
0
145. Section 1039.640 is removed.

Subpart H--Averaging, Banking, and Trading for Certification

0
146. Section 1039.701 is amended by adding paragraph (h) to read as 
follows:

Sec.  1039.701  General provisions.

* * * * *
    (h) You may use either of the following approaches to retire or 
forego emission credits:
    (1) You may retire emission credits generated from any number of 
your engines. This may be considered donating emission credits to the 
environment. Identify any such credits in the reports described in 
Sec.  1039.730. Engines must comply with the applicable FELs even if 
you donate or sell the corresponding emission credits under this 
paragraph (h). Those credits may no longer be used by anyone to 
demonstrate compliance with any EPA emission standards.
    (2) You may certify a family using an FEL below the emission 
standard as described in this part and choose not to generate emission 
credits for that family. If you do this, you do not need to calculate 
emission credits for those families and you do not need to submit or 
keep the associated records described in this subpart for that family.
0
147. Section 1039.705 is amended by revising paragraphs (b), (c) 
introductory text, and (c)(1) to read as follows:

Sec.  1039.705  How do I generate and calculate emission credits?

* * * * *
    (b) For each participating family, calculate positive or negative 
emission credits relative to the otherwise applicable emission 
standard. Calculate positive emission credits for a family that has an 
FEL below the standard. Calculate negative emission credits for a 
family 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 kilogram (kg), using consistent units 
throughout the following equation:

Emission credits (kg) = (Std-FEL) [ltarr8] (Volume) [ltarr8] (AvgPR) 
[ltarr8] (UL) [ltarr8] (10-\3\)

Where:

Std = the emission standard, in grams per kilowatt-hour, that 
applies under subpart B of this part for engines not participating 
in the ABT program of this subpart (the ``otherwise applicable 
standard'').
FEL = the family emission limit for the engine family, in grams per 
kilowatt-hour.
Volume = the number of engines eligible to participate in the 
averaging, banking, and trading program within the given engine 
family during the model year, as described in paragraph (c) of this 
section.
AvgPR = the average of maximum engine power values of all the engine 
configurations within an engine family, calculated on a sales-
weighted basis, in kilowatts.
UL = the useful life for the given engine family, in hours.

    (c) As described in Sec.  1039.730, compliance with the 
requirements of this subpart is determined at the end of the model year 
based on actual U.S.-directed production volumes. Do not include any of 
the following engines to calculate emission credits:
    (1) Engines with a permanent exemption under subpart G of this part 
or under 40 CFR part 1068.
* * * * *
0
148. Section 1039.710 is amended by revising paragraph (c) to read as 
follows:

Sec.  1039.710  How do I average emission credits?

* * * * *
    (c) If you certify an engine family to an FEL that exceeds the 
otherwise applicable standard, you must obtain enough emission credits 
to offset the engine family's deficit by the due date for the final 
report required in Sec.  1039.730. The emission credits used to address 
the deficit may come from your other engine families that generate 
emission credits in the same model year, 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
149. Section 1039.725 is amended by revising paragraph (b)(2) to read 
as follows:

Sec.  1039.725  What must I include in my application for 
certification?

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid negative 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
150. Section 1039.730 is amended by revising paragraphs (b)(1), (b)(4), 
and (c)(2) to read as follows:

Sec.  1039.730  What ABT reports must I send to EPA?

* * * * *
    (b) * * *
    (1) Engine-family designation and averaging set.
* * * * *
    (4) The projected and actual U.S.-directed production volumes for 
the model year. If you changed an FEL during the model year, identify 
the actual U.S.-directed production volume associated with each FEL.
* * * * *
    (c) * * *
    (2) State whether you will retain any emission credits for banking. 
If you choose to retire emission credits that would otherwise be 
eligible for banking, identify the engine families that generated the 
emission credits, including the number of emission credits from each 
family.
* * * * *
0
151. Section 1039.735 is amended by revising paragraphs (a) and (b) to 
read as follows:

Sec.  1039.735  What records must I keep?

    (a) You must organize and maintain your records as described in 
this section.
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits.
* * * * *
0
152. Section 1039.740 is amended by revising paragraph (a) to read as 
follows:

Sec.  1039.740  What restrictions apply for using emission credits?

* * * * *
    (a) Averaging sets. Emission credits may be exchanged only within 
an

[[Page 40688]]

averaging set. For emission credits generated by Tier 4 engines, there 
are two averaging sets--one for engines at or below 560 kW and another 
for engines above 560 kW.
* * * * *

Subpart I--Definitions and Other Reference Information

0
153. Section 1039.801 is amended as follows:
0
a. By revising the definitions of ``Aircraft'' and ``Designated 
Compliance Officer''.
0
b. By removing the definition for ``Designated Enforcement Officer''.
0
c. By adding definitions for ``Dual-fuel'' and ``Flexible-fuel''.
0
d. By revising paragraph (1)(i) of the definition of ``Model year'' and 
the definition of ``Placed into service''.
0
e. By removing the definition for ``Point of first retail sale''.
    The revisions and additions read as follows:

Sec.  1039.801  What definitions apply to this part?

* * * * *
    Aircraft means any vehicle capable of sustained air travel more 
than 100 feet above the ground.
* * * * *
    Designated Compliance Officer means the Director, Diesel Engine 
Compliance Center, U.S. Environmental Protection Agency, 2000 
Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov; epa.gov/otaq/verify.
* * * * *
    Dual-fuel means relating to an engine designed for operation on two 
different fuels but not on a continuous mixture of those fuels (see 
Sec.  1039.601(b)). For purposes of this part, such an engine remains a 
dual-fuel engine even if it is designed for operation on three or more 
different fuels.
* * * * *
    Flexible-fuel means relating to an engine designed for operation on 
any mixture of two or more different fuels (see Sec.  1039.601(b)).
* * * * *
    Model year means one of the following things:
    (1) * * *
    (i) Calendar year of production.
* * * * *
    Placed into service means put into initial use for its intended 
purpose. Engines and equipment do not qualify as being ``placed into 
service'' based on incidental use by a manufacturer or dealer.
* * * * *
0
154. Section 1039.815 is revised to read as follows:

Sec.  1039.815  What provisions apply to confidential information?

    The provisions of 40 CFR 1068.10 apply for information you consider 
confidential.
0
155. Section 1039.825 is revised to read as follows:

Sec.  1039.825  What reporting and recordkeeping requirements apply 
under this part?

    (a) This part includes various requirements to submit and record 
data or other information. Unless we specify otherwise, store required 
records in any format and on any media and keep them readily available 
for eight years after you send an associated application for 
certification, or eight years after you generate the data if they do 
not support an application for certification. You are expected to keep 
your own copy of required records rather than relying on someone else 
to keep records on your behalf. We may review these records at any 
time. You must promptly send us organized, written records in English 
if we ask for them. We may require you to submit written records in an 
electronic format.
    (b) The regulations in Sec.  1039.255, 40 CFR 1068.25, and 40 CFR 
1068.101 describe your obligation to report truthful and complete 
information. This includes information not related to certification. 
Failing to properly report information and keep the records we specify 
violates 40 CFR 1068.101(a)(2), which may involve civil or criminal 
penalties.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1039.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.
    (e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
engines and equipment regulated under this part:
    (1) We specify the following requirements related to engine 
certification in this part 1039:
    (i) In Sec.  1039.20 we require engine manufacturers to label 
stationary engines that do not meet the standards in this part.
    (ii) In Sec.  1039.135 we require engine manufacturers to keep 
certain records related to duplicate labels sent to equipment 
manufacturers.
    (iii) [Reserved]
    (iv) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (v) [Reserved]
    (vi) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions. For example, 
equipment manufacturers must submit reports and keep records related to 
the flexibility provisions in Sec.  1039.625.
    (vii) In Sec.  1039.725, 1039.730, and 1039.735 we specify certain 
records related to averaging, banking, and trading.
    (2) We specify the following requirements related to testing in 40 
CFR part 1065:
    (i) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (ii) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (iii) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (iv) In 40 CFR 1065.695 we identify the specific information and 
data items to record when measuring emissions.
    (3) We specify the following requirements related to the general 
compliance provisions in 40 CFR part 1068:
    (i) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (ii) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (iii) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (iv) In 40 CFR 1068.105 we require equipment manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (v) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (vi) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (vii) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (viii) In 40 CFR 1068.450 and 1068.455 we specify certain records

[[Page 40689]]

related to testing production-line engines in a selective enforcement 
audit.
    (ix) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (x) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.

PART 1042--CONTROL OF EMISSIONS FROM NEW AND IN-USE MARINE 
COMPRESSION-IGNITION ENGINES AND VESSELS

0
156. The authority citation for part 1042 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart A--Overview and Applicability

0
157. Section 1042.1 is amended by revising paragraphs (a) and (c) 
introductory text to read as follows:

Sec.  1042.1  Applicability.

* * * * *
    (a) The emission standards of this part 1042 for freshly 
manufactured engines apply for new marine engines starting with the 
model years noted in the following table:

                         Table 1 to Sec.   1042.1--Part 1042 Applicability by Model Year
----------------------------------------------------------------------------------------------------------------
                                                                        Displacement (L/cyl) or
             Engine category               Maximum engine power \a\           application           Model year
----------------------------------------------------------------------------------------------------------------
Category 1..............................  kW <75....................  disp.< 0.9................        \b\ 2009
                                          75 <= kW <= 3700..........  disp.< 0.9................            2012
                                                                      0.9 <= disp. < 1.2........            2013
                                                                      1.2 <= disp. < 2.5........            2014
                                                                      2.5 <= disp. < 3.5........            2013
                                                                      3.5 <= disp. < 7.0........            2012
                                          kW > 3700.................  All.......................            2014
Category 2..............................  kW <= 3700................  7.0 <= disp. < 15.0.......            2013
                                          kW > 3700.................  7.0 <= disp. < 15.0.......            2014
                                          All.......................  15 <= disp. < 30..........            2014
Category 3..............................  All.......................  disp. >= 30...............            2011
----------------------------------------------------------------------------------------------------------------
\a\ See Sec.   1042.140, which describes how to determine maximum engine power.
\b\ See Table 1 of Sec.   1042.101 for the first model year in which this part 1042 applies for engines with
  maximum engine power below 75 kW and displacement at or above 0.9 L/cyl.

* * * * *
    (c) Freshly manufactured engines with maximum engine power at or 
above 37 kW and originally manufactured and certified before the model 
years identified in Table 1 to this section are subject to emission 
standards and requirements of 40 CFR part 94. The provisions of this 
part 1042 do not apply for such engines certified under 40 CFR part 94, 
except as follows beginning June 29, 2010:
* * * * *
0
158. Section 1042.2 is revised to read as follows:

Sec.  1042.2  Who is responsible for compliance?

    The regulations in this part 1042 contain provisions that affect 
both engine manufacturers and others. However, the requirements of this 
part, other than those of subpart I of this part, are generally 
addressed to the engine manufacturer for freshly manufactured marine 
engines or other certificate holders. The term ``you'' generally means 
the engine manufacturer, as defined in Sec.  1042.901, especially for 
issues related to certification (including production-line testing, 
reporting, etc.). Note that for engines that become new after being 
placed into service (such as engines converted from highway or 
stationary use, or engines installed on vessels that are reflagged to 
become U.S. vessels), the requirements that normally apply for 
manufacturers of freshly manufactured engines apply to the importer or 
any other entity we allow to obtain a certificate of conformity.
0
159. Section 1042.30 is revised to read as follows:

Sec.  1042.30  Submission of information.

    Unless we specify otherwise, send all reports and requests for 
approval to the Designated Compliance Officer (see Sec.  1042.901). See 
Sec.  1042.925 for additional reporting and recordkeeping provisions.

Subpart B--Emission Standards and Related Requirements

0
160. Section 1042.101 is amended by revising the section heading and 
paragraphs (a), (b), and (c) to read as follows:

Sec.  1042.101  Exhaust emission standards for Category 1 and Category 
2 engines.

    (a) Duty-cycle standards. Exhaust emissions from your engines may 
not exceed emission standards, as follows:
    (1) Measure emissions using the test procedures described in 
subpart F of this part.
    (2) The following CO emission standards in this paragraph (a)(2) 
apply starting with the applicable model year identified in Sec.  
1042.1:
    (i) 8.0 g/kW-hr for engines below 8 kW.
    (ii) 6.6 g/kW-hr for engines at or above 8 kW and below 19 kW.
    (iii) 5.5 g/kW-hr for engines at or above 19 kW and below 37 kW.
    (iv) 5.0 g/kW-hr for engines at or above 37 kW.
    (3) Except as described in paragraphs (a)(4) and (5) of this 
section, the Tier 3 standards for PM and NOX+HC emissions 
are described in the following tables:

              Table 1 to Sec.   1042.101--Tier 3 Standards for Category 1 Engines Below 3700 kW \a\
----------------------------------------------------------------------------------------------------------------
                               Displacement  (L/  Maximum engine                                  NOX+HC  (g/kW-
Power density and application        cyl)             power         Model year     PM  (g/kW-hr)      hr) \b\
----------------------------------------------------------------------------------------------------------------
all..........................  disp. < 0.9.....  kW < 19........           2009+            0.40             7.5
                                                 19 > kW < 75...       2009-2013            0.30             7.5
                                                                           2014+        \c\ 0.30         \c\ 4.7

[[Page 40690]]

 
Commercial engines with kW/L   disp. < 0.9.....  kW >= 75.......           2012+            0.14             5.4
 <=35.                         0.9 <= disp. <    all............           2013+            0.12             5.4
                                1.2.             kW < 600.......       2014-2017            0.11             5.6
                               1.2 <= disp. <    ...............           2018+            0.10             5.6
                                2.5.             kW >= 600......           2014+            0.11             5.6
                               2.5 > disp. <     kW < 600.......       2013-2017            0.11             5.6
                                3.5.                                       2018+            0.10             5.6
                                                 kW >= 600......           2013+            0.11             5.6
Commercial engines with kW/L   disp. < 0.9.....  kW >= 75.......           2012+            0.15             5.8
 >35, and all recreational     0.9 <= disp. <    all............           2013+            0.14             5.8
 engines >=75 kW.               1.2.                                       2014+            0.12             5.8
                               1.2 <= disp. <                              2013+            0.12             5.8
                                2.5.                                       2012+            0.11             5.8
                               2.5 > disp. <
                                3.5.
                               3.5 > disp. <
                                7.0.
----------------------------------------------------------------------------------------------------------------
\a\ No Tier 3 standards apply for commercial Category 1 engines at or above 3700 kW. See Sec.   1042.1(c) and
  paragraph (a)(7) of this section for the standards that apply for these engines.
\b\ The applicable NOX+HC standards specified for Tier 2 engines in Appendix I of this part continue to apply
  instead of the values noted in the table for commercial engines at or above 2000 kW. FELs for these engines
  may not be higher than the Tier 1 NOX standard specified in Appendix I of this part.
\c\ See paragraph (a)(4) of this section for alternative PM and NOX+HC standards for engines at or above 19 kW
  and below 75 kW with displacement below 0.9 L/cyl.

              Table 2 to Sec.   1042.101--Tier 3 Standards for Category 2 Engines Below 3700 kW \a\
----------------------------------------------------------------------------------------------------------------
                                                                                                   NOX+HC (g/kW-
         Displacement (L/cyl)             Maximum engine power      Model year     PM (g/kW-hr)         hr)
----------------------------------------------------------------------------------------------------------------
7.0 <= disp. <= 15.0..................  kW < 2000...............           2013+            0.14             6.2
                                        2000 <= kW <= 3700......           2013+            0.14         \b\ 7.8
15.0 <= disp. < 20.0 \c\..............  kW < 2000...............           2014+            0.34             7.0
20.0 <= disp. < 25.0 \c\..............  kW < 2000...............           2014+            0.27             9.8
25.0 <= disp. < 30.0 \c\..............  kW < 2000...............           2014+            0.27            11.0
----------------------------------------------------------------------------------------------------------------
\a\ The Tier 3 standards in this table do not apply for Category 2 engines at or above 2000 kW with per-cylinder
  displacement at or above 15.0 liters, or for any Category 2 engines at or above 3700 kW. See Sec.   1042.1(c)
  and paragraphs (a)(6) through (8) of this section for the standards that apply for these engines.
\b\ For engines subject to the 7.8 g/kW-hr NOX+HC standard, FELs may not be higher than the Tier 1 NOX standards
  specified in Appendix I of this part.
\c\ There are no Tier 3 standards for Category 2 engines with per-cylinder displacement at or above 15 and 20
  liters with maximum engine power at or above 2000 kW. See paragraphs (a)(6) and (7) of this section for the
  Tier 4 standards that apply for these engines starting with the 2014 model year.

    (4) For Tier 3 engines at or above 19 kW and below 75 kW with 
displacement below 0.9 L/cyl, you may alternatively certify some or all 
of your engine families to a PM emission standard of 0.20 g/kW-hr and a 
NOX+HC emission standard of 5.8 g/kW-hr for 2014 and later 
model years.
    (5) Starting with the 2014 model year, recreational marine engines 
at or above 3700 kW (with any displacement) must be certified under 
this part 1042 to the Tier 3 standards specified in this section for 
3.5 to 7.0 L/cyl recreational marine engines.
    (6) Interim Tier 4 PM standards apply for 2014 and 2015 model year 
engines between 2000 and 3700 kW as specified in this paragraph (a)(6). 
These engines are considered to be Tier 4 engines.
    (i) For Category 1 engines, the Tier 3 PM standards from Table 1 to 
this section continue to apply. PM FELs for these engines may not be 
higher than the applicable Tier 2 PM standards specified in Appendix I 
of this part.
    (ii) For Category 2 engines with per-cylinder displacement below 
15.0 liters, the Tier 3 PM standards from Table 2 to this section 
continue to apply. PM FELs for these engines may not be higher than 
0.27 g/kW-hr.
    (iii) For Category 2 engines with per-cylinder displacement at or 
above 15.0 liters, the PM standard is 0.34 g/kW-hr for engines at or 
above 2000 kW and below 3300 kW, and 0.27 g/kW-hr for engines at or 
above 3300 kW and below 3700 kW. PM FELs for these engines may not be 
higher than 0.50 g/kW-hr.
    (7) Except as described in paragraph (a)(8) of this section, the 
Tier 4 standards for PM, NOX, and HC emissions are described 
in the following table:

Table 3 to Sec.   1042.101--Tier 4 Standards for Category 2 and Commercial Category 1 Engines at or Above 600 kW
----------------------------------------------------------------------------------------------------------------
                               Displacement (L/
     Maximum engine power            cyl)           Model year     PM (g/kW-hr)    NOX (g/kW-hr)   HC (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
600 <=kW <1400...............  all.............  2017+..........            0.04             1.8            0.19
1400 <=kW <2000..............  all.............  2016+..........            0.04             1.8            0.19
2000 <=kW <=3700 \a\.........  all.............  2014+..........            0.04             1.8            0.19
kW >3700.....................  disp. <15.0.....  2014-2015......            0.12             1.8            0.19
                               15.0 <= disp.     2014-2015......            0.25             1.8            0.19
                                <30.0.

[[Page 40691]]

 
                               all.............  2016+..........            0.06             1.8            0.19
----------------------------------------------------------------------------------------------------------------
\a\ See paragraph (a)(6) of this section for interim PM standards that apply for model years 2014 and 2015 for
  engines between 2000 and 3700 kW. The Tier 4 NOX FEL cap for engines at or above 2000 kW and below 3700 kW is
  7.0 g/kW-hr. Starting in the 2016 model year, the Tier 4 PM FEL cap for engines at or above 2000 kW and below
  3700 kW is 0.34 g/kW-hr.

    (8) The following optional provisions apply for complying with the 
Tier 3 and Tier 4 standards specified in paragraphs (a)(3) through (7) 
of this section:
    (i) You may use NOX credits accumulated through the ABT 
program to certify Tier 4 engines to a NOX+HC emission 
standard of 1.9 g/kW-hr instead of the NOX and HC standards 
that would otherwise apply by certifying your family to a 
NOX+HC FEL. Calculate the NOX credits needed as 
specified in subpart H of this part using the NOX+HC 
emission standard and FEL in the calculation instead of the otherwise 
applicable NOX standard and FEL. You may not generate 
credits relative to the alternate standard or certify to the standard 
without using credits.
    (ii) For engines below 1000 kW, you may delay complying with the 
Tier 4 standards in the 2017 model year for up to nine months, but you 
must comply no later than October 1, 2017.
    (iii) For engines at or above 3700 kW, you may delay complying with 
the Tier 4 standards in the 2016 model year for up to twelve months, 
but you must comply no later than December 31, 2016.
    (iv) For Category 2 engines at or above 1400 kW, you may 
alternatively comply with the Tier 3 and Tier 4 standards specified in 
Table 4 of this section instead of the NOX, HC, 
NOX+HC, and PM standards specified in paragraphs (a)(3) 
through (7) of this section. The CO standards specified in paragraph 
(a)(2) of this section apply without regard to whether you choose this 
option. If you choose this option, you must do so for all engines at or 
above 1400 kW in the same displacement category (that is, 7-15, 15-20, 
20-25, or 25-30 liters per cylinder) in model years 2012 through 2015.

   Table 4 to Sec.   1042.101--Optional Tier 3 and Tier 4 Standards for Category 2 Engines at or Above 1400 kW
----------------------------------------------------------------------------------------------------------------
                                Maximum engine
             Tier                    power         Model year     PM (g/kW-hr)    NOX (g/kW-hr)    HC (g/kW-hr)
----------------------------------------------------------------------------------------------------------------
Tier 3.......................  kW 1400.
----------------------------------------------------------------------------------------------------------------
Tier 4.......................  1400 <=kW <=3700            2015            0.04  1.8............            0.19
                               kW >3700........            2015            0.06  1.8............            0.19
----------------------------------------------------------------------------------------------------------------

    (b) Averaging, banking, and trading. You may generate or use 
emission credits under the averaging, banking, and trading (ABT) 
program as described in subpart H of this part for demonstrating 
compliance with NOX, NOX+HC, and PM emission 
standards for Category 1 and Category 2 engines. You may also use 
NOX or NOX+HC emission credits to comply with the 
alternate NOX+HC standard in paragraph (a)(8)(i) of this 
section. Generating or using emission credits requires that you specify 
a family emission limit (FEL) for each pollutant you include in the ABT 
program for each engine family. These FELs serve as the emission 
standards for the engine family with respect to all required testing 
instead of the standards specified in paragraph (a) of this section. 
The FELs determine the not-to-exceed standards for your engine family, 
as specified in paragraph (c) of this section. Unless otherwise 
specified, the following FEL caps apply:
    (1) FELs for Tier 3 engines may not be higher than the applicable 
Tier 2 standards specified in Appendix I of this part.
    (2) FELs for Tier 4 engines may not be higher than the applicable 
Tier 3 standards specified in paragraph (a)(3) of this section.
    (3) The following FEL caps apply for engines at or above 3700 kW 
that are not subject to Tier 3 standards under paragraph (a)(3) of this 
section:
    (i) FELs may not be higher than the applicable Tier 1 
NOX standards specified in Appendix I of this part before 
the Tier 4 standards start to apply.
    (ii) FELs may not be higher than the applicable Tier 2 
NOX+THC standards specified in Appendix I of this part after 
the Tier 4 standards start to apply.
    (c) Not-to-exceed standards. Except as noted in Sec.  1042.145(e), 
exhaust emissions from all engines subject to the requirements of this 
part may not exceed the not-to-exceed (NTE) standards as follows:
    (1) Use the following equation to determine the NTE standards:
    (i) NTE standard for each pollutant = STD x M.

Where:

STD = The standard specified for that pollutant in this section if 
you certify without using ABT for that pollutant; or the FEL for 
that pollutant if you certify using ABT.
M = The NTE multiplier for that pollutant.
    (ii) Round each NTE standard to the same number of decimal places 
as the emission standard.
    (2) Determine the applicable NTE zone and subzones as described in 
Sec.  1042.515. Determine NTE multipliers for specific zones and 
subzones and pollutants as follows:
    (i) For marine engines certified using the duty cycle specified in 
Sec.  1042.505(b)(1), except for variable-speed propulsion marine 
engines used with controllable-pitch propellers or with electrically 
coupled propellers, apply the following NTE multipliers:
    (A) Subzone 1: 1.2 for Tier 3 NOX+HC standards.
    (B) Subzone 1: 1.5 for Tier 4 standards and Tier 3 p.m. and CO 
standards.
    (C) Subzone 2: 1.5 for Tier 4 NOX and HC standards and 
for Tier 3 NOX+HC standards.
    (D) Subzone 2: 1.9 for PM and CO standards.

[[Page 40692]]

    (ii) For recreational marine engines certified using the duty cycle 
specified in Sec.  1042.505(b)(2), except for variable-speed marine 
engines used with controllable-pitch propellers or with electrically 
coupled propellers, apply the following NTE multipliers:
    (A) Subzone 1: 1.2 for Tier 3 NOX+HC standards.
    (B) Subzone 1: 1.5 for Tier 3 p.m. and CO standards.
    (C) Subzones 2 and 3: 1.5 for Tier 3 NOX+HC standards.
    (D) Subzones 2 and 3: 1.9 for PM and CO standards.
    (iii) For variable-speed marine engines used with controllable-
pitch propellers or with electrically coupled propellers that are 
certified using the duty cycle specified in Sec.  1042.505(b)(1), (2), 
or (3), apply the following NTE multipliers:
    (A) Subzone 1: 1.2 for Tier 3 NOX+HC standards.
    (B) Subzone 1: 1.5 for Tier 4 standards and Tier 3 p.m. and CO 
standards.
    (C) Subzone 2: 1.5 for Tier 4 NOX and HC standards and 
for Tier 3 NOX+HC standards.
    (D) Subzone 2: 1.9 for PM and CO standards. However, there is no 
NTE standard in Subzone 2b for PM emissions if the engine family's 
applicable standard for PM is at or above 0.07 g/kW-hr.
    (iv) For constant-speed engines certified using a duty cycle 
specified in Sec.  1042.505(b)(3) or (4), apply the following NTE 
multipliers:
    (A) Subzone 1: 1.2 for Tier 3 NOX+HC standards.
    (B) Subzone 1: 1.5 for Tier 4 standards and Tier 3 p.m. and CO 
standards.
    (C) Subzone 2: 1.5 for Tier 4 NOX and HC standards and 
for Tier 3 NOX+HC standards.
    (D) Subzone 2: 1.9 for PM and CO standards. However, there is no 
NTE standard for PM emissions if the engine family's applicable 
standard for PM is at or above 0.07 g/kW-hr.
    (v) For variable-speed auxiliary marine engines certified using the 
duty cycle specified in Sec.  1042.505(b)(5)(ii) or (iii):
    (A) Subzone 1: 1.2 for Tier 3 NOX+HC standards.
    (B) Subzone 1: 1.5 for Tier 4 standards and Tier 3 p.m. and CO 
standards.
    (C) Subzone 2: 1.2 for Tier 3 NOX+HC standards.
    (D) Subzone 2: 1.5 for Tier 4 standards and Tier 3 p.m. and CO 
standards. However, there is no NTE standard for PM emissions if the 
engine family's applicable standard for PM is at or above 0.07 g/kW-hr.
    (3) The NTE standards apply to your engines whenever they operate 
within the NTE zone for an NTE sampling period of at least thirty 
seconds, during which only a single operator demand set point may be 
selected. Engine operation during a change in operator demand is 
excluded from any NTE sampling period. There is no maximum NTE sampling 
period.
    (4) Collect emission data for determining compliance with the NTE 
standards using the procedures described in subpart F of this part.
    (5) You may ask us to accept as compliant an engine that does not 
fully meet specific requirements under the applicable NTE standards 
where such deficiencies are necessary for safety.
* * * * *
0
161. Section 1042.104 is amended by revising paragraph (a)(2) to read 
as follows:

Sec.  1042.104  Exhaust emission standards for Category 3 engines.

    (a) * * *
    (2) NOX standards apply based on the engine's model year 
and maximum in-use engine speed as shown in the following table:

                    Table 1 to Sec.   1042.104--NOX Emission Standards for Category 3 Engines
                                                    [g/kW-hr]
----------------------------------------------------------------------------------------------------------------
                                                                      Maximum in-use engine speed
                                                      ----------------------------------------------------------
       Emission standards              Model year       Less than 130
                                                             RPM            130-2000 RPM \a\       Over 2000 RPM
----------------------------------------------------------------------------------------------------------------
Tier 1..........................  2004-2010 \b\......            17.0  45.0 [middot] n(-0.20)...             9.8
Tier 2..........................  2011-2015..........            14.4  44.0 [middot] n(-0.23)...             7.7
Tier 3 \c\......................  2016 and later.....             3.4  9.0 [middot] n(-0.20)....             2.0
----------------------------------------------------------------------------------------------------------------
\a\ Applicable standards are calculated from n (maximum in-use engine speed, in RPM, as specified in Sec.
  1042.140). Round the standards to one decimal place.
\b\ Tier 1 NOX standards apply as specified in 40 CFR part 94 for engines originally manufactured in model years
  2004 through 2010. They are shown here only for reference.
\c\ For engines designed with on-off controls as specified in Sec.   1042.115(g), the Tier 2 standards continue
  to apply anytime the engine has disabled its Tier 3 NOX emission controls.

* * * * *
0
162. Section 1042.110 is amended by removing and reserving paragraph 
(b) and revising paragraph (d).
    The revision reads as follows:

Sec.  1042.110  Recording reductant use and other diagnostic functions.

* * * * *
    (d) For Category 3 engines equipped with on-off NOX 
controls (as allowed by Sec.  1042.115(g)), you must also equip your 
engine to continuously monitor NOX concentrations in the 
exhaust. See Sec.  1042.650 to determine if this requirement applies 
for a given Category 1 or Category 2 engine. For measurement 
technologies involving discrete sampling events, measurements are 
considered continuous if they repeat at least once every 60 seconds; we 
may approve a longer sampling period if it is necessary or appropriate 
for sufficiently accurate measurements. Describe your system for 
onboard NOX measurements in your application for 
certification. Use good engineering judgment to alert operators if 
measured NOX concentrations indicate malfunctioning emission 
controls. Record any such operation in nonvolatile computer memory. You 
are not required to monitor NOX concentrations during 
operation for which the emission controls may be disabled under Sec.  
1042.115(g). For the purpose of this paragraph (d), ``malfunctioning 
emission controls'' means any condition in which the measured 
NOX concentration exceeds the highest value expected when 
the engine is in compliance with the installed engine standard of Sec.  
1042.104(g). Use good engineering judgment to determine these expected 
values during production-line testing of the engine using linear 
interpolation between test points and accounting for the degree to 
which the cycle-weighted emissions of the engine are below the 
standard. You may also use additional intermediate

[[Page 40693]]

test points measured during the production-line test. Note that the 
provisions of paragraph (a) of this section also apply for SCR systems 
covered by this paragraph (d). For engines subject to both the 
provisions of paragraph (a) of this section and this paragraph (d), use 
good engineering judgment to integrate diagnostic features to comply 
with both paragraphs. For example, engines may use on-off 
NOX controls to disable certain emission control functions 
only if the diagnostic system indicates that the monitoring described 
in this paragraph (d) is active.
0
163. Section 1042.120 is amended by revising paragraph (b) introductory 
text to read as follows:

Sec.  1042.120  Emission-related warranty requirements.

* * * * *
    (b) Warranty period. Your emission-related warranty must be valid 
for at least as long as the minimum warranty periods listed in this 
paragraph (b) in hours of operation and years, whichever comes first. 
You may offer an emission-related warranty more generous than we 
require. The emission-related warranty for the engine may not be 
shorter than any basic mechanical warranty you provide without charge 
for the engine. Similarly, the emission-related warranty for any 
component may not be shorter than any warranty you provide without 
charge for that component. This means that your warranty may not treat 
emission-related and nonemission-related defects differently for any 
component. If an engine has no hour meter, we base the warranty periods 
in this paragraph (b) only on the engine's age (in years). The warranty 
period begins when the engine is placed into service. The following 
minimum warranty periods apply:
* * * * *
0
164. Section 1042.125 is amended by revising paragraphs (a)(2)(i), 
(a)(3)(i), (c), and (e) to read as follows:

Sec.  1042.125  Maintenance instructions.

* * * * *
    (a) * * *
    (2) * * *
    (i) For EGR-related filters and coolers, DEF filters, PCV valves, 
and fuel injector tips (cleaning only), the minimum interval is 1,500 
hours.
* * * * *
    (3) * * *
    (i) For EGR-related filters and coolers, DEF filters, PCV valves, 
and fuel injector tips (cleaning only), the minimum interval is 1,500 
hours.
* * * * *
    (c) Special maintenance. You may specify more frequent maintenance 
to address problems related to special situations, such as atypical 
engine operation. You must clearly state that this additional 
maintenance is associated with the special situation you are 
addressing. You may also address maintenance of low-use engines (such 
as recreational or stand-by engines) by specifying the maintenance 
interval in terms of calendar months or years in addition to your 
specifications in terms of engine operating hours. All special 
maintenance instructions must be consistent with good engineering 
judgment. We may disapprove your maintenance instructions if we 
determine that you have specified special maintenance steps to address 
maintenance that is unlikely to occur in use, or engine operation that 
is not atypical. For example, this paragraph (c) does not allow you to 
design engines that require special maintenance for a certain type of 
expected operation. If we determine that certain maintenance items do 
not qualify as special maintenance under this paragraph (c), you may 
identify this as recommended additional maintenance under paragraph (b) 
of this section.
* * * * *
    (e) Maintenance that is not emission-related. For maintenance 
unrelated to emission controls, you may schedule any amount of 
inspection or maintenance. You may also take these inspection or 
maintenance steps during service accumulation on your emission-data 
engines, as long as they are reasonable and technologically necessary. 
This might include adding engine oil, changing air, fuel, or oil 
filters, servicing engine-cooling systems, and adjusting idle speed, 
governor, engine bolt torque, valve lash, or injector lash. You may not 
perform this nonemission-related maintenance on emission-data engines 
more often than the least frequent intervals that you recommend to the 
ultimate purchaser.
* * * * *
0
165. Section 1042.130 is amended by revising paragraph (b) to read as 
follows:

Sec.  1042.130  Installation instructions for vessel manufacturers.

* * * * *
    (b) Make sure these instructions have the following information:
    (1) Include the heading: ``Emission-related installation 
instructions''.
    (2) State: ``Failing to follow these instructions when installing a 
certified engine in a vessel violates federal law (40 CFR 1068.105(b)), 
subject to fines or other penalties as described in the Clean Air 
Act.''
    (3) Describe the instructions needed to properly install the 
exhaust system and any other components. Include instructions 
consistent with the requirements of Sec.  1042.205(u).
    (4) Describe any necessary steps for installing the diagnostic 
system described in Sec.  1042.110.
    (5) Describe how your certification is limited for any type of 
application. . For example, if your engines are certified only for 
constant-speed operation, tell vessel manufacturers not to install the 
engines in variable-speed applications or modify the governor.
    (6) Describe any other instructions to make sure the installed 
engine will operate according to design specifications in your 
application for certification. This may include, for example, 
instructions for installing aftertreatment devices when installing the 
engines.
    (7) State: ``If you install the engine in a way that makes the 
engine's emission control information label hard to read during normal 
engine maintenance, you must place a duplicate label on the vessel, as 
described in 40 CFR 1068.105.''
    (8) Describe any vessel labeling requirements specified in Sec.  
1042.135.
* * * * *
0
166. Section 1042.135 is amended by revising paragraphs (c), (d)(1), 
and (e) introductory text to read as follows:

Sec.  1042.135  Labeling.

* * * * *
    (c) The label must--
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark. You may 
identify another company and use its trademark instead of yours if you 
comply with the branding provisions of 40 CFR 1068.45.
    (3) Include EPA's standardized designation for the engine family 
(and subfamily, where applicable).
    (4) Identify all the emission standards that apply to the engine 
(or FELs, if applicable). If you do not declare an FEL under subpart H 
of this part, you may alternatively state the engine's category, 
displacement (in liters or L/cyl), maximum engine power (in kW), and 
power density (in kW/L) as needed to determine the emission standards 
for the engine family. You may specify displacement, maximum engine 
power, or power density as a range consistent with the ranges listed in 
Sec.  1042.101. See Sec.  1042.140 for descriptions of how to specify 
per-cylinder displacement, maximum engine power, and power density.
    (5) State the date of manufacture [DAY (optional), MONTH, and 
YEAR]; however, you may omit this from the label if you stamp, engrave, 
or otherwise

[[Page 40694]]

permanently identify it elsewhere on the engine, in which case you must 
also describe in your application for certification where you will 
identify the date on the engine.
    (6) Identify the application(s) for which the engine family is 
certified (such as constant-speed auxiliary, variable-speed propulsion 
engines used with fixed-pitch propellers, etc.). If the engine is 
certified as a recreational engine, state: ``INSTALLING THIS 
RECREATIONAL ENGINE IN A COMMERCIAL VESSEL OR USING THE VESSEL FOR 
COMMERCIAL PURPOSES MAY VIOLATE FEDERAL LAW SUBJECT TO CIVIL PENALTY 
(40 CFR 1042.601).''
    (7) For engines using sulfur-sensitive technologies, state: ``ULTRA 
LOW SULFUR DIESEL FUEL ONLY''.
    (8) State the useful life for your engine family if the applicable 
useful life is based on the provisions of Sec.  1042.101(e)(2) or (3), 
or Sec.  1042.104(d)(2).
    (9) Identify the emission control system. Use terms and 
abbreviations as described in 40 CFR 1068.45. You may omit this 
information from the label if there is not enough room for it and you 
put it in the owners manual instead.
    (10) State: ``THIS MARINE ENGINE COMPLIES WITH U.S. EPA REGULATIONS 
FOR [MODEL YEAR].''
    (11) For a Category 1 or Category 2 engine that can be modified to 
operate on residual fuel, but has not been certified to meet the 
standards on such a fuel, include the statement: ``THIS ENGINE IS 
CERTIFIED FOR OPERATION ONLY WITH DIESEL FUEL. MODIFYING THE ENGINE TO 
OPERATE ON RESIDUAL OR INTERMEDIATE FUEL MAY BE A VIOLATION OF FEDERAL 
LAW SUBJECT TO CIVIL PENALTIES.''
    (12) For an engine equipped with on-off emissions controls as 
allowed by Sec.  1042.115, include the statement: ``THIS ENGINE IS 
CERTIFIED WITH ON-OFF EMISSION CONTROLS. OPERATION OF THE ENGINE 
CONTRARY TO 40 CFR 1042.115(g) IS A VIOLATION OF FEDERAL LAW SUBJECT TO 
CIVIL PENALTIES.''
    (13) For engines intended for installation on domestic or public 
vessels, include the following statement: ``THIS ENGINE DOES NOT COMPLY 
WITH INTERNATIONAL MARINE REGULATIONS FOR COMMERCIAL VESSELS UNLESS IT 
IS ALSO COVERED BY AN EIAPP CERTIFICATE.''
    (d) * * *
    (1) If your emission control information label includes all the 
information described in paragraphs (c)(5) and (9) of this section, you 
may identify other emission standards that the engine meets or does not 
meet (such as international standards). You may include this 
information by adding it to the statement we specify or by including a 
separate statement.
* * * * *
    (e) For engines using sulfur-sensitive technologies, create a 
separate label with the statement: ``ULTRA LOW SULFUR DIESEL FUEL 
ONLY''. Permanently attach this label to the vessel near the fuel inlet 
or, if you do not manufacture the vessel, take one of the following 
steps to ensure that the vessel will be properly labeled:
* * * * *
0
167. Section 1042.140 is amended by revising paragraph (e) to read as 
follows:

Sec.  1042.140  Maximum engine power, displacement, power density, and 
maximum in-use engine speed.

* * * * *
    (e) Throughout this part, references to a specific power value for 
an engine are based on maximum engine power. For example, the group of 
engines with maximum engine power below 600 kW may be referred to as 
engines below 600 kW.
* * * * *

Subpart C--Certifying Engine Families

0
168. Section 1042.201 is amended by revising paragraphs (a) and (g) to 
read as follows:

Sec.  1042.201  General requirements for obtaining a certificate of 
conformity.

    (a) You must send us a separate application for a certificate of 
conformity for each engine family. A certificate of conformity is valid 
for new production from the indicated effective date until the end of 
the model year for which it is issued, which may not extend beyond 
December 31 of that year. No certificate will be issued after December 
31 of the model year. You may amend your application for certification 
after the end of the model year in certain circumstances as described 
in Sec. Sec.  1042.220 and 1042.225. You must renew your certification 
annually for any engines you continue to produce.
* * * * *
    (g) We may require you to deliver your test engines to a facility 
we designate for our testing (see Sec.  1042.235(c)). Alternatively, 
you may choose to deliver another engine that is identical in all 
material respects to the test engine, or another engine that we 
determine can appropriately serve as an emission-data engine for the 
engine family.
* * * * *
0
169. Section 1042.205 is amended by revising paragraphs (g), (o), 
(r)(1), and (bb)(1) to read as follows:

Sec.  1042.205  Application requirements.

* * * * *
    (g) List the specifications of the test fuel(s) to show that they 
fall within the required ranges we specify in 40 CFR part 1065.
* * * * *
    (o) Present emission data for HC, NOX, PM, and CO on an 
emission-data engine to show your engines meet emission standards as 
specified in Sec. Sec.  1042.101 or 1042.104. Note that you must submit 
PM data for all engines, whether or not a PM standard applies. Show 
emission figures before and after applying adjustment factors for 
regeneration and deterioration factors for each pollutant and for each 
engine. If we specify more than one grade of any fuel type (for 
example, high-sulfur and low-sulfur diesel fuel), you need to submit 
test data only for one grade, unless the regulations of this part 
specify otherwise for your engine. Include emission results for each 
mode for Category 3 engines or for other engines if you do discrete-
mode testing under Sec.  1042.505. For engines using on-off controls as 
described in Sec.  1042.115(g), include emission data demonstrating 
compliance with the Tier 2 standards when the engines Tier 3 NOx 
emission controls are disabled. Note that Sec. Sec.  1042.235 and 
1042.245 allows you to submit an application in certain cases without 
new emission data.
* * * * *
    (r) * * *
    (1) Report all valid test results involving measurement of 
pollutants for which emission standards apply. Also indicate whether 
there are test results from invalid tests or from any other tests of 
the emission-data engine, whether or not they were conducted according 
to the test procedures of subpart F of this part. We may require you to 
report these additional test results. We may ask you to send other 
information to confirm that your tests were valid under the 
requirements of this part and 40 CFR part 1065.
* * * * *
    (bb) * * *
    (1) Describe your normal practice for importing engines. For 
example, this may include identifying the names and addresses of any 
agents you have authorized to import your engines.
* * * * *

[[Page 40695]]

0
170. Section 1042.225 is amended by revising the introductory text and 
adding paragraph (b)(4) to read as follows:

Sec.  1042.225  Amending applications for certification.

    Before we issue you a certificate of conformity, you may amend your 
application to include new or modified engine configurations, subject 
to the provisions of this section. After we have issued your 
certificate of conformity, but before the end of the model year, you 
may send us an amended application requesting that we include new or 
modified engine configurations within the scope of the certificate, 
subject to the provisions of this section. Before the end of the model 
year, you must amend your application if any changes occur with respect 
to any information that is included or should be included in your 
application. After the end of the model year, you may amend your 
application only to update maintenance instructions as described in 
Sec.  1042.220 or to modify an FEL as described in paragraph (f) of 
this section.
* * * * *
    (b) * * *
    (4) Include any other information needed to make your application 
correct and complete.
* * * * *
0
171. Section 1042.235 is amended by revising paragraphs (b), (c)(4), 
and (d)(1) to read as follows:

Sec.  1042.235  Emission testing related to certification.

* * * * *
    (b) Test your emission-data engines using the procedures and 
equipment specified in subpart F of this part. In the case of dual-fuel 
engines, measure emissions when operating with each type of fuel for 
which you intend to certify the engine. In the case of flexible-fuel 
engines, measure emissions when operating with the fuel mixture that 
best represents in-use operation or is most likely to have the highest 
NOX emissions (or NOX+HC emissions for engines 
subject to NOX+HC standards), though you may ask us to 
instead to perform tests with both fuels separately if you can show 
that intermediate mixtures are not likely to occur in use.
* * * * *
    (c) * * *
    (4) Before we test one of your engines, we may calibrate it within 
normal production tolerances for anything we do not consider an 
adjustable parameter. For example, this would apply for an engine 
parameter that is subject to production variability because it is 
adjustable during production, but is not considered an adjustable 
parameter (as defined in Sec.  1042.901) because it is permanently 
sealed. For parameters that relate to a level of performance that is 
itself subject to a specified range (such as maximum power output), we 
will generally perform any calibration under this paragraph (c)(4) in a 
way that keeps performance within the specified range.
    (d) * * *
    (1) The engine family from the previous model year differs from the 
current engine family only with respect to model year, items identified 
in Sec.  1042.225(a), or other characteristics unrelated to emissions. 
We may waive this criterion for differences we determine not to be 
relevant.
* * * * *
0
172. Section 1042.240 is amended by revising paragraph (c)(3), adding 
paragraphs (c)(4) and (5), and revising paragraph (d) to read as 
follows:

Sec.  1042.240  Demonstrating compliance with exhaust emission 
standards.

* * * * *
    (c) * * *
    (3) Sawtooth 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 
emissions over the useful life 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. Base deterioration factors 
for engines with such emission patterns on the difference between (or 
ratio of) the point of the sawtooth 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.
    (4) Deterioration factor for crankcase emissions. If your engine 
vents crankcase emissions to the exhaust or to the atmosphere, you must 
account for crankcase emission deterioration, using good engineering 
judgment. You may use separate deterioration factors for crankcase 
emissions of each pollutant (either multiplicative or additive) or 
include the effects in combined deterioration factors that include 
exhaust and crankcase emissions together for each pollutant.
    (5) Dual-fuel and flexible-fuel engines. In the case of dual-fuel 
and flexible-fuel engines, apply deterioration factors separately for 
each fuel type. You may accumulate service hours on a single emission-
data engine using the type of fuel or the fuel mixture expected to have 
the highest combustion and exhaust temperatures; you may ask us to 
approve a different fuel mixture if you demonstrate that a different 
criterion is more appropriate.
    (d) Determine the official emission result for each pollutant to at 
least one more decimal place than the applicable standard. Apply the 
deterioration factor to the official emission result, as described in 
paragraph (c) of this section, then round the adjusted figure to the 
same number of decimal places as the emission standard. Compare the 
rounded emission levels to the emission standard for each emission-data 
engine. In the case of NOX+HC standards, apply the 
deterioration factor to each pollutant and then add the results before 
rounding.
* * * * *
0
173. Section 1042.250 is amended by revising paragraphs (b)(3)(iv) and 
(c) to read as follows:

Sec.  1042.250  Recordkeeping and reporting.

* * * * *
    (b) * * *
    (3) * * *
    (iv) All your emission tests, including the date and purpose of 
each test and documentation of test parameters as specified in part 40 
CFR part 1065.
* * * * *
    (c) Keep required data from emission tests and all other 
information specified in this section for eight years after we issue 
your certificate. If you use the same emission data or other 
information for a later model year, the eight-year period restarts with 
each year that you continue to rely on the information.
* * * * *
0
174. Section 1042.255 is amended by revising paragraphs (c)(2), (d), 
and (e) to read as follows:

Sec.  1042.255  EPA decisions.

* * * * *
    (c) * * *
    (2) Submit false or incomplete information (paragraph (e) of this 
section applies if this is fraudulent). This includes doing anything 
after submission of your application to render any of the submitted 
information false or incomplete.
* * * * *
    (d) We may void the certificate of conformity for an engine family 
if you fail to keep records, send reports, or give us information as 
required under this part or the Clean Air Act. Note that these are also 
violations of 40 CFR 1068.101(a)(2).

[[Page 40696]]

    (e) We may void your certificate if we find that you intentionally 
submitted false or incomplete information. This includes rendering 
submitted information false or incomplete after submission.
* * * * *

Subpart D--Testing Production-Line Engines

0
175. Section 1042.302 is amended by revising paragraph (a) to read as 
follows:

Sec.  1042.302  Applicability of this subpart for Category 3 engines.

* * * * *
    (a) You must test each Category 3 engine at the sea trial of the 
vessel in which it is installed or within the first 300 hours of 
operation, whichever occurs first. This may involve testing a fully 
assembled production engine before it is installed in the vessel. Since 
you must test each engine, the provisions of Sec. Sec.  1042.310 and 
1042.315(b) do not apply for Category 3 engines. If we determine that 
an engine failure under this subpart is caused by defective components 
or design deficiencies, we may revoke or suspend your certificate for 
the engine family as described in Sec.  1042.340. If we determine that 
an engine failure under this subpart is caused only by incorrect 
assembly, we may suspend your certificate for the engine family as 
described in Sec.  1042.325. If the engine fails, you may continue 
operating only to complete the sea trial and return to port. It is a 
violation of 40 CFR 1068.101(b)(1) to operate the vessel further until 
you remedy the cause of failure. Each two-hour period of such operation 
constitutes a separate offense. A violation lasting less than two hours 
constitutes a single offense.
* * * * *

Subpart F--Test Procedures

0
176. Section 1042.501 is amended by revising paragraphs (d), (e), and 
(f) and adding paragraph (h) to read as follows:

Sec.  1042.501  How do I run a valid emission test?

* * * * *
    (d) Adjust measured emissions to account for aftertreatment 
technology with infrequent regeneration as described in Sec.  1042.525.
    (e) Duty-cycle testing is limited to atmospheric pressures between 
91.000 and 103.325 kPa.
    (f) You may use special or alternate procedures to the extent we 
allow them under 40 CFR 1065.10.
* * * * *
    (h) This subpart is addressed to you as a manufacturer, but it 
applies equally to anyone who does testing for you, and to us when we 
perform testing to determine if your engines meet emission standards.
0
177. Section 1042.505 is amended by revising paragraph (b)(5)(iii) to 
read as follows:

Sec.  1042.505  Testing engines using discrete-mode or ramped-modal 
duty cycles.

* * * * *
    (b) * * *
    (5) * * *
    (iii) Use the 8-mode duty cycle or the corresponding ramped-modal 
cycle described in 40 CFR part 1039, Appendix II, paragraph (c) for 
variable-speed auxiliary engines with maximum engine power at or above 
19 kW that are not propeller-law engines.
* * * * *
0
178. Section 1042.515 is amended by revising paragraphs (f)(2), (f)(4), 
and (g) to read as follows:

Sec.  1042.515  Test procedures related to not-to-exceed standards.

* * * * *
    (f) * * *
    (2) You may ask us to approve a Limited Testing Region (LTR). An 
LTR is a region of engine operation, within the applicable NTE zone, 
where you have demonstrated that your engine family operates for no 
more than 5.0 percent of its normal in-use operation, on a time-
weighted basis. You must specify an LTR using boundaries based on 
engine speed and power (or torque), where the LTR boundaries must 
coincide with some portion of the boundary defining the overall NTE 
zone. Any emission data collected within an LTR for a time duration 
that exceeds 5.0 percent of the duration of its respective NTE sampling 
period will be excluded when determining compliance with the applicable 
NTE standards. Any emission data collected within an LTR for a time 
duration of 5.0 percent or less of the duration of the respective NTE 
sampling period will be included when determining compliance with the 
NTE standards.
* * * * *
    (4) You may exclude emission data based on catalytic aftertreatment 
temperatures as follows:
    (i) For an engine equipped with a catalytic NOX 
aftertreatment system, exclude NOX emission data that is 
collected when the exhaust temperature at any time during the NTE event 
is less than 250 [deg]C.
    (ii) For an engine equipped with an oxidizing catalytic 
aftertreatment system, exclude HC and CO emission data that is 
collected when the exhaust temperature at any time during the NTE event 
is less than 250 [deg]C. Also exclude PM emission data if the 
applicable PM standard (or family emission limit) is above 0.06 g/kW-
hr. Where there are parallel paths, measure the temperature 30 cm 
downstream of the last oxidizing aftertreatment device in the path with 
the greatest exhaust flow.
    (iii) Measure exhaust temperature within 30 cm downstream of the 
last applicable catalytic aftertreatment device. Where there are 
parallel paths, use good engineering judgment to measure the 
temperature within 30 cm downstream of the last applicable catalytic 
aftertreatment device in the path with the greatest exhaust flow.
    (g) Emission sampling is not valid for NTE testing if it includes 
any active regeneration, unless the emission averaging period includes 
the complete regeneration event(s) and the full period of engine 
operation until the start of the next regeneration event. This 
provision applies only for engines that send an electronic signal 
indicating the start of the regeneration event.
0
179. Section 1042.525 is revised to read as follows:

Sec.  1042.525  How do I adjust emission levels to account for 
infrequently regenerating aftertreatment devices?

    For engines using aftertreatment technology with infrequent 
regeneration events that may occur during testing, take one of the 
following approaches to account for the emission impact of 
regeneration, or use an alternate methodology that we approve for 
Category 3 engines:
    (a) You may use the calculation methodology described in 40 CFR 
1065.680 to adjust measured emission results. Do this by developing an 
upward adjustment factor and a downward adjustment factor for each 
pollutant based on measured emission data and observed regeneration 
frequency as follows:
    (1) Adjustment factors should generally apply to an entire engine 
family, but you may develop separate adjustment factors for different 
configurations within an engine family. Use the adjustment factors from 
this section in all testing for the engine family.
    (2) You may use carryover or carry-across data to establish 
adjustment factors for an engine family as described in Sec.  1042.235, 
consistent with good engineering judgment.
    (3) Determine the frequency of regeneration, F, as described in 40 
CFR 1065.680 from in-use operating data or from running repetitive 
tests in a

[[Page 40697]]

laboratory. If the engine is designed for regeneration at fixed time 
intervals, you may apply good engineering judgment to determine F based 
on those design parameters.
    (4) Identify the value of F in each application for certification 
for which it applies.
    (b) You may ask us to approve an alternate methodology to account 
for regeneration events. We will generally limit approval to cases 
where your engines use aftertreatment technology with extremely 
infrequent regeneration and you are unable to apply the provisions of 
this section.
    (c) You may choose to make no adjustments to measured emission 
results if you determine that regeneration does not significantly 
affect emission levels for an engine family (or configuration) or if it 
is not practical to identify when regeneration occurs. If you choose 
not to make adjustments under paragraph (a) or (b) of this section, 
your engines must meet emission standards for all testing, without 
regard to regeneration.

Subpart G--Special Compliance Provisions

0
180. Section 1042.601 is amended by adding paragraph (j) to read as 
follows:

Sec.  1042.601  General compliance provisions for marine engines and 
vessels.

* * * * *
    (j) Subpart C of this part describes how to test and certify dual-
fuel and flexible-fuel engines. Some multi-fuel engines may not fit 
either of those defined terms. For such engines, we will determine 
whether it is most appropriate to treat them as single-fuel engines, 
dual-fuel engines, or flexible-fuel engines based on the range of 
possible and expected fuel mixtures. For example, an engine might burn 
natural gas but initiate combustion with a pilot injection of diesel 
fuel. If the engine is designed to operate with a single fueling 
algorithm (i.e., fueling rates are fixed at a given engine speed and 
load condition), we would generally treat it as a single-fuel engine, 
In this context, the combination of diesel fuel and natural gas would 
be its own fuel type. If the engine is designed to also operate on 
diesel fuel alone, we would generally treat it as a dual-fueled engine. 
If the engine is designed to operate on varying mixtures of the two 
fuels, we would generally treat it as a flexible-fueled engine. To the 
extent that requirements vary for the different fuels or fuel mixtures, 
we may apply the more stringent requirements.
0
181. Section 1042.605 is amended by revising paragraphs (e)(3) to read 
as follows:

Sec.  1042.605  Dressing engines already certified to other standards 
for nonroad or heavy-duty highway engines for marine use.

* * * * *
    (e) * * *
    (3) Send the Designated Compliance Officer written notification 
describing your plans before using the provisions of this section. In 
addition, by February 28 of each calendar year (or less often if we 
tell you), send the Designated Compliance Officer a signed letter with 
all the following information:
    (i) Identify your full corporate name, address, and telephone 
number.
    (ii) List the engine models for which you used this exemption in 
the previous year and describe your basis for meeting the sales 
restrictions of paragraph (d)(4) of this section.
    (iii) State: ``We prepared each listed engine model for marine 
application without making any changes that could increase its 
certified emission levels, as described in 40 CFR 1042.605.''
* * * * *
0
182. Section 1042.610 is amended by revising paragraph (e)(2) to read 
as follows:

Sec.  1042.610  Certifying auxiliary marine engines to land-based 
standards.

* * * * *
    (e) * * *
    (2) Send the Designated Compliance Officer written notification 
describing your plans before using the provisions of this section. In 
addition, by February 28 of each calendar year (or less often if we 
tell you), send the Designated Compliance Officer a signed letter with 
all the following information:
    (i) Identify your full corporate name, address, and telephone 
number.
    (ii) List the engine models for which you used this exemption in 
the previous year and describe your basis for meeting the sales 
restrictions of paragraph (d)(3) of this section.
    (iii) State: ``We prepared each listed engine model for marine 
application without making any changes that could increase its 
certified emission levels, as described in 40 CFR 1042.610.''
* * * * *
0
183. Section 1042.630 is amended by revising paragraph (f) to read as 
follows:

Sec.  1042.630  Personal-use exemption.

* * * * *
    (f) The vessel must be a vessel that is not classed or subject to 
Coast Guard inspections or surveys. Note that dockside examinations 
performed by the Coast Guard are not considered inspections (see 46 
U.S.C. 3301 and 46 U.S.C. 4502).

Sec.  1042.640  [Removed]

0
184. Section 1042.640 is removed.
0
185. Section 1042.650 is amended by revising paragraphs (a) and (d) to 
read as follows:

Sec.  1042.650  Migratory vessels.

* * * * *
    (a) Temporary exemption. A vessel owner may ask us for a temporary 
exemption from the tampering prohibition in 40 CFR 1068.101(b)(1) for a 
vessel if it will operate for an extended period outside the United 
States where ULSD is not available. In your request, describe where the 
vessel will operate, how long it will operate there, why ULSD will be 
unavailable, and how you will modify the engine, including its emission 
controls. If we approve your request, you may modify the engine, but 
only as needed to disable or remove the emission controls needed for 
meeting the Tier 4 standards. You must return the engine to its 
original certified configuration before the vessel returns to the 
United States to avoid violating the tampering prohibition in 40 CFR 
1068.101(b)(1). We may set additional conditions to prevent 
circumvention of the provisions of this part.
* * * * *
    (d) Auxiliary engines on Category 3 vessels. Auxiliary engines that 
will be installed on vessels with Category 3 propulsion engines qualify 
for an exemption from the standards of this part provided all the 
following conditions are met:
    (1) To be eligible for this exemption, the engine must meet all of 
the following criteria.
    (i) The engine must be certified to the applicable NOX 
standards of Annex VI and meet all other applicable requirements of 40 
CFR part 1043. Engines installed on vessels constructed on or after 
January 1, 2016 must conform fully to the Annex VI Tier III 
NOX standards as described in 40 CFR part 1043 and meet all 
other applicable requirements in 40 CFR part 1043. Engines that would 
otherwise be subject to the Tier 4 standards of this part must also 
conform fully to the Annex VI Tier III NOX standards as 
described in 40 CFR part 1043.
    (ii) The engine may not be used for propulsion (except for 
emergency engines).
    (iii) Engines certified to the Annex VI Tier III standards may be 
equipped with on-off NOX controls, as long as they conform 
to the requirements of Sec. Sec.  1042.110(d) and 1042.115(g);

[[Page 40698]]

however, the engines must comply fully with the Annex VI Tier II 
standards when the emission controls are disabled, and meet any other 
requirements that apply under Annex VI.
    (2) You must notify the Designated Compliance Officer of your 
intent to use this exemption before you introduce engines into U.S. 
commerce, not later than the time that you apply for an EIAPP 
certificate for the engine under 40 CFR part 1043.
    (3) The remanufactured engine requirements of subpart I of this 
part do not apply.
    (4) If you introduce an engine into U.S. commerce under this 
paragraph (d), you must meet the labeling requirements in Sec.  
1042.135, but add the following statement instead of the compliance 
statement in Sec.  1042.135(c)(10):
    THIS ENGINE DOES NOT COMPLY WITH CURRENT U.S. EPA EMISSION 
STANDARDS UNDER 40 CFR 1042.650 AND IS FOR USE SOLELY IN VESSELS WITH 
CATEGORY 3 PROPULSION ENGINES. INSTALLATION OR USE OF THIS ENGINE IN 
ANY OTHER APPLICATION MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO 
CIVIL PENALTY.
    (5) The reporting requirements of Sec.  1042.660 apply for engines 
exempted under this paragraph (d).
0
186. Section 1042.655 is amended by revising the section heading and 
paragraph (b) to read as follows:

Sec.  1042.655  Special certification provisions for Category 3 engines 
with aftertreatment.

* * * * *
    (b) Required testing. The emission-data engine must be tested as 
specified in subpart F of this part to verify that the engine-out 
emissions comply with the Tier 2 standards. The catalyst material or 
other aftertreatment device must be tested under conditions that 
accurately represent actual engine conditions for the test points. This 
catalyst or aftertreatment testing may be performed on a benchscale.
* * * * *
0
187. Section 1042.660 is amended by revising paragraphs (b) and (c)(1) 
to read as follows:

Sec.  1042.660  Requirements for vessel manufacturers, owners, and 
operators.

* * * * *
    (b) For vessels equipped with SCR systems requiring the use of urea 
or other reductants, owners and operators must report to the Designated 
Enforcement Officer within 30 days any operation of such vessels 
without the appropriate reductant. This includes vessels with auxiliary 
engines certified to Annex VI standards under Sec.  1042.650(d). 
Failure to comply with the requirements of this paragraph is a 
violation of 40 CFR 1068.101(a)(2). Note that such operation is a 
violation of 40 CFR 1068.101(b)(1).
    (c) * * *
    (1) The requirements of this paragraph (c)(1) apply only for 
Category 3 engines. All maintenance, repair, adjustment, and alteration 
of Category 3 engines subject to the provisions of this part performed 
by any owner, operator or other maintenance provider must be performed 
using good engineering judgment, in such a manner that the engine 
continues (after the maintenance, repair, adjustment or alteration) to 
meet the emission standards it was certified as meeting prior to the 
need for service. This includes but is not limited to complying with 
the maintenance instructions described in Sec.  1042.125. Adjustments 
are limited to the range specified by the engine manufacturer in the 
approved application for certification. Note that where a repair (or 
other maintenance) cannot be completed while at sea, it is not a 
violation to continue operating the engine to reach your destination.
* * * * *
0
188. Section 1042.670 is amended by revising paragraph (d) to read as 
follows:

Sec.  1042.670  Special provisions for gas turbine engines.

* * * * *
    (d) Equivalent displacement. Apply displacement-based provisions of 
this part by calculating an equivalent displacement from maximum engine 
power. The equivalent per-cylinder displacement (in liters) equals 
maximum engine power in kW multiplied by 0.00311, except that all gas 
turbines with maximum engine power above 9,300 kW are considered to 
have an equivalent per-cylinder displacement of 29.0 liters. Also, 
determine the appropriate Tier 3 standards for Category 1 engines based 
on the engine having an equivalent power density below 35 kW per liter.
* * * * *

Subpart H--Averaging, Banking, and Trading for Certification

0
189. Section 1042.701 is amended by adding paragraphs (j) and (k) to 
read as follows:

Sec.  1042.701  General provisions.

* * * * *
    (j) NOX+HC and PM credits generated under 40 CFR part 94 
may be used under this part in the same manner as NOX+HC and 
PM credits generated under this part.
    (k) You may use either of the following approaches to retire or 
forego emission credits:
    (1) You may retire emission credits generated from any number of 
your engines. This may be considered donating emission credits to the 
environment. Identify any such credits in the reports described in 
Sec.  1042.730. Engines must comply with the applicable FELs even if 
you donate or sell the corresponding emission credits under this 
paragraph (k). Those credits may no longer be used by anyone to 
demonstrate compliance with any EPA emission standards.
    (2) You may certify a family using an FEL below the emission 
standard as described in this part and choose not to generate emission 
credits for that family. If you do this, you do not need to calculate 
emission credits for those families and you do not need to submit or 
keep the associated records described in this subpart for that family.
0
190. Section 1042.705 is amended by revising paragraph (c) to read as 
follows:

Sec.  1042.705  Generating and calculating emission credits.

* * * * *
    (c) As described in Sec.  1042.730, compliance with the 
requirements of this subpart is determined at the end of the model year 
based on actual U.S.-directed production volumes. Do not include any of 
the following engines to calculate emission credits:
    (1) Engines with a permanent exemption under subpart G of this part 
or under 40 CFR part 1068.
    (2) Exported engines.
    (3) Engines not subject to the requirements of this part, such as 
those excluded under Sec.  1042.5.
    (4) [Reserved]
    (5) Any other engines, where we indicate elsewhere in this part 
1042 that they are not to be included in the calculations of this 
subpart.
0
191. Section 1042.710 is amended by revising paragraph (c) to read as 
follows:

Sec.  1042.710  Averaging emission credits.

* * * * *
    (c) If you certify an engine family to an FEL that exceeds the 
otherwise applicable emission standard, you must obtain enough emission 
credits to offset the engine family's deficit by the due date for the 
final report required in Sec.  1042.730. The emission credits used to 
address the deficit may come from your other engine families that 
generate emission credits in the same model year, from emission credits 
you have

[[Page 40699]]

banked from previous model years, or from emission credits generated in 
the same or previous model years that you obtained through trading.
0
192. Section 1042.725 is amended by revising paragraph (b)(2) to read 
as follows:

Sec.  1042.725  Information required for the application for 
certification.

* * * * *
    (b) * * *
    (2) Detailed calculations of projected emission credits (positive 
or negative) based on projected production volumes. We may require you 
to include similar calculations from your other engine families to 
demonstrate that you will be able to avoid negative 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
193. Section 1042.730 is amended by revising paragraphs (b) and (c)(2) 
to read as follows:

Sec.  1042.730  ABT reports.

* * * * *
    (b) Your end-of-year and final reports must include the following 
information for each engine family participating in the ABT program:
    (1) Engine-family designation and averaging set.
    (2) The emission standards that would otherwise apply to the engine 
family.
    (3) The FEL for each pollutant. If you change the FEL after the 
start of production, identify the date that you started using the new 
FEL and/or give the engine identification number for the first engine 
covered by the new FEL. In this case, identify each applicable FEL and 
calculate the positive or negative emission credits as specified in 
Sec.  1042.225.
    (4) The projected and actual U.S.-directed production volumes for 
the model year, as described in Sec.  1042.705(c). If you changed an 
FEL during the model year, identify the actual U.S.-directed production 
volume associated with each FEL.
    (5) Maximum engine power for each engine configuration, and the 
average engine power weighted by U.S.-directed production volumes for 
the engine family.
    (6) Useful life.
    (7) Calculated positive or negative emission credits for the whole 
engine family. Identify any emission credits that you traded, as 
described in paragraph (d)(1) of this section.
    (c) * * *
    (2) State whether you will retain any emission credits for banking. 
If you choose to retire emission credits that would otherwise be 
eligible for banking, identify the engine families that generated the 
emission credits, including the number of emission credits from each 
family.
* * * * *
0
194. Section 1042.735 is amended by revising paragraphs (a) and (b) to 
read as follows:

Sec.  1042.735  Recordkeeping.

    (a) You must organize and maintain your records as described in 
this section.
    (b) Keep the records required by this section for at least eight 
years after the due date for the end-of-year report. You may not use 
emission credits for any engines if you do not keep all the records 
required under this section. You must therefore keep these records to 
continue to bank valid credits.
* * * * *

Subpart I--Special Provisions for Remanufactured Marine Engines

0
195. Section 1042.810 is amended by revising paragraph (c) to read as 
follows:

Sec.  1042.810  Requirements for owner/operators and installers during 
remanufacture.

* * * * *
    (c) Your engine is not subject to the standards of this subpart if 
we determine that no certified remanufacturing system is available for 
your engine as described in Sec.  1042.815. For engines that are 
remanufactured during multiple events within a five-year period, you 
are not required to use a certified system until all of your engine's 
cylinders have been replaced after the system became available. For 
example, if you remanufacture your 16-cylinder engine by replacing four 
cylinders each January and a system becomes available for your engine 
June 1, 2010, your engine must be in a certified configuration when you 
replace four cylinders in January of 2014. At that point, all 16 
cylinders would have been replaced after June 1, 2010.
* * * * *
0
196. Section 1042.830 is revised to read as follows:

Sec.  1042.830  Labeling.

    (a) The labeling requirements of this paragraph (a) apply for 
remanufacturing that is subject to the standards of this subpart. At 
the time of remanufacture, affix a permanent and legible label 
identifying each engine. The label must be--
    (1) Attached in one piece so it is not removable without being 
destroyed or defaced.
    (2) Secured to a part of the engine needed for normal operation and 
not normally requiring replacement.
    (3) Durable and readable for the engine's entire useful life.
    (4) Written in English.
    (b) The label required under paragraph (a) of this section must--
    (1) Include the heading ``EMISSION CONTROL INFORMATION''.
    (2) Include your full corporate name and trademark.
    (3) Include EPA's standardized designation for the engine family.
    (4) State the engine's category, displacement (in liters or L/cyl), 
maximum engine power (in kW), and power density (in kW/L) as needed to 
determine the emission standards for the engine family. You may specify 
displacement, maximum engine power, and power density as ranges 
consistent with the ranges listed in Sec.  1042.101. See Sec.  1042.140 
for descriptions of how to specify per-cylinder displacement, maximum 
engine power, and power density.
    (5) State: ``THIS MARINE ENGINE MEETS THE STANDARDS OF 40 CFR 1042, 
SUBPART I, FOR [CALENDAR YEAR OF REMANUFACTURE].''
    (c) For remanufactured engines that are subject to this subpart as 
described in Sec.  1042.801(a), but are not subject to remanufacturing 
standards as allowed by Sec.  1042.810 or Sec.  1042.815, you may 
voluntarily add a label as specified in paragraphs (a) and (b) of this 
section, except that the label must omit the standardized designation 
for the engine family and include the following alternative compliance 
statement: ``THIS MARINE ENGINE IS NOT SUBJECT TO REMANUFACTURING 
STANDARDS UNDER 40 CFR 1042, SUBPART I, FOR [CALENDAR YEAR OF 
REMANUFACTURE].''
    (d) You may add information to the emission control information 
label to identify other emission standards that the engine meets or 
does not meet (such as international standards). You may also add other 
information to ensure that the engine will be properly maintained and 
used.
    (e) You may ask us to approve modified labeling requirements in 
this section if you show that it is necessary or appropriate. We will 
approve your request if your alternate label is consistent with the 
intent of the labeling requirements of this section.
0
197. Section 1042.840 is amended by revising paragraphs (c) and (o) to 
read as follows:

[[Page 40700]]

Sec.  1042.840  Application requirements for remanufactured engines.

* * * * *
    (c) Summarize the cost effectiveness analysis used to demonstrate 
your system will meet the availability criteria of Sec.  1042.815. 
Identify the maximum allowable costs for vessel modifications to meet 
the criteria.
* * * * *
    (o) Report all valid test results. Also indicate whether there are 
test results from invalid tests or from any other tests of the 
emission-data engine, whether or not they were conducted according to 
the test procedures of subpart F of this part. If you measure 
CO2, report those emission levels. We may require you to 
report these additional test results. We may ask you to send other 
information to confirm that your tests were valid under the 
requirements of this part and 40 CFR part 1065.
* * * * *

Subpart J--Definitions and Other Reference Information

0
198. Section 1042.901 is amended as follows:
0
a. By revising the definition of ``Designated Compliance Officer''.
0
b. By adding definitions for ``Designated Enforcement Officer'', 
``Dual-fuel'', and ``Flexible-fuel''.
0
c. By revising the definition for ``Low-sulfur diesel fuel'', ``Model 
year'', and ``Placed into service''.
0
d. By removing the definition for ``Point of first retail sale''.
    The revisions and additions read as follows:

Sec.  1042.901  Definitions.

* * * * *
    Designated Compliance Officer means the Director, Diesel Engine 
Compliance Center, U.S. Environmental Protection Agency, 2000 
Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov; epa.gov/otaq/verify.
    Designated Enforcement Officer means the Director, Air Enforcement 
Division (2242A), U.S. Environmental Protection Agency, 1200 
Pennsylvania Ave. NW.,Washington, DC 20460.
* * * * *
    Dual-fuel means relating to an engine designed for operation on two 
different fuels but not on a continuous mixture of those fuels (see 
Sec.  1042.601(j)). For purposes of this part, such an engine remains a 
dual-fuel engine even if it is designed for operation on three or more 
different fuels. Note that this definition differs from MARPOL Annex 
VI.
* * * * *
    Flexible-fuel means relating to an engine designed for operation on 
any mixture of two or more different fuels (see Sec.  1042.601(j)).
* * * * *
    Low-sulfur diesel fuel means one of the following:
    (1) For in-use fuels, low-sulfur diesel fuel means a diesel fuel 
marketed as low-sulfur diesel fuel having a maximum sulfur 
concentration of 500 parts per million.
    (2) For testing, low-sulfur diesel fuel has the meaning given in 40 
CFR part 1065.
* * * * *
    Model year means any of the following:
    (1) For freshly manufactured marine engines (see definition of 
``new marine engine,'' paragraph (1)), model year means one of the 
following:
    (i) Calendar year of production.
    (ii) Your annual new model production period if it is different 
than the calendar year. This must include January 1 of the calendar 
year for which the model year is named. It may not begin before January 
2 of the previous calendar year and it must end by December 31 of the 
named calendar year. For seasonal production periods not including 
January 1, model year means the calendar year in which the production 
occurs, unless you choose to certify the applicable engine family with 
the following model year. For example, if your production period is 
June 1, 2010 through November 30, 2010, your model year would be 2010 
unless you choose to certify the engine family for model year 2011.
    (2) For an engine that is converted to a marine engine after being 
certified and placed into service as a motor vehicle engine, a nonroad 
engine that is not a marine engine, or a stationary engine, model year 
means the calendar year in which the engine was originally produced. 
For an engine that is converted to a marine engine after being placed 
into service as a motor vehicle engine, a nonroad engine that is not a 
marine engine, or a stationary engine without having been certified, 
model year means the calendar year in which the engine becomes a new 
marine engine. (See definition of ``new marine engine,'' paragraph 
(2)).
    (3) For an uncertified marine engine excluded under Sec.  1042.5 
that is later subject to this part 1042 as a result of being installed 
in a different vessel, model year means the calendar year in which the 
engine was installed in the non-excluded vessel. For a marine engine 
excluded under Sec.  1042.5 that is later subject to this part 1042 as 
a result of reflagging the vessel, model year means the calendar year 
in which the engine was originally manufactured. For a marine engine 
that become new under paragraph (7) of the definition of ``new marine 
engine,'' model year means the calendar year in which the engine was 
originally manufactured. (See definition of ``new marine engine,'' 
paragraphs (3) and (7).)
    (4) For engines that do not meet the definition of ``freshly 
manufactured'' but are installed in new vessels, model year means the 
calendar year in which the engine is installed in the new vessel (see 
definition of ``new marine engine,'' paragraph (4)).
    (5) For remanufactured engines, model year means the calendar year 
in which the remanufacture takes place.
    (6) For imported engines:
    (i) For imported engines described in paragraph (6)(i) of the 
definition of ``new marine engine,'' model year has the meaning given 
in paragraphs (1) through (4) of this definition.
    (ii) For imported engines described in paragraph (6)(ii) of the 
definition of ``new marine engine,'' model year means the calendar year 
in which the engine is remanufactured.
    (iii) For imported engines described in paragraph (6)(iii) of the 
definition of ``new marine engine,'' model year means the calendar year 
in which the engine is first assembled in its imported configuration, 
unless specified otherwise in this part or in 40 CFR part 1068.
    (iv) For imported engines described in paragraph (6)(iv) of the 
definition of ``new marine engine,'' model year means the calendar year 
in which the engine is imported.
    (7) [Reserved]
    (8) For freshly manufactured vessels, model year means the calendar 
year in which the keel is laid or the vessel is at a similar stage of 
construction. For vessels that become new under paragraph (2) or (3) of 
the definition of ``new vessel'' (as a result of modifications), model 
year means the calendar year in which the modifications physically 
begin.
* * * * *
    Placed into service means put into initial use for its intended 
purpose. Engines and vessels do not qualify as being ``placed into 
service'' based on incidental use by a manufacturer or dealer.
* * * * *
0
199. Section 1042.905 is revised to read as follows:

Sec.  1042.905  Symbols, acronyms, and abbreviations.

    The following symbols, acronyms, and abbreviations apply to this 
part:

[[Page 40701]]

------------------------------------------------------------------------
 
------------------------------------------------------------------------
ABT.................................  Averaging, banking, and trading.
AECD................................  auxiliary emission control device.
CFR.................................  Code of Federal Regulations.
CH4.................................  methane.
CO..................................  carbon monoxide.
CO2.................................  carbon dioxide.
cyl.................................  cylinder.
disp................................  displacement.
ECA.................................  Emission Control Area.
EEZ.................................  Exclusive Economic Zone.
EPA.................................  Environmental Protection Agency.
FEL.................................  Family Emission Limit.
g...................................  grams.
HC..................................  hydrocarbon.
IMO.................................  International Maritime
                                       Organization.
hr..................................  hours.
kPa.................................  kilopascals.
kW..................................  kilowatts.
L...................................  liters.
LTR.................................  Limited Testing Region.
N2O.................................  nitrous oxide.
NARA................................  National Archives and Records
                                       Administration.
NMHC................................  nonmethane hydrocarbon.
NOX.................................  oxides of nitrogen (NO and NO2).
NTE.................................  not-to-exceed.
PM..................................  particulate matter.
RPM.................................  revolutions per minute.
SAE.................................  Society of Automotive Engineers.
SCR.................................  selective catalytic reduction.
THC.................................  total hydrocarbon.
THCE................................  total hydrocarbon equivalent.
ULSD................................  ultra low-sulfur diesel fuel.
U.S.C...............................  United States Code.
------------------------------------------------------------------------

0
200. Section 1042.910 is revised to read as follows:

Sec.  1042.910  Incorporation by reference.

    (a) Certain material is incorporated by reference into this part 
with the approval of the Director of the Federal Register under 5 
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, the Environmental Protection Agency must 
publish a notice of the change in the Federal Register and the material 
must be available to the public. All approved material is available for 
inspection at U.S. EPA, Air and Radiation Docket and Information 
Center, 1301 Constitution Ave. NW., Room B102, EPA West Building, 
Washington, DC 20460, (202) 202-1744, and is available from the sources 
listed below. It is also available for inspection at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (b) The International Maritime Organization, 4 Albert Embankment, 
London SE1 7SR, United Kingdom, or www.imo.org, or 44-(0)20-7735-7611.
    (1) MARPOL Annex VI, Regulations for the Prevention of Air 
Pollution from Ships, Third Edition, 2013, and NOx Technical 
Code 2008.
    (i) Revised MARPOL Annex VI, Regulations for the Prevention of 
Pollution from Ships, Third Edition, 2013 (``2008 Annex VI''); IBR 
approved for Sec.  1042.901.
    (ii) NOx Technical Code 2008, Technical Code on Control 
of Emission of Nitrogen Oxides from Marine Diesel Engines, 2013 
Edition, (``NOx Technical Code''); IBR approved for 
Sec. Sec.  1042.104(g), 1042.230(d), 1042.302(c) and (e), 1042.501(g), 
and 1042.901.
    (iii) Annex 12, Resolution MEPC.251(66) from the Report of the 
Marine Environment Protection Committee on its Sixty-Sixth Session, 
April 25, 2014. This document describes new and revised provisions that 
are considered to be part of Annex VI and NOx Technical Code 
2008 as referenced in paragraphs (a)(1)(i) and (ii) of this section. 
IBR approved for Sec. Sec.  1042.104(g), 1042.230(d), 1042.302(c) and 
(e), 1042.501(g), and 1042.901.
    (2) [Reserved]
0
201. Section 1042.915 is revised to read as follows:

Sec.  1042.915  Confidential information.

    The provisions of 40 CFR 1068.10 apply for information you consider 
confidential.
0
202. Section 1042.925 is revised to read as follows:

Sec.  1042.925  Reporting and recordkeeping requirements.

    (a) This part includes various requirements to submit and record 
data or other information. Unless we specify otherwise, store required 
records in any format and on any media and keep them readily available 
for eight years after you send an associated application for 
certification, or eight years after you generate the data if they do 
not support an application for certification. You are expected to keep 
your own copy of required records rather than relying on someone else 
to keep records on your behalf. We may review these records at any 
time. You must promptly send us organized, written records in English 
if we ask for them. We may require you to submit written records in an 
electronic format.
    (b) The regulations in Sec.  1042.255, 40 CFR 1068.25, and 40 CFR 
1068.101 describe your obligation to report truthful and complete 
information. This includes information not related to certification. 
Failing to properly report information and keep the records we specify 
violates 40 CFR 1068.101(a)(2), which may involve civil or criminal 
penalties.
    (c) Send all reports and requests for approval to the Designated 
Compliance Officer (see Sec.  1042.801).
    (d) Any written information we require you to send to or receive 
from another company is deemed to be a required record under this 
section. Such records are also deemed to be submissions to EPA. We may 
require you to send us these records whether or not you are a 
certificate holder.
    (e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the 
Office of Management and Budget approves the reporting and 
recordkeeping specified in the applicable regulations. The following 
items illustrate the kind of reporting and recordkeeping we require for 
engines and vessels regulated under this part:
    (1) We specify the following requirements related to engine 
certification in this part 1042:
    (i) In Sec.  1042.135 we require engine manufacturers to keep 
certain records related to duplicate labels sent to vessel 
manufacturers.
    (ii) In Sec.  1042.145 we state the requirements for interim 
provisions.
    (iii) In subpart C of this part we identify a wide range of 
information required to certify engines.
    (iv) In Sec. Sec.  1042.345 and 1042.350 we specify certain records 
related to production-line testing.
    (v) In subpart G of this part we identify several reporting and 
recordkeeping items for making demonstrations and getting approval 
related to various special compliance provisions.
    (vi) In Sec. Sec.  1042.725, 1042.730, and 1042.735 we specify 
certain records related to averaging, banking, and trading.
    (vii) In subpart I of this part we specify certain records related 
to meeting requirements for remanufactured engines.
    (2) We specify the following requirements related to testing in 40 
CFR part 1065:
    (i) In 40 CFR 1065.2 we give an overview of principles for 
reporting information.
    (ii) In 40 CFR 1065.10 and 1065.12 we specify information needs for 
establishing various changes to published test procedures.
    (iii) In 40 CFR 1065.25 we establish basic guidelines for storing 
test information.
    (iv) In 40 CFR 1065.695 we identify the specific information and 
data items to record when measuring emissions.
    (3) We specify the following requirements related to the general

[[Page 40702]]

compliance provisions in 40 CFR part 1068:
    (i) In 40 CFR 1068.5 we establish a process for evaluating good 
engineering judgment related to testing and certification.
    (ii) In 40 CFR 1068.25 we describe general provisions related to 
sending and keeping information.
    (iii) In 40 CFR 1068.27 we require manufacturers to make engines 
available for our testing or inspection if we make such a request.
    (iv) In 40 CFR 1068.105 we require vessel manufacturers to keep 
certain records related to duplicate labels from engine manufacturers.
    (v) In 40 CFR 1068.120 we specify recordkeeping related to 
rebuilding engines.
    (vi) In 40 CFR part 1068, subpart C, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to various exemptions.
    (vii) In 40 CFR part 1068, subpart D, we identify several reporting 
and recordkeeping items for making demonstrations and getting approval 
related to importing engines.
    (viii) In 40 CFR 1068.450 and 1068.455 we specify certain records 
related to testing production-line engines in a selective enforcement 
audit.
    (ix) In 40 CFR 1068.501 we specify certain records related to 
investigating and reporting emission-related defects.
    (x) In 40 CFR 1068.525 and 1068.530 we specify certain records 
related to recalling nonconforming engines.
0
203. Appendix II is revised to read as follows:

Appendix II to Part 1042--Steady-State Duty Cycles

    (a) The following duty cycles apply as specified in Sec.  
1042.505(b)(1):
    (1) The following duty cycle applies for discrete-mode testing:

------------------------------------------------------------------------
                                                 Percent of
         E3 mode No.             Engine speed     maximum     Weighting
                                     \1\         test power    factors
------------------------------------------------------------------------
1............................  Maximum test             100          0.2
                                speed.
2............................  91%............           75          0.5
3............................  80%............           50         0.15
4............................  63%............           25         0.15
------------------------------------------------------------------------
\1\ Maximum test speed is defined in 40 CFR part 1065. Percent speed
  values are relative to maximum test speed.

    (2) The following duty cycle applies for ramped-modal testing:

----------------------------------------------------------------------------------------------------------------
                                       Time in mode
              RMC mode                   (seconds)        Engine speed 1 3            Power (percent) 2 3
----------------------------------------------------------------------------------------------------------------
1a Steady-state.....................             229  Maximum test speed.....  100%.
1b Transition.......................              20  Linear transition......  Linear transition in torque.
2a Steady-state.....................             166  63%....................  25%.
2b Transition.......................              20  Linear transition......  Linear transition in torque.
3a Steady-state.....................             570  91%....................  75%.
3b Transition.......................              20  Linear transition......  Linear transition in torque.
4a Steady-state.....................             175  80%....................  50%.
----------------------------------------------------------------------------------------------------------------
\1\ Maximum test speed is defined in 40 CFR part 1065. Percent speed is relative to maximum test speed.
\2\ The percent power is relative to the maximum test power.
\3\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  a linear progression from the torque setting of the current mode to the torque setting of the next mode, and
  simultaneously command a similar linear progression for engine speed if there is a change in speed setting.

    (b) The following duty cycles apply as specified in Sec.  
1042.505(b)(2):
    (1) The following duty cycle applies for discrete-mode testing:

------------------------------------------------------------------------
                                                 Percent of
         E5 mode No.             Engine speed     maximum     Weighting
                                     \1\         test power    factors
------------------------------------------------------------------------
1............................  Maximum test             100         0.08
                                speed.
2............................  91%............           75         0.13
3............................  80%............           50         0.17
4............................  63%............           25         0.32
5............................  Warm idle......            0          0.3
------------------------------------------------------------------------
\1\ Maximum test speed is defined in 40 CFR part 1065. Percent speed
  values are relative to maximum test speed.

    (2) The following duty cycle applies for ramped-modal testing:

[[Page 40703]]

----------------------------------------------------------------------------------------------------------------
                                       Time in mode
              RMC mode                   (seconds)        Engine speed 1 3            Power (percent) 2 3
----------------------------------------------------------------------------------------------------------------
1a Steady-state.....................             167  Warm idle..............  0%.
1b Transition.......................              20  Linear transition......  Linear transition in torque.
2a Steady-state.....................              85  Maximum test speed.....  100%.
2b Transition.......................              20  Linear transition......  Linear transition in torque.
3a Steady-state.....................             354  63%....................  25%.
3b Transition.......................              20  Linear transition......  Linear transition in torque.
4a Steady-state.....................             141  91%....................  75%.
4b Transition.......................              20  Linear transition......  Linear transition in torque.
5a Steady-state.....................             182  80%....................  50%.
5b Transition.......................              20  Linear transition......  Linear transition in torque.
6 Steady-state......................             171  Warm idle..............  0%.
----------------------------------------------------------------------------------------------------------------
\1\ Maximum test speed is defined in 40 CFR part 1065. Percent speed is relative to maximum test speed.
\2\ The percent power is relative to the maximum test power.
\3\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  a linear progression from the torque setting of the current mode to the torque setting of the next mode, and
  simultaneously command a similar linear progression for engine speed if there is a change in speed setting.

    (c) The following duty cycles apply as specified in Sec.  
1042.505(b)(3):
    (1) The following duty cycle applies for discrete-mode testing:

------------------------------------------------------------------------
                                                   Torque
         E2 mode No.             Engine speed    (percent)    Weighting
                                     \1\            \2\        factors
------------------------------------------------------------------------
1............................  Engine Governed          100          0.2
2............................  Engine Governed           75          0.5
3............................  Engine Governed           50         0.15
4............................  Engine Governed           25         0.15
------------------------------------------------------------------------
\1\ Speed terms are defined in 40 CFR part 1065.
\2\ The percent torque is relative to the maximum test torque as defined
  in 40 CFR part 1065.

    (2) The following duty cycle applies for ramped-modal testing:

----------------------------------------------------------------------------------------------------------------
                                       Time in mode
              RMC mode                   (seconds)          Engine speed             Torque  (percent) 1 2
----------------------------------------------------------------------------------------------------------------
1a Steady-state.....................             229  Engine Governed........  100%.
1b Transition.......................              20  Engine Governed........  Linear transition.
2a Steady-state.....................             166  Engine Governed........  25%.
2b Transition.......................              20  Engine Governed........  Linear transition.
3a Steady-state.....................             570  Engine Governed........  75%.
3b Transition.......................              20  Engine Governed........  Linear transition.
4a Steady-state.....................             175  Engine Governed........  50%.
----------------------------------------------------------------------------------------------------------------
\1\ The percent torque is relative to the maximum test torque as defined in 40 CFR part 1065.
\2\ Advance from one mode to the next within a 20-second transition phase. During the transition phase, command
  a linear progression from the torque setting of the current mode to the torque setting of the next mode.

0
204. Appendix III is revised to read as follows:

Appendix III to Part 1042--Not-To-Exceed Zones

    (a) The following definitions apply for this Appendix III:
    (1) Percent power means the percentage of the maximum power 
achieved at Maximum Test Speed (or at Maximum Test Torque for 
constant-speed engines).
    (2) Percent speed means the percentage of Maximum Test Speed.
    (b) Figure 1 of this Appendix illustrates the default NTE zone 
for marine engines certified using the duty cycle specified in Sec.  
1042.505(b)(1), except for variable-speed propulsion marine engines 
used with controllable-pitch propellers or with electrically coupled 
propellers, as follows:
    (1) Subzone 1 is defined by the following boundaries:
    (i) Percent power / 100 >= 0.7 [middot] (percent speed / 
100)\2.5\.
    (ii) Percent power / 100 <= (percent speed / 90)\3.5\.
    (iii) Percent power / 100 >= 3.0 [middot] (1 - percent speed / 
100).
    (2) Subzone 2 is defined by the following boundaries:
    (i) Percent power / 100 >= 0.7 [middot] (percent speed / 
100)\2.5\.
    (ii) Percent power / 100 <= (percent speed / 90)\3.5\.
    (iii) Percent power / 100 < 3.0 [middot] (1 - percent speed / 
100).
    (iv) Percent speed / 100 >= 0.7.
    (3) Note that the line separating Subzone 1 and Subzone 2 
includes the following endpoints:
    (i) Percent speed = 78.9 percent; Percent power = 63.2 percent.
    (ii) Percent speed = 84.6 percent; Percent power = 46.1 percent.

[[Page 40704]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.089

    (c) Figure 2 of this Appendix illustrates the default NTE zone 
for recreational marine engines certified using the duty cycle 
specified in Sec.  1042.505(b)(2), except for variable-speed marine 
engines used with controllable-pitch propellers or with electrically 
coupled propellers, as follows:
    (1) Subzone 1 is defined by the following boundaries:
    (i) Percent power / 100 >= 0.7 [middot] (percent speed / 
100)\2.5\.
    (ii) Percent power / 100 <= (percent speed / 90)\3.5\.
    (iii) Percent power / 100 >= 3.0 [middot] (1 - percent speed / 
100).
    (iv) Percent power <= 95 percent.
    (2) Subzone 2 is defined by the following boundaries:
    (i) Percent power / 100 >= 0.7 [middot] (percent speed / 
100)\2.5\.
    (ii) Percent power / 100 <= (percent speed / 90)\3.5\.
    (iii) Percent power / 100 < 3.0 [middot] (1 - percent speed / 
100).
    (iv) Percent speed >= 70 percent.
    (3) Subzone 3 is defined by the following boundaries:
    (i) Percent power / 100 <= (percent speed / 90)\3.5\.
    (ii) Percent power > 95 percent.
    (4) Note that the line separating Subzone 1 and Subzone 3 
includes a point at Percent speed = 88.7 percent and Percent power = 
95.0 percent. See paragraph (b)(3) of this appendix regarding the 
line separating Subzone 1 and Subzone 2.

[[Page 40705]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.090

    (d) Figure 3 of this Appendix illustrates the default NTE zone 
for variable-speed marine engines used with controllable-pitch 
propellers or with electrically coupled propellers that are 
certified using the duty cycle specified in Sec.  1042.505(b)(1), 
(2), or (3), as follows:
    (1) Subzone 1 is defined by the following boundaries:
    (i) Percent power / 100 >= 0.7 [middot] (percent speed / 
100)\2.5\.
    (ii) Percent power / 100 >= 3.0 [middot] (1 - percent speed / 
100).
    (iii) Percent speed >= 78.9 percent.
    (2) Subzone 2a is defined by the following boundaries:
    (i) Percent power / 100 >= 0.7  (percent speed / 
100)\2.5\.
    (ii) Percent speed >= 70 percent.
    (iii) Percent speed < 78.9 percent, for Percent power > 63.3 
percent.
    (iv) Percent power / 100 < 3.0 [middot] (1 - percent speed / 
100), for Percent speed >= 78.9 percent.
    (3) Subzone 2b is defined by the following boundaries:
    (i) The line formed by connecting the following two points on a 
plot of speed-vs.-power:
    (A) Percent speed = 70 percent; Percent power = 28.7 percent.
    (B) Percent power = 40 percent; Speed = governed speed.
    (ii) Percent power / 100 < 0.7 [middot] (percent speed / 
100)\2.5\.
    (4) Note that the line separating Subzone 1 and Subzone 2a 
includes the following endpoints:
    (i) Percent speed = 78.9 percent; Percent power = 63.3 percent.
    (ii) Percent speed = 84.6 percent; Percent power = 46.1 percent.

[[Page 40706]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.091

    (e) Figure 4 of this Appendix illustrates the default NTE zone 
for constant-speed engines certified using a duty cycle specified in 
Sec.  1042.505(b)(3) or (b)(4), as follows:
    (1) Subzone 1 is defined by the following boundaries:
    (i) Percent power >= 70 percent.
    (ii) [Reserved]
    (2) Subzone 2 is defined by the following boundaries:
    (i) Percent power < 70 percent.
    (ii) Percent power >= 40 percent.
    [GRAPHIC] [TIFF OMITTED] TP13JY15.092
    

[[Page 40707]]

    (f) Figure 5 of this Appendix illustrates the default NTE zone 
for variable-speed auxiliary marine engines certified using the duty 
cycle specified in Sec.  1042.505(b)(5)(ii) or (iii), as follows:
    (1) The default NTE zone is defined by the boundaries specified 
in 40 CFR 86.1370(b)(1), (2), and (4).
    (2) A special PM subzone is defined in 40 CFR 1039.515(b).
    [GRAPHIC] [TIFF OMITTED] TP13JY15.093
    
PART 1043--CONTROL OF NOX, SOX, AND PM 
EMISSIONS FROM MARINE ENGINES AND VESSELS SUBJECT TO THE MARPOL 
PROTOCOL

0
205. The authority citation for part 1043 continues to read as follows:

    Authority:  33 U.S.C. 1901-1912.

0
206. Section 1043.60 is amended by revising paragraph (a) introductory 
text to read as follows:

Sec.  1043.60  Operating requirements for engines and vessels subject 
to this part.

* * * * *
    (a) Except as specified otherwise in this part, NOX 
emission limits apply to all engines with power output of more than 130 
kW that will be installed on vessels subject to this part as specified 
in the following table:
* * * * *
0
207. Section 1043.100 is revised to read as follows:

Sec.  1043.100  Incorporation by reference.

    (a) Certain material is incorporated by reference into this part 
with the approval of the Director of the Federal Register under 5 
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, the Environmental Protection Agency must 
publish a notice of the change in the Federal Register and the material 
must be available to the public. All approved material is available for 
inspection at U.S. EPA, Air and Radiation Docket and Information 
Center, 1301 Constitution Ave. NW., Room B102, EPA West Building, 
Washington, DC 20460, (202) 202-1744, and is available from the sources 
listed below. It is also available for inspection at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (b) The International Maritime Organization, 4 Albert Embankment, 
London SE1 7SR, United Kingdom, or www.imo.org, or 44-(0)20-7735-7611.
    (1) MARPOL Annex VI, Regulations for the Prevention of Air 
Pollution from Ships, Third Edition, 2013, and NOX Technical 
Code 2008.
    (i) Revised MARPOL Annex VI, Regulations for the Prevention of 
Pollution from Ships, Third Edition, 2013 (``2008 Annex VI''); IBR 
approved for Sec. Sec.  1043.1 introductory text, 1043.20, 1043.30(f), 
1043.60(c), and 1043.70(a).
    (ii) NOX Technical Code 2008, Technical Code on Control 
of Emission of Nitrogen Oxides from Marine Diesel Engines, 2013 
Edition, (``NOX Technical Code''); IBR approved for 
Sec. Sec.  1043.20, 1043.41(b) and (h), and 1043.70(a).
    (iii) Annex 12, Resolution MEPC.251(66) from the Report of the 
Marine Environment Protection Committee on its Sixty-Sixth Sesson, 
April 25, 2014. This document describes new and revised provisions that 
are considered to be part of Annex VI and NOX Technical Code 
2008 as referenced in paragraphs (a)(1)(i) and (ii) of this section. 
IBR approved for Sec. Sec.  1043.1 introductory text, 1043.20, 
1043.30(f), 1043.41(b) and (h), 1043.60(c), and 1043.70(a).
    (2) [Reserved]

[[Page 40708]]

PART 1065--ENGINE-TESTING PROCEDURES

0
208. The authority citation for part 1065 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart A--Applicability and General Provisions

0
209. Section 1065.15 is amended by revising paragraphs (a)(2)(ii) and 
(iv) to read as follows:

Sec.  1065.15  Overview of procedures for laboratory and field testing.

* * * * *
    (a) * * *
    (2) * * *
    (ii) Nonmethane hydrocarbon, NMHC, which results from subtracting 
methane, CH4, from THC. You may choose to measure NMOG 
emissions to demonstrate compliance with NMHC standards.
* * * * *
    (iv) Nonmethane hydrocarbon-equivalent, NMHCE, which results from 
adjusting NMHC mathematically to be equivalent on a carbon-mass basis. 
You may choose to measure NMOG emissions to demonstrate compliance with 
NMHCE standards.
* * * * *

Subpart F--Performing an Emission Test in the Laboratory

0
210. Section 1065.510 is amended by revising paragraphs (c) 
introductory text and (d)(5)(iii) to read as follows:

Sec.  1065.510  Engine mapping.

* * * * *
    (c) Negative torque mapping. If your engine is subject to a 
reference duty cycle that specifies negative torque values (i.e., 
engine motoring), generate a motoring torque curve by any of the 
following procedures:
* * * * *
    (d) * * *
    (5) * * *
    (iii) For any isochronous governed (0% speed droop) constant-speed 
engine, you may map the engine with two points as described in this 
paragraph (d)(5)(iii). After stabilizing at the no-load governed speed 
in paragraph (d)(4) of this section, record the mean feedback speed and 
torque. Continue to operate the engine with the governor or simulated 
governor controlling engine speed using operator demand, and control 
the dynamometer to target a speed of 99.5% of the recorded mean no-load 
governed speed. Allow speed and torque to stabilize. Record the mean 
feedback speed and torque. Record the target speed. The absolute value 
of the speed error (the mean feedback speed minus the target speed) 
must be no greater than 0.1% of the recorded mean no-load governed 
speed. From this series of two mean feedback speed and torque values, 
use linear interpolation to determine intermediate values. Use this 
series of two mean feedback speeds and torques to generate a power map 
as described in paragraph (e) of this section. Note that the measured 
maximum test torque as determined in Sec.  1065.610 (b)(1) will be the 
mean feedback torque recorded on the second point.
* * * * *

Subpart G--Calculations and Data Requirements

0
211. Section 1065.610 is amended by revising paragraphs (a)(1)(ii), 
(a)(1)(iii), (a)(1)(vi), (b), and (c)(1) and (2) to read as follows:

Sec.  1065.610  Duty cycle generation.

* * * * *
    (a) * * *
    (1) * * *
    (ii) Determine the lowest and highest engine speeds corresponding 
to 98% of Pmax, using linear interpolation, and no 
extrapolation, as appropriate.
    (iii) Determine the engine speed corresponding to maximum power, 
fnPmax, by calculating the average of the two speed values 
from paragraph (a)(1)(ii) of this section. If there is only one speed 
where power is equal to 98% of Pmax, take fnPmax 
as the speed at which Pmax occurs.
* * * * *
    (vi) Determine the lowest and highest engine speeds corresponding 
to the value calculated in paragraph (a)(1)(v) of this section, using 
linear interpolation as appropriate. Calculate fntest as the 
average of these two speed values. If there is only one speed 
corresponding to the value calculated in paragraph (a)(1)(v) of this 
section, take fntest as the speed where the maximum of the 
sum of the squares occurs.
* * * * *
    (b) Maximum test torque, Ttest. For constant-speed engines, 
determine the measured Ttest from the torque and power-
versus-speed maps, generated according to Sec.  1065.510, as follows:
    (1) For constant speed engines mapped using the methods in Sec.  
1065.510(d)(5)(i) or (ii), determine Ttest as follows:
    (i) Determine maximum power, Pmax, from the engine map 
generated according to Sec.  1065.510 and calculate the value for power 
equal to 98% of Pmax.
    (ii) Determine the lowest and highest engine speeds corresponding 
to 98% of Pmax, using linear interpolation, and no 
extrapolation, as appropriate.
    (iii) Determine the engine speed corresponding to maximum power, 
fnPmax, by calculating the average of the two speed values 
from paragraph (a)(1)(ii) of this section. If there is only one speed 
where power is equal to 98% of Pmax, take fnPmax 
as the speed at which Pmax occurs.
    (iv) Transform the map into a normalized power-versus-speed map by 
dividing power terms by Pmax and dividing speed terms by 
fnPmax. Use the Equation 1065.610-1 to calculate a quantity 
representing the sum of squares from the normalized map.
    (v) Determine the maximum value for the sum of the squares from the 
map and multiply that value by 0.98.
    (vi) Determine the lowest and highest engine speeds corresponding 
to the value calculated in paragraph (a)(1)(v) of this section, using 
linear interpolation as appropriate. Calculate fntest as the 
average of these two speed values. If there is only one speed 
corresponding to the value calculated in paragraph (a)(1)(v) of this 
section, take fntest as the speed where the maximum of the 
sum of the squares occurs.
    (vii) The measured Ttest is the mapped torque at 
fntest.
    (2) For constant-speed engines using the two-point mapping method 
in Sec.  1065.510(d)(5)(iii), you may follow paragraph (a)(1) of this 
section to determine the measured Ttest, or you may use the 
measured torque of the second point as the measured Ttest 
directly.
    (3) Transform normalized torques to reference torques according to 
paragraph (d) of this section by using the measured maximum test torque 
determined according to paragraph (b)(1) of this section--or use your 
declared maximum test torque, as allowed in Sec.  1065.510.
    (c) * * *
    (1) % speed. If your normalized duty cycle specifies % speed 
values, use your warm idle speed and your maximum test speed to 
transform the duty cycle, as follows:

[[Page 40709]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.094

    Example:

% speed = 85%
fntest = 2364 r/min
fnidle = 650 r/min
fnref = 85% [middot] (2364 - 650) + 650
fnref = 2107 r/min

    (2) A, B, and C speeds. If your normalized duty cycle specifies 
speeds as A, B, or C values, use your power-versus-speed curve to 
determine the lowest speed below maximum power at which 50% of maximum 
power occurs. Denote this value as nlo. Take nlo 
to be warm idle speed if all power points at speeds below the maximum 
power speed are higher than 50% of maximum power. Also determine the 
highest speed above maximum power at which 70% of maximum power occurs. 
Denote this value as nhi. If all power points at speeds 
above the maximum power speed are higher than 70% of maximum power, 
take nhi to be the declared maximum safe engine speed or the 
declared maximum representative engine speed, whichever is lower. Use 
nhi and nlo to calculate reference values for A, 
B, or C speeds as follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.095

    Example: 
nlo = 1005 r/min
nhi = 2385 r/min
fnrefA = 0.25 [middot] (2385 - 1005) + 1005
fnrefB = 0.50 [middot] (2385 - 1005) + 1005
fnrefC = 0.75 [middot] (2385 - 1005) + 1005
fnrefA = 1350 r/min
fnrefB = 1695 r/min
fnrefC = 2040 r/min
* * * * *
0
212. Section 1065.655 is amended by revising paragraph (d)(1) to read 
as follows:

Sec.  1065.655  Chemical balances of fuel, intake air, and exhaust.

* * * * *
    (d) * * *
    (1) You may calculate wC as described in this paragraph 
(d)(1) based on measured fuel properties. To do so, you must determine 
values for [alpha] and [beta] in all cases, but you may set [gamma] and 
[delta] to zero if the default value listed in Table 1 of this section 
is zero. Calculate wC using the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.097

Where:
wC= carbon mass fraction of fuel.
MC = molar mass of carbon.
[alpha] = atomic hydrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted.
MH = molar mass of hydrogen.
[beta] = atomic oxygen-to-carbon ratio of the mixture of fuel(s) 
being combusted.
MO = molar mass of oxygen.
[gamma] = atomic sulfur-to-carbon ratio of the mixture of fuel(s) 
being combusted.
MS = molar mass of sulfur.
[delta] = atomic nitrogen-to-carbon ratio of the mixture of fuel(s) 
being combusted.
MN = molar mass of nitrogen.

    Example: 
[alpha] = 1.8
[beta] = 0.05
[gamma] = 0.0003
[delta] = 0.0001
MC = 12.0107
MH = 1.00794
MO = 15.9994
MS = 32.065
MN = 14.0067

[[Page 40710]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.098

wC= 0.8206
* * * * *
0
213. Section 1065.680 is added to read as follows:

Sec.  1065.680  Adjusting emission levels to account for infrequently 
regenerating aftertreatment devices.

    This section describes how to calculate and apply emission 
adjustment factors for engines using aftertreatment technology with 
infrequent regeneration events that may occur during testing. These 
adjustment factors are typically calculated based on measurements 
conducted for the purposes of engine certification, and then used to 
adjust the results of testing related to demonstrating compliance with 
emission standards. For this section, ``regeneration'' means an 
intended event during which emission levels change while the system 
restores aftertreatment performance. For example, exhaust gas 
temperatures may increase temporarily to remove sulfur from adsorbers 
or to oxidize accumulated particulate matter in a trap. Also, 
``infrequent'' refers to regeneration events that are expected to occur 
on average less than once over a transient or ramped-modal duty cycle, 
or on average less than once per mode in a discrete-mode test.
    (a) Adjustment factors. Apply adjustment factors based on whether 
there is active regeneration during a test segment. The test segment 
may be a test interval or a full duty cycle, as described in paragraph 
(b) of this section. For engines subject to standards over more than 
one duty cycle, you must develop adjustment factors under this section 
for each separate duty cycle. You must be able to identify active 
regeneration in a way that is readily apparent during all testing. All 
adjustment factors for regeneration are additive.
    (1) If active regeneration does not occur during a test segment, 
apply an upward adjustment factor, UAF, that will be added to the 
measured emission rate for that test segment. Use the following 
equation to calculate UAF:
[GRAPHIC] [TIFF OMITTED] TP13JY15.099

Where:

EFA[cycle] = the average emission factor over the test 
segment as determined in paragraph (a)(4) of this section.
EFL[cycle] = measured emissions over a complete test 
segment in which active regeneration does not occur.

    Example: 
EFARMC = 0.15 g/kW[middot]hr
EFLRMC = 0.11 g/kW[middot]hr
UAFRMC = 0.15-0.11 = 0.04 g/kW[middot]hr
    (2) If active regeneration occurs or starts to occur during a 
test segment, apply a downward adjustment factor, DAF, that will be 
subtracted from the measured emission rate for that test segment. 
Use the following equation to calculate DAF:

[[Page 40711]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.100

Where:

EFH[cycle] = measured emissions over the test segment 
from a complete regeneration event, or the average emission rate 
over multiple complete test segments with regeneration if the 
complete regeneration event lasts longer than one test segment.

    Example: 
EFARMC = 0.15 g/kW[middot]hr
EFHRMC = 0.50 g/kW[middot]hr
DAFRMC = 0.50-0.15 = 0.35 g/kW[middot]hr

    (3) Note that emissions for a given pollutant may be lower during 
regeneration, in which case EFL would be greater than 
EFH, and both UAF and DAF would be negative.
    (4) Calculate the average emission factor, EFA, as 
follows:
[GRAPHIC] [TIFF OMITTED] TP13JY15.101

Where:

F[cycle] = the frequency of the regeneration event during 
the test segment, expressed in terms of the fraction of equivalent 
test segments during which active regeneration occurs, as described 
in paragraph (a)(5) of this section.

    Example: 
FRMC = 0.10
EFARMC = 0.10 [middot] 0.50 + (1.00 - 0.10) [middot] 0.11 
= 0.15 g/kW[middot]hr

    (5) The frequency of regeneration, F, generally characterizes how 
often a regeneration event occurs within a series of test segments. 
Determine F using the following equation, subject to the provisions of 
paragraph (a)(6) of this section:
[GRAPHIC] [TIFF OMITTED] TP13JY15.102

Where:

ir[cycle] = the number of successive test segments 
required to complete an active regeneration, rounded up to the next 
whole number.
if[cycle] = the number of test segments from the end of 
one complete regeneration event to the start of the next active 
regeneration, without rounding.

    Example: 
    [GRAPHIC] [TIFF OMITTED] TP13JY15.103
    
    (6) Use good engineering judgment to determine ir and 
if, as follows:
    (i) For engines that are programmed to regenerate after a specific 
time interval, you may determine the duration of a regeneration event 
and the time between regeneration events based on the engine's design 
parameters. For other engines, determine these values based on 
measurements from in-use operation or from running repetitive duty 
cycles in a laboratory.
    (ii) For engines subject to standards over multiple duty cycles, 
such as for transient and steady-state testing, apply this same 
calculation to determine a value of F for each duty cycle.
    (iii) Consider an example for an engine that is designed to 
regenerate its PM filter 500 minutes after the end of the last 
regeneration event, with the regeneration event lasting 30 minutes. If 
the RMC takes 28 minutes, irRMC = 2 (30 / 28 = 1.07, which 
rounds up to 2), and ifRMC = 500 / 28 = 17.86.
    (b) Develop adjustment factors for different types of testing as 
follows:
    (1) Discrete-mode testing. Develop separate adjustment factors for 
each test mode (test interval) of a discrete-mode test. When measuring 
EFH, if a regeneration event has started but is not complete 
when you reach the end of the sampling time for a test interval, extend 
the sampling period for that test interval until the regeneration event 
is complete.
    (2) Ramped-modal and transient testing. Develop a separate set of 
adjustment factors for an entire ramped-modal cycle or transient duty 
cycle. When measuring EFH, if a regeneration event has 
started but is not complete when you reach the end of the duty-cycle, 
start the next repeat test as soon as possible, allowing for the time 
needed to complete emission measurement and installation of new filters 
for PM measurement; in that case EFH is the average emission 
level for the test segments that included regeneration.
    (3) Accounting for cold-start measurements. For engines subject to 
cold-start testing requirements, incorporate cold-start operation into 
your analysis as follows:
    (i) Determine the frequency of regeneration, F, in a way that 
incorporates the impact of cold-start operation in proportion to the 
cold-start weighting factor specified in the standard-setting part. You 
may use good engineering judgment to determine the effect of cold-start 
operation analytically.
    (ii) Treat cold-start testing and hot-start testing together as a 
single test segment for adjusting measured emission results under this 
section.

[[Page 40712]]

Apply the adjustment factor to the composite emission result.
    (iii) You may apply the adjustment factor only to the hot-start 
test result if your aftertreatment technology does not regenerate 
during cold operation as represented by the cold-start transient duty 
cycle. If we ask for it, you must demonstrate this by engineering 
analysis or by test data.
    (c) If an engine has multiple regeneration strategies, determine 
and apply adjustment factors under this section separately for each 
type of regeneration.
0
214. Section 1065.1005 is amended by revising paragraph (f)(2) to read 
as follows:

Sec.  1065.1005  Symbols, abbreviations, acronyms, and units of 
measure.

* * * * *
    (f) * * *
    (2) This part uses the following molar masses or effective molar 
masses of chemical species:

----------------------------------------------------------------------------------------------------------------
                                                                                                  10g-
                    Symbol                                     Quantity                 \3\[middot]kg[middot]mol
                                                                                                  -\1\
----------------------------------------------------------------------------------------------------------------
Mair..........................................  molar mass of dry air \1\.............             28.96559
MAr...........................................  molar mass of argon...................               39.948
MC............................................  molar mass of carbon..................              12.0107
MCH3OH........................................  molar mass of methanol................             32.04186
MC2H5OH.......................................  molar mass of ethanol.................             46.06844
MC2H4O........................................  molar mass of acetaldehyde............             44.05256
MCH4N2O.......................................  molar mass of urea....................             60.05526
MC3H8.........................................  molar mass of propane.................             44.09562
MC3H7OH.......................................  molar mass of propanol................             60.09502
MCO...........................................  molar mass of carbon monoxide.........              28.0101
MCH4..........................................  molar mass of methane.................              16.0425
MCO2..........................................  molar mass of carbon dioxide..........              44.0095
MH............................................  molar mass of atomic hydrogen.........              1.00794
MH2...........................................  molar mass of molecular hydrogen......              2.01588
MH2O..........................................  molar mass of water...................             18.01528
MCH2O.........................................  molar mass of formaldehyde............             30.02598
MHe...........................................  molar mass of helium..................             4.002602
MN............................................  molar mass of atomic nitrogen.........              14.0067
MN2...........................................  molar mass of molecular nitrogen......              28.0134
MNH3..........................................  molar mass of ammonia.................             17.03052
MNMHC.........................................  effective C1 molar mass of nonmethane             13.875389
                                                 hydrocarbon \2\.
MNMHCE........................................  effective C1 molar mass of nonmethane             13.875389
                                                 hydrocarbon equivalent \2\.
MNOX..........................................  effective molar mass of oxides of                   46.0055
                                                 nitrogen \3\.
MN2O..........................................  molar mass of nitrous oxide...........              44.0128
MO............................................  molar mass of atomic oxygen...........              15.9994
MO2...........................................  molar mass of molecular oxygen........              31.9988
MS............................................  molar mass of sulfur..................               32.065
MTHC..........................................  effective C1 molar mass of total                  13.875389
                                                 hydrocarbon \2\.
MTHCE.........................................  effective C1 molar mass of total                  13.875389
                                                 hydrocarbon equivalent \2\.
----------------------------------------------------------------------------------------------------------------
\1\ See paragraph (f)(1) of this section for the composition of dry air.
\2\ The effective molar masses of THC, THCE, NMHC, and NMHCE are defined on a C1 basis and are based on an
  atomic hydrogen-to-carbon ratio, [alpha], of 1.85 (with [beta], [gamma], and [delta] equal to zero).
\3\ The effective molar mass of NOX is defined by the molar mass of nitrogen dioxide, NO2.

* * * * *

PART 1066--VEHICLE-TESTING PROCEDURES

0
215. The authority citation for part 1066 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart C--Dynamometer Specifications

0
216. Section 1066.210 is amended by revising paragraph (d)(3) to read 
as follows:

Sec.  1066.210  Dynamometers.

* * * * *
    (d) * * *
    (3) The load applied by the dynamometer simulates forces acting on 
the vehicle during normal driving according to the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.104

Where:

FR = total road-load force to be applied at the surface of the roll. 
The total force is the sum of the individual tractive forces applied 
at each roll surface.
i = a counter to indicate a point in time over the driving schedule. 
For a dynamometer operating at 10-Hz intervals over a 600-second 
driving schedule, the maximum value of i should be 6,000.
A = a vehicle-specific constant value representing the vehicle's 
frictional load in lbf or newtons. See subpart D of this part.
Gi = instantaneous road grade, in percent (increase in 
elevation per 100 units horizontal length).
B = a vehicle-specific coefficient representing load from drag and 
rolling resistance, which are a function of vehicle speed, in lbf/
mph or N[middot]s/m. See subpart D of this part.
v = instantaneous linear speed at the roll surfaces as measured by 
the dynamometer, in mph or m/s. Let vi-1 = 0 for i = 0.
C = a vehicle-specific coefficient representing aerodynamic effects, 
which are a function of vehicle speed squared, in lbf/mph\2\ or 
N[middot]s\2\/m\2\. See subpart D of this part.

[[Page 40713]]

Me = the vehicle's effective mass in lbm or kg, including 
the effect of rotating axles as specified in Sec.  1066.310(b)(7).
t = elapsed time in the driving schedule as measured by the 
dynamometer, in seconds. Let ti-1 = 0 for i = 0.
M = the measured vehicle mass, in lbm or kg.
ag = acceleration of Earth's gravity, as described in 40 
CFR 1065.630.

* * * * *

Subpart D--Coastdown

0
217. Section 1066.301 is amended by adding introductory text to read as 
follows:

Sec.  1066.301  Overview of road-load determination procedures.

    Vehicle testing on a chassis dynamometer involves simulating the 
road-load force, which is the sum of forces acting on a vehicle from 
aerodynamic drag, tire rolling resistance, driveline losses, and other 
effects of friction. Determine dynamometer settings to simulate road-
load force in two stages. First, perform a road-load force 
specification by characterizing on-road operation. Second, perform a 
road-load derivation to determine the appropriate dynamometer load 
settings to simulate the road-load force specification from the on-road 
test.
* * * * *
0
218. Section 1066.310 is amended by revising paragraphs (b)(7)(ii)(B) 
and (D) to read as follows:

Sec.  1066.310  Coastdown procedures for vehicles above 14,000 pounds 
GVWR.

* * * * *
    (b) * * *
    (7) * * *
    (ii) * * *
    (B) Calculate the vehicle's effective mass, Me, in kg by 
adding 56.7 kg to the measured vehicle mass, M, for each tire making 
road contact. This accounts for the rotational inertia of the wheels 
and tires.
* * * * *
    (D) Plot the data from all the coastdown runs on a single plot of 
Fi vs. vi\2\ to determine the slope correlation, 
D, based on the following equation:
[GRAPHIC] [TIFF OMITTED] TP13JY15.105

Where:

M = the measured vehicle mass, expressed to at least the nearest 0.1 
kg.
ag = acceleration of Earth's gravity, as described in 40 
CFR 1065.630.
[Delta]h = change in elevation over the measurement interval, in m. 
Assume [Delta]h = 0 if you are not correcting for grade.
[Delta]s = distance the vehicle travels down the road during the 
measurement interval, in m.
Am = the calculated value of the y-intercept based on the 
curve-fit.

* * * * *

Subpart E--Preparing Vehicles and Running an Exhaust Emission Test

0
219. Section 1066.410 is amended by revising paragraph (h) introductory 
text to read as follows:

Sec.  1066.410  Dynamometer test procedure.

* * * * *
(h) Determine equivalent test weight as follows:
* * * * *

Subpart G--Calculations

0
220. Section 1066.605 is amended by redesignating paragraphs (d) 
through (g) as paragraphs (e) through (h), respectively and adding a 
new paragraph (d) to read as follows:

Sec.  1066.605  Mass-based and molar-based exhaust emission 
calculations.

* * * * *
    (d) Calculate g/mile emission rates using the following equation 
unless specified otherwise in the standard-setting part:
[GRAPHIC] [TIFF OMITTED] TP13JY15.106

Where:
e[emission] = emission rate over the test interval.
m[emission] = emission mass over the test interval.
D = the measured driving distance over the test interval.

    Example: 
    [GRAPHIC] [TIFF OMITTED] TP13JY15.107
    
* * * * *

Subpart H--Cold Temperature Test Procedures

0
221. Section 1066.710 is amended by revising paragraphs (a)(5) and 
(d)(3) introductory text to read as follows:

Sec.  1066.710  Cold temperature testing procedures for measuring CO 
and NMHC emissions and determining fuel economy.

* * * * *
    (a) * * *

[[Page 40714]]

    (5) Adjust the dynamometer to simulate vehicle operation on the 
road at -7 [deg]C as described in Sec.  1066.305(b)(2).
* * * * *
    (d) * * *
    (3) You may start the preconditioning drive once the fuel in the 
fuel tank reaches (-12.6 to -1.4) [deg]C. Precondition the vehicle as 
follows:
* * * * *

Subpart I--Exhaust Emission Test Procedures for Motor Vehicles

0
222. Section 1066.815 is amended by revising paragraph (b) introductory 
text to read as follows:

Sec.  1066.815  Exhaust emission test procedures for FTP testing.

* * * * *
    (b) PM sampling options. Collect PM using any of the procedures 
specified in paragraphs (b)(1) through (5) of this section and use the 
corresponding equation in Sec.  1066.820 to calculate FTP composite 
emissions. Testing must meet the requirements related to filter face 
velocity as described in 40 CFR 1065.170(c)(1)(vi), except as specified 
in paragraphs (b)(4) and (5) of this section. For procedures involving 
flow weighting, set the filter face velocity to a weighting target of 
1.0 to meet the requirements of 40 CFR 1065.170(c)(1)(vi). Allow filter 
face velocity to decrease as a percentage of the weighting factor if 
the weighting factor is less than 1.0. Use the appropriate equations in 
Sec.  1066.610 to show that you meet the dilution factor requirements 
of Sec.  1066.110(b)(2)(iii)(B). If you collect PM using the procedures 
specified in paragraph (b)(4) or (b)(5) of this section, the residence 
time requirements in 40 CFR 1065.140(e)(3) apply, except that you may 
exceed an overall residence time of 5.5 s for sample flow rates below 
the highest expected sample flow rate.
* * * * *

PART 1068--GENERAL COMPLIANCE PROVISIONS FOR HIGHWAY, STATIONARY, 
AND NONROAD PROGRAMS

0
223. The authority citation for part 1068 continues to read as follows:

    Authority:  42 U.S.C. 7401-7671q.

Subpart A--Applicability and Miscellaneous Provisions

0
224. Section 1068.1 is revised to read as follows:

Sec.  1068.1  Does this part apply to me?

    (a) The provisions of this part apply to everyone with respect to 
the engine and equipment categories as described in this paragraph (a). 
They apply to everyone, including owners, operators, parts 
manufacturers, and persons performing maintenance. Where we identify an 
engine category, the provisions of this part also apply with respect to 
the equipment using such engines. This part 1068 applies to different 
engine and equipment categories as follows:
    (1) This part 1068 applies to motor vehicles we regulate under 40 
CFR part 86, subpart S, to the extent and in the manner specified in 40 
CFR parts 85 and 86.
    (2) This part 1068 applies for heavy-duty motor vehicles certified 
under 40 CFR part 1037, subject to the provisions of 40 CFR parts 85 
and 1037. This part 1068 applies to other heavy-duty motor vehicles and 
motor vehicle engines to the extent and in the manner specified in 40 
CFR parts 85, 86, and 1036.
    (3) This part 1068 applies to highway motorcycles we regulate under 
40 CFR part 86, subparts E and F, to the extent and in the manner 
specified in 40 CFR parts 85 and 86.
    (4) This part 1068 applies to aircraft we regulate under 40 CFR 
part 87 to the extent and in the manner specified in 40 CFR part 87.
    (5) This part 1068 applies for locomotives that are subject to the 
provisions of 40 CFR part 1033. This part 1068 does not apply for 
locomotives or locomotive engines that were originally manufactured 
before July 7, 2008, and that have not been remanufactured on or after 
July 7, 2008.
    (6) This part 1068 applies for land-based nonroad compression-
ignition engines that are subject to the provisions of 40 CFR part 
1039. This part 1068 does not apply for engines certified under 40 CFR 
part 89.
    (7) This part 1068 applies for stationary compression-ignition 
engines certified using the provisions of 40 CFR parts 89, 94, 1039, 
and 1042 as described in 40 CFR part 60, subpart IIII.
    (8) This part 1068 applies for marine compression-ignition engines 
that are subject to the provisions of 40 CFR part 1042. This part 1068 
does not apply for marine compression-ignition engines certified under 
40 CFR part 94.
    (9) This part 1068 applies for marine spark-ignition engines that 
are subject to the provisions of 40 CFR part 1045. This part 1068 does 
not apply for marine spark-ignition engines certified under 40 CFR part 
91.
    (10) This part 1068 applies for large nonroad spark-ignition 
engines that are subject to the provisions of 40 CFR part 1048.
    (11) This part 1068 applies for stationary spark-ignition engines 
certified using the provisions of 40 CFR part 1048 or part 1054, as 
described in 40 CFR part 60, subpart JJJJ.
    (12) This part 1068 applies for recreational engines and vehicles, 
including snowmobiles, off-highway motorcycles, and all-terrain 
vehicles that are subject to the provisions of 40 CFR part 1051.
    (13) This part applies for small nonroad spark-ignition engines 
that are subject to the provisions of 40 CFR part 1054. This part 1068 
does not apply for nonroad spark-ignition engines certified under 40 
CFR part 90.
    (14) This part applies for fuel-system components installed in 
nonroad equipment powered by volatile liquid fuels that are subject to 
the provisions of 40 CFR part 1060.
    (b) [Reserved]
    (c) Paragraph (a) of this section identifies the parts of the CFR 
that define emission standards and other requirements for particular 
types of engines and equipment. This part 1068 refers to each of these 
other parts generically as the ``standard-setting part.'' For example, 
40 CFR part 1051 is always the standard-setting part for snowmobiles. 
Follow the provisions of the standard-setting part if they are 
different than any of the provisions in this part.
    (d) Specific provisions in this part 1068 start to apply separate 
from the schedule for certifying engines/equipment to new emission 
standards, as follows:
    (1) The provisions of Sec. Sec.  1068.30 and 1068.310 apply for 
stationary spark-ignition engines built on or after January 1, 2004, 
and for stationary compression-ignition engines built on or after 
January 1, 2006.
    (2) The provisions of Sec. Sec.  1068.30 and 1068.235 apply for the 
types of engines/equipment listed in paragraph (a) of this section 
beginning January 1, 2004, if they are used solely for competition.
    (3) The standard-setting part may specify how the provisions of 
this part 1068 apply for uncertified engines/equipment.
0
225. Section 1068.10 is amended by revising the section heading to read 
as follows:

Sec.  1068.10  Confidential information.

* * * * *
0
226. Section 1068.15 is amended by revising the section heading and 
paragraph (a) to read as follows:

[[Page 40715]]

Sec.  1068.15  General provisions for EPA decision-making.

    (a) Not all EPA employees may represent the Agency with respect to 
EPA decisions under this part or the standard-setting part. Only the 
Administrator of the Environmental Protection Agency or an official to 
whom the Administrator has delegated specific authority may represent 
the Agency. For more information, ask for a copy of the relevant 
sections of the EPA Delegations Manual from the Designated Compliance 
Officer.
* * * * *

Sec.  1068.20--[Amended]  

0
227. Section 1068.20 is amended by removing paragraphs (b) and (c) and 
redesignating paragraphs (d) through (f) as paragraphs (b) through (d), 
respectively.
0
228. Section 1068.27 is revised to read as follows:

Sec.  1068.27  May EPA conduct testing with my engines/equipment?

    (a) As described in the standard-setting part, we may perform 
testing on your engines/equipment before we issue a certificate of 
conformity. This is generally known as confirmatory testing.
    (b) If we request it, you must make a reasonable number of 
production-line engines or pieces of production-line equipment 
available for a reasonable time so we can test or inspect them for 
compliance with the requirements of this chapter.
    (c) If your emission-data engine/equipment or production engine/
equipment requires special components for proper testing, you must 
promptly provide any such components to us if we ask for them.
0
229. Section 1068.30 is revised to read as follows:

Sec.  1068.30  Definitions.

    The following definitions apply to this part. The definitions apply 
to all subparts unless we note otherwise. All undefined terms have the 
meaning the Clean Air Act gives to them. The definitions follow:
    Affiliated companies or affiliates means one of the following:
    (1) For determinations related to small manufacturer allowances or 
other small business provisions, these terms mean all entities 
considered to be affiliates with your entity under the Small Business 
Administration's regulations in 13 CFR 121.103.
    (2) For all other provisions, these terms mean all of the 
following:
    (i) Parent companies (as defined in this section).
    (ii) Subsidiaries (as defined in this section).
    (iii) Subsidiaries of your parent company.
    Aftertreatment means relating to a catalytic converter, particulate 
filter, or any other system, component, or technology mounted 
downstream of the exhaust valve (or exhaust port) whose design function 
is to reduce emissions in the engine exhaust before it is exhausted to 
the environment. Exhaust-gas recirculation (EGR) is not aftertreatment.
    Aircraft means any vehicle capable of sustained air travel more 
than 100 feet above the ground.
    Certificate holder means a manufacturer (including importers) with 
a valid certificate of conformity for at least one family in a given 
model year, or the preceding model year. Note that only manufacturers 
may hold certificates. Your applying for or accepting a certificate is 
deemed to be your agreement that you are a manufacturer.
    Clean Air Act means the Clean Air Act, as amended, 42 U.S.C. 7401-
7671q.
    Date of manufacture means one of the following:
    (1) For engines, the date on which the crankshaft is installed in 
an engine block, with the following exceptions:
    (i) For engines produced by secondary engine manufacturers under 
Sec.  1068.262, date of manufacture means the date the engine is 
received from the original engine manufacturer. You may assign an 
earlier date up to 30 days before you received the engine, but not 
before the crankshaft was installed. You may not assign an earlier date 
if you cannot demonstrate the date the crankshaft was installed.
    (ii) Manufacturers may assign a date of manufacture at a point in 
the assembly process later than the date otherwise specified under this 
definition. For example, a manufacturer may use the build date printed 
on the label or stamped on the engine as the date of manufacture.
    (2) For equipment, the date on which the engine is installed, 
unless otherwise specified in the standard-setting part. Manufacturers 
may alternatively assign a date of manufacture later in the assembly 
process.
    Days means calendar days, including weekends and holidays.
    Defeat device has the meaning given in the standard-setting part.
    Designated Compliance Officer means one of the following:
    (1) For motor vehicles regulated under 40 CFR part 86, subpart S: 
Director, Light-Duty Vehicle Center, U.S. Environmental Protection 
Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; 
complianceinfo@epa.gov; epa.gov/otaq/verify.
    (2) For compression-ignition engines used in heavy-duty highway 
vehicles regulated under 40 CFR part 86, subpart A, and 40 CFR parts 
1036 and 1037, and for nonroad and stationary compression-ignition 
engines or equipment regulated under 40 CFR parts 60, 1033, 1039, and 
1042: Director, Diesel Engine Compliance Center, U.S. Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; 
complianceinfo@epa.gov; epa.gov/otaq/verify.
    (3) Director, Gasoline Engine Compliance Center, U.S. Environmental 
Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; nonroad-si-cert@epa.gov; epa.gov/otaq/verify, for all the following engines and 
vehicles:
    (i) For spark-ignition engines used in heavy-duty highway vehicles 
regulated under 40 CFR part 86, subpart A, and 40 CFR parts 1036 and 
1037,
    (ii) For highway motorcycles regulated under 40 CFR part 86, 
subpart E.
    (iii) For nonroad and stationary spark-ignition engines or 
equipment regulated under 40 CFR parts 60, 1045, 1048, 1051, 1054, and 
1060.
    Engine means an engine block with an installed crankshaft, or a gas 
turbine engine. The term engine does not include engine blocks without 
an installed crankshaft, nor does it include any assembly of 
reciprocating engine components that does not include the engine block. 
(Note: For purposes of this definition, any component that is the 
primary means of converting an engine's energy into usable work is 
considered a crankshaft, whether or not it is known commercially as a 
crankshaft.) This includes complete and partially complete engines as 
follows:
    (1) A complete engine is a fully assembled engine in its final 
configuration. In the case of equipment-based standards, an engine is 
not considered complete until it is installed in the equipment, even if 
the engine itself is fully assembled.
    (2) A partially complete engine is an engine that is not fully 
assembled or is not in its final configuration. Except where we specify 
otherwise in this part or the standard-setting part, partially complete 
engines are subject to the same standards and requirements as complete 
engines. The following would be considered examples of partially 
complete engines:
    (i) An engine that is missing certain emission-related components.
    (ii) A new engine that was originally assembled as a motor-vehicle 
engine

[[Page 40716]]

that will be recalibrated for use as a nonroad engine.
    (iii) A new engine that was originally assembled as a land-based 
engine that will be modified for use as a marine propulsion engine.
    (iv) A short block consisting of a crankshaft and other engine 
components connected to the engine block, but missing the head 
assembly.
    (v) A long block consisting of all engine components except the 
fuel system and an intake manifold.
    (vi) In the case of equipment-based standards, a fully functioning 
engine that is not yet installed in the equipment. For example, a fully 
functioning engine that will be installed in an off-highway motorcycle 
or a locomotive is considered partially complete until it is installed 
in the equipment.
    Engine-based standard means an emission standard expressed in units 
of grams of pollutant per kilowatt-hour (or grams of pollutant per 
horsepower-hour) that applies to the engine. Emission standards are 
either engine-based or equipment-based. Note that engines may be 
subject to additional standards such as smoke standards.
    Engine-based test means an emission test intended to measure 
emissions in units of grams of pollutant per kilowatt-hour (or grams of 
pollutant per horsepower-hour), without regard to whether the standard 
applies to the engine or equipment. Note that some products that are 
subject to engine-based testing are subject to additional test 
requirements such as for smoke.
    Engine configuration means a unique combination of engine hardware 
and calibration within an engine family. Engines within a single engine 
configuration differ only with respect to normal production variability 
or factors unrelated to emissions.
    Engine/equipment and engines/equipment mean engine(s) and/or 
equipment depending on the context. Specifically these terms mean the 
following:
    (1) Engine(s) when only engine-based standards apply.
    (2) Engine(s) for testing issues when engine-based testing applies.
    (3) Engine(s) and equipment when both engine-based and equipment-
based standards apply.
    (4) Equipment when only equipment-based standards apply.
    (5) Equipment for testing issues when equipment-based testing 
applies.
    Equipment means one of the following things:
    (1) Any vehicle, vessel, or other type of equipment that is subject 
to the requirements of this part or that uses an engine that is subject 
to the requirements of this part. An installed engine is part of the 
equipment.
    (2) Fuel-system components that are subject to an equipment-based 
standard under this chapter. Installed fuel-system components are also 
considered part of the engine/equipment to which they are attached.
    Equipment-based standard means an emission standard that applies to 
the equipment in which an engine is used or to fuel-system components 
associated with an engine, without regard to how the emissions are 
measured. If equipment-based standards apply, we require that the 
equipment or fuel-system components be certified rather than just the 
engine. Emission standards are either engine-based or equipment-based. 
For example, recreational vehicles we regulate under 40 CFR part 1051 
are subject to equipment-based standards even if emission measurements 
are based on engine operation alone.
    Excluded engines/equipment means engines/equipment that are not 
subject to emission standards or other requirements because they do not 
meet the definitions or other regulatory provisions that define 
applicability. For example, a non-stationary engine that is used solely 
for off-highway competition is excluded from the requirements of this 
part because it meets neither the definition of ``motor vehicle 
engine'' nor ``nonroad engine'' under section 216 of the Clean Air Act.
    Exempted means relating to engines/equipment that are not required 
to meet otherwise applicable standards. Exempted engines/equipment must 
conform to regulatory conditions specified for an exemption in this 
part 1068 or in the standard-setting part. Exempted engines/equipment 
are deemed to be ``subject to'' the standards of the standard-setting 
part even though they are not required to comply with the otherwise 
applicable requirements. Engines/equipment exempted with respect to a 
certain tier of standards may be required to comply with an earlier 
tier of standards as a condition of the exemption; for example, engines 
exempted with respect to Tier 3 standards may be required to comply 
with Tier 1 or Tier 2 standards.
    Family means engine family or emission family, as applicable under 
the standard-setting part.
    Final deteriorated test result has the meaning given in the 
standard-setting part. If it is not defined in the standard-setting 
part, it means the emission level that results from applying all 
appropriate adjustments (such as deterioration factors) to the measured 
emission result of the emission-data engine.
    Gas turbine engine means anything commercially known as a gas 
turbine engine or any collection of assembled engine components that is 
substantially similar to engines commercially known as gas turbine 
engines. For example, a jet engine is a gas turbine engine. Gas turbine 
engines may be complete or partially complete. Turbines that rely on 
external combustion such as steam engines are not gas turbine engines.
    Good engineering judgment means judgments made consistent with 
generally accepted scientific and engineering principles and all 
available relevant information. See Sec.  1068.5.
    Manufacturer has the meaning given in section 216(1) of the Clean 
Air Act (42 U.S.C. 7550(1)). In general, this term includes any person 
who manufactures or assembles an engine or piece of equipment for sale 
in the United States or otherwise introduces a new engine or piece of 
equipment into U.S. commerce. This includes importers that import new 
engines or new equipment into the United States for resale. It also 
includes secondary engine manufacturers.
    Model year has the meaning given in the standard-setting part. 
Unless the standard-setting part specifies otherwise, model year for 
individual engines/equipment is based on the date of manufacture or a 
later stage in the assembly process determined by the manufacturer, 
subject to the limitations described in Sec. Sec.  1068.103 and 
1068.360. The model year of a new engine that is neither certified nor 
exempt is deemed to be the calendar year in which it is sold, offered 
for sale, imported, or delivered or otherwise introduced into U.S. 
commerce.
    Motor vehicle has the meaning given in 40 CFR 85.1703(a).
    New has the meaning we give it in the standard-setting part. Note 
that in certain cases, used and remanufactured engines/equipment may be 
``new'' engines/equipment.
    Nonroad engine means:
    (1) Except as discussed in paragraph (2) of this definition, a 
nonroad engine is an internal combustion engine that meets any of the 
following criteria:
    (i) It is (or will be) used in or on a piece of equipment that is 
self-propelled or serves a dual purpose by both propelling itself and 
performing another function (such as garden tractors, off-highway 
mobile cranes and bulldozers).
    (ii) It is (or will be) used in or on a piece of equipment that is 
intended to be propelled while performing its function (such as 
lawnmowers and string trimmers).

[[Page 40717]]

    (iii) By itself or in or on a piece of equipment, it is portable or 
transportable, meaning designed to be and capable of being carried or 
moved from one location to another. Indicia of transportability 
include, but are not limited to, wheels, skids, carrying handles, 
dolly, trailer, or platform.
    (2) An internal combustion engine is not a nonroad engine if it 
meets any of the following criteria:
    (i) The engine is used to propel a motor vehicle, an aircraft, or 
equipment used solely for competition.
    (ii) The engine is regulated under 40 CFR part 60, (or otherwise 
regulated by a federal New Source Performance Standard promulgated 
under section 111 of the Clean Air Act (42 U.S.C. 7411)). Note that 
this criterion does not apply for engines meeting any of the criteria 
of paragraph (1) of this definition that are voluntarily certified 
under 40 CFR part 60.
    (iii) The engine otherwise included in paragraph (1)(iii) of this 
definition remains or will remain at a location for more than 12 
consecutive months or a shorter period of time for an engine located at 
a seasonal source. A location is any single site at a building, 
structure, facility, or installation. For any engine (or engines) that 
replaces an engine at a location and that is intended to perform the 
same or similar function as the engine replaced, include the time 
period of both engines in calculating the consecutive time period. An 
engine located at a seasonal source is an engine that remains at a 
seasonal source during the full annual operating period of the seasonal 
source. A seasonal source is a stationary source that remains in a 
single location on a permanent basis (i.e., at least two years) and 
that operates at that single location approximately three months (or 
more) each year. See Sec.  1068.31 for provisions that apply if the 
engine is removed from the location.
    Operating hours means:
    (1) For engine and equipment storage areas or facilities, times 
during which people other than custodians and security personnel are at 
work near, and can access, a storage area or facility.
    (2) For other areas or facilities, times during which an assembly 
line operates or any of the following activities occurs:
    (i) Testing, maintenance, or service accumulation.
    (ii) Production or compilation of records.
    (iii) Certification testing.
    (iv) Translation of designs from the test stage to the production 
stage.
    (v) Engine or equipment manufacture or assembly.
    Parent company means any entity that has a controlling ownership of 
another company. Note that the standard-setting part may treat a 
partial owner as a parent company even if it does not have controlling 
ownership of a company.
    Piece of equipment means any vehicle, vessel, locomotive, aircraft, 
or other type of equipment equipped with engines to which this part 
applies.
    Placed into service means used for its intended purpose. Engines/
equipment do not qualify as being ``placed into service'' based on 
incidental use by a manufacturer or dealer.
    Reasonable technical basis means information that would lead a 
person familiar with engine design and function to reasonably believe a 
conclusion related to compliance with the requirements of this part. 
For example, it would be reasonable to believe that parts performing 
the same function as the original parts (and to the same degree) would 
control emissions to the same degree as the original parts. Note that 
what is a reasonable basis for a person without technical training 
might not qualify as a reasonable technical basis.
    Relating to as used in this section means relating to something in 
a specific, direct manner. This expression is used in this section only 
to define terms as adjectives and not to broaden the meaning of the 
terms. Note that ``relating to'' is used in the same manner as in the 
standard-setting parts.
    Replacement engine means an engine exempted as a replacement engine 
under Sec.  1068.240.
    Revoke means to terminate the certificate or an exemption for a 
family. If we revoke a certificate or exemption, you must apply for a 
new certificate or exemption before continuing to introduce the 
affected engines/equipment into U.S. commerce. This does not apply to 
engines/equipment you no longer possess.
    Secondary engine manufacturer means anyone who produces a new 
engine by modifying a complete or partially complete engine that was 
made by a different company. For the purpose of this definition, 
``modifying'' does not include making changes that do not remove an 
engine from its original certified configuration. Secondary engine 
manufacturing includes, for example, converting automotive engines for 
use in industrial applications, or land-based engines for use in marine 
applications. This applies whether it involves a complete or partially 
complete engine and whether the engine was previously certified to 
emission standards or not.
    (1) Manufacturers controlled by the manufacturer of the base engine 
(or by an entity that also controls the manufacturer of the base 
engine) are not secondary engine manufacturers; rather, both entities 
are considered to be one manufacturer for purposes of this part.
    (2) This definition applies equally to equipment manufacturers that 
modify engines. Also, equipment manufacturers that certify to 
equipment-based standards using engines produced by another company are 
deemed to be secondary engine manufacturers.
    (3) Except as specified in paragraph (2) of this definition, 
companies importing complete engines into the United States are not 
secondary engine manufacturers regardless of the procedures and 
relationships between companies for assembling the engines.
    Small business means either of the following:
    (1) A company that qualifies under the standard-setting part for 
special provisions for small businesses or small-volume manufacturers.
    (2) A company that qualifies as a small business under the 
regulations adopted by the Small Business Administration at 13 CFR 
121.201 if the standard-setting part does not establish such qualifying 
criteria.
    Standard-setting part means a part in the Code of Federal 
Regulations that defines emission standards for a particular engine 
and/or piece of equipment (see Sec.  1068.1(a)). For example, the 
standard-setting part for marine spark-ignition engines is 40 CFR part 
1045. For provisions related to evaporative emissions, the standard-
setting part may be 40 CFR part 1060, as specified in 40 CFR 1060.1.
    Subsidiary means an entity that is owned or controlled by a parent 
company.
    Suspend means to temporarily discontinue the certificate or an 
exemption for a family. If we suspend a certificate, you may not sell, 
offer for sale, or introduce or deliver into commerce in the United 
States or import into the United States engines/equipment from that 
family unless we reinstate the certificate or approve a new one. This 
also applies if we suspend an exemption, unless we reinstate the 
exemption.
    Ultimate purchaser means the first person who in good faith 
purchases a new engine or new piece of equipment for purposes other 
than resale.
    United States, in a geographic sense, means the States, the 
District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth 
of the Northern Mariana Islands, Guam, American Samoa, and the U.S. 
Virgin Islands.

[[Page 40718]]

    U.S.-directed production volume has the meaning given in the 
standard-setting part.
    Void means to invalidate a certificate or an exemption ab initio 
(``from the beginning''). If we void a certificate, all the engines/
equipment introduced into U.S. commerce under that family for that 
model year are considered uncertified (or nonconforming) and are 
therefore not covered by a certificate of conformity, and you are 
liable for all engines/equipment introduced into U.S. commerce under 
the certificate and may face civil or criminal penalties or both. This 
applies equally to all engines/equipment in the family, including 
engines/equipment introduced into U.S. commerce before we voided the 
certificate. If we void an exemption, all the engines/equipment 
introduced into U.S. commerce under that exemption are considered 
uncertified (or nonconforming), and you are liable for engines/
equipment introduced into U.S. commerce under the exemption and may 
face civil or criminal penalties or both. You may not sell, offer for 
sale, or introduce or deliver into commerce in the United States or 
import into the United States any additional engines/equipment using 
the voided exemption.
    Voluntary emission recall means a repair, adjustment, or 
modification program voluntarily initiated and conducted by a 
manufacturer to remedy any emission-related defect for which engine 
owners have been notified.
    We (us, our) means the Administrator of the Environmental 
Protection Agency and any authorized representatives.
0
230. Section 1068.31 is amended by revising the section heading, the 
introductory text, and paragraph (c) to read as follows:

Sec.  1068.31  Changing the status of nonroad or stationary engines 
under the definition of ``nonroad engine''.

    This section specifies the provisions that apply when an engine 
previously used in a nonroad application is subsequently used in an 
application other than a nonroad application, or when an engine 
previously used in a stationary application (i.e., an engine that was 
not used as a nonroad engine and that was not used to propel a motor 
vehicle, an aircraft, or equipment used solely for competition) is 
moved.
* * * * *
    (c) A stationary engine does not become a new nonroad engine if it 
is moved but continues to meet the criteria specified in paragraph 
(2)(iii) in the definition of ``nonroad engine'' in Sec.  1068.30 in 
its new location. For example, a transportable engine that is used in a 
single specific location for 18 months and is later moved to a second 
specific location where it will remain for at least 12 months is 
considered to be a stationary engine in both locations. Note that for 
stationary engines that are neither portable nor transportable in 
actual use, the residence-time restrictions in the definition of 
``nonroad engine'' generally do not apply.
* * * * *
0
231. A new Sec.  1068.32 is added to read as follows:

Sec.  1068.32  Explanatory terms.

    This section explains how certain phrases and terms are used in 40 
CFR parts 1000 through 1099, especially those used to clarify and 
explain regulatory provisions.
    (a) Types of provisions. The term ``provision'' includes all 
aspects of the regulations. As described in this section, regulatory 
provisions include standards, requirements, prohibitions, and 
allowances, along with a variety of other types of provisions. In 
certain cases, we may use these terms to apply to some but not all of 
the provisions of a part or section. For example, we may apply the 
allowances of a section for certain engines, but not the requirements. 
We may also apply all provisions except the requirements and 
prohibitions.
    (1) A standard is a requirement established by regulation that 
limits the emissions of air pollutants. Examples of standards include 
numerical emission standards (such as 0.01 g/kW-hr) and design 
standards (such a closed crankcase standard). Compliance with or 
conformance to a standard is a specific type of requirement, and in 
some cases a standard may be discussed as a requirement. Thus, a 
statement about the requirements of a part or section also applies with 
respect to the standards of the part or section.
    (2) The regulations apply other requirements in addition to 
standards. For example, manufacturers are required to keep records and 
provide reports to EPA.
    (3) While requirements state what someone must do, prohibitions 
state what someone may not do. Prohibitions are often referred to as 
prohibited acts or prohibited actions. Most penalties apply for 
violations of prohibitions. A list of prohibitions may therefore 
include the failure to meet a requirement as a prohibited action.
    (4) Allowances provide some form of relief from requirements. This 
may include provisions delaying implementation, establishing exemptions 
or test waivers, or creating alternative compliance options. Allowances 
may be conditional. For example, we may exempt you from certain 
requirements on the condition that you meet certain other requirements.
    (5) The regulations also include important provisions that are not 
standards, requirements, prohibitions, or allowances, such as 
definitions.
    (6) Engines/equipment are generally considered ``subject to'' a 
specific provision if that provision applies, or if it does not apply 
because of an exemption authorized under the regulation. For example, 
locomotives are subject to the provisions of 40 CFR part 1033 even if 
they are exempted from the standards of part 1033.
    (b) Singular and plural. Unless stated otherwise or unless it is 
clear from the regulatory context, provisions written in singular form 
include the plural form and provisions written in plural form include 
the singular form. For example, the statement ``The manufacturer must 
keep this report for three years'' is equivalent to ``The manufacturers 
must keep these reports for three years.''
    (c) Inclusive lists. Lists in the regulations prefaced by 
``including'' or ``this includes'' are not exhaustive. The terms 
``including'' and ``this includes'' should be read to mean ``including 
but not limited to'' and ``this includes but is not limited to''. For 
example, the phrase ``including small manufacturers'' does not exclude 
large manufacturers. However, prescriptive statements to ``include'' 
specific items (such as those related to recordkeeping and reporting 
requirements) may be exhaustive.
    (d) Notes. Statements that begin with ``Note:'' or ``Note that'' 
are intended to clarify specific regulatory provisions stated elsewhere 
in the regulations. By themselves, such statements are not intended to 
specify regulatory requirements. Such statements are typically used for 
regulatory text that, while legally sufficient to specify a 
requirement, may be misunderstood by some readers. For example, the 
regulations might note that a word is defined elsewhere in the 
regulations to have a specific meaning that may be either narrower or 
broader than some readers might assume.
    (e) Examples. Examples provided in the regulations are typically 
introduced by either ``for example'' or ``such as''. Specific examples 
given in the regulations do not necessarily represent the most common 
examples. The regulations may specify examples conditionally (that is, 
specifying that they are applicable only if certain criteria or 
conditions are met). Lists of examples cannot be presumed to be 
exhaustive lists.

[[Page 40719]]

    (f) Generally and typically. Statements that begin with 
``generally'', ``in general'', or ``typically'' should not be read to 
apply universally or absolutely. Rather they are intended to apply for 
the most common circumstances. ``Generally'' and ``typically'' 
statements may be identified as notes as described in paragraph (d) of 
this section.
    (g) Unusual circumstances. The regulations specify certain 
allowances that apply ``in unusual circumstances''. While it is 
difficult to precisely define what ``unusual circumstances'' means, 
this generally refers to specific circumstances that are both rare and 
unforeseeable. For example, a severe hurricane in the northeastern 
United States may be considered to be an unusual circumstance, while a 
less severe hurricane in the southeastern United States may not be. 
Where the regulations limit an allowance to unusual circumstances, 
manufacturers and others should not presume that such an allowance will 
be available to them. Provisions related to unusual circumstances may 
be described using the phrase ``normal circumstances'', which are those 
circumstances that are not unusual circumstances.
    (h) Exceptions and other specifications. Regulatory provisions may 
be expressed as a general prohibition, requirement, or allowance that 
is modified by other regulatory text. Such provisions may include 
phrases such as ``unless specified otherwise'', ``except as 
specified'', or ``as specified in this section''. It is important that 
the exceptions and the more general statement be considered together. 
This regulatory construct is intended to allow the core requirement or 
allowance to be stated in simple, clear sentences, rather than more 
precise and comprehensive sentences that may be misread. For example, 
where an action is prohibited in most but not all circumstances, the 
provision may state that you may not take the action, ``except as 
specified in this section.'' The exceptions could then be stated in 
subsequent regulatory text.
0
232. Section 1068.35 is amended by revising the section heading to read 
as follows:

Sec.  1068.35  Symbols, acronyms, and abbreviations.

* * * * *
0
233. Section 1068.40 is amended by revising the section heading and 
paragraph (a) and removing paragraph (c).
    The revisions read as follows:

Sec.  1068.40  Special provisions for implementing changes in the 
regulations.

    (a) During the 12 months following the effective date of any change 
in the provisions of this part, you may ask to apply the previously 
applicable provisions. Note that the effective date is generally 30 or 
60 days after publication in the Federal Register, as noted in the 
final rule. We will generally approve your request if you can 
demonstrate that it would be impractical to comply with the new 
requirements. We may consider the potential for adverse environmental 
impacts in our decision. Similarly, in unusual circumstances, you may 
ask for relief under this paragraph (a) from new requirements that 
apply under the standard-setting part.
* * * * *
0
234. Section 1068.45 is amended by revising paragraph (e) and adding 
paragraphs (g) and (h) to read as follows:

Sec.  1068.45  General labeling provisions.

* * * * *
    (e) Prohibitions against removing labels. As specified in Sec.  
1068.101(b)(7), removing permanent labels is prohibited except for 
certain circumstances. Removing temporary or removable labels 
prematurely is also prohibited by Sec.  1068.101(b)(7).
* * * * *
    (g) Date format. If you use a coded approach to identify the 
engine/equipment's date of manufacture, describe or interpret the code 
in your application for certification.
    (h) Branding. The following provisions apply if you identify the 
name and trademark of another company instead of your own on your 
emission control information label, as provided in the standard-setting 
part:
    (1) You must have a contractual agreement with the other company 
that obligates that company to take the following steps:
    (i) Meet the emission warranty requirements that apply under the 
standard-setting part. This may involve a separate agreement involving 
reimbursement of warranty-related expenses.
    (ii) Report all warranty-related information to the certificate 
holder.
    (2) In your application for certification, identify the company 
whose trademark you will use.
    (3) You remain responsible for meeting all the requirements of this 
chapter, including warranty and defect-reporting provisions.
0
235. Section 1068.95 is revised to read as follows:

Sec.  1068.95  Incorporation by reference.

    (a) Certain material is incorporated by reference into this part 
with the approval of the Director of the Federal Register under 5 
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, a document must be published in the Federal 
Register and the material must be available to the public. All approved 
materials are available for inspection at the Air and Radiation Docket 
and Information Center (Air Docket) in the EPA Docket Center (EPA/DC) 
at Rm. 3334, EPA West Bldg., 1301 Constitution Ave. NW., Washington, 
DC. The EPA/DC Public Reading Room hours of operation are 8:30 a.m. to 
4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number of the EPA/DC Public Reading Room is (202) 566-1744, 
and the telephone number for the Air Docket is (202) 566-1742. These 
approved materials are also available for inspection at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call (202) 741-6030 or go to 
http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. In addition, these materials are available from the 
sources listed below.
    (b) SAE International, 400 Commonwealth Dr., Warrendale, PA 15096-
0001, (724) 776-4841, or http://www.sae.org:
    (1) SAE J1930, Electrical/Electronic Systems Diagnostic Terms, 
Definitions, Abbreviations, and Acronyms, revised April 2002 (``SAE 
J1930''), IBR approved for Sec.  1068.45(f).
    (2) [Reserved]

Subpart B--Prohibited Actions and Related Requirements

0
236. Section 1068.101 is amended by revising the introductory text and 
paragraphs (a)(1), (b), and (h) introductory text to read as follows:

Sec.  1068.101  What general actions does this regulation prohibit?

    This section specifies actions that are prohibited and the maximum 
civil penalties that we can assess for each violation in accordance 
with 42 U.S.C. 7522 and 7524. The maximum penalty values listed in 
paragraphs (a) and (b) of this section and in Sec.  1068.125 apply as 
of December 7, 2013. As described in paragraph (h) of this section, 
these maximum penalty limits are different for earlier violations and 
they may be adjusted as set forth in 40 CFR part 19.
    (a) * * *
    (1) Introduction into commerce. You may not sell, offer for sale, 
or introduce

[[Page 40720]]

or deliver into commerce in the United States or import into the United 
States any new engine/equipment after emission standards take effect 
for the engine/equipment, unless it is covered by a valid certificate 
of conformity for its model year and has the required label or tag. You 
also may not take any of the actions listed in the previous sentence 
with respect to any equipment containing an engine subject to this 
part's provisions unless the engine is covered by a valid certificate 
of conformity for its model year and has the required engine label or 
tag. We may assess a civil penalty up to $37,500 for each engine or 
piece of equipment in violation.
    (i) For purposes of this paragraph (a)(1), a valid certificate of 
conformity is one that applies for the same model year as the model 
year of the equipment (except as allowed by Sec.  1068.105(a)), covers 
the appropriate category or subcategory of engines/equipment (such as 
locomotive or sterndrive/inboard Marine SI or nonhandheld Small SI), 
and conforms to all requirements specified for equipment in the 
standard-setting part. Engines/equipment are considered not covered by 
a certificate unless they are in a configuration described in the 
application for certification.
    (ii) The prohibitions of this paragraph (a)(1) also apply for new 
engines you produce to replace an older engine in a piece of equipment, 
except that the engines may qualify for the replacement-engine 
exemption in Sec.  1068.240.
    (iii) The prohibitions of this paragraph (a)(1) also apply for new 
engines that will be installed in equipment subject to equipment-based 
standards, except that the engines may qualify for an exemption under 
Sec.  1068.260(c) or Sec.  1068.262.
    (iv) Where the regulations specify that you are allowed to 
introduce engines/equipment into U.S. commerce without a certificate of 
conformity, you may take any of the otherwise prohibited actions 
specified in this paragraph (a)(1) with respect to those engines/
equipment.
* * * * *
    (b) The following prohibitions apply to everyone with respect to 
the engines and equipment to which this part applies:
    (1) Tampering. You may not remove or render inoperative any device 
or element of design installed on or in engines/equipment in compliance 
with the regulations prior to its sale and delivery to the ultimate 
purchaser. You also may not knowingly remove or render inoperative any 
such device or element of design after such sale and delivery to the 
ultimate purchaser. This includes, for example, operating an engine 
without a supply of appropriate quality urea if the emission control 
system relies on urea to reduce NOX emissions or the use of 
incorrect fuel or engine oil that renders the emissions control system 
inoperative. Section 1068.120 describes how this applies to rebuilding 
engines. See the standard-setting part, which may include additional 
provisions regarding actions prohibited by this requirement. For a 
manufacturer or dealer, we may assess a civil penalty up to $37,500 for 
each engine or piece of equipment in violation. For anyone else, we may 
assess a civil penalty up to $3,750 for each engine or piece of 
equipment in violation. This prohibition does not apply in any of the 
following situations:
    (i) You need to repair the engine/equipment and you restore it to 
proper functioning when the repair is complete.
    (ii) You need to modify the engine/equipment to respond to a 
temporary emergency and you restore it to proper functioning as soon as 
possible.
    (iii) You modify new engines/equipment that another manufacturer 
has already certified to meet emission standards and recertify them 
under your own family. In this case you must tell the original 
manufacturer not to include the modified engines/equipment in the 
original family.
    (2) Defeat devices. You may not knowingly manufacture, sell, offer 
to sell, or install, any component that bypasses, impairs, defeats, or 
disables the control of emissions of any regulated pollutant, except as 
explicitly allowed by the standard-setting part. We may assess a civil 
penalty up to $3,750 for each component in violation.
    (3) Stationary engines. For an engine that is excluded from any 
requirements of this chapter because it is a stationary engine, you may 
not move it or install it in any mobile equipment except as allowed by 
the provisions of this chapter. You may not circumvent or attempt to 
circumvent the residence-time requirements of paragraph (2)(iii) of the 
nonroad engine definition in Sec.  1068.30. Anyone violating this 
paragraph (b)(3) is deemed to be a manufacturer in violation of 
paragraph (a)(1) of this section. We may assess a civil penalty up to 
$37,500 for each engine or piece of equipment in violation.
    (4) Competition engines/equipment. (i) For uncertified engines/
equipment that are excluded or exempted as new engines/equipment from 
any requirements of this chapter because they are to be used solely for 
competition, you may not use any of them in a manner that is 
inconsistent with use solely for competition. Anyone violating this 
paragraph (b)(4)(i) is deemed to be a manufacturer in violation of 
paragraph (a)(1) of this section. We may assess a civil penalty up to 
$37,500 for each engine or piece of equipment in violation.
    (ii) For certified nonroad engines/equipment that qualify for 
exemption from the tampering prohibition as described in Sec.  1068.235 
because they are to be used solely for competition, you may not use any 
of them in a manner that is inconsistent with use solely for 
competition. Anyone violating this paragraph (b)(4)(ii) is in violation 
of paragraph (b)(1) or (2) of this section. Certified motor vehicles 
and motor vehicle engines and their emission control devices must 
remain in their certified configuration even if they are used solely 
for competition or if they become nonroad vehicles or engines; anyone 
modifying a certified motor vehicle or motor vehicle engine for any 
reason is subject to the tampering and defeat device prohibitions of 40 
CFR 1068.101(b) and 42 U.S.C. 7522(a)(3).
    (5) Importation. You may not import an uncertified engine or piece 
of equipment if it is defined to be new in the standard-setting part 
with a model year for which emission standards applied. Anyone 
violating this paragraph (b)(5) is deemed to be a manufacturer in 
violation of paragraph (a)(1) of this section. We may assess a civil 
penalty up to $37,500 for each engine or piece of equipment in 
violation. Note the following:
    (i) The definition of new is broad for imported engines/equipment; 
uncertified engines and equipment (including used engines and 
equipment) are generally considered to be new when imported.
    (ii) Used engines/equipment that were originally manufactured 
before applicable EPA standards were in effect are generally not 
subject to emission standards.
    (6) Warranty, recall, and maintenance instructions. You must meet 
your obligation to honor your emission-related warranty under Sec.  
1068.115, including any commitments you identify in your application 
for certification. You must also fulfill all applicable requirements 
under subpart F of this part related to emission-related defects and 
recalls. You must also provide emission-related installation and 
maintenance instructions as described in the standard-setting part. 
Failure to meet these obligations is prohibited. Also, except as 
specifically

[[Page 40721]]

provided by regulation, you are prohibited from directly or indirectly 
communicating to the ultimate purchaser or a later purchaser that the 
emission-related warranty is valid only if the owner has service 
performed at authorized facilities or only if the owner uses authorized 
parts, components, or systems. We may assess a civil penalty up to 
$37,500 for each engine or piece of equipment in violation.
    (7) Labeling. (i) You may not remove or alter an emission control 
information label or other required permanent label except as specified 
in this paragraph (b)(7) or otherwise allowed by this chapter. Removing 
or altering an emission control information label is a violation of 
paragraph (b)(1) of this section. However, it is not a violation to 
remove a label in the following circumstances:
    (A) The engine is destroyed, is permanently disassembled, or 
otherwise loses its identity such that the original title to the engine 
is no longer valid.
    (B) The regulations specifically direct you to remove the label. 
For example, see Sec.  1068.235.
    (C) The part on which the label is mounted needs to be replaced. In 
this case, you must have a replacement part with a duplicate of the 
original label installed by the certifying manufacturer or an 
authorized agent, except that the replacement label may omit the date 
of manufacture if applicable. We generally require labels to be 
permanently attached to parts that will not normally be replaced, but 
this provision allows for replacements in unusual circumstances, such 
as damage in a collision or other accident.
    (D) The original label is incorrect, provided that it is replaced 
with the correct label from the certifying manufacturer or an 
authorized agent. This allowance to replace incorrect labels does not 
affect whether the application of an incorrect original label is a 
violation.
    (ii) Removing or altering a temporary or removable label contrary 
to the provisions of this paragraph (b)(7)(ii) is a violation of 
paragraph (b)(1) of this section.
    (A) For labels identifying temporary exemptions, you may not remove 
or alter the label while the engine/equipment is in an exempt status. 
The exemption is automatically revoked for each engine/equipment for 
which the label has been removed.
    (B) For temporary or removable consumer information labels, only 
the ultimate purchaser may remove the label.
    (iii) You may not apply a false emission control information label. 
You also may not manufacture, sell, or offer to sell false labels. The 
application, manufacture, sale, or offer for sale of false labels is a 
violation of this section (such as paragraph (a)(1) or (b)(2) of this 
section). Note that applying an otherwise valid emission control 
information label to the wrong engine is considered to be applying a 
false label.
    (iv) Information on engine/equipment labels as specified in this 
chapter is deemed to be information submitted to EPA and is therefore 
subject to the prohibition against knowingly submitting false 
information under paragraph (a)(2) of this section and 18 U.S.C. 1001.
* * * * *
    (h) The maximum penalty values listed in paragraphs (a) and (b) of 
this section and in Sec.  1068.125 apply as of December 7, 2013. 
Maximum penalty values for earlier violations are published in 40 CFR 
part 19. Maximum penalty limits may be adjusted after December 7, 2013 
based on the Consumer Price Index. The specific regulatory provisions 
for changing the maximum penalties, published in 40 CFR part 19, 
reference the applicable U.S. Code citation on which the prohibited 
action is based. The following table is shown here for informational 
purposes:
* * * * *
0
237. Section 1068.103 is revised to read as follows:

Sec.  1068.103  Provisions related to the duration and applicability of 
certificates of conformity.

    (a) Engines/equipment covered by a certificate of conformity are 
limited to those that are produced during the period specified in the 
certificate and conform to the specifications described in the 
certificate and the associated application for certification. For the 
purposes of this paragraph (a), ``specifications'' includes the 
emission control information label and any conditions or limitations 
identified by the manufacturer or EPA. For example, if the application 
for certification specifies certain engine configurations, the 
certificate does not cover any configurations that are not specified. 
We may ignore any information provided in the application that we 
determine is not relevant to a demonstration of compliance with 
applicable regulations, such as your projected production volumes in 
many cases.
    (b) Unless the standard-setting part specifies otherwise, determine 
the production period corresponding to each certificate of conformity 
as specified in this paragraph (b). In general, the production period 
is the manufacturer's annual production period identified as a model 
year.
    (1) For engines/equipment subject to emission standards based on 
model years, the first day of the annual production period can be no 
earlier than January 2 of the calendar year preceding the year for 
which the model year is named, or the earliest date of manufacture for 
any engine/equipment in the engine family, whichever is later. The last 
day of the annual production period can be no later than December 31 of 
the calendar year for which the model year is named or the latest date 
of manufacture for any engine/equipment in the engine family, whichever 
is sooner. Note that this approach limits how you can designate a model 
year for your engines/equipment; however, it does not limit your 
ability to meet more stringent emission standards early where this is 
permitted in the regulation.
    (2) For fuel-system components certified to evaporative emission 
standards based on production periods rather than model years, the 
production period is either the calendar year or a longer period we 
specify consistent with the manufacturer's normal production practices.
    (c) A certificate of conformity will not cover engines/equipment 
you produce with a date of manufacture earlier than the date you submit 
the application for certification for the family. You may start to 
produce engines/equipment after you submit an application for 
certification and before the effective date of a certificate of 
conformity, subject to the following conditions:
    (1) The engines/equipment must conform in all material respects to 
the engines/equipment described in your application. Note that if we 
require you to modify your application, you must ensure that all 
engines/equipment conform to the specifications of the modified 
application.
    (2) The engines/equipment may not be sold, offered for sale, 
introduced into U.S. commerce, or delivered for introduction into U.S. 
commerce before the effective date of the certificate of conformity.
    (3) You must notify us in your application for certification that 
you plan to use the provisions of this paragraph (c) and when you 
intend to start production. If the standard-setting part specifies 
mandatory testing for production-line engines, you must start testing 
as directed in the standard-setting part based on your actual start of 
production, even if that occurs before we approve your certification. 
You must also agree to give us full opportunity to inspect and/or test 
the engines/

[[Page 40722]]

equipment during and after production. For example, we must have the 
opportunity to specify selective enforcement audits as allowed by the 
standard-setting part and the Clean Air Act as if the engines/equipment 
were produced after the effective date of the certificate.
    (4) See Sec.  1068.262 for special provisions that apply for 
secondary engine manufacturers receiving shipment of partially complete 
engines before the effective date of a certificate.
    (d) The prohibition in Sec.  1068.101(a)(1) against offering to 
sell engines/equipment without a valid certificate of conformity 
generally does not apply for engines/equipment that have not yet been 
produced. You may contractually agree to produce engines/equipment 
before obtaining the required certificate of conformity. This is 
intended to allow manufacturers of low-volume products to establish a 
sufficient market for engines/equipment before going through the effort 
to certify.
    (e) Engines/equipment with a date of manufacture after December 31 
of the calendar year for which a model year is named are not covered by 
the certificate of conformity for that model year. You must submit an 
application for a new certificate of conformity demonstrating 
compliance with applicable standards even if the engines/equipment are 
identical to those built before December 31.
    (f) The flexible approach to naming the annual production period 
described in paragraph (b)(1) of this section is intended to allow you 
to introduce new products at any point during the year. This is based 
on the expectation that production periods generally run on consistent 
schedules from year to year. You may not use this flexibility to 
arrange your production periods such that you can avoid annual 
certification.
    (g) An engine is generally assigned a model year based on its date 
of manufacture, which is typically based on the date the crankshaft is 
installed in the engine (see Sec.  1068.30). You may not circumvent the 
provisions of Sec.  1068.101(a)(1) by stockpiling engines with a date 
of manufacture before new or changed emission standards take effect by 
deviating from your normal production and inventory practices. (For 
purposes of this paragraph (g), normal production and inventory 
practices means those practices you typically use for similar families 
in years in which emission standards do not change. We may require you 
to provide us routine production and inventory records that document 
your normal practices for the preceding eight years.) For most engines 
you should plan to complete the assembly of an engine of a given model 
year into its certified configuration within the first week after the 
end of the model year if new emission standards start to apply in that 
model year. For special circumstances it may be appropriate for your 
normal business practice to involve more time. For engines with per-
cylinder displacement below 2.5 liters, if new emission standards start 
to apply in a given year, we would consider an engine not to be covered 
by a certificate of conformity for the preceding model year if the 
engine is not assembled in a compliant configuration within 30 days 
after the end of the model year for that engine family. (Note: an 
engine is considered ``in a compliant configuration'' without being 
fully assembled if Sec.  1068.260(a) or (b) authorizes shipment of the 
engine without certain components.) For example, in the case where new 
standards apply in the 2010 model year, and your normal production 
period is based on the calendar year, you must complete the assembly of 
all your 2009 model year engines before January 31, 2010, or an earlier 
date consistent with your normal production and inventory practices. 
For engines with per-cylinder displacement at or above 2.5 liters, this 
time may not exceed 60 days. Note that for the purposes of this 
paragraph (g), an engine shipped under Sec.  1068.261 is deemed to be a 
complete engine. Note also that Sec.  1068.245 allows flexibility for 
additional time in unusual circumstances. Note finally that disassembly 
of complete engines and reassembly (such as for shipment) does not 
affect the determination of model year; the provisions of this 
paragraph (g) apply based on the date on which initial assembly is 
complete.
    (h) This paragraph (h) describes the effect of suspending, 
revoking, or voiding a certificate of conformity. See the definitions 
of ``suspend,'' ``revoke,'' and ``void'' in Sec.  1068.30. Engines/
equipment produced at a time when the otherwise applicable certificate 
of conformity has been suspended or revoked are not covered by a 
certificate of conformity. Where a certificate of conformity is void, 
all engines/equipment produced under that certificate of conformity are 
not and were not covered by a certificate of conformity. In cases of 
suspension, engines/equipment will be covered by a certificate only if 
they are produced after the certificate is reinstated or a new 
certificate is issued. In cases of revocation and voiding, engines/
equipment will be covered by a certificate only if they are produced 
after we issue a new certificate. 42 U.S.C. 7522(a)(1) and Sec.  
1068.101(a)(1) prohibit selling, offering for sale, introducing into 
commerce, delivering for introduction into commerce, and importing 
engines/equipment that are not covered by a certificate of conformity, 
and they prohibit anyone from causing another to violate these 
prohibitions.
    (i) You may transfer a certificate to another entity only in the 
following cases:
    (1) You may transfer a certificate to a parent company, including a 
parent company that purchases your company after we have issued your 
certificate.
    (2) You may transfer a certificate to a subsidiary including a 
subsidiary you purchase after we have issued your certificate.
    (3) You may transfer a certificate to a subsidiary of your parent 
company.
0
238. Section 1068.105 is amended by revising paragraphs (a) and (c)(2) 
to read as follows:

Sec.  1068.105  What other provisions apply to me specifically if I 
manufacture equipment needing certified engines?

* * * * *
    (a) Transitioning to new engine-based standards. If new engine-
based emission standards apply in a given model year, your equipment 
produced in that calendar year (or later) must have engines that are 
certified to the new standards, except that you may continue to use up 
normal inventories of earlier engines that were built before the date 
of the new or changed standards. For purposes of this paragraph (a), 
normal inventory applies for engines you possess and engines from your 
engine supplier's normal inventory. (Note: this paragraph (a) does not 
apply in the case of new remanufacturing standards.) We may require you 
and your engine suppliers to provide us routine production and/or 
inventory records that document your normal practices for the preceding 
eight years. For example, if you have records documenting that your 
normal inventory practice is to keep on hand a one-month supply of 
engines based on your upcoming production schedules, and a new tier of 
standards starts to apply for the 2015 model year, you may order 
engines consistent with your normal inventory requirements late in the 
engine manufacturer's 2014 model year and install those engines in your 
equipment consistent with your normal production schedule. Also, if 
your model year starts before the end of the calendar year preceding 
new standards, you may use engines from the previous model year for 
those units you completely assemble before January 1 of the year that 
new

[[Page 40723]]

standards apply. If emission standards for the engine do not change in 
a given model year, you may continue to install engines from the 
previous model year without restriction (or any earlier model year for 
which the same standards apply). You may not circumvent the provisions 
of Sec.  1068.101(a)(1) by stockpiling engines that were built before 
new or changed standards take effect. Similarly, you may not circumvent 
the provisions of Sec.  1068.101(a)(1) by knowingly installing engines 
that were stockpiled by engine suppliers in violation of Sec.  
1068.103(f). Note that this allowance does not apply for equipment 
subject to equipment-based standards. See 40 CFR 1060.601 for similar 
provisions that apply for equipment subject to evaporative emission 
standards. Note that the standard-setting part may impose further 
restrictions on using up inventories of engines from an earlier model 
year under this paragraph (a).
* * * * *
    (c) * * *
    (2) Permanently attach the duplicate label to your equipment by 
securing it to a part needed for normal operation and not normally 
requiring replacement. Make sure an average person can easily read it. 
Note that attaching an inaccurate duplicate label may be a violation of 
Sec.  1068.101(b)(7).
* * * * *
0
239. Section 1068.110 is amended by revising the section heading and 
paragraph (d) to read as follows:

Sec.  1068.110  Other provisions for engines/equipment in service.

* * * * *
    (d) Defeat devices. We may test components, engines, and equipment 
to investigate potential defeat devices. We may also require the 
manufacturer to do this testing. If we choose to investigate one of 
your designs, we may require you to show us that a component is not a 
defeat device, and that an engine/equipment does not have a defeat 
device. To do this, you may have to share with us information regarding 
test programs, engineering evaluations, design specifications, 
calibrations, on-board computer algorithms, and design strategies. It 
is a violation of the Clean Air Act for anyone to make, install or use 
defeat devices as described in Sec.  1068.101(b)(2) and the standard-
setting part.
* * * * *
0
240. Section 1068.115 is amended by revising the section heading to 
read as follows:

Sec.  1068.115  What are manufacturers' emission-related warranty 
requirements?

* * * * *
0
241. Section 1068.120 is amended by revising the section heading and 
paragraph (f) to read as follows:

Sec.  1068.120  Requirements for rebuilding engines.

* * * * *
    (f) A rebuilt engine or other used engine may replace a certified 
engine in a piece of equipment only if the engine was built and/or 
rebuilt to a certified configuration meeting equivalent or more 
stringent emission standards. Note that a certified configuration would 
generally include more than one model year. A rebuilt engine being 
installed that is from the same model year or a newer model year than 
the engine being replaced meets this requirement. The following 
examples illustrate the provisions of this paragraph (f):
    (1) In most cases, you may use a rebuilt Tier 2 engine to replace a 
Tier 1 engine or another Tier 2 engine.
    (2) You may use a rebuilt Tier 1 engine to replace a Tier 2 engine 
if the two engines differ only with respect to model year or other 
characteristics unrelated to emissions since such engines would be 
considered to be in the same configuration. This may occur if the Tier 
1 engine had emission levels below the Tier 2 standards or if the Tier 
2 engine was certified with a Family Emission Limit for calculating 
emission credits.
    (3) You may use a rebuilt engine that originally met the Tier 1 
standards without certification, as provided under Sec.  1068.265, to 
replace a certified Tier 1 engine. This may occur for engines produced 
under a Transition Program for Equipment Manufacturers such as that 
described in 40 CFR 1039.625.
    (4) You may never replace a certified engine with an engine rebuilt 
to a configuration that does not meet EPA emission standards. Note 
that, for purposes of this paragraph (f)(4), a configuration is 
considered to meet EPA emission standards if it was previously 
certified or was otherwise shown to meet emission standards (see Sec.  
1068.265).
* * * * *
0
242. Section 1068.125 is amended by revising paragraph (b) introductory 
text to read as follows:

Sec.  1068.125  What happens if I violate the regulations?

* * * * *
    (b) Administrative penalties. Instead of bringing a civil action, 
we may assess administrative penalties if the total is less than 
$320,000 against you individually. This maximum penalty may be greater 
if the Administrator and the Attorney General jointly determine that a 
greater administrative penalty assessment is appropriate, or if the 
limit is adjusted under 40 CFR part 19. No court may review this 
determination. Before we assess an administrative penalty, you may ask 
for a hearing as described in subpart G of this part. The Administrator 
may compromise or remit, with or without conditions, any administrative 
penalty that may be imposed under this section.
* * * * *

Subpart C-- Exemptions and Exclusions

0
243. Section 1068.201 is amended by revising the section heading and 
paragraphs (a), (c), and (i) to read as follows:

Sec.  1068.201  General exemption and exclusion provisions.

* * * * *
    (a) This subpart identifies which engines/equipment qualify for 
exemptions and what information we need. We may require more 
information.
* * * * *
    (c) If you use an exemption under this subpart, we may require you 
to add a permanent or temporary label to your exempted engines/
equipment. You may ask us to modify these labeling requirements if it 
is appropriate for your engine/equipment.
* * * * *
    (i) If you want to take an action with respect to an exempted or 
excluded engine/equipment that is prohibited by the exemption or 
exclusion, such as selling it, you need to certify the engine/equipment 
or qualify for a different exemption.
    (1) We will issue a certificate of conformity if you send us an 
application for certification showing that you meet all the applicable 
requirements from the standard-setting part and pay the appropriate 
fee. Alternatively, we may allow you to include in an existing 
certified engine family those engines/equipment you modify (or 
otherwise demonstrate) to be identical to engines/equipment already 
covered by the certificate. We would base such an approval on our 
review of any appropriate documentation. These engines/equipment must 
have emission control information labels that accurately describe their 
status.
    (2) The exemption provisions of this part may be applied to new 
engines without regard to whether or not they have already been 
certified or exempted. You may ask to apply the exemption

[[Page 40724]]

provisions prospectively to used engines to cover circumstances not 
otherwise allowed by the original certification or exemption. Note that 
application of new exemption provisions does not apply with respect to 
actions that occur before the new exemption applies. For example, you 
may ask for a testing exemption for a new or used engine that has 
already been introduced into commerce under a competition exemption, 
but the testing exemption would not cover non-competition use that 
occurred before we approved the testing exemption.
0
244. Section 1068.210 is amended by revising the section heading and 
paragraph (e) to read as follows:

Sec.  1068.210  Exempting test engines/equipment.

* * * * *
    (e) If we approve your request for a testing exemption, we will 
send you a letter or a memorandum describing the basis and scope of the 
exemption. It will also include any necessary terms and conditions, 
which normally require you to do the following:
    (1) Stay within the scope of the exemption.
    (2) Create and maintain adequate records that we may inspect.
    (3) Add a permanent label to all engines/equipment exempted under 
this section, consistent with Sec.  1068.45, with at least the 
following items:
    (i) The label heading ``EMISSION CONTROL INFORMATION''.
    (ii) Your corporate name and trademark.
    (iii) Engine displacement, family identification, and model year of 
the engine/equipment (as applicable), or whom to contact for further 
information.
    (iv) The statement: ``THIS [engine, equipment, vehicle, etc.] IS 
EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 FROM EMISSION STANDARDS AND 
RELATED REQUIREMENTS.''
    (4) Tell us when the test program is finished.
    (5) Tell us the final disposition of the engines/equipment.
0
245. Section 1068.215 is amended by revising the section heading and 
paragraphs (a) and (c)(3)(iv) to read as follows:

Sec.  1068.215  Exempting manufacturer-owned engines/equipment.

    (a) You are eligible for this exemption for manufacturer-owned 
engines/equipment only if you are a certificate holder. Any engine for 
which you meet all applicable requirements under this section is exempt 
without request.
* * * * *
    (c) * * *
    (3) * * *
    (iv) The statement: ``THIS [engine, equipment, vehicle, etc.] IS 
EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 FROM EMISSION STANDARDS AND 
RELATED REQUIREMENTS.''
0
246. Section 1068.220 is revised to read as follows:

Sec.  1068.220  Exempting display engines/equipment.

    (a) Anyone may request an exemption for display engines/equipment.
    (b) Nonconforming display engines/equipment will be exempted if 
they are used only for displays in the interest of a business or the 
general public. This exemption does not apply to engines/equipment 
displayed for private use, private collections, or any other purpose we 
determine is inappropriate for a display exemption.
    (c) You may operate the exempted engine/equipment, but only if we 
approve specific operation that is part of the display, or is necessary 
for the display (possibly including operation that is indirectly 
necessary for the display). We may consider any relevant factor in our 
approval process, including the extent of the operation, the overall 
emission impact, and whether the engine/equipment meets emission 
requirements of another country.
    (d) You may sell or lease the exempted engine/equipment only with 
our advance approval.
    (e) To use this exemption, you must add a permanent label to all 
engines/equipment exempted under this section, consistent with Sec.  
1068.45, with at least the following items:
    (1) The label heading ``EMISSION CONTROL INFORMATION''.
    (2) Your corporate name and trademark.
    (3) Engine displacement, family identification, and model year of 
the engine/equipment (as applicable), or whom to contact for further 
information.
    (4) The statement: ``THIS [engine, equipment, vehicle, etc.] IS 
EXEMPT UNDER 40 CFR 1068.220 FROM EMISSION STANDARDS AND RELATED 
REQUIREMENTS.''
    (f) We may set other conditions for approval of this exemption.
0
247. Section 1068.225 is amended by revising the section heading and 
paragraph (d)(4) to read as follows:

Sec.  1068.225  Exempting engines/equipment for national security.

* * * * *
    (d) * * *
    (4) The statement: ``THIS [engine, equipment, vehicle, etc.] HAS AN 
EXEMPTION FOR NATIONAL SECURITY UNDER 40 CFR 1068.225.''
0
248. Section 1068.230 is amended by revising the section heading and 
paragraphs (b) and (c) to read as follows:

Sec.  1068.230  Exempting engines/equipment for export.

* * * * *
    (b) Engines/equipment exported to a country not covered by 
paragraph (a) of this section are exempt from the prohibited acts in 
this part without a request. If you produce exempt engines/equipment 
for export and any of them are sold or offered for sale to an ultimate 
purchaser in the United States, the exemption is automatically void for 
those engines/equipment, except as specified in Sec.  1068.201(i). You 
may operate engines/equipment in the United States only as needed to 
prepare and deliver them for export.
    (c) Except as specified in paragraph (d) of this section, label 
exempted engines/equipment (including shipping containers if the label 
on the engine/equipment will be obscured by the container) with a label 
showing that they are not certified for sale or use in the United 
States. This label may be permanent or removable. See Sec.  1068.45 for 
provisions related to the use of removable labels and applying labels 
to containers without labeling individual engines/equipment. The label 
must include your corporate name and trademark and the following 
statement: ``THIS [engine, equipment, vehicle, etc.] IS SOLELY FOR 
EXPORT AND IS THEREFORE EXEMPT UNDER 40 CFR 1068.230 FROM U.S. EMISSION 
STANDARDS AND RELATED REQUIREMENTS.''
* * * * *
0
249. Section 1068.235 is revised to read as follows:

Sec.  1068.235  Exempting nonroad engines/equipment used solely for 
competition.

    The following provisions apply for nonroad engines/equipment, but 
not for motor vehicles:
    (a) New nonroad engines/equipment you produce that are used solely 
for competition are excluded from emission standards. We may exempt 
(rather than exclude) new nonroad engines/equipment you produce that 
you intend to be used solely for competition, where we determine that 
such engines/equipment are unlikely to be used contrary to your intent. 
See the standard-setting parts for specific provisions where 
applicable. Note that the definitions in the standard-setting part may 
deem uncertified engines/equipment to be new upon importation.
    (b) If you modify any nonroad engines/equipment after they have 
been placed into service in the United States

[[Page 40725]]

so they will be used solely for competition, they are exempt without 
request. This exemption applies only to the prohibitions in Sec.  
1068.101(b)(1) and (2) and are valid only as long as the engine/
equipment is used solely for competition. You may not use the 
provisions of this paragraph (b) to circumvent the requirements that 
apply to the sale of new competition engines under the standard-setting 
part.
    (c) If you modify any nonroad engines/equipment under paragraph (b) 
of this section, you must destroy the original emission labels. If you 
loan, lease, sell, or give any of these engines/equipment to someone 
else, you must tell the new owner (or operator, if applicable) in 
writing that they may be used only for competition.
0
250. Section 1068.240 is amended by revising the section heading and 
paragraphs (c)(1), (c)(3), and (e) introductory text to read as 
follows:

Sec.  1068.240  Exempting new replacement engines.

* * * * *
    (c) * * *
    (1) You may produce a limited number of replacement engines under 
this paragraph (c) representing 0.5 percent of your annual production 
volumes for each category and subcategory of engines identified in 
Table 1 to this section (1.0 percent through 2013). Calculate this 
number by multiplying your annual U.S.-directed production volume by 
0.005 (or 0.01 through 2013) and rounding to the nearest whole number. 
Determine the appropriate production volume by identifying the highest 
total annual U.S.-directed production volume of engines from the 
previous three model years for all your certified engines from each 
category or subcategory identified in Table 1 to this section, as 
applicable. In unusual circumstances, you may ask us to base your 
production limits on U.S.-directed production volume for a model year 
more than three years prior. You may include stationary engines and 
exempted engines as part of your U.S.-directed production volume. 
Include U.S.-directed engines produced by any affiliated companies and 
those from any other companies you license to produce engines for you.
* * * * *
    (3) Send the Designated Compliance Officer a report by September 30 
of the year following any year in which you produced exempted 
replacement engines under this paragraph (c). In your report include 
the total number of replacement engines you produce under this 
paragraph (c) for each category or subcategory, as appropriate, and the 
corresponding total production volumes determined under paragraph 
(c)(1) of this section. If you send us a report under this paragraph 
(c)(3), you must also include the total number of replacement engines 
you produced under paragraphs (b), (d), and (e) of this section. Count 
exempt engines as tracked under paragraph (b) of this section only if 
you meet all the requirements and conditions that apply under paragraph 
(b) of this section by the due date for the annual report. You may 
include the information required under this paragraph (c)(3) in 
production reports required under the standard-setting part.
* * * * *
    (e) Partially complete current-tier replacement engines. The 
provisions of paragraph (d) of this section apply for engines you 
produce from a current line of certified engines or vehicles if you 
ship them as partially complete engines for replacement purposes. This 
applies for engine-based and equipment-based standards as follows:
* * * * *
0
251. Section 1068.245 is amended by revising the section heading and 
paragraph (g)(4) to read as follows:

Sec.  1068.245  Temporary provisions addressing hardship due to unusual 
circumstances.

* * * * *
    (g) * * *
    (4) A statement describing the engine's status as an exempted 
engine:
    (i) If the engine/equipment does not meet any emission standards, 
add the following statement:``THIS [engine, equipment, vehicle, etc.] 
IS EXEMPT UNDER 40 CFR 1068.245 FROM EMISSION STANDARDS AND RELATED 
REQUIREMENTS.''
    (ii) If the engines/equipment meet alternate emission standards as 
a condition of an exemption under this section, we may specify a 
different statement to identify the alternate emission standards.
0
252. Section 1068.250 is amended by revising the section heading and 
paragraphs (c) introductory text and (k)(4) and removing and reserving 
paragraph (h).
    The revisions read as follows:

Sec.  1068.250  Extending compliance deadlines for small businesses 
under hardship.

* * * * *
    (c) Send the Designated Compliance Officer a written request for an 
extension as soon as possible before you are in violation. In your 
request, show that all the following conditions and requirements apply:
* * * * *
    (k) * * *
    (4) A statement describing the engine's status as an exempted 
engine:
    (i) If the engine/equipment does not meet any emission standards, 
add the following statement:``THIS [engine, equipment, vehicle, etc.] 
IS EXEMPT UNDER 40 CFR 1068.250 FROM EMISSION STANDARDS AND RELATED 
REQUIREMENTS.''
    (ii) If the engine/equipment meets alternate emission standards as 
a condition of an exemption under this section, we may specify a 
different statement to identify the alternate emission standards.
0
253. Section 1068.255 is amended by revising the section heading and 
paragraph (a) introductory text to read as follows:

Sec.  1068.255  Exempting engines and fuel-system components for 
hardship for equipment manufacturers and secondary engine 
manufacturers.

* * * * *
    (a) Equipment exemption. As an equipment manufacturer, you may ask 
for approval to produce exempted equipment for up to 12 months. We will 
generally limit this to a single interval up to 12 months in the first 
year that new or revised emission standards apply. Exemptions under 
this section are not limited to small businesses. Send the Designated 
Compliance Officer a written request for an exemption before you are in 
violation. In your request, you must show you are not at fault for the 
impending violation and that you would face serious economic hardship 
if we do not grant the exemption. This exemption is not available under 
this paragraph (a) if you manufacture the engine or fuel-system 
components you need for your own equipment, or if complying engines or 
fuel-system components are available from other manufacturers that 
could be used in your equipment, unless we allow it elsewhere in this 
chapter. We may impose other conditions, including provisions to use 
products meeting less stringent emission standards or to recover the 
lost environmental benefit. In determining whether to grant the 
exemptions, we will consider all relevant factors, including the 
following:
* * * * *
0
254. Section 1068.260 is revised to read as follows:

[[Page 40726]]

Sec.  1068.260  General provisions for selling or shipping engines that 
are not yet in their certified configuration.

    Except as specified in paragraph (e) of this section, all new 
engines in the United States are presumed to be subject to the 
prohibitions of Sec.  1068.101, which generally require that all new 
engines be in a certified configuration before being sold, offered for 
sale, or introduced or delivered into commerce in the United States or 
imported into the United States. All emission-related components 
generally need to be installed on an engine for such an engine to be in 
its certified configuration. This section specifies clarifications and 
exemptions related to these requirements for engines. Except for 
paragraph (c) of this section, the provisions of this section generally 
apply for engine-based standards but not for equipment-based exhaust 
emission standards.
    (a) The provisions of this paragraph (a) apply for emission-related 
components that cannot practically be assembled before shipment because 
they depend on equipment design parameters.
    (1) You do not need an exemption to ship an engine that does not 
include installation or assembly of certain emission-related 
components, if those components are shipped along with the engine. For 
example, you may generally ship aftertreatment devices along with 
engines rather than installing them on the engine before shipment. We 
may require you to describe how you plan to use this provision.
    (2) You may ask us at the time of certification for an exemption to 
allow you to ship your engines without emission-related components. If 
we allow this, we may specify conditions that we determine are needed 
to ensure that shipping the engine without such components will not 
result in the engine being operated outside of its certified 
configuration. You must identify unshipped parts by specific part 
numbers if they cannot be properly characterized by performance 
specification. For example, electronic control units, turbochargers, 
and EGR coolers must generally be identified by part number. Parts that 
we believe can be properly characterized by performance specification 
include air filters, noncatalyzed mufflers, and charge air coolers. See 
paragraph (d) of this section for additional provisions that apply in 
certain circumstances.
    (b) You do not need an exemption to ship engines without specific 
components if they are not emission-related components identified in 
Appendix I of this part. For example, you may generally ship engines 
without the following parts:
    (1) Radiators needed to cool the engine.
    (2) Exhaust piping between the engine and an aftertreatment device, 
between two aftertreatment devices, or downstream of the last 
aftertreatment device.
    (c) If you are a certificate holder, partially complete engines/
equipment shipped between two of your facilities are exempt, subject to 
the provisions of this paragraph (c), as long as you maintain ownership 
and control of the engines/equipment until they reach their 
destination. We may also allow this where you do not maintain actual 
ownership and control of the engines/equipment (such as hiring a 
shipping company to transport the engines) but only if you demonstrate 
that the engines/equipment will be transported only according to your 
specifications. See Sec.  1068.261(b) for the provisions that apply 
instead of this paragraph (c) for the special case of integrated 
manufacturers using the delegated-assembly exemption. Notify us of your 
intent to use this exemption in your application for certification, if 
applicable. Your exemption is effective when we grant your certificate. 
You may alternatively request an exemption in a separate submission; 
for example, this would be necessary if you will not be the certificate 
holder for the engines in question. We may require you to take specific 
steps to ensure that such engines/equipment are in a certified 
configuration before reaching the ultimate purchaser. Note that since 
this is a temporary exemption, it does not allow you to sell or 
otherwise distribute to ultimate purchasers an engine/equipment in an 
uncertified configuration with respect to exhaust emissions. Note also 
that the exempted engine/equipment remains new and subject to emission 
standards (see definition of ``exempted'' in Sec.  1068.30) until its 
title is transferred to the ultimate purchaser or it otherwise ceases 
to be new.
    (d) See Sec.  1068.261 for delegated-assembly provisions in which 
certificate-holding manufacturers ship engines that are not yet 
equipped with certain emission-related components. See Sec.  1068.262 
for provisions related to manufacturers shipping partially complete 
engines for which a secondary engine manufacturer holds the certificate 
of conformity.
    (e) Engines used in hobby vehicles are not presumed to be engines 
subject to the prohibitions of Sec.  1068.101. Hobby vehicles are 
reduced-scale models of vehicles that are not capable of transporting a 
person. Some gas turbine engines are subject to the prohibitions of 
Sec.  1068.101, but we do not presume that all gas turbine engines are 
subject to these prohibitions. Other engines that do not have a valid 
certificate of conformity or exemption when sold, offered for sale, or 
introduced or delivered into commerce in the United States or imported 
into the United States are presumed to be engines subject to the 
prohibitions of Sec.  1068.101 unless we determine that such engines 
are excluded from the prohibitions of Sec.  1068.101.
    (f) While we presume that new non-hobby engines are subject to the 
prohibitions of Sec.  1068.101, we may determine that a specific engine 
is not subject to these prohibitions based on information you provide 
or other information that is available to us. For example, the 
provisions of this part 1068 and the standard-setting parts provide for 
exemptions in certain circumstances. Also, some engines may be subject 
to separate prohibitions under subchapter C instead of the prohibitions 
of Sec.  1068.101.
0
255. Section 1068.261 is amended by revising the section heading and 
paragraph (a) to read as follows:

Sec.  1068.261  Delegated assembly and other provisions related to 
engines not yet in the certified configuration.

* * * * *
    (a) Shipping an engine separately from an aftertreatment component 
that you have specified as part of its certified configuration will not 
be a violation of the prohibitions in Sec.  1068.101(a)(1) subject to 
the provisions in this section. We may also require that you apply some 
or all of the provisions of this section for other components if we 
determine it is necessary to ensure that shipping the engine without 
such components will not result in the engine being operated outside of 
its certified configuration. In making this determination, we will 
consider the importance of the component for controlling emissions and 
the likelihood that equipment manufacturers will have an incentive to 
disregard your emission-related installation instructions based on any 
relevant factors, such as the cost of the component and any real or 
perceived expectation of a negative impact on engine or equipment 
performance.
* * * * *
0
256. Section 1068.262 is revised to read as follows:

[[Page 40727]]

Sec.  1068.262  Shipment of engines to secondary engine manufacturers.

    This section specifies how manufacturers may introduce into U.S. 
commerce partially complete engines that have an exemption or a 
certificate of conformity held by a secondary engine manufacturer and 
are not yet in a certified configuration. See the standard-setting part 
to determine whether and how the provisions of this section apply. 
(Note: See Sec.  1068.261 for provisions related to manufacturers 
introducing into U.S. commerce partially complete engines for which 
they hold the certificate of conformity.) This exemption is temporary 
as described in paragraph (g) of this section.
    (a) The provisions of this section generally apply where the 
secondary engine manufacturer has substantial control over the design 
and assembly of emission controls. In unusual circumstances we may 
allow other secondary engine manufacturers to use these provisions. In 
determining whether a manufacturer has substantial control over the 
design and assembly of emission controls, we would consider the degree 
to which the secondary engine manufacturer would be able to ensure that 
the engine will conform to the regulations in its final configuration. 
Such secondary engine manufacturers may finish assembly of partially 
complete engines in the following cases:
    (1) You obtain an engine that is not fully assembled with the 
intent to manufacture a complete engine.
    (2) You obtain an engine with the intent to modify it before it 
reaches the ultimate purchaser.
    (3) You obtain an engine with the intent to install it in equipment 
that will be subject to equipment-based standards.
    (b) Manufacturers may introduce into U.S. commerce partially 
complete engines as described in this section if they have a written 
request for such engines from a secondary engine manufacturer that has 
certified the engine and will finish the engine assembly. The written 
request must include a statement that the secondary engine manufacturer 
has a certificate of conformity for the engine and identify a valid 
engine family name associated with each engine model ordered (or the 
basis for an exemption if applicable, as specified in paragraph (e) of 
this section). The original engine manufacturer must apply a removable 
label meeting the requirements of Sec.  1068.45 that identifies the 
corporate name of the original manufacturer and states that the engine 
is exempt under the provisions of Sec.  1068.262. The name of the 
certifying manufacturer must also be on the label or, alternatively, on 
the bill of lading that accompanies the engines during shipment. The 
original engine manufacturer may not apply a permanent emission control 
information label identifying the engine's eventual status as a 
certified engine.
    (c) If you are the secondary engine manufacturer and you will hold 
the certificate, you must include the following information in your 
application for certification:
    (1) Identify the original engine manufacturer of the partially 
complete engine or of the complete engine you will modify.
    (2) Describe briefly how and where final assembly will be 
completed. Specify how you have the ability to ensure that the engines 
will conform to the regulations in their final configuration. (Note: 
Paragraph (a) of this section prohibits using the provisions of this 
section unless you have substantial control over the design and 
assembly of emission controls.)
    (3) State unconditionally that you will not distribute the engines 
without conforming to all applicable regulations.
    (d) If you are a secondary engine manufacturer and you are already 
a certificate holder for other families, you may receive shipment of 
partially complete engines after you apply for a certificate of 
conformity but before the certificate's effective date. In this case, 
all the provisions of Sec.  1068.103(c)(1) through (3) apply. This 
exemption allows the original manufacturer to ship engines after you 
have applied for a certificate of conformity. Manufacturers may 
introduce into U.S. commerce partially complete engines as described in 
this paragraph (d) if they have a written request for such engines from 
a secondary engine manufacturer stating that the application for 
certification has been submitted (instead of the information we specify 
in paragraph (b) of this section). We may set additional conditions 
under this paragraph (d) to prevent circumvention of regulatory 
requirements. Consistent with Sec.  1068.103(c), we may also revoke an 
exemption under this paragraph (d) if we have reason to believe that 
the application for certification will not be approved or that the 
engines will otherwise not reach a certified configuration before 
reaching the ultimate purchaser. This may require that you export the 
engines.
    (e) The provisions of this section also apply for shipping 
partially complete engines if the engine is covered by a valid 
exemption and there is no valid engine family name that could be used 
to represent the engine model. Unless we approve otherwise in advance, 
you may do this only when shipping engines to secondary engine 
manufacturers that are certificate holders. In this case, the secondary 
engine manufacturer must identify the regulatory cite identifying the 
applicable exemption instead of a valid engine family name when 
ordering engines from the original engine manufacturer.
    (f) If secondary engine manufacturers determine after receiving an 
engine under this section that the engine will not be covered by a 
certificate or exemption as planned, they may ask us to allow for 
shipment of the engines back to the original engine manufacturer or to 
another secondary engine manufacturer. This might occur in the case of 
an incorrect shipment or excess inventory. We may modify the provisions 
of this section as appropriate to address these cases.
    (g) Both original and secondary engine manufacturers must keep the 
records described in this section for at least five years, including 
the written request for engines and the bill of lading for each 
shipment (if applicable). The written request is deemed to be a 
submission to EPA and is thus subject to the reporting requirements of 
40 CFR 1068.101(a)(2).
    (h) These provisions are intended only to allow secondary engine 
manufacturers to obtain or transport engines in the specific 
circumstances identified in this section so any exemption under this 
section expires when the engine reaches the point of final assembly 
identified in paragraph (c)(2) of this section.
    (i) For purposes of this section, an allowance to introduce 
partially complete engines into U.S. commerce includes a conditional 
allowance to sell, introduce, or deliver such engines into commerce in 
the United States or import them into the United States. It does not 
include a general allowance to offer such partially complete engines 
for sale because this exemption is intended to apply only for cases in 
which the certificate holder already has an arrangement to purchase the 
engines from the original engine manufacturer. This exemption does not 
allow the original engine manufacturer to subsequently offer the 
engines for sale to a different manufacturer who will hold the 
certificate unless that second manufacturer has also complied with the 
requirements of this part. The exemption does not apply for any 
individual engines that are not labeled as specified in this section or 
which are shipped to someone who is not a certificate holder.

[[Page 40728]]

    (j) We may suspend, revoke, or void an exemption under this 
section, as follows:
    (1) We may suspend or revoke your exemption if you fail to meet the 
requirements of this section. We may suspend or revoke an exemption 
related to a specific secondary engine manufacturer if that 
manufacturer sells engines that are in not in a certified configuration 
in violation of the regulations. We may disallow this exemption for 
future shipments to the affected secondary engine manufacturer or set 
additional conditions to ensure that engines will be assembled in the 
certified configuration.
    (2) We may void an exemption for all the affected engines if you 
intentionally submit false or incomplete information or fail to keep 
and provide to EPA the records required by this section.
    (3) The exemption is void for an engine that is shipped to a 
company that is not a certificate holder or for an engine that is 
shipped to a secondary engine manufacturer that is not in compliance 
with the requirements of this section.
    (4) The secondary engine manufacturer may be liable for causing a 
prohibited act if voiding the exemption is due to its own actions.
    (k) No exemption is needed to import equipment that does not 
include an engine. No exemption from exhaust emission standards is 
available under this section for equipment subject to equipment-based 
standards if the engine has been installed.
0
257. Section 1068.265 is amended by revising the section heading to 
read as follows:

Sec.  1068.265  Provisions for engines/equipment conditionally exempted 
from certification.

* * * * *

Subpart D--Imports

0
258. Section 1068.301 is amended by revising the section heading and 
paragraphs (b) and (d) and adding paragraph (e) to read as follows:

Sec.  1068.301  General provisions for importing engines/equipment.

* * * * *
    (b) In general, engines/equipment that you import must be covered 
by a certificate of conformity unless they were built before emission 
standards started to apply. This subpart describes the limited cases 
where we allow importation of exempt or excluded engines/equipment. If 
an engine has an exemption from exhaust emission standards, this allows 
you to import the equipment under the same exemption.
* * * * *
    (d) Complete the appropriate EPA declaration before importing any 
engines or equipment. These forms may be submitted and stored 
electronically and are available on the Internet at http://www.epa.gov/OTAQ/imports/ or by phone at 734-214-4100. Importers must keep these 
records for five years and make them available promptly upon request.
    (e) The standard-setting part may define uncertified engines/
equipment to be ``new'' upon importation, whether or not they have 
already been placed into service. This may affect how the provisions of 
this subpart apply for your engines/equipment. (See the definition of 
``new'' and other relevant terms in the standard-setting part.)
0
259. Section 1068.305 is amended by revising paragraphs (b)(1) and (2) 
to read as follows:

Sec.  1068.305  How do I get an exemption or exclusion for imported 
engines/equipment?

* * * * *
    (b) * * *
    (1) Give your name, address, and telephone number.
    (2) Give the engine/equipment owner's name, address, and telephone 
number.
* * * * *
0
260. Section 1068.310 is amended by revising the section heading and 
paragraph (a) to read as follows:

Sec.  1068.310  Exclusions for imported engines/equipment.

* * * * *
    (a) Engines/equipment used solely for competition. Engines/
equipment that you demonstrate will be used solely for competition are 
excluded from the restrictions on imports in Sec.  1068.301(b), but 
only if they are properly labeled. See the standard-setting part for 
provisions related to this demonstration that may apply. Section 
1068.101(b)(4) prohibits anyone from using these excluded engines/
equipment for purposes other than competition. We may waive the 
labeling requirement or allow a removable label for engines/equipment 
that are being temporarily imported for one or more specific 
competition events.
* * * * *
0
261. Section 1068.315 is amended by revising the section heading and 
paragraph (i) to read as follows:

Sec.  1068.315  Permanent exemptions for imported engines/equipment.

* * * * *
    (i) Ancient engine/equipment exemption. If you are not the original 
engine/equipment manufacturer, you may import nonconforming engines/
equipment that are subject to a standard-setting part and were first 
manufactured at least 21 years earlier, as long as they are still 
substantially in their original configurations.
0
262. Section 1068.325 is amended by revising the section heading, 
introductory text, and paragraphs (a), (c), (d), and (j)(5) to read as 
follows:

Sec.  1068.325  Temporary exemptions for imported engines/equipment.

    You may import engines/equipment under certain temporary 
exemptions, subject to the conditions in this section. We may ask U.S. 
Customs and Border Protection to require a specific bond amount to make 
sure you comply with the requirements of this subpart. You may not sell 
or lease one of these engines/equipment while it is in the United 
States except as specified in this section or Sec.  1068.201(i). You 
must eventually export the engine/equipment as we describe in this 
section unless it conforms to a certificate of conformity or it 
qualifies for one of the permanent exemptions in Sec.  1068.315 or the 
standard-setting part.
    (a) Exemption for repairs or alterations. You may temporarily 
import nonconforming engines/equipment under bond solely for repair or 
alteration, subject to our advance approval as described in paragraph 
(j) of this section. You may operate the engine/equipment in the United 
States only as necessary to repair it, alter it, or ship it to or from 
the service location. Export the engine/equipment directly after 
servicing is complete, or confirm that it has been destroyed.
* * * * *
    (c) Display exemption. You may temporarily import nonconforming 
engines/equipment under bond for display if you follow the requirements 
of Sec.  1068.220, subject to our advance approval as described in 
paragraph (j) of this section. This exemption expires one year after 
you import the engine/equipment, unless we approve your request for an 
extension. The engine/equipment must be exported (or destroyed) by the 
time the exemption expires or directly after the display concludes, 
whichever comes first.
    (d) Export exemption. You may temporarily import nonconforming 
engines/equipment to export them, as described in Sec.  1068.230. Label 
the engine/equipment as described in Sec.  1068.230. You may sell or 
lease the engines/equipment for operation

[[Page 40729]]

outside the United States consistent with the provisions of Sec.  
1068.230.
* * * * *
    (j) * * *
    (5) Acknowledge that EPA enforcement officers may conduct 
inspections or testing as allowed under the Clean Air Act.
* * * * *
0
263. Section 1068.335 is amended by revising the section heading to 
read as follows:

Sec.  1068.335  Penalties for violations.

* * * * *
0
264. Section 1068.360 is amended by revising the section heading and 
paragraph (b) to read as follows:

Sec.  1068.360  Restrictions for assigning a model year to imported 
engines and equipment.

* * * * *
    (b) This paragraph (b) applies for the importation of engines and 
equipment that have not been placed into service, where the importation 
occurs in any calendar year that is more than one year after the named 
model year of the engine or equipment when emission control 
requirements applying to current engines are different than for engines 
or equipment in the named model year, unless they are imported under 
special provisions for Independent Commercial Importers as allowed 
under the standard-setting part. Regardless of what other provisions of 
this subchapter U specify for the model year of the engine or 
equipment, such engines and equipment are deemed to have an applicable 
model year no more than one year earlier than the calendar year in 
which they are imported. For example, a new engine identified as a 2007 
model-year product that is imported on January 31, 2010 will be treated 
as a 2009 model-year engine; the same engine will be treated as a 2010 
model-year engine if it is imported any time in calendar year 2011.
* * * * *

Subpart E--Selective Enforcement Auditing

0
265. Section 1068.401 is revised to read as follows:

Sec.  1068.401  What is a selective enforcement audit?

    (a) We may conduct or require you as a certificate holder to 
conduct emission tests on production engines/equipment in a selective 
enforcement audit. This requirement is independent of any requirement 
for you to routinely test production-line engines/equipment. Where 
there are multiple entities meeting the definition of manufacturer, we 
may require manufacturers other than the certificate holder to conduct 
or participate in the audit as necessary. For products subject to 
equipment-based standards, but tested using engine-based test 
procedures, this subpart applies to the engines and/or the equipment, 
as applicable. Otherwise this subpart applies to engines for products 
subject to engine-based standards and to equipment for products subject 
to equipment-based standards.
    (b) If we send you a signed test order, you must follow its 
directions and the provisions of this subpart. We may tell you where to 
test the engines/equipment. This may be where you produce the engines/
equipment or any other emission testing facility. You are responsible 
for all testing costs whether the testing is conducted at your facility 
or another facility.
    (c) If we select one or more of your families for a selective 
enforcement audit, we will send the test order to the person who signed 
the application for certification or we will deliver it in person.
    (d) If we do not select a testing facility, notify the Designated 
Compliance Officer within one working day of receiving the test order 
where you will test your engines/equipment.
    (e) You must do everything we require in the audit without delay. 
We may suspend or revoke your certificate of conformity for the 
affected engine families if you do not fulfill your obligations under 
this subpart.
0
266. Section 1068.405 is amended by revising paragraph (a)(1) to read 
as follows:

Sec.  1068.405  What is in a test order?

    (a) * * *
    (1) The family we have identified for testing. We may also specify 
individual configurations.
* * * * *
0
267. Section 1068.415 is amended by revising paragraphs (c) and (d) to 
read as follows:

Sec.  1068.415  How do I test my engines/equipment?

* * * * *
    (c) Test at least two engines/equipment in each 24-hour period 
(including void tests). However, for engines with maximum engine power 
above 560 kW, you may test one engine per 24-hour period. If you 
request and justify it, we may approve a lower testing rate.
    (d) For exhaust emissions, accumulate service on test engines/
equipment at a minimum rate of 6 hours per engine or piece of equipment 
during each 24-hour period; however, service accumulation to stabilize 
an engine's emission levels may not take longer than eight days. The 
first 24-hour period for service accumulation begins when you finish 
preparing an engine or piece of equipment for testing. The minimum 
service accumulation rate does not apply on weekends or holidays. We 
may approve a longer stabilization period or a lower service 
accumulation rate if you request and justify it. We may require you to 
accumulate hours more rapidly than the minimum rate, as appropriate. 
Plan your service accumulation to allow testing at the rate specified 
in paragraph (c) of this section. Select operation for accumulating 
operating hours on your test engines/equipment to represent normal in-
use operation for the family.
* * * * *
0
268. Section 1068.420 is amended by revising paragraphs (b) and (e) to 
read as follows:

Sec.  1068.420  How do I know when my engine family fails an SEA?

* * * * *
    (b) Continue testing engines/equipment until you reach a pass 
decision for all pollutants or a fail decision for one pollutant, as 
described in paragraph (c) of this section.
* * * * *
    (e) If you reach a pass decision for one pollutant, but need to 
continue testing for another pollutant, we will not use these later 
test results for the pollutant with the pass decision as part of the 
SEA.
* * * * *
0
269. Section 1068.425 is amended by revising paragraph (b) to read as 
follows:

Sec.  1068.425  What happens if one of my production-line engines/
equipment exceeds the emission standards?

* * * * *
    (b) You may ask for a hearing relative to the suspended certificate 
of conformity for the failing engine/equipment as specified in subpart 
G of this part.
0
270. Section 1068.430 is amended by revising paragraph (c) to read as 
follows:

Sec.  1068.430  What happens if a family fails an SEA?

* * * * *
    (c) You may ask for a hearing as described in subpart G of this 
part up to 15 days after we suspend the certificate for a family. If we 
agree that we used erroneous information in deciding to suspend the 
certificate before a hearing is held, we will reinstate the 
certificate.
0
271. Section 1068.450 is amended by revising paragraph (b) to read as 
follows:

[[Page 40730]]

Sec.  1068.450  What records must I send to EPA?

* * * * *
    (b) We may ask you to add information to your written report, so we 
can determine whether your new engines/equipment conform to the 
requirements of this subpart.
* * * * *

Subpart F--Reporting Defects and Recalling Engines/Equipment

0
272. Section 1068.501 is amended by revising paragraphs (a)(1)(iv), 
(a)(8), and (b)(1)(iii) to read as follows:

Sec.  1068.501  How do I report emission-related defects?

* * * * *
    (a) * * *
    (1) * * *
    (iv) Any other component whose failure would commonly increase 
emissions of any regulated pollutant without significantly degrading 
engine/equipment performance.
* * * * *
    (8) Send all reports required by this section to the Designated 
Compliance Officer.
* * * * *
    (b) * * *
    (1) * * *
    (iii) You receive any other information for which good engineering 
judgment would indicate the component or system may be defective, such 
as information from dealers, field-service personnel, equipment 
manufacturers, hotline complaints, in-use testing, or engine diagnostic 
systems.
* * * * *
0
273. Section 1068.505 is amended by revising paragraphs (a), (c), and 
(g) to read as follows:

Sec.  1068.505  How does the recall program work?

    (a) If we make a determination that a substantial number of 
properly maintained and used engines/equipment do not conform to the 
regulations of this chapter during their useful life, you must submit a 
plan to remedy the nonconformity of your engines/equipment. We will 
notify you of our determination in writing. Our notice will identify 
the class or category of engines/equipment affected and describe how we 
reached our conclusion. If this happens, you must meet the requirements 
and follow the instructions in this subpart. You must remedy at your 
expense noncompliant engines/equipment that have been properly 
maintained and used, as described in Sec.  1068.510(a)(7), regardless 
of their age or extent of service accumulation at the time of repair. 
You may not transfer this expense to a dealer (or equipment 
manufacturer for engine-based standards) through a franchise or other 
agreement.
* * * * *
    (c) Unless we withdraw the determination of noncompliance, you must 
respond to it by sending a remedial plan to the Designated Compliance 
Officer. We will designate a date by which you must send us the 
remedial plan; the designated date will be no sooner than 45 days after 
we notify you, and no sooner than 30 days after a hearing.
* * * * *
    (g) For purposes of recall, ``owner'' means someone who owns an 
engine or piece of equipment affected by a remedial plan.
0
274. Section 1068.510 is amended by revising paragraph (a)(6) to read 
as follows:

Sec.  1068.510  How do I prepare and apply my remedial plan?

    (a) * * *
    (6) How you will notify owners; include a copy of any notification 
letters.
* * * * *
0
275. Section 1068.515 is amended by revising paragraph (c) to read as 
follows:

Sec.  1068.515  How do I mark or label repaired engines/equipment?

* * * * *
    (c) On the label, designate the specific recall campaign and 
identify the facility where you repaired or inspected the engine/
equipment.
* * * * *
0
276. Section 1068.530 is amended by revising the introductory text to 
read as follows:

Sec.  1068.530  What records must I keep?

    We may review your records at any time so it is important that you 
keep required information readily available. Keep records associated 
with your recall campaign for five years after you send the last report 
we require under Sec.  1068.525(b). Organize and maintain your records 
as described in this section.
* * * * *
0
277. Subpart G is revised to read as follows:
Subpart G--Hearings
Sec.
1068.601 Overview.
1068.610 Request for hearing--suspending, revoking, or voiding a 
certificate of conformity.
1068.615 Request for hearing-- denied application for certification, 
automatically suspended certificate, and determinations related to 
certification.
1068.620 Request for hearing--recall.
1068.625 Request for hearing--nonconformance penalties.
1068.650 Procedures for informal hearings.

Subpart G--Hearings

Sec.  1068.601  Overview.

    The regulations of this chapter involve numerous provisions that 
may result in EPA making a decision or judgment that you may consider 
adverse to your interests and that either limits your business 
activities or requires you to pay penalties. As specified in the 
regulations, this might involve an opportunity for an informal hearing 
or a formal hearing that follows specific procedures and is directed by 
a Presiding Officer. The regulations generally specify when we would 
hold a hearing. In limited circumstances, we may grant a request for a 
hearing related to adverse decisions regarding regulatory provisions 
for which we do not specifically describe the possibility of asking for 
a hearing.
    (a) If you request a hearing regarding our decision to assess 
administrative penalties under Sec.  1068.125, we will hold a formal 
hearing according to the provisions of 40 CFR 22.1 through 22.32 and 
22.34.
    (b) For other issues where the regulation allows for a hearing in 
response to an adverse decision, you may request an informal hearing as 
described in Sec.  1068.650. Sections 1068.610 through 1068.625 
describe when and how to request an informal hearing under various 
circumstances.
    (c) The time limits we specify are calendar days and include 
weekends and holidays, except that a deadline falling on a Saturday, 
Sunday, or a federal holiday is understood to move to the next business 
day. Your filing will be considered timely based on the following 
criteria relative to the specified deadline:
    (1) The postmarked date for items sent by U.S. mail must be on or 
before the specified date.
    (2) The ship date for items sent from any location within the 
United States by commercial carriers must be on or before the specified 
date.
    (3) Items sent by mail or courier from outside the United States 
must be received by the specified date.
    (4) The time and date stamp on an email message must be at or 
before 5:00 p.m. on the specified date.
    (5) The time and date stamp on faxed pages must be at or before 
5:00 p.m. on the specified date.

[[Page 40731]]

    (6) Hand-delivered items must be received by the appropriate 
personnel by 3:00 p.m. on the specified date.
    (d) See the standard-setting part for additional information. If 
the standard-setting part specifies any provisions that are contrary to 
those described in this subpart, the provisions of the standard-setting 
part apply instead of those described in this subpart.

Sec.  1068.610  Request for hearing--suspending, revoking, or voiding a 
certificate of conformity.

    (a) You may request an informal hearing as described in Sec.  
1068.650 if you disagree with our decision to suspend, revoke, or void 
a certificate of conformity. We will approve your request for an 
informal hearing under this paragraph (a) if we find that your request 
raises a substantial factual issue in the decision we made that, if 
addressed differently, could alter the outcome of that decision.
    (b) If you request a hearing regarding the outcome of a testing 
regimen with established evaluation criteria, such as selective 
enforcement audits or routine production-line testing, we will hold a 
hearing limited to the following issues that are relevant to your 
circumstances:
    (1) Whether tests were conducted in accordance with applicable 
regulations.
    (2) Whether test equipment was properly calibrated and functioning.
    (3) Whether specified sampling procedures were followed to select 
engines/equipment for testing.
    (4) Whether there is a basis for determining that the problems 
identified do not apply for engines/equipment produced at plants other 
than the one from which engines/equipment were selected for testing.
    (c) You must send your hearing request in writing to the Designated 
Compliance Officer no later than 30 days after we notify you of our 
decision to suspend, revoke, or void your certificate, or by some later 
deadline we specify. If the deadline passes, we may nevertheless grant 
you a hearing at our discretion.
    (d) Your hearing request must include the following information:
    (1) Identify the classes or categories of engines/equipment that 
will be the subject of the hearing.
    (2) State briefly which issues you will raise at the hearing for 
each affected class or category of engines/equipment.
    (3) Specify why you believe the hearing will conclude in your favor 
for each of the issues you will raise.
    (4) Summarize the evidence supporting your position on each of the 
issues you will raise and include any supporting data.

Sec.  1068.615  Request for hearing--denied application for 
certification, automatically suspended certificate, and determinations 
related to certification.

    (a) You may request an informal hearing as described in Sec.  
1068.650 if we deny your application for a certificate of conformity, 
if your certificate of conformity is automatically suspended under the 
regulations, or if you disagree with determinations we make as part of 
the certification process. For example, you might disagree with our 
determinations regarding adjustable parameters under Sec.  1068.50 or 
regarding your good engineering judgment under Sec.  1068.5.
    (b) You must send your hearing request in writing to the Designated 
Compliance Officer no later than 30 days after we notify you of our 
decision, or by some later deadline we specify. If the specified 
deadline passes, we may nevertheless grant you a hearing at our 
discretion.
    (c) Your hearing request must include the information specified in 
Sec.  1068.610(d).
    (d) We will approve your request for an informal hearing if we find 
that your request raises a substantial factual issue in the decision we 
made that, if addressed differently, could alter the outcome of that 
decision.

Sec.  1068.620  Request for hearing--recall.

    (a) You may request an informal hearing as described in Sec.  
1068.650 if you disagree with our decision to order a recall.
    (b) You must send your hearing request in writing to the Designated 
Compliance Officer no later than 45 days after we notify you of our 
decision, or by some later deadline we specify. If the specified 
deadline passes, we may nevertheless grant you a hearing at our 
discretion.
    (c) Your hearing request must include the information specified in 
Sec.  1068.610(d).

Sec.  1068.625  Request for hearing--nonconformance penalties.

    (a) You may request an informal hearing as described in Sec.  
1068.650 if you disagree with our determination of compliance level or 
penalty calculation or both. The hearing will address only whether the 
compliance level or penalty was determined in accordance with the 
regulations.
    (b) Send a request for a hearing in writing to the Designated 
Compliance Officer within the following time frame, as applicable:
    (1) No later than 15 days after we notify you that we have approved 
a nonconformance penalty under this subpart if the compliance level is 
in the allowable range of nonconformity.
    (2) No later than 15 days after completion of the Production 
Compliance Audit if the compliance level exceeds the upper limit.
    (3) No later than 15 days after we notify you of an adverse 
decision for all other cases.
    (c) If you miss the specified deadline in paragraph (b) of this 
section, we may nevertheless grant you a hearing at our discretion.
    (d) Your hearing request must include the information specified in 
Sec.  1068.610(d).
    (e) We will approve your request for an informal hearing if we find 
that your request raises a substantial factual issue in the decision we 
made that, if addressed differently, could alter the outcome of that 
decision.

Sec.  1068.650  Procedures for informal hearings.

    (a) The following provisions apply for arranging the hearing:
    (1) After granting your request for an informal hearing, we will 
designate a Presiding Officer for the hearing.
    (2) The Presiding Officer will select the time and place for the 
hearing. The hearing must be held as soon as practicable for all 
parties involved.
    (3) The Presiding Officer may require that all argument and 
presentation of evidence be concluded by a certain date after 
commencement of the hearing.
    (b) The Presiding Officer will establish a paper or electronic 
hearing record, which may be made available for inspection. The hearing 
record includes, but is not limited to, the following materials:
    (1) All documents relating to the application for certification, 
including the certificate of conformity itself, if applicable.
    (2) Your request for a hearing and the accompanying supporting 
data.
    (3) Correspondence and other data relevant to the hearing.
    (4) The Presiding Officer's written decision regarding the subject 
of the hearing, together with any accompanying material.
    (c) You may appear in person or you may be represented by counsel 
or by any other representative you designate.
    (d) The Presiding Officer may arrange for a prehearing conference, 
either in response to a request from any party or at his or her own 
discretion. The Presiding Officer will select the time and place for 
the prehearing conference. The Presiding Officer will summarize the 
results of the conference and include the written summary as part of 
the record. The prehearing conference

[[Page 40732]]

may involve consideration of the following items:
    (1) Simplification of the issues.
    (2) Stipulations, admissions of fact, and the introduction of 
documents.
    (3) Limitation of the number of expert witnesses.
    (4) Possibility of reaching an agreement to resolve any or all of 
the issues in dispute.
    (5) Any other matters that may aid in expeditiously and 
successfully concluding the hearing.
    (e) Hearings will be conducted as follows:
    (1) The Presiding Officer will conduct informal hearings in an 
orderly and expeditious manner. The parties may offer oral or written 
evidence; however, the Presiding Officer may exclude evidence that is 
irrelevant, immaterial, or repetitious.
    (2) Witnesses will not be required to testify under oath; however, 
the Presiding Officer must make clear that 18 U.S.C. 1001 specifies 
civil and criminal penalties for knowingly making false statements or 
representations or using false documents in any matter within the 
jurisdiction of EPA or any other department or agency of the United 
States.
    (3) Any witness may be examined or cross-examined by the Presiding 
Officer, by you, or by any other parties.
    (4) Written transcripts must be made for all hearings. Anyone may 
purchase copies of transcripts from the reporter.
    (f) The Presiding Officer will make a final decision with written 
findings, conclusions and supporting rationale on all the substantial 
factual issues presented in the record. The findings, conclusions, and 
written decision must be provided to the parties and made a part of the 
record.
0
278. Appendix I to part 1068 is amended by revising paragraph IV to 
read as follows:

APPENDIX I TO PART 1068--EMISSION-RELATED COMPONENTS

* * * * *
    IV. Emission-related components also include any other part whose 
primary purpose is to reduce emissions or whose failure would commonly 
increase emissions without significantly degrading engine/equipment 
performance.

Department of Transportation

National Highway Traffic Safety Administration

49 CFR Chapter V

    In consideration of the foregoing, under the authority of 49 U.S.C. 
322, 5 U.S.C. 552, 49 U.S.C. 30166, 49 U.S.C. 30167, 49 U.S.C. 32307, 
49 U.S.C. 32505, 49 U.S.C. 32708, 49 U.S.C. 32910, 49 U.S.C. 33116, 49 
U.S.C. 32901, 49 U.S.C. 32902, 49 U.S.C. 30101, 49 U.S.C. 32905, 49 
U.S.C. 32906, and delegation of authority at 49 CFR 1.95, NHTSA amends 
49 CFR chapter V as follows:

PART 512--CONFIDENTIAL BUSINESS INFORMATION

0
279. Revise the authority citation for part 512 to read as follows:

    Authority:  49 U.S.C. 322; 5 U.S.C. 552; 49 U.S.C. 30166; 49 
U.S.C. 30167; 49 U.S.C. 32307; 49 U.S.C. 32505; 49 U.S.C. 32708; 49 
U.S.C. 32910; 49 U.S.C. 33116; delegation of authority at 49 CFR 
1.95.
0
280. Amend Sec.  512.6 by revising paragraph (c)(2) to read as follows:

Sec.  512.6  How should I prepare documents when submitting a claim for 
confidentiality?

* * * * *
    (c) * * *
    (2) Confidential portions of electronic files submitted in other 
than their original format must be marked ``Confidential Business 
Information'' or ``Entire Page Confidential Business Information'' at 
the top of each page. If only a portion of a page is claimed to be 
confidential, that portion shall be designated by brackets. Files 
submitted in their original format that cannot be marked as described 
above must, to the extent practicable, identify confidential 
information by alternative markings using existing attributes within 
the file or means that are accessible through use of the file's 
associated program. When alternative markings are used, such as font 
changes or symbols, the submitter must use one method consistently for 
electronic files of the same type within the same submission. The 
method used for such markings must be described in the request for 
confidentiality. Files and materials that cannot be marked internally, 
such as video clips or executable files or files provided in a format 
specifically requested by the agency, shall be renamed prior to 
submission so the words ``Confidential Bus Info'' appears in the file 
name or, if that is not practicable, the characters ``Conf Bus Info'' 
or ``CBI'' appear. In all cases, a submitter shall provide an 
electronic copy of its request for confidential treatment on any medium 
containing confidential information, except where impracticable.
* * * * *
0
281. Revise Sec.  512.7 to read as follows:

Sec.  512.7  Where should I send the information for which I am 
requesting confidentiality?

    Except for requests pertaining to information submitted under 49 
CFR part 537, any claim for confidential treatment must be submitted to 
the Chief Counsel of the National Highway Traffic Safety 
Administration, 1200 New Jersey Avenue SE., West Building W41-227, 
Washington, DC 20590. Requests for confidential treatment for 
information submitted under 49 CFR part 537 shall accompany the 
submission and be provided to NHTSA through the electronic portal 
identified in 49 CFR 537.5(a)(4) or through an email address that will 
be provided and maintained by NHTSA.

PART 523--VEHICLE CLASSIFICATION

0
282. Revise the authority citation for part 523 to read as follows:

    Authority:  49 U.S.C. 32901; delegation of authority at 49 CFR 
1.95.
0
283. Revise Sec.  523.2 to read as follows:

Sec.  523.2  Definitions.

    Ambulance has the meaning given in 40 CFR 86.1803.
    Approach angle means the smallest angle, in a plane side view of an 
automobile, formed by the level surface on which the automobile is 
standing and a line tangent to the front tire static loaded radius arc 
and touching the underside of the automobile forward of the front tire.
    Axle clearance means the vertical distance from the level surface 
on which an automobile is standing to the lowest point on the axle 
differential of the automobile.
    Base tire (for passenger automobiles, light trucks, and medium duty 
passenger vehicles) means the tire size specified as standard equipment 
by the manufacturer on each unique combination of a vehicle's footprint 
and model type. Standard equipment is defined in 40 CFR 86.1803.
    Basic vehicle frontal area is used as defined in 40 CFR 86.1803 for 
passenger automobiles, light trucks, medium duty passenger vehicles and 
Class 2b through 3 pickup trucks and vans. For heavy-duty tracts and 
vocational vehicles, it has the meaning given in 40 CFR 1037.801.
    Breakover angle means the supplement of the largest angle, in the 
plan side view of an automobile that can be formed by two lines tangent 
to the front and rear static loaded radii arcs and intersecting at a 
point on the underside of the automobile.
    Cab-complete vehicle means a vehicle that is first sold as an 
incomplete

[[Page 40733]]

vehicle that substantially includes the vehicle cab section as defined 
in 40 CFR 1037.801. For example, vehicles known commercially as 
chassis-cabs, cab-chassis, box-deletes, bed-deletes, and cut-away vans 
are considered cab-complete vehicles. A cab includes a steering column 
and a passenger compartment. Note that a vehicle lacking some 
components of the cab is a cab-complete vehicle if it substantially 
includes the cab.
    Cargo-carrying volume means the luggage capacity or cargo volume 
index, as appropriate, and as those terms are defined in 40 CFR 
600.315-08, in the case of automobiles to which either of these terms 
apply. With respect to automobiles to which neither of these terms 
apply, ``cargo-carrying volume'' means the total volume in cubic feet, 
rounded to the nearest 0.1 cubic feet, of either an automobile's 
enclosed nonseating space that is intended primarily for carrying cargo 
and is not accessible from the passenger compartment, or the space 
intended primarily for carrying cargo bounded in the front by a 
vertical plane that is perpendicular to the longitudinal centerline of 
the automobile and passes through the rearmost point on the rearmost 
seat and elsewhere by the automobile's interior surfaces.
    Class 2b vehicles are vehicles with a gross vehicle weight rating 
(GVWR) ranging from 8,501 to 10,000 pounds.
    Class 3 through Class 8 vehicles are vehicles with a gross vehicle 
weight rating (GVWR) of 10,001 pounds or more as defined in 49 CFR 
565.15.
    Commercial medium- and heavy-duty on-highway vehicle means an on-
highway vehicle with a gross vehicle weight rating of 10,000 pounds or 
more as defined in 49 U.S.C. 32901(a)(7).
    Complete vehicle has the meaning given to completed vehicle as 
defined in 49 CFR 567.3.
    Curb weight has the meaning given in 49 CFR 571.3.
    Dedicated vehicle has the same meaning as dedicated automobile as 
defined in 49 U.S.C. 32901(a)(8).
    Departure angle means the smallest angle, in a plane side view of 
an automobile, formed by the level surface on which the automobile is 
standing and a line tangent to the rear tire static loaded radius arc 
and touching the underside of the automobile rearward of the rear tire.
    Dual-fueled vehicle (multi-fuel, or flexible-fuel vehicle) has the 
same meaning as dual fueled automobile as defined in 49 U.S.C. 
32901(a)(9).
    Electric vehicle means a vehicle that does not include an engine, 
and is powered solely by an external source of electricity and/or solar 
power. Note that this does not include electric hybrid or fuel-cell 
vehicles that use a chemical fuel such as gasoline, diesel fuel, or 
hydrogen. Electric vehicles may also be referred to as all-electric 
vehicles to distinguish them from hybrid vehicles.
    Emergency vehicle means one of the following:
    (1) For passenger cars, light trucks and medium duty passenger 
vehicles, emergency vehicle has the meaning in 49 U.S.C. 32902(e).
    (2) For heavy-duty vehicles, emergency vehicle has the meaning 
given in 40 CFR 1037.801.
    Engine code has the meaning given in 40 CFR 86.1803.
    Final stage manufacturer has the meaning given in 49 CFR 567.3.
    Fire truck has the meaning given in 40 CFR 86.1803.
    Footprint is defined as the product of track width (measured in 
inches, calculated as the average of front and rear track widths, and 
rounded to the nearest tenth of an inch) times wheelbase (measured in 
inches and rounded to the nearest tenth of an inch), divided by 144 and 
then rounded to the nearest tenth of a square foot. For purposes of 
this definition, track width is the lateral distance between the 
centerlines of the base tires at ground, including the camber angle. 
For purposes of this definition, wheelbase is the longitudinal distance 
between front and rear wheel centerlines.
    Full-size pickup truck means a light truck or medium duty passenger 
vehicle that meets the requirements specified in 40 CFR 86.1866-12(e).
    Gross axle weight rating (GAWR) has the meaning given in 49 CFR 
571.3.
    Gross combination weight rating (GCWR) has the meaning given in 49 
CFR 571.3.
    Gross vehicle weight rating (GVWR) has the meaning given in 49 CFR 
571.3.
    Heavy-duty engine means any engine used for (or for which the 
engine manufacturer could reasonably expect to be used for) motive 
power in a heavy-duty vehicle. For purposes of this definition in this 
part, the term ``engine'' includes internal combustion engines and 
other devices that convert chemical fuel into motive power. For 
example, a fuel cell and motor used in a heavy-duty vehicle is a heavy-
duty engine.
    Heavy-duty vehicle means a vehicle as defined in Sec.  523.6.
    Incomplete vehicle has the meaning given in 49 CFR 567.3.
    Innovative technology means technology certified under 40 CFR 
1036.610, 40 CFR 1037.610 and 49 CFR 535.7(f).
    Light truck means a non-passenger automobile meeting the criteria 
in Sec.  523.5.
    Manufacturer has the meaning in 49 U.S.C. 30102.
    Medium duty passenger vehicle means a vehicle which would satisfy 
the criteria in Sec.  523.5 (relating to light trucks) but for its 
gross vehicle weight rating or its curb weight, which is rated at more 
than 8,500 lbs GVWR or has a vehicle curb weight of more than 6,000 
pounds or has a basic vehicle frontal area in excess of 45 square feet, 
and which is designed primarily to transport passengers, but does not 
include a vehicle that--
    (1) Is an ``incomplete vehicle''' as defined in this subpart; or
    (2) Has a seating capacity of more than 12 persons; or
    (3) Is designed for more than 9 persons in seating rearward of the 
driver's seat; or
    (4) Is equipped with an open cargo area (for example, a pick-up 
truck box or bed) of 72.0 inches in interior length or more. A covered 
box not readily accessible from the passenger compartment will be 
considered an open cargo area for purposes of this definition.
    Mild hybrid gasoline-electric vehicle means a vehicle as defined by 
EPA in 40 CFR 86.1866-12(e).
    Motor home has the meaning given in 49 CFR 571.3.
    Motor vehicle has the meaning giving in 49 U.S.C. 30102.
    Off-cycle technology means technology certified under 40 CFR 
1036.610, 40 CFR 1037.610 and 49 CFR 535.7(f).
    Passenger-carrying volume means the sum of the front seat volume 
and, if any, rear seat volume, as defined in 40 CFR 600.315-08, in the 
case of automobiles to which that term applies. With respect to 
automobiles to which that term does not apply, ``passenger-carrying 
volume'' means the sum in cubic feet, rounded to the nearest 0.1 cubic 
feet, of the volume of a vehicle's front seat and seats to the rear of 
the front seat, as applicable, calculated as follows with the head 
room, shoulder room, and leg room dimensions determined in accordance 
with the procedures outlined in Society of Automotive Engineers 
Recommended Practice J1100, Motor Vehicle Dimensions (Report of Human 
Factors Engineering Committee, Society of Automotive Engineers, 
approved November 2009).
    (1) For front seat volume, divide 1,728 into the product of the 
following SAE dimensions, measured in inches to the nearest 0.1 inches, 
and round the quotient to the nearest 0.001 cubic feet.

[[Page 40734]]

    (i) H61-Effective head room--front.
    (ii) W3-Shoulder room--front.
    (iii) L34-Maximum effective leg room-accelerator.
    (2) For the volume of seats to the rear of the front seat, divide 
1,728 into the product of the following SAE dimensions, measured in 
inches to the nearest 0.1 inches, and rounded the quotient to the 
nearest 0.001 cubic feet.
    (i) H63-Effective head room--second.
    (ii) W4-Shoulder room--second.
    (iii) L51-Minimum effective leg room--second.
    Phase 1 means the greenhouse gas emissions standards and fuel 
efficiency standards for medium- and heavy-duty engines and vehicles 
program published in 2011, effective beginning with model year 2013.
    Phase 2 means means the greenhouse gas emissions standards and fuel 
efficiency standards for medium- and heavy-duty engines and vehicles 
program effective beginning with model year 2018 for heavy-duty 
trailers and model year 2021 for all other heavy-duty vehicles and 
engines.
    Pickup truck means a non-passenger automobile which has a passenger 
compartment and an open cargo area (bed).
    Recreational vehicle or RV means a motor vehicle equipped with 
living space and amenities found in a motor home.
    Running clearance means the distance from the surface on which an 
automobile is standing to the lowest point on the automobile, excluding 
unsprung weight.
    Static loaded radius arc means a portion of a circle whose center 
is the center of a standard tire-rim combination of an automobile and 
whose radius is the distance from that center to the level surface on 
which the automobile is standing, measured with the automobile at curb 
weight, the wheel parallel to the vehicle's longitudinal centerline, 
and the tire inflated to the manufacturer's recommended pressure.
    Strong hybrid gasoline-electric vehicle means a vehicle as defined 
by EPA in 40 CFR 86.1866-12(e).
    Temporary living quarters means a space in the interior of an 
automobile in which people may temporarily live and which includes 
sleeping surfaces, such as beds, and household conveniences, such as a 
sink, stove, refrigerator, or toilet.
    Transmission class has the meaning given in 40 CFR 600.002.
    Tranmission configuration has the meaning given in 40 CFR 600.002.
    Transmission type has the meaning given in 40 CFR 86.1803.
    Van means a vehicle with a body that fully encloses the driver and 
a cargo carrying or work performing compartment. The distance from the 
leading edge of the windshield to the foremost body section of vans is 
typically shorter than that of pickup trucks and sport utility 
vehicles.
    Vocational tractor means a tractor that is classified as a 
vocational vehicle according to 40 CFR 1037.630
    Vocational vehicle means a vehicle that is equipped for a 
particular industry, trade or occupation such as construction, heavy 
hauling, mining, logging, oil fields, refuse and includes vehicles such 
as school buses, motorcoaches and RVs.
    Work truck means a vehicle that is rated at more than 8,500 pounds 
and less than or equal to 10,000 pounds gross vehicle weight, and is 
not a medium-duty passenger vehicle as defined in 40 CFR 86.1803.
0
284. Revise Sec.  523.6 to read as follows:

Sec.  523.6  Heavy-duty vehicle.

    (a) A heavy-duty vehicle is any commercial medium or heavy-duty on-
highway vehicle or a work truck, as defined in 49 U.S.C. 32901(a)(7) 
and (19). For the purpose of this section, heavy-duty vehicles are 
divided into four regulatory categories as follows:
    (1) Heavy-duty pickup trucks and vans;
    (2) Heavy-duty vocational vehicles;
    (3) Truck tractors with a GVWR above 26,000 pounds; and
    (4) Heavy-duty trailers.
    (b) The heavy-duty vehicle classification does not include vehicles 
excluded as specified in 49 CFR 535.3.
0
285. Revise Sec.  523.7 to read as follows:

Sec.  523.7  Heavy-duty pickup trucks and vans.

    Heavy-duty pickup trucks and vans are pickup trucks and vans with a 
gross vehicle weight rating between 8,501 pounds and 14,000 pounds 
(Class 2b through 3 vehicles) manufactured as complete vehicles by a 
single or final stage manufacturer or manufactured as incomplete 
vehicles as designated by a manufacturer. A manufacturer may also 
optionally designate as a heavy-duty pickup truck or van any cab-
complete or complete vehicle having a GVWR over 14,000 pounds and below 
26,001 pounds equipped with a spark ignition engine or any spark 
ignition engine certified and sold as a loose engine manufactured for 
use in a heavy-duty pickup truck or van. See references in 40 CFR 
86.1819, 40 CFR 1037.150, and 49 CFR 535.5(a).
0
286. Add Sec.  523.10 to read as follows:

Sec.  523.10  Heavy-duty trailers.

    (a) A trailer means a motor vehicle with or without motive power, 
designed for carrying persons or property and for being drawn by 
another motor vehicle as defined in 49 CFR 571.3. For the purpose of 
this part, heavy-duty trailers include only those trailers designed to 
be drawn by a truck tractor or vocational tractor. Heavy-duty trailers 
may be divided into different types and categories as follows:
    (1) Box vans are trailers with an enclosed cargo space that is 
permanently attached to the chassis, with fixed sides, nose, and roof 
and is designed to carry a wide range of freight. Tankers are not box 
vans.
    (2) Box vans with self-contained refrigeration systems are 
refrigerated vans. All other box vans are dry vans.
    (3) Trailers that are not box vans are non-box trailers. This 
includes chassis that are designed only for temporarily mounted 
containers.
    (4) Box trailers with length greater than 50 feet are long box 
trailers. Other box trailers are short box trailers.
    (b) Heavy-duty trailers does not include excluded trailers as 
specified in 49 CFR 535.3.

PART 534--RIGHTS AND RESPONSIBILITIES OF MANUFACTURERS IN THE 
CONTEXT OF CHANGES IN CORPORATE RELATIONSHIPS

0
287. Revise the authority citation for part 534 to read as follows:

    Authority:  49 U.S.C. 32901; delegation of authority at 49 CFR 
1.95.
0
288. Add Sec.  534.8 to read as follows:

Sec.  534.8  Shared corporate relationships.

    (a) Vehicles and engines built by multiple manufacturers can share 
responsibility for complying with fuel consumption standards in 49 CFR 
part 535, if allowed by EPA under 40 CFR 1037.620 and a joint agreement 
between the parties is sent to EPA and NHTSA.
    (1) Each agreement must--
    (i) Define how the vehicles and engines will be divided among each 
manufacturer;
    (ii) Specify which manufacturer(s) will be responsible for the EPA 
certificates of conformity required in 40 CFR 1036.201 and 40 CFR 
1037.201;
    (iii) Describe the vehicles and engines in terms of the model 
types, production volumes, and model years (production periods if 
necessary);
    (iv) Describe which manufacturer(s) have engineering and design 
control and sale distribution ownership over the vehicles and/or 
engines; and

[[Page 40735]]

    (v) Include signatures from all parties involved in the shared 
corporate relationship.
    (2) After defining the shared relationship between the 
manufacturers for the initiating model year, manufacturers cannot 
change the defined ownerships for subsequent model years unless one 
manufacturer assumes a successor relationship over another manufacturer 
that previously shared ownership.
    (3) Multiple manufacturers must designate the same shared 
responsibility for complying with fuel consumption as selected for GHG 
standards unless otherwise allowed by EPA and NHTSA.
    (b) NHTSA reserves the right to reject the joint agreement.
0
289. Revise part 535 to read as follows:

PART 535 MEDIUM- AND HEAVY-DUTY VEHICLE FUEL EFFICIENCY PROGRAM

Sec.
535.1 Scope.
535.2 Purpose.
535.3 Applicability.
535.4 Definitions.
535.5 Standards.
535.6 Measurement and calculation procedures.
535.7 Averaging, banking, and trading (ABT) credit program.
535.8 Reporting requirements and recordkeeping requirements.
535.9 Enforcement approach.
535.10 How do manufacturers comply with fuel consumption standards?

    Authority:  49 U.S.C. 32902 and 30101; delegation of authority 
at 49 CFR 1.95.

Sec.  535.1  Scope.

    This part establishes fuel consumption standards pursuant to 49 
U.S.C. 32902(k) for work trucks and commercial medium-duty and heavy-
duty on-highway vehicles, including trailers (hereafter referenced as 
heavy-duty vehicles), and engines manufactured for sale in the United 
States and establishes a credit program manufacturers may use to comply 
with standards and requirements for manufacturers to provide reports to 
the National Highway Traffic Safety Administration regarding their 
efforts to reduce the fuel consumption of heavy-duty vehicles.

Sec.  535.2  Purpose.

    The purpose of this part is to reduce the fuel consumption of new 
heavy-duty vehicles by establishing maximum levels for fuel consumption 
standards while providing a flexible credit program to assist 
manufacturers in complying with standards.

Sec.  535.3  Applicability.

    (a) This part applies to manufacturers that produce complete and 
incomplete heavy-duty vehicles as defined in 49 CFR part 523, and to 
the manufacturers of all heavy-duty engines manufactured for use in the 
applicable vehicles for each given model year.
    (b) Vehicle and engine manufacturers that must comply with this 
part include manufacturers required to have approved certificates of 
conformity from EPA as specified in 40 CFR parts 86, 1036, and 1037, 
except for minor differences in excluded vehicles as specified in 
paragraph (d) of this section.
    (c) In certain special conditions where EPA allows manufacturers to 
designate other manufacturers to comply with GHG standards or grants 
special allowances in the construction of vehicles, as specified in 40 
CFR 1037.620, 1037.621, and 1037.650, these allowances can be used to 
comply with the fuel consumption standards of this part.
    (d) Manufacturers required to meet the fuel consumption standards 
of this part also include manufacturers completing, altering, or 
assembling motor vehicles or motor vehicle equipment into--
    (1) Electric vehicles; and
    (2) Alternative fueled vehicles from all types of heavy duty engine 
conversions.
    (i) Entities that install alternative fuel conversion systems into 
vehicles acquired from vehicle manufacturers prior to first retail sale 
or introduction into interstate commerce may be regulated under this 
part if designated by the vehicle manufacturer and EPA to be the 
certificate holder.
    (ii) Entities installing alternative fuel conversions are regulated 
as vehicle and engine manufacturers.
    (iii) Entities can be omitted from compliance with vehicle based 
standards, if-
    (A) Allowed by EPA;
    (B) They provide a reasonable technical basis that the modified 
vehicle continues to meet vehicle standards; and
    (C) They provide a joint agreement to EPA and NHTSA as specified in 
49 CFR 534.7.
    (e) The following heavy-duty vehicles and engines are excluded from 
the requirements of this part:
    (1) Medium-duty passenger vehicles and other vehicles subject to 
the light-duty corporate average fuel economy standards in 49 CFR parts 
531 and 533.
    (2) Recreational vehicles, including motor homes manufactured 
before model year 2021 exept those produced by manufacturers 
voluntarily complying with NHTSA's early voational standards for model 
years 2013 through 2020.
    (3) Heavy-duty trailers meeting one or more of the following 
criteria are excluded from vehicle standards in Sec.  535.5(e):
    (i) Trailers designed for in-field operations in logging or mining.
    (ii) Trailers designed to operate at low speeds such that they are 
unsuitable for normal highway operation.
    (iii) Trailers designed to perform their primary function while 
stationary, if they have permanently affixed components designed for 
heavy construction. This would include crane trailers and concrete 
trailers. Trailers would not qualify under this paragraph based on 
welding equipment or other components that are commonly used separate 
from trailers.
    (iv) Trailers less than 35 feet long with three axles, and all 
trailers with four or more axles.
    (v) Trailers intended for temporary or permanent residence, office 
space, or other work space, such as campers, mobile homes, and carnival 
trailers.
    (vi) Trailers built before January 1, 2021, except those trailers 
voluntarily complaying with NHTSA's early trailer standards for model 
years 2018-2020.
    (vii) Equipment that serves similar purposes to trailers but is not 
intended to be pulled by a tractor.
    (viii) Containers that are not permanently mounted on chassis.
    (ix) Trailers designed to be drawn by vehicles other than tractors, 
and those that are coupled to vehicles with pintle hooks or hitches 
instead of a fifth wheel.
    (f) The following heavy-duty vehicles and engines are exempted from 
the requirements of this part:
    (1) Off-road vehicles. Manufacturers producing heavy-duty 
vocational vehicles or vocational tractors that are intended for off-
road use meeting the criteria of paragraph (f)(1)(i) of this section 
are exempted from vehicle standards in Sec.  535.5(b) and (c) but must 
comply with engine standards in Sec.  535.5(d).
    (i) Vehicles primarily designed to perform work off-road (such as 
in oil fields, mining, forests, or construction sites), and meeting at 
least one of the criteria of paragraph (f)(1)(i)(A) of this section and 
at least one of the criteria of paragraph (f)(1)(i)(B) of this section.
    (A) Vehicle must have affixed components designed to work in an 
off-road environment (for example, hazardous material equipment or 
drilling equipment) or was designed to operate at low speeds making 
them unsuitable for normal highway operation.

[[Page 40736]]

    (B) Vehicles must--
    (1) Have an axle that has a gross axle weight rating (GAWR) of 
29,000 pounds or more;
    (2) Have a speed attainable in 2 miles of not more than 33 mph; or
    (3) Have a speed attainable in 2 miles of not more than 45 mph, an 
unloaded vehicle weight that is not less than 95 percent of its gross 
vehicle weight rating (GVWR), and no capacity to carry occupants other 
than the driver and operating crew.
    (C) Manufacturers building tractors exempted under this provision 
must request preliminary approval before introducing vehicles into 
commerce. The request with supporting information must be sent to EPA 
that will coordinate with NHTSA in making a determination in accordance 
with 40 CFR 1037.210. Vehicles introduced into U.S. commerce without 
approval under this paragraph violate 40 CFR 1068.101(a)(1).
    (ii) [Reserved]
    (2) Small business manufacturers. (i) For Phase 1, small business 
manufacturers are exempted from the vehicle and engine standards of 
Sec.  535.5, but must comply with the reporting requirements of Sec.  
535.8(g).
    (ii) For Phase 2, fuel consumption standards apply on a delayed 
schedule for manufacturers meeting the small business criteria 
specified in 13 CFR 121.201 and in 40 CFR 86.1819-14(k)(5), 40 CFR 
1036.150, and 40 CFR 1037.150. Qualifying manufacturers of truck 
tractors, vocational vehicles, heavy duty pickups and vans, and engines 
are not subject to the fuel consumption standards for vehicles and 
engines built before January 1, 2022. Qualifying manufacturers may 
choose to voluntarily comply early.
    (iii) Small business manufacturers producing vehicles and engines 
that run on any fuel other than gasoline, E85, or diesel fuel meeting 
the criteria specified in 13 CFR 121.201 and in 40 CFR 86.1819-
14(k)(5), 40 CFR 1036.150, and 40 CFR 1037.150 may delay complying with 
every new mandatory standard under this part by one model year.
    (g) For model year 2021 and later, emergency vehicles may comply 
with alternative fuel consumption standards as specified in Sec.  
535.5(b)(5) instead of the standards specified in Sec.  535.5(b)(4). 
Vehicles certified to these alternative standards may not generate or 
use positive fuel consumption credits but negative credits must be 
averaged within an averaging set.
    (h) NHTSA may exclude or exempt vehicles and engines under special 
conditions allowed by EPA in accordance with 40 CFR parts 85, 86, 1036, 
1037, and 1068. Manufacturers should consult the agencies if uncertain 
how to apply any EPA provision under the NHTSA fuel consumption 
program. Upon notification by EPA of a fraudulent use of an exemption, 
NHTSA reserves that right to suspend or revoke any exemption or 
exclusion.

Sec.  535.4  Definitions.

    The terms manufacture and manufacturer are used as defined in 
section 501 of the Act and the terms commercial medium-duty and heavy-
duty on highway vehicle, fuel and work truck are used as defined in 49 
U.S.C. 32901.
    Act means the Motor Vehicle Information and Cost Savings Act, as 
amended by Pub. L. 94-163 and 96-425.
    Administrator means the Administrator of the National Highway 
Traffic Safety Administration (NHTSA) or the Administrator's delegate.
    Advanced technology means vehicle technology under this fuel 
consumption program in Sec. Sec.  535.6 and 535.7 and by EPA under 40 
CFR 86.1819-14(d)(7), 1036.615, or 1037.615.
    Alternative fuel conversion has the meaning given for clean 
alternative fuel conversion in 40 CFR 85.502.
    A to B testing has the meaning given in 40 CFR 1037.801.
    Automatic tire inflation system has the meaning in 40 CFR 1037.801.
    Averaging set means, a set of engines or vehicles in which fuel 
consumption credits may be exchanged. Credits generated by one engine 
or vehicle family may only be used by other respective engine or 
vehicle families in the same averaging set. Note that an averaging set 
may comprise more than one regulatory subcategory. The averaging sets 
for this HD program are defined as follows:
    (1) Heavy-duty pickup trucks and vans.
    (2) Vocational light-heavy vehicles with a GVWR above 8,500 pounds 
but at or below 19,500 pounds.
    (3) Vocational and tractor medium-heavy vehicles with a GVWR above 
19,500 pounds but at or below 33,000 pounds.
    (4) Vocational and tractor heavy-heavy vehicles with a GVWR above 
33,000 pounds.
    (5) Compression-ignition light heavy-duty engines for Class 2b to 5 
vehicles with a GVWR above 8,500 pounds but at or below 19,500 pounds.
    (6) Compression-ignition medium heavy-duty engines for Class 6 and 
7 vehicles with a GVWR above 19,500 but at or below 33,000 pounds.
    (7) Compression-ignition heavy heavy-duty engines for Class 8 
vehicles with a GVWR above 33,000 pounds.
    (8) Spark-ignition engines in Class 2b to 8 vehicles with a GVWR 
above 8,500 pounds.
    (9) Long box van trailers.
    (10) Short box van trailers.
    (11) Long refrigerated box van trailers.
    (12) Short refrigerated box van trailers.
    Cab-complete vehicle has the meaning given in 49 CFR part 523.
    Carryover means relating to certification based on emission data 
generated from an earlier model year.
    Certificate holder means the manufacturer who holds the certificate 
of conformity for the vehicle or engine and that assigns the model year 
based on the date when its manufacturing operations are completed 
relative to its annual model year period.
    Certificate of Conformity means an approval document granted by EPA 
to a manufacturer that submits an application for a vehicle or engine 
emissions family in 40 CFR 1036.205 and 1037.205. A certificate of 
conformity is valid from the indicated effective date until December 31 
of the model year for which it is issued. The certificate must be 
renewed annually for any vehicle a manufacturer continues to produce.
    Certification means process of obtaining a certificate of 
conformity for a vehicle family that complies with the emission 
standards and requirements in this part.
    Certified emission level means the highest deteriorated emission 
level in an engine family for a given pollutant from the applicable 
transient and/or steady-state testing rounded to the same number of 
decimal places as the applicable standard. Note that you may have two 
certified emission levels for CO2 if you certify a family 
for both vocational and tractor use.
    Chassis-cab means the incomplete part of a vehicle that includes a 
frame, a completed occupant compartment and that requires only the 
addition of cargo-carrying, work-performing, or load-bearing components 
to perform its intended functions.
    Chief Counsel means the NHTSA Chief Counsel, or his or her 
designee.
    Complete sister vehicle is a complete vehicle of the same 
configuration as a cab-complete vehicle.
    Complete vehicle has the meaning given in 49 CFR part 523.
    Compression-ignition (CI) means relating to a type of 
reciprocating, internal-combustion engine, such as a diesel engine, 
that is not a spark-ignition engine. Note that 40 CFR 1036.1 also deems 
gas turbine engines and other engines to be compression-ignition 
engines.

[[Page 40737]]

    Configuration means a subclassification within a test group for 
passenger cars, light trucks and medium-duty passenger vehicles and 
heavy-duty pickup trucks and vans which is based on basic engine, 
engine code, transmission type and gear ratios, and final drive ratio.
    Curb weight has the meaning given in 40 CFR 86.1803.
    Date of manufacture means the date on which the certifying vehicle 
manufacturer completes its manufacturing operations, except as follows:
    (1) Where the certificate holder is an engine manufacturer that 
does not manufacture the complete or incomplete vehicle, the date of 
manufacture of the vehicle is based on the date assembly of the vehicle 
is completed.
    (2) EPA and NHTSA may approve an alternate date of manufacture 
based on the date on which the certifying (or primary) vehicle 
manufacturer completes assembly at the place of main assembly, 
consistent with the provisions of 40 CFR 1037.601 and 49 CFR 567.4.
    (3) A vehicle manufacturer that completes assembly of a vehicle at 
two or more facilities may ask to use as the month and year of 
manufacture, for that vehicle, the month and year in which 
manufacturing is completed at the place of main assembly, consistent 
with provisions of 49 CFR 567.4, as the model year. Note that such 
staged assembly is subject to the provisions of 40 CFR 1068.260(c). 
NHTSA's allowance of this provision is effective when EPA approves the 
manufacturer's certificates of conformity for these vehicles.
    Day cab has the meaning given in 40 CFR 1037.801.
    Emergency vehicle means a vehicle that meets one of the criteria in 
40 CFR 1037.801.
    Engine family has the meaning given in 40 CFR 1036.230.
    Excluded means a vehicle or engine manufacturer or component is not 
required to comply with any aspects with the NHTSA fuel consumption 
program.
    Exempted means a vehicle or engine manufacturer or component is not 
required to comply with certain provisions of the NHTSA fuel 
consumption program.
    Family certification level (FCL) has the meaning given in 40 CFR 
1036.801.
    Family emission limit (FEL) has the meaning given in 40 CFR 
1037.801.
    Final drive ratio has the meaning in 40 CFR 1037.801.
    Final-stage manufacturer has the meaning given in 49 CFR 567.3.
    Fleet in this part means all the heavy-duty vehicles or engines 
within each of the regulatory sub-categories that are manufactured by a 
manufacturer in a particular model year and that are subject to fuel 
consumption standards under Sec.  535.5.
    Fleet average fuel consumption is the calculated average fuel 
consumption performance value for a manufacturer's fleet derived from 
the production weighted fuel consumption values of the unique vehicle 
configurations within each vehicle model type that makes up that 
manufacturer's vehicle fleet in a given model year. In this part, the 
fleet average fuel consumption value is determined for each 
manufacturer's fleet of heavy-duty pickup trucks and vans.
    Fleet average fuel consumption standard is the actual average fuel 
consumption standard for a manufacturer's fleet derived from the 
production weighted fuel consumption standards of each unique vehicle 
configuration, based on payload, tow capacity and drive configuration 
(2, 4 or all-wheel drive), of the model types that makes up that 
manufacturer's vehicle fleet in a given model year. In this part, the 
fleet average fuel consumption standard is determined for each 
manufacturer's fleet of heavy-duty pickup trucks and vans.
    Fuel cell means an electrochemical cell that produces electricity 
via the non-combustion reaction of a consumable fuel, typically 
hydrogen.
    Fuel cell electric vehicle means a motor vehicle propelled solely 
by an electric motor where energy for the motor is supplied by a fuel 
cell.
    Fuel efficiency means the amount of work performed for each gallon 
of fuel consumed.
    Gaseous fuel has the meaning given in 40 CFR 1037.801.
    Good engineering judgment has the meaning given in 40 CFR 1068.30. 
See 40 CFR 1068.5 for the administrative process used to evaluate good 
engineering judgment.
    Heavy-duty off-road vehicle means a heavy-duty vocational vehicle 
or vocational tractor that is intended for off-road use.
    Heavy-duty vehicle has the meaning given in 49 CFR part 523.
    Heavy-haul tractor has the meaning given in 40 CFR 1037.801.
    Heavy heavy-duty (HHD) vehicle means a Class 8 vehicle with a GVWR 
above 33,000 pounds.
    Hybrid engine or hybrid powertrain means an engine or powertrain 
that includes energy storage features other than a conventional battery 
system or conventional flywheel. Supplemental electrical batteries and 
hydraulic accumulators are examples of hybrid energy storage systems. 
Note that certain provisions in this part treat hybrid engines and 
powertrains intended for vehicles that include regenerative braking 
different than those intended for vehicles that do not include 
regenerative braking.
    Hybrid vehicle means a vehicle that includes energy storage 
features (other than a conventional battery system or conventional 
flywheel) in addition to an internal combustion engine or other engine 
using consumable chemical fuel. Supplemental electrical batteries and 
hydraulic accumulators are examples of hybrid energy storage systems 
Note that certain provisions in this part treat hybrid vehicles that 
include regenerative braking different than those that do not include 
regenerative braking.
    Incomplete vehicle has the meaning given in 49 CFR part 523. For 
the purpose of this regulation, a manufacturer may request EPA and 
NHTSA to allow the certification of a vehicle as an incomplete vehicle 
if it manufactures the engine and sells the unassembled chassis 
components, provided it does not produce and sell the body components 
necessary to complete the vehicle.
    Light heavy-duty (LHD) vehicle means a Class 2b through 5 vehicle 
with a GVWR at or below 19,500 pounds.
    Liquefied petroleum gas (LPG) has the meaning given in 40 CFR 
1036.801.
    Low rolling resistance tire means a tire on a vocational vehicle 
with a tire rolling resistance level (TRRL) of 7.7 kg/metric ton or 
lower, a steer tire on a tractor with a TRRL of 7.7 kg/metric ton or 
lower, or a drive tire on a tractor with a TRRL of 8.1 kg/metric ton or 
lower.
    Medium heavy-duty (MHD) vehicle means a Class 6 or 7 vehicle with a 
GVWR above 19,500 pounds GVWR but at or below 33,000 pounds.
    Model type has the meaning given in 40 CFR 600.002.
    Model year as it applies to engines means the manufacturer's annual 
new model production period, except as restricted under this 
definition. 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. Manufacturers may not adjust model years to circumvent or delay 
compliance with standards.
    Model year as it applies to vehicles 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

[[Page 40738]]

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.
    (1) 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.
    (2) Unless a vehicle is being shipped to a secondary 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.
    Natural gas has the meaning given in 40 CFR 1036.801. Vehicles that 
use a pilot-ignited natural gas engine (which uses a small diesel fuel 
ignition system), are still considered natural gas vehicles.
    NHTSA Enforcement means the NHTSA Associate Administrator for 
Enforcement, or his or her designee.
    Party means the person alleged to have committed a violation of 
Sec.  535.9, and includes manufacturers of vehicles and manufacturers 
of engines.
    Payload means in this part the resultant of subtracting the curb 
weight from the gross vehicle weight rating.
    Petroleum has the meaning given in 40 CFR 1036.801.
    Pickup truck has the meaning given in 49 CFR part 523.
    Plug-in hybrid electric vehicle (PHEV) means a hybrid electric 
vehicle that has the capability to charge the battery or batteries used 
for vehicle propulsion from an off-vehicle electric source, such that 
the off-vehicle source cannot be connected to the vehicle while the 
vehicle is in motion.
    Power take-off (PTO) means a secondary engine shaft or other system 
on a vehicle that provides substantial auxiliary power for purposes 
unrelated to vehicle propulsion or normal vehicle accessories such as 
air conditioning, power steering, and basic electrical accessories. A 
typical PTO uses a secondary shaft on the engine to transmit power to a 
hydraulic pump that powers auxiliary equipment such as a boom on a 
bucket truck.
    Powertrain family has the meaning given in 40 CFR 1037.231. 
Manufacturers choosing to perform powertrain testing as specified in 40 
CFR 1037.550, divide product lines into powertrain families that are 
expected to have similar fuel consumptions and CO2 emission 
characteristics throughout the useful life.
    Preliminary approval means approval granted by an authorized EPA 
representative prior to submission of an application for certification, 
consistent with the provisions of 40 CFR 1037.210. For requirements 
involing NHTSA, EPA will ensure decisions are jointly made and will 
convey the decision to the manufacturer.
    Primary intended service class has the meaning for engines as 
specified in 40 CFR 1036.140.
    Rechargeable Energy Storage System (RESS) means the component(s) of 
a hybrid engine or vehicle that store recovered energy for later use, 
such as the battery system in a electric hybrid vehicle.
    Regulatory category means each of the four types of heavy-duty 
vehicles defined in 49 CFR 523.6 and the heavy-duty engines used in 
these heavy-duty vehicles.
    Regulatory subcategory means the sub-groups in each regulatory 
category to which fuel consumption standards and requirements apply, 
and are defined as follows:
    (1) Heavy-duty pick-up trucks and vans.
    (2) Vocational vehicle subcategories are shown in Tables 1 and 2 
below and include vocational tractors. Table 1 includes vehicles 
complying with Phase 1 standards. Phase 2 vehicles are included in 
Table 2 which have 21 separate subcategories to account for differences 
in engine type, GVWR, and the vehicle characteristics corresponding to 
the duty cycles for vocational vehicles.

            Table 1--Phase 1 Vocational Vehicle Subcategories
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
LHD vocational vehicles.
MHD vocational vehicles.
HHD vocational vehicles.
------------------------------------------------------------------------

                                Table 2--Phase 2 Vocational Vehicle Subcategories
----------------------------------------------------------------------------------------------------------------
           Engine type              LHD vocational vehicles    MHD vocational vehicles   HHD vocational vehicles
----------------------------------------------------------------------------------------------------------------
CI...............................  Urban....................  Urban...................  Urban.
CI...............................  Multi-Purpose............  Multi-Purpose...........  Multi-Purpose.
CI...............................  Regional.................  Regional................  Regional.
CI and SI........................  Emergency................  Emergency...............  Emergency.
SI...............................  Urban....................  Urban...................  Urban.
SI...............................  Multi-Purpose............  Multi-Purpose...........  Multi-Purpose.
SI...............................  Regional.................  Regional................  Regional.
----------------------------------------------------------------------------------------------------------------

    (3) Tractor subcategories are shown in Table 3 below for Phase 1 
and 2. Table 3 includes 10 separate subcategories for tractors 
complying with Phase 1 and 2 standards. The heavy-haul tractor 
subcategory only applies for Phase 2.

           Table 3--Phase 1 and 2 Truck Tractor Subcategories
------------------------------------------------------------------------
           Class 7              Class 8 day cabs    Class 8 sleeper cabs
------------------------------------------------------------------------
Low-roof tractors...........  Low-roof day cab      Low-roof sleeper cab
                               tractors.             tractors.
Mid-roof tractors...........  Mid-roof day cab      Mid-roof sleeper cab
                               tractors.             tractors.
High-roof tractors..........  High-roof day cab     High-roof sleeper
                               tractors.             cab tractors.
                                                    Heavy-haul tractors
                                                     (applies only to
                                                     Phase 2 program).
------------------------------------------------------------------------

[[Page 40739]]

    (4) Trailer subcategories are shown in Table 4 of this section for 
the Phase 2 program. Trailers do not comply under the Phase 1 program. 
Table 4 includes 10 separate subcategories for trailers, which are only 
subject to Phase 2 only standards.

                     Table 4--Trailer Subcategories
------------------------------------------------------------------------
                                  Partial-aero
     Full-aero trailers             trailers           Other trailers
------------------------------------------------------------------------
Long box dry vans...........  Long box dry vans...  Non-aero box vans.
Short box dry vans..........  Short box dry vans..  Non-box trailers.
Long box refrigerated vans..  Long box              ....................
                               refrigerated vans.
Short box refrigerated vans.  Short box             ....................
                               refrigerated vans.
------------------------------------------------------------------------

    (5) Engine subcategories are shown in Table 5 below. Table 5 
includes 6 separate subcategories for engines which are the same for 
Phase 1 and 2 standards.

                      Table 5--Engine Subcategories
------------------------------------------------------------------------
         LHD engines               MHD engines           HHD engines
------------------------------------------------------------------------
CI engines for vocational     CI engines for        CI engines for
 vehicles.                     vocational vehicles.  vocational
                                                     vehicles.
                              CI engines for truck  CI engines for truck
                               tractors.             tractors.
------------------------------------------------------------------------
                       All spark-ignition engines.
------------------------------------------------------------------------

    Roof height means the maximum height of a vehicle (rounded to the 
nearest inch), excluding narrow accessories such as exhaust pipes and 
antennas, but including any wide accessories such as roof fairings. 
Measure roof height of the vehicle configured to have its maximum 
height that will occur during actual use, with properly inflated tires 
and no driver, passengers, or cargo onboard. Determine the base roof 
height on fully inflated tires having a static loaded radius equal to 
the arithmetic mean of the largest and smallest static loaded radius of 
tires a manufacturer offers or a standard tire EPA approves. If a 
vehicle is equipped with an adjustable roof fairing, measure the roof 
height with the fairing in its lowest setting. Once the maximum height 
is determined, roof heights are divided into the following categories:
    (1) Low-roof means a vehicle with a roof height of 120 inches or 
less.
    (2) Mid-roof means a vehicle with a roof height between 121 and 147 
inches.
    (3) High-roof means a vehicle with a roof height of 148 inches or 
more.
    Service class group means a group of engine and vehicle averaging 
sets defined as follows:
    (1) Spark-ignition engines, light heavy-duty compression-ignition 
engines, light heavy-duty vocational vehicles and heavy-duty pickup 
trucks and vans.
    (2) Medium heavy-duty compression-ignition engines and medium 
heavy-duty vocational vehicles and tractors.
    (3) Heavy heavy-duty compression-ignition engines and heavy heavy-
duty vocational vehicles and tractors.
    Sleeper cab means a type of truck cab that has a compartment behind 
the driver's seat intended to be used by the driver for sleeping. This 
includes both cabs accessible from the driver's compartment and those 
accessible from outside the vehicle.
    Small business manufacturer means a manufacturer meeting the 
criteria specified in 13 CFR 121.201. For manufacturers owned by a 
parent company, the employee and revenue limits apply to the total 
number employees and total revenue of the parent company and all its 
subsidiaries.
    Spark-ignition (SI) means relating to a gasoline-fueled engine or 
any other type of engine with a spark plug (or other sparking device) 
and with operating characteristics significantly similar to the 
theoretical Otto combustion cycle. Spark-ignition engines usually use a 
throttle to regulate intake air flow to control power during normal 
operation. Note that some spark-ignition engines are subject to 
requirements that apply for compression-ignition engines as described 
in 40 CFR 1036.140.
    Subconfiguration means a unique combination within a vehicle 
configuration of equivalent test weight, road-load horsepower, and any 
other operational characteristics or parameters that EPA determines may 
significantly affect CO2 emissions within a vehicle 
configuration as defined in 40 CFR 600.002.
    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 heavy-duty vehicles.
    (ii) 5.6 tons for medium heavy-duty vehicles.
    (iii) 7.5 tons for heavy heavy-duty vocational vehicles.
    (2) For tractors:
    (i) 12.5 tons for Class 7.
    (ii) 19 tons for Class 8.
    (iii) 43 tons for heavy-haul tractors.
    (3) For trailers:
    (i) 10 tons for short box vans.
    (ii) 19 tons for other trailers.
    Standard tractor has the meaning given in 40 CFR 1037.501.
    Standard trailer has the meaning given in 40 CFR 1037.501.
    Test group means the multiple vehicle lines and model types that 
share critical emissions and fuel consumption related features and that 
are certified as a group by a common certificate of conformity issued 
by EPA and is used collectively with other test groups within an 
averaging set or regulatory subcategory and is used by NHTSA for 
determining the fleet average fuel consumption.
    Tire rolling resistance level (TRRL) means a value with units of 
kg/metric ton that represents that rolling resistance of a tire 
configuration. TRRLs are used as inputs to the GEM model under 40 CFR 
1037.520. Note that a manufacturer may assign a value higher than a 
measured rolling resistance of a tire configuration.
    Towing capacity in this part is equal to the resultant of 
subtracting the gross vehicle weight rating from the gross combined 
weight rating.

[[Page 40740]]

    Trade means to exchange fuel consumption credits, either as a buyer 
or a seller.
    Truck tractor has the meaning given in 49 CFR 571.3. This includes 
most heavy-duty vehicles specifically designed for the primary purpose 
of pulling trailers, but does not include vehicles designed to carry 
other loads. For purposes of this definition ``other loads'' would not 
include loads carried in the cab, sleeper compartment, or toolboxes. 
Examples of vehicles that are similar to tractors but that are not 
tractors under this part include dromedary tractors, automobile 
haulers, straight trucks with trailers hitches, and tow trucks.
    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.
    Useful life has the meaning given in 40 CFR 1036.801 and 1037.801.
    Vehicle configuration means a unique combination of vehicle 
hardware and calibration (related to measured or modeled emissions) 
within a vehicle family. Vehicles with hardware or software 
differences, but that have no hardware or software differences related 
to measured or modeled emissions or fuel consumption can be included in 
the same vehicle configuration. Note that vehicles with hardware or 
software differences related to measured or modeled emissions or fuel 
consumption are considered to be different configurations even if they 
have the same GEM inputs and FEL. Vehicles within a vehicle 
configuration differ only with respect to normal production variability 
or factors unrelated to measured or modeled emissions and fuel 
consumption for EPA and NHTSA.
    Vehicle family has the meaning given in 40 CFR 1037.230. 
Manufacturers designate families in accordance with EPA provisions and 
may not choose different families between the NHTSA and EPA programs.
    Vehicle service class has the meaning for vehicles as specified in 
the 40 CFR 1037.801.
    Vocational tractor has the meaning given in 40 CFR 1037.801.
    Zero emissions vehicle means an electric vehicle or a fuel cell 
vehicle.

Sec.  535.5  Standards.

    (a) Heavy-duty pickup trucks and vans. Each manufacturer's fleet of 
heavy-duty pickup trucks and vans shall comply with the fuel 
consumption standards in this paragraph (a) expressed in gallons per 
100 miles. Each vehicle must be manufactured to comply for its useful 
life. If the manufacturer's fleet includes conventional vehicles 
(gasoline, diesel and alternative fueled vehicles) and advanced 
technology vehicles in Phase 1 (hybrids with regenerative braking, 
vehicles equipped with Rankine-cycle engines, electric and fuel cell 
vehicles), it should divide its fleet into two separate fleets each 
with its own separate fleet average fuel consumption standard which the 
manufacturer must comply with the requirements of this paragraph (a). 
NHTSA standards correspond to the same requirements for EPA as 
specified in 40 CFR 86.1819-14.
    (1) Mandatory standards. For model years 2016 and later, each 
manufacturer must comply with the fleet average standard derived from 
the unique subconfiguration target standards (or groups of 
subconfigurations approved by EPA in accordance with 40 CFR 86.1819) of 
the model types that make up the manufacturer's fleet in a given model 
year. Each subconfiguration has a unique attribute-based target 
standard, defined by each group of vehicles having the same payload, 
towing capacity and whether the vehicles are equipped with a 2-wheel or 
4-wheel drive configuration. Phase 1 target standards apply for model 
years 2016 through 2020. Phase 2 target standards apply for model year 
2021 and afterwards.
    (2) Subconfiguration target standards. (i) Two alternatives exist 
for determining the subconfiguration target standards for Phase 1. For 
each alternative, separate standards exist for compression-ignition and 
spark-ignition vehicles:
    (A) The first alternative allows manufacturers to determine a fixed 
fuel consumption standard that is constant over the model years; and
    (B) The second alternative allows manufacturers to determine 
standards that are phased-in gradually each year.
    (ii) Calculate the subconfiguration target standards as specified 
in this paragraph (a)(2)(ii), using the appropriate coefficients from 
Table 6 choosing between the alternatives in paragraph (a)(2)(i) of 
this section. For electric or fuel cell heavy-duty vehicles, use 
compression-ignition vehicle coefficients ``c'' and ``d'' and for 
hybrid (including plug-in hybrid), dedicated and dual-fueled vehicles, 
use coefficients ``c'' and ``d'' appropriate for the engine type used. 
Round each standard to the nearest 0.001 gallons per 100 miles and 
specify all weights in pounds rounded to the nearest pound. Calculate 
the subconfiguration target standards using the following equation:

Subconfiguration Target Standard (gallons per 100 miles) = [c x (WF)] + 
d
    Where:
WF = Work Factor = [0.75 x (Payload Capacity + Xwd)] + [0.25 x Towing 
Capacity]
Xwd = 4wd Adjustment = 500 lbs if the vehicle group is equipped with 
4wd and all-wheel drive, otherwise equals 0 lbs for 2wd.
Payload Capacity = GVWR (lbs) - Curb Weight (lbs) (for each vehicle 
group)
Towing Capacity = GCWR (lbs) - GVWR (lbs) (for each vehicle group)

  Table 6--Coefficients for Mandatory Subconfiguration Target Standards
------------------------------------------------------------------------
           Model year(s)                    c                  d
------------------------------------------------------------------------
              Phase 1 Alternative 1--Fixed Target Standards
------------------------------------------------------------------------
                         CI Vehicle Coefficients
------------------------------------------------------------------------
2016 to 2018......................          0.0004322              3.330
2019 to 2020......................          0.0004086              3.143
------------------------------------------------------------------------
                         SI Vehicle Coefficients
------------------------------------------------------------------------
2016 to 2018......................          0.0005131              3.961
2019 to 2020......................          0.0004951              3.815
------------------------------------------------------------------------

[[Page 40741]]

 
            Phase 1 Alternative 2--Phased-in Target Standards
------------------------------------------------------------------------
                         CI Vehicle Coefficients
------------------------------------------------------------------------
2016..............................          0.0004519              3.477
2017..............................          0.0004371              3.369
2018 to 2020......................          0.0004086              3.143
------------------------------------------------------------------------
                         SI Vehicle Coefficients
------------------------------------------------------------------------
2016..............................          0.0005277              4.073
2017..............................          0.0005176              3.983
2018 to 2020......................          0.0004951              3.815
------------------------------------------------------------------------
                     Phase 2--Fixed Target Standards
------------------------------------------------------------------------
                         CI Vehicle Coefficients
------------------------------------------------------------------------
2021..............................          0.0003988              3.065
2022..............................          0.0003880              2.986
2023..............................          0.0003792              2.917
2024..............................          0.0003694              2.839
2025..............................          0.0003605              2.770
2026..............................          0.0003507              2.701
2027 and later....................          0.0003418              2.633
------------------------------------------------------------------------
                         SI Vehicle Coefficients
------------------------------------------------------------------------
2021..............................          0.0004827              3.725
2022..............................          0.0004703              3.623
2023..............................          0.0004591              3.533
2024..............................          0.0004478              3.443
2025..............................          0.0004366              3.364
2026..............................          0.0004253              3.274
2027 and later....................          0.0004152              3.196
------------------------------------------------------------------------

    (3) Fleet average fuel consumption standard. (i) Calculate each 
manufacturer's fleet average fuel consumption standard for conventional 
and advanced technology fleets separately based on the subconfiguration 
target standards specified in paragraph (a)(2) of this section, 
weighted to production volumes and averaged using the following 
equation combining all the applicable vehicles in a manufacturer's 
U.S.-directed fleet (compression-ignition, spark-ignition and advanced 
technology vehicles) for a given model year, rounded to the nearest 
0.001 gallons per 100 miles:
[GRAPHIC] [TIFF OMITTED] TP13JY15.108

Where:

Subconfiguration Target Standardi = fuel consumption 
standard for each group of vehicles with same payload, towing 
capacity and drive configuration (gallons per 100 miles).
Volumei = production volume of each unique subconfiguration of a 
model type based upon payload, towing capacity and drive 
configuration.

    (A) A manufacturer may group together subconfigurations that have 
the same test weight (ETW), GVWR, and GCWR. Calculate work factor and 
target value assuming a curb weight equal to two times ETW minus GVWR.
    (B) A manufacturer may group together other subconfigurations if it 
uses the lowest target value calculated for any of the 
subconfigurations.
    (ii) For Phase 1, manufacturers must select an alternative for 
subconfiguration target standards at the same time they submit the 
model year 2016 pre-model year Report, specified in Sec.  535.8. Once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply with the same alternative for subsequent model 
years.
    (4) Voluntary standards. (i) Manufacturers may choose voluntarily 
to comply early with fuel consumption standards for model years 2013 
through 2015, as determined in paragraphs (a)(4)(iii) and (iv) of this 
section, for example, in order to begin accumulating credits through 
over-compliance with the applicable standard. A manufacturer choosing 
early compliance must comply with all the vehicles and engines it 
manufactures in each regulatory category for a given model year.
    (ii) A manufacturer must declare its intent to voluntarily comply 
with fuel consumption standards at the same time it submits a Pre-Model 
Report, prior to the compliance model year beginning as specified in 
Sec.  535.8; and, once selected, the decision cannot be reversed and 
the manufacturer must continue to comply for each subsequent model year 
for all the vehicles and engines it

[[Page 40742]]

manufactures in each regulatory category for a given model year.
    (iii) Calculate separate subconfiguration target standards for 
compression-ignition and spark-ignition vehicles for model years 2013 
through 2015 using the equation in paragraph (a)(2)(ii) of this 
section, substituting the appropriate values for the coefficients in 
the following table as appropriate:

  Table 7--Coefficients for Voluntary Subconfiguration Target Standards
------------------------------------------------------------------------
           Model year(s)                    c                  d
------------------------------------------------------------------------
                         CI Vehicle Coefficients
------------------------------------------------------------------------
2013 and 14.......................          0.0004695              3.615
2015..............................          0.0004656              3.595
------------------------------------------------------------------------
                         SI Vehicle Coefficients
------------------------------------------------------------------------
2013 and 14.......................          0.0005424              4.175
2015..............................          0.0005390              4.152
------------------------------------------------------------------------

    (iv) Calculate the fleet average fuel consumption standards for 
model years 2013 through 2015 using the equation in paragraph (a)(3) of 
this section.
    (5) Exclusion of vehicles not certified as complete vehicles. The 
vehicle standards in paragraph (a) of this section do not apply for 
vehicles that are chassis-certified with respect to EPA's criteria 
pollutant test procedure in 40 CFR part 86, subpart S. Any chassis-
certified vehicles must comply with the vehicle standards and 
requirements of paragraph (b) of this section and the engine standards 
of paragraph (d) of this section for engines used in these vehicles. A 
vehicle manufacturer choosing to comply with this paragraph and that is 
not the engine manufacturer is required to notify the engine 
manufacturers that their engines are subject to paragraph (d) of this 
section and that it intends to use their engines in excluded vehicles.
    (6) Optional certification under this section. Manufacturers may 
certify any complete or cab-complete Class 2b through 5 vehicles 
weighing at or below 19,500 pounds GVWR and any incomplete vehicles 
approved by EPA for inclusion under this paragraph to the same testing 
and standard that applies to a comparable complete sister vehicles as 
determined in accordance in 40 CFR 86.1819-14(j). Calculate the target 
standard value under paragraph (a)(2) of this section based on the same 
work factor value that applies for the complete sister vehicle.
    (7) Loose engines. This paragraph applies for model year 2020 and 
earlier spark-ignition engines identical to engines used in vehicles 
certified to the standards of this paragraph (a), where manufacturers 
sell such engines as loose engines or installed in incomplete vehicles 
that are not cab-complete vehicles in accordance with 40 CFR 86.1819-
14(k)(8). Vehicles in which those engines are installed are subject to 
standards in paragraph (b) of this section and the engines are subject 
to standards in paragraph (d) of this section. Loose engines produced 
each model year must comply with provisions of 40 CFR 86.1819-14(k)(8).
    (8) Alternative fuel vehicle conversions. Alternative fuel vehicle 
conversions may demonstrate compliance with the standards of this part 
or other alternative compliance approaches allowed by EPA in 40 CFR 
85.525.
    (9) Useful life. The following useful life values apply for the 
standards of this section:
    (i) 120,000 miles or 10 years, whichever comes first, for Class 2b 
through Class 3 heavy-duty pickup trucks and vans certified to Phase 1 
standards.
    (ii) 150,000 miles or 15 years, whichever comes first, for Class 2b 
through Class 3 heavy-duty pickup trucks and vans certified to Phase 2 
standards.
    (iii) For Phase 1 credits that you calculate based on a useful life 
of 120,000 miles, multiply any banked credits that you carry forward 
for use into the Phase 2 program by 1.25. For Phase 1 credit deficits 
that you generate based on a useful life of 120,000 miles multiply the 
credit deficit by 1.25 if offsetting the shortfall with Phase 2 
credits.
    (10) Optional standards. For model years 2013 through 2019, 
manufacturers may calculate target standards ``c'' coefficients rounded 
to the nearest six decimal places (0.000001) and ``d'' coefficients 
rounded to the nearest two decimal places (0.01) based on the standards 
listed in tables 6 or 7. If a manufacturer chooses this option, the 
fleet standard calculated in accordance with paragraph (a)(3) of this 
section and fuel consumption rate calculated in accordance with 
paragraph (a)(5) of this section must be rounded to the nearest 0.01 
gallons per 100 miles. If a manufacturer chooses this provision it will 
be applicable for all model years 2013 through 2019.
    (b) Heavy-duty vocational vehicles. Each manufacturer building a 
complete or incomplete heavy-duty vocational vehicles shall comply with 
the fuel consumption standards in this paragraph (b) expressed in 
gallons per 1000 ton-miles. Engines used in heavy-duty vocational 
vehicles shall comply with the standards in paragraph (d) of this 
section. Each vehicle must be manufactured to comply for its useful 
life.
    (1) Mandatory standards. Heavy-duty vocational vehicles produced 
for Phase 1 must comply with the fuel consumption standards in 
paragraph (b)(3) of this section. For Phase 2, each vehicle 
manufacturer of heavy-duty vocational vehicles must comply with the 
fuel consumption standards in paragraph (b)(4) of this section.
    (i) For model years 2016 to 2020, the heavy-duty vocational 
vehicles are subdivided by GVWR into three regulatory subcategories as 
defined in Sec.  535.4, each with its own assigned standard.
    (ii) For model years 2021 and later, the heavy-duty vocational 
vehicle category is subdivided into 21 regulatory subcategories 
depending upon whether vehicles are equipped with a compression or 
spark ignition engine, as defined in Sec.  535.4. Each subcategory has 
its own assigned standard.
    (iii) For purposes of certifying vehicles to fuel consumption 
standards, manufacturers must divide their product lines in each 
regulatory subcategory into vehicle families that have similar 
emissions and fuel consumption features, as specified by EPA in 40 CFR 
part 1037, subpart C. These families will be subject to the

[[Page 40743]]

applicable standards. Each vehicle family is limited to a single model 
year.
    (2) Voluntary compliance. (i) For model years 2013 through 2015, a 
manufacturer may choose voluntarily to comply early with the fuel 
consumption standards provided in paragraph (b)(3) of this section. For 
example, a manufacturer may choose to comply early in order to begin 
accumulating credits through over-compliance with the applicable 
standards. A manufacturer choosing early compliance must comply with 
all the vehicles and engines it manufacturers in each regulatory 
category for a given model year.
    (ii) A manufacturer must declare its intent to voluntarily comply 
with fuel consumption standards and identify its plans to comply before 
it submits its first application for a certificate of conformity for 
the respective model year as specified in Sec.  535.8; and, once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply for each subsequent model year for all the vehicles 
and engines it manufacturers in each regulatory category for a given 
model year.
    (3) Regulatory subcategory standards for model years 2013 to 2020. 
The mandatory and voluntary fuel consumption standards for heavy-duty 
vocational vehicles are given in the following table:

                         Table 8--Phase 1 Vocational Vehicle Fuel Consumption Standards
                                          [Gallons per 1000 ton-miles]
----------------------------------------------------------------------------------------------------------------
                                                                  LHD Vocational  MHD Vocational  HHD Vocational
                    Regulatory subcategories                         vehicles        vehicles        vehicles
----------------------------------------------------------------------------------------------------------------
                                  Model Years 2013 to 2016 Voluntary Standards
----------------------------------------------------------------------------------------------------------------
Standard........................................................         38.1139         22.9862         22.2004
----------------------------------------------------------------------------------------------------------------
                                  Model Years 2017 to 2020 Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Standard........................................................         36.6405         22.1022         21.8075
----------------------------------------------------------------------------------------------------------------

    (4) Regulatory subcategory standards for model years 2021 and 
later. The mandatory fuel consumption standards for heavy-duty 
vocational vehicles are given in the following table:

                         Table 9--Phase 2 Vocational Vehicle Fuel Consumption Standards
                                          [gallons per 1000 ton-miles]
----------------------------------------------------------------------------------------------------------------
                                                                  LHD Vocational  MHD Vocational  HHD Vocational
                           Duty cycle                                vehicles        vehicles        vehicles
----------------------------------------------------------------------------------------------------------------
                               Model Years 2021 to 2023 Standards for CI Vehicles
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         29.0766         18.4676         19.4499
Multi-Purpose...................................................         29.9607         18.6640         19.6464
Regional........................................................         31.2377         18.2711         18.5658
----------------------------------------------------------------------------------------------------------------
                               Model Years 2021 to 2023 Standards for SI Vehicles
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         36.0077         22.8424         24.0801
Multi-Purpose...................................................         37.0204         23.0674         24.3052
Regional........................................................         38.5957         22.6173         22.9549
----------------------------------------------------------------------------------------------------------------
                               Model Years 2024 to 2026 Standards for CI Vehicles
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         27.8978         17.5835         18.6640
Multi-Purpose...................................................         28.6837         17.7800         18.8605
Regional........................................................         29.8625         17.4853         17.8782
----------------------------------------------------------------------------------------------------------------
                               Model Years 2024 to 2026 Standards for SI Vehicles
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         35.1075         22.1672         23.4050
Multi-Purpose...................................................         36.1202         22.3923         23.6300
Regional........................................................         37.5830         22.0547         22.3923
----------------------------------------------------------------------------------------------------------------
                              Model Years 2027 and later Standards for CI Vehicles
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         26.7191         16.8959         17.8782
Multi-Purpose...................................................         27.5049         17.0923         17.9764
Regional........................................................         28.6837         16.6994         17.0923
----------------------------------------------------------------------------------------------------------------
                              Model Years 2027 and later Standards for SI Vehicles
----------------------------------------------------------------------------------------------------------------
Urban...........................................................         33.6446         21.2670         22.0547
Multi-Purpose...................................................         34.6574         21.4921         22.2797

[[Page 40744]]

 
Regional........................................................         36.1202         21.0420         21.1545
----------------------------------------------------------------------------------------------------------------

    (5) Regulatory subcategory standards for model year 2021 and later 
emergency vehicles. The mandatory fuel consumption standards for heavy-
duty emergency vehicles are given in the following table:

                         Table 10--Phase 2 Emergency Vehicle Fuel Consumption Standards
                                         [Gallons per 1000 ton-miles] *
----------------------------------------------------------------------------------------------------------------
                                                                LHD Vocational   MHD Vocational   HHD Vocational
                   Regulatory subcategories                        vehicles         vehicles         vehicles
----------------------------------------------------------------------------------------------------------------
Model Years 2021 and later Emergency Vehicle Standards.......         30.6483          19.1552          21.1198
----------------------------------------------------------------------------------------------------------------
* Vehicles certified to these alternative standards may not generate fuel consumption credits.

    (6) Subfamily standards. Manufacturers may specify a family 
emission limit (FEL) in terms of fuel consumption for each vehicle 
subfamily. The FEL may not be less than the result of fuel consumption 
modeling from 40 CFR 1037.520. The FELs is the fuel consumption 
standards for the vehicle subfamily instead of the standards specified 
in paragraph (b)(3) and (4) of this section and can be used for 
calculating fuel consumption credits in accordance with Sec.  535.7.
    (7) Vehicle families for advanced and innovative technologies. For 
vocational vehicles subject to Phase 1 standards, manufacturers must 
create separate vehicle families for vehicles that contain advanced or 
off-cycle technologies and group those vehicles together in a vehicle 
family if they use the same advanced or innovative technologies.
    (8) Certifying across service classes. A manufacturer may 
optionally certify a vocational vehicle to the standards and useful 
life applicable to a heavier vehicle service class (or regulatory 
subcategory changes such as complying with the heavy heavy-duty 
standard instead of medium heavy-duty standard), provided the 
manufacturer does not generate credits with the vehicle. If a 
manufacturer includes lighter vehicles in a credit-generating subfamily 
(with an FEL below the standard), they must exclude their production 
volume from the credit calculation. Note that if the subfamily is a 
credit-using subfamily, the manufacturer must include the production 
volume of the lighter vehicles in the credit calculations.
    (9) Off-road exemptions. Heavy-duty vocational vehicles, including 
vocational tractors meeting the off-road criteria in Sec.  535.3 are 
exempted from the requirements in this paragraph (b) of this section, 
but the engines in these vehicles must meet the requirements of 
paragraph (d) of this section. Manufacturers may request approval in 
accordance with the provisions in 40 CFR 1037.150 and 40 CFR 1037.210 
to determine if they are producing vehicles that meet the criteria for 
the heavy-duty off-road vehicle exemption. A manufacturer's request 
must be submitted in advance of the model year, or early enough in the 
model year, to ensure that an application for a certificate of 
conformity, as required in 40 CFR 1037.201, can be submitted if the 
approval is denied. The approval is a collaboration between NHTSA and 
EPA and can be given informally or through a formal determination. If a 
manufacturer requests a formal determination, the manufacturer must 
submit the required documentation in 40 CFR 1037.150 to both agenices.
    (10) Small business alternative fuel engine converters. Small 
business alternative fuel engine converters may delay implementation of 
the standards in paragraph (b)(4) of this section for one year for each 
increase in stringency throughout the proposed rule.
    (11) Useful life. The following useful life values apply for the 
standards of this section:
    (i) 110,000 miles or 10 years, whichever comes first, for Class 2b 
through Class 5 vocational vehicles certified to Phase 1 standards.
    (ii) 150,000 miles or 15 years, whichever comes first, for Class 2b 
through Class 5 vocational vehicles certified to Phase 2 standards.
    (iii) 185,000 miles or 10 years, whichever comes first, for Class 6 
and Class 7 vehicles above 19,500 pounds GVWR and at or below 33,000 
pounds GVWR for Phase 1 and for Phase 2.
    (iv) 435,000 miles or 10 years, whichever comes first, for Class 8 
vehicles above 33,000 pounds GVWR for Phase 1 and for Phase 2.
    (v) For Phase 1 credits that you calculate based on a useful life 
of 110,000 miles, multiply any banked credits that you carry forward 
for use into the Phase 2 program by 1.36. For Phase 1 credit deficits 
that you generate based on a useful life of 110,000 miles multiply the 
credit deficit by 1.36, if offsetting the shortfall with Phase 2 
credits.
    (12) Recreational vehicles. Recreational vehicles manufactured 
after model year 2020 must comply with the fuel consumption standards 
of this section. Manufacturers producing these vehicles may also 
certify to fuel consumption standards from 2014 through model year 
2020. Manufacturers may earn credits retroactively for early compliance 
with fuel consumption standards. Once selected, a manufacturer cannot 
reverse the decision and the manufacturer must continue to comply for 
each subsequent model year for all the vehicles it manufacturers in 
each regulatory subcategory for a given model year.
    (13) Optional standards. (i) For model years 2013 through 2019, 
manufacturers have the option to use heavy-duty vocational vehicle fuel 
consumption standards given in the following table:

[[Page 40745]]

                        Table 11--Optional Vocational Vehicle Fuel Consumption Standards
                                          [Gallons per 1,000 ton-miles]
----------------------------------------------------------------------------------------------------------------
                    Regulatory subcategories                        LH vehicles     MH vehicles     HH vehicles
----------------------------------------------------------------------------------------------------------------
                                  Model Years 2017 to 2019 Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Standard........................................................            36.7            22.1            21.8
----------------------------------------------------------------------------------------------------------------
                                       Model Year 2016 Mandatory Standard
----------------------------------------------------------------------------------------------------------------
Standard........................................................            38.1            23.0            22.2
----------------------------------------------------------------------------------------------------------------
                                  Model Years 2013 to 2015 Voluntary Standards
----------------------------------------------------------------------------------------------------------------
Standard........................................................            38.1            23.0            22.2
----------------------------------------------------------------------------------------------------------------

    (ii) If a manufacturer chooses this option, the fuel consumption 
rate calculated in accordance with 49 CFR 535.6(b)(4) must be rounded 
to the nearest 0.1 gallons per 1,000 ton-miles.
    (iii) If a manufacturer chooses this option, it must apply these 
same standards for each model year from 2013 through 2019.
    (c) Truck tractors. Each manufacturer building truck tractors, 
except vocational tractors, with a GVWR above 26,000 pounds shall 
comply with the fuel consumption standards in this paragraph (c) 
expressed in gallons per 1000 ton-miles. Each vehicle must be 
manufactured to comply for its useful life.
    (1) Mandatory standards. For model years 2016 and later, each 
manufacturer of truck tractors must comply with the fuel consumption 
standards in paragraph (c)(3) of this section.
    (i) Based on the roof height and the design of the cab, truck 
tractors are divided into subcatagories as described in Sec.  535.4. 
The standards that apply to each regulatory subcategory are shown in 
paragraphs (c)(2) and (3) of this section, each with its own assigned 
standard.
    (ii) For purposes of certifying vehicles to fuel consumption 
standards, manufacturers must divide their product lines in each 
regulatory subcategory into vehicles families that have similar 
emissions and fuel consumption features, as specified by EPA in 40 CFR 
1037.230, and these families will be subject to the applicable 
standards. Each vehicle family is limited to a single model year.
    (iii) Standards for truck tractor engines are given in paragraph 
(d) of this section.
    (2) Voluntary compliance. (i) For model years 2013 through 2015, a 
manufacturer may choose voluntarily to comply early with the fuel 
consumption standards provided in paragraph (c)(3) of this section. For 
example, a manufacturer may choose to comply early in order to begin 
accumulating credits through over-compliance with the applicable 
standards. A manufacturer choosing early compliance must comply with 
all the vehicles and engines it manufacturers in each regulatory 
category for a given model year.
    (ii) A manufacturer must declare its intent to voluntarily comply 
with fuel consumption standards and identify its plans to comply before 
it submits its first application for a certificate of conformity for 
the respective model year as specified in Sec.  535.8; and, once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply for each subsequent model year for all the vehicles 
and engines it manufacturers in each regulatory category for a given 
model year.
    (3) Regulatory subcategory standards. The fuel consumption 
standards for truck tractors, except for vocational tractors, are given 
in the following table:

                               Table 12--Truck Tractor Fuel Consumption Standards
                                          [Gallons per 1,000 ton-miles]
----------------------------------------------------------------------------------------------------------------
                                                              Day cab               Sleeper cab
            Regulatory subcategories             ------------------------------------------------   Heavy-haul
                                                      Class 7         Class 8         Class 8
----------------------------------------------------------------------------------------------------------------
                              Phase 1--Model Years 2013 to 2015 Voluntary Standards
----------------------------------------------------------------------------------------------------------------
Low Roof........................................         10.5108          7.9568          6.6798  ..............
Mid Roof........................................         11.6896          8.6444          7.4656  ..............
High Roof.......................................         12.1807          9.0373          7.3674  ..............
----------------------------------------------------------------------------------------------------------------
                                   Phase 1--Model Year 2016 Mandatory Standard
----------------------------------------------------------------------------------------------------------------
Low Roof........................................         10.5108          7.9568          6.6798  ..............
Mid Roof........................................         11.6896          8.6444          7.4656  ..............
High Roof.......................................         12.1807          9.0373          7.3674  ..............
----------------------------------------------------------------------------------------------------------------
                              Phase 1--Model Years 2017 to 2020 Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Low Roof........................................         10.2161          7.8585          6.4833  ..............
Mid Roof........................................         11.2967          8.4479          7.1709  ..............
High Roof.......................................         11.7878          8.7426          7.0727  ..............
----------------------------------------------------------------------------------------------------------------

[[Page 40746]]

 
                              Phase 2--Model Years 2021 to 2023 Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Low Roof........................................          9.5285          7.6621          6.8762          5.3045
Mid Roof........................................         10.5108          8.2515          7.6621  ..............
High Roof.......................................         10.7073          8.4479          7.5639  ..............
----------------------------------------------------------------------------------------------------------------
                              Phase 2--Model Years 2024 to 2026 Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Low Roof........................................          8.8409          7.0727          6.2868          5.1081
Mid Roof........................................          9.8232          7.6621          6.9745  ..............
High Roof.......................................          9.9214          7.7603          6.8762  ..............
----------------------------------------------------------------------------------------------------------------
                             Phase 2--Model Years 2027 and later Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Low Roof........................................          8.5462          6.8762          6.0904          5.0098
Mid Roof........................................          9.4303          7.4656          6.7780  ..............
High Roof.......................................          9.4303          7.4656          6.5815  ..............
----------------------------------------------------------------------------------------------------------------

    (4) Subfamily standards. Manufacturers may specify a family 
emission limit (FEL) in terms of fuel consumption for each vehicle 
subfamily. The FEL may not be less than the result of fuel consumption 
modeling from 40 CFR 1037.520. The FEL serves as the fuel consumption 
standards for the vehicle subfamily instead of the standards specified 
in paragraph (c)(3) of this section and can be used for calculating 
fuel consumption credits in accordance with Sec.  535.7.
    (5) Vehicle families for advanced and innovative technologies. For 
tractors subject to Phase 1 standards, manufacturers must create 
separate vehicle families for vehicles that contain advanced or off-
cycle technologies and group those vehicles together in a vehicle 
family if they use the same advanced or innovative technologies.
    (6) Certifying across service classes. A manufacturer may 
optionally certify a tractor to the standards and useful life 
applicable to a heavier vehicle service class (or regulatory 
subcategory changes such as complying with the Class 8 day-cab tractor 
standard instead of Class 7 day-cab tractor), provided the manufacturer 
does not generate credits with the vehicle. If a manufacturer includes 
lighter vehicles in a credit-generating subfamily (with an FEL below 
the standard), exclude their production volume from the credit 
calculation. Note that if the subfamily is a credit-using subfamily, 
the manufacturer must include the production volume of the lighter 
vehicles in the credit calculations.
    (7) Vocational tractors. Tractors meeting the definition of 
vocational tractors in 49 CFR 523.2 must comply with requirements for 
heavy-duty vocational vehicles specified in paragraphs (b) and (d) of 
this section. Class 7 and Class 8 tractors certified or exempted as 
vocational tractors are limited in production to no more than 21,000 
vehicles in any three consecutive model years. If a manufacturer is 
determined as not applying this allowance in good faith by EPA in its 
applications for certification in accordance with 40 CFR 1037.205 and 
1037.610, a manufacturer must comply with the tractor fuel consumption 
standards in paragraph (c)(3) of this section.
    (8) Optional standards. (i) For Phase 1, manufacturers may use the 
heavy-duty truck tractor fuel consumption standards given in the 
following table:

         Table 13-- Optional Truck Tractor Fuel Consumption Standards for Model Years 2013 Through 2019
                                          [Gallons per 1,000 ton-miles]
----------------------------------------------------------------------------------------------------------------
                                                                             Day cab                Sleeper cab
                    Regulatory subcategories                    ------------------------------------------------
                                                                     Class 7         Class 8          Class 8
----------------------------------------------------------------------------------------------------------------
                                  Model Years 2017 to 2019 Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Low Roof.......................................................            10.2              7.8             6.5
Mid Roof.......................................................            11.3              8.4             7.2
High Roof......................................................            11.8              8.7             7.1
----------------------------------------------------------------------------------------------------------------
                                      Model Years 2016 Mandatory Standards
----------------------------------------------------------------------------------------------------------------
Low Roof.......................................................            10.5              8               6.7
Mid Roof.......................................................            11.7              8.7             7.4
High Roof......................................................            12.2              9               7.3
----------------------------------------------------------------------------------------------------------------
                                  Model Years 2013 to 2015 Voluntary Standards
----------------------------------------------------------------------------------------------------------------
Low Roof.......................................................            10.5              8               6.7
Mid Roof.......................................................            11.7              8.7             7.4

[[Page 40747]]

 
High Roof......................................................            12.2              9               7.3
----------------------------------------------------------------------------------------------------------------

    (ii) If a manufacturer chooses this option, the fuel consumption 
rate calculated in accordance with Sec.  535.6(b)(4) must be rounded to 
the nearest 0.1 gallons per 1,000 ton-miles.
    (iii) If a manufacturer chooses this option, it must apply these 
same standards for each model year from 2013 through 2019.
    (9) Useful life. The following useful life values apply for the 
standards of this section:
    (i) 185,000 miles or 10 years, whichever comes first, for Class 6 
and Class 7 tractors above 19,500 pounds GVWR and at or below 33,000 
pounds GVWR for Phase 1 and for Phase 2.
    (ii) 435,000 miles or 10 years, whichever comes first, for Class 8 
tractors above 33,000 pounds GVWR for Phase 1 and for Phase 2.
    (d) Heavy-duty engines. Each manufacturer of heavy-duty engines 
shall comply with the fuel consumption standards in this paragraph (d) 
of this section expressed in gallons per 100 horsepower-hour. Each 
engine must be manufactured to comply for its useful life. The 
provisions of this part apply to all new 2014 model year and later 
heavy-duty engines. This includes engines fueled by conventional and 
alternative fuels for engines that will be installed in heavy-duty 
vehicles above 14,000 pounds GVWR. These provisions also apply for 
engines that will be installed in heavy-duty glider vehicles at or 
below 14,000 pounds GVWR Each engine manufactured for use in a heavy-
duty tractor or vocational vehicle must be certified to the primary 
intended service class that it is designed for in accordance with 40 
CFR 1036.108 and 1036.140.
    (1) Mandatory standards. Manufacturers of heavy-duty engines shall 
comply with the mandatory fuel consumption standards in paragraphs 
(d)(3) through (6) of this section for model years 2017 and later for 
compression-ignition engines and for model years 2016 and later for 
spark-ignition engines.
    (i) The heavy-duty engine regulatory category is divided into six 
regulatory subcategories, five compression-ignition subcategories and 
one spark-ignition subcategory, as shown in Table 14 of this section.
    (ii) Separate standards exist for engines manufactured for use in 
heavy-duty vocational vehicles and in truck tractors.
    (iii) For purposes of certifying engines to fuel consumption 
standards, manufacturers must divide their product lines in each 
regulatory subcategory into engine families that have similar fuel 
consumption features and the same primary intended service class, as 
specified by EPA in 40 CFR 1036.230, and these families will be subject 
to the same standards. Each engine family is limited to a single model 
year.
    (2) Voluntary compliance. (i) For model years 2013 through 2016 for 
compression-ignition engines, and for model year 2015 for spark-
ignition engines, a manufacturer may choose voluntarily to comply with 
the fuel consumption standards provided in paragraph (d)(3) through (5) 
of this section. For example, a manufacturer may choose to comply early 
in order to begin accumulating credits through over-compliance with the 
applicable standards. A manufacturer choosing early compliance must 
comply with all the vehicles and engines it manufacturers in each 
regulatory category for a given model year except in model year 2013 
the manufacturer may comply with individual engine families as 
specified in 40 CFR 1036.150(a)(2).
    (ii) A manufacturer must declare its intent to voluntarily comply 
with fuel consumption standards and identify its plans to comply before 
it submits its first application for a certificate of conformity for 
the respective model year as specified in Sec.  535.8; and, once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply for each subsequent model year for all the vehicles 
and engines it manufacturers in each regulatory category for a given 
model year.
    (3) Regulatory subcategory standards. The primary fuel consumption 
standards for heavy-duty engines are given in the following table:

                                             Table 14--Primary Heavy-Duty Engine Fuel Consumption Standards
                                                                 [Gallons per 100 hp-hr]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Regulatory subcategory                   LHD CI engines   MHD CI engines and all other    HHD CI engines and all other     SI engines
---------------------------------------------------------  and all other              engines                         engines            ---------------
                                                              engines    ----------------------------------------------------------------
                       Application                       ----------------                                                                       All
                                                            Vocational      Vocational        Tractor       Vocational        Tractor
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Phase 1--Voluntary Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
2015....................................................  ..............  ..............  ..............  ..............  ..............          7.0552
2013 to 2016............................................          5.8939          5.8939          4.9312          5.5697           4.666  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Phase 1--Mandatory Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
2016....................................................  ..............  ..............  ..............  ..............  ..............          7.0552
2017 to 2020............................................          5.6582          5.6582          4.7839          5.4519          4.5187          7.0552
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40748]]

 
                                                              Phase 2--Mandatory Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
2021 to 2023............................................          5.5501          5.5501          4.7053          5.3438          4.4499          7.0552
2024 to 2026............................................          5.4617          5.4617          4.6071          5.2652          4.3517          7.0552
2027 and later..........................................          5.4322          5.4322          4.5776          5.2358          4.3320          7.0552
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (4) Alternate subcategory standards. The alternative fuel 
consumption standards for heavy-duty compression-ignition engines are 
as follows:
    (i) Manufacturers entering the voluntary program in model years 
2014 through 2016, may choose to certify compression-ignition engine 
families unable to meet standards provided in paragraph (d)(3) of this 
section to the alternative fuel consumption standards of this paragraph 
(d)(4).
    (ii) Manufacturers may not certify engines to these alternate 
standards if they are part of an averaging set in which they carry a 
balance of banked credits. For purposes of this section, manufacturers 
are deemed to carry credits in an averaging set if they carry credits 
from advance technology that are allowed to be used in that averaging 
set in accordance with Sec.  535.7(d)(12).
    (iii) The emission standards of this section are determined as 
specified by EPA in 40 CFR 1036.620(a) through (c) and should be 
converted to equivalent fuel consumption values.
    (5) Alternate phase-in standards. Manufacturers have the option to 
comply with EPA emissions standards for compression-ignition engines 
using an alternative phase-in schedule that correlates with EPA's OBD 
standards. If a manufacturer chooses to use the alternative phase-in 
schedule for meeting EPA standards and optionally chooses to comply 
early with the NHTSA fuel consumption program, it must use the same 
phase-in schedule beginning in model year 2013 for fuel consumption 
standards and must remain in the program for each model year thereafter 
until model year 2020. The fuel consumption standard for each model 
year of the alternative phase-in schedule is provided in Table 15 of 
this section. Note that engines certified to these standards are not 
eligible for early credits under Sec.  535.7.

                   Table 15--Phase 1 Alternative Phase-in CI Engine Fuel Consumption Standards
                                             [Gallons per 100 hp-hr]
----------------------------------------------------------------------------------------------------------------
                            Tractors                                LHD engines     MHD engines     HHD engines
----------------------------------------------------------------------------------------------------------------
Model Years 2013 to 2015........................................              NA          5.0295          4.7642
Model Years 2016 to 2020 [dagger]...............................              NA          4.7839          4.5187
----------------------------------------------------------------------------------------------------------------
Vocational                                                          LHD engines     MHD engines     HHD engines
----------------------------------------------------------------------------------------------------------------
Model Years 2013 to 2015........................................          6.0707          6.0707          5.6680
Model Years 2016 to 2020[dagger]................................          5.6582          5.6582          5.4519
----------------------------------------------------------------------------------------------------------------
Note: [dagger] These alternate standards for 2016 and later are the same as the otherwise applicable standards
  through 2020.

    (6) Optional standards. (i) For model years 2013 through 2020, 
manufacturers may use heavy-duty engine fuel consumption standards 
given in the following tables:

                                         Table 16--Optional Primary Heavy-Duty Engine Fuel Consumption Standards
                                                                 [Gallons per 100 hp-hr]
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Regulatory subcategory              LHD CI engines             MHD CI engines                      HHD CI engines               SI Engines
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Application                     Vocational        Vocational          Tractor         Vocational          Tractor             All
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Mandatory Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
Model Years.................................                                        2017 to 2020                                            2016 to 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Standards...................................              5.66              5.66              4.78              5.45              4.52              7.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Voluntary Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
Model Years.................................                                        2013 to 2016                                                    2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
Standards...................................              5.89              5.89              4.93              5.57              4.67              7.06
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 40749]]

                       Table 17--Alternative Phase-in CI Engine Fuel Consumption Standards
                                             [Gallons per 100 hp-hr]
----------------------------------------------------------------------------------------------------------------
            Truck Tractors                  LHD CI engines           MHD CI engines           HHD CI engines
----------------------------------------------------------------------------------------------------------------
Model Years 2013 to 2015.............  NA.....................  5.03...................  4.76
Model Years 2016 to 2020 [dagger]....  NA.....................  4.78...................  4.52
Vocational vehicles..................  LHD CI Engines.........  MHD CI Engines.........  HHD CI Engines
Model Years 2013 to 2015.............  6.07...................  6.07...................  5.67
Model Years 2016 and later [dagger]..  5.66...................  5.66...................  5.45
----------------------------------------------------------------------------------------------------------------

    (ii) If a manufacturer chooses this option, the fuel consumption 
rate calculated in accordance with Sec.  535.6(c)(4) must be rounded to 
the nearest 0.01 gallon per 100 hp-hr.
    (iii) If a manufacturer chooses this option, it must apply these 
same standards for each model year from 2013 through 2020.
    (7) Specialty vehicles. Manufacturers of specialty vehicles as 
identified in 40 CFR 1037.605 may comply with fuel consumption 
standards by complying with alternate emission standards that are 
equivalent to standards that apply for non-road engines as identified 
in 40 CFR 1037.605, and using Sec.  535.6 and exercising good 
engineering judgment to determine equivalent fuel consumption 
standards.
    (8) Alternative fuel conversions. Engines that have been converted 
to operate on alternative fuels may demonstrate compliance with the 
standards of this part or other alternative compliance approaches 
allowed by EPA in 40 CFR 85.525.
    (9) Useful life. The following useful life values apply for the 
standards of this section:
    (i) 110,000 miles or 10 years, whichever comes first, for engines 
used in Class 2b through Class 5 vehicles certified to Phase 1 
standards.
    (ii) 150,000 miles or 15 years, whichever comes first, for engines 
used in Class 2b through Class 5 vehicles certified to Phase 2 
standards.
    (iii) 185,000 miles or 10 years, whichever comes first, for engines 
used in Class 6 and Class 7 vehicles above 19,500 pounds GVWR and at or 
below 33,000 pounds GVWR for Phase 1 and for Phase 2.
    (iv) 435,000 miles or 10 years, whichever comes first, for engines 
used in Class 8 vehicles above 33,000 pounds GVWR for Phase 1 and for 
Phase 2.
    (v) For Phase 1 credits that you calculate based on a useful life 
of 110,000 miles, multiply any banked credits that you carry forward 
for use into the Phase 2 program by 1.36. For Phase 1 credit deficits 
that you generate based on a useful life of 110,000 miles multiply the 
credit deficit by 1.36, if offsetting the shortfall with Phase 2 
credits.
    (e) Heavy-duty Trailers. Each manufacturer of heavy-duty trailers 
as specified in 49 CFR 523.10, shall comply with the fuel consumption 
standards in paragraph (e)(1) of this section expressed in gallons per 
1000 ton-miles. Each vehicle must be manufactured to comply for its 
useful life. There are no Phase 1 standards for trailers. Different 
levels of stringency apply for box vans depending on features that may 
affect aerodynamic performance.
    (1) Fuel consumption standards. Trailers manufactured in model year 
2021 and later must comply with the fuel consumption standards of this 
section. For model years 2018 through 2020, trailer manufacturers have 
the option to voluntarily comply with the fuel consumption standards of 
this section.
    (i) Non-aero and non-box trailer standards. Non-aero and non-box 
trailers must comply with the regulatory subcategory fuel consumption 
standards in this section.
    (A) ``Non-aero trailers'' for trailers 35 feet or longer are box 
vans that have a rear lift gate or rear hinged ramp, and at least one 
of the following side features: Side lift gate, belly box, side-mounted 
pull-out platform, steps for side-door access, or a drop-deck design. 
``Non-aero trailers'' for trailers less than 35 feet long are 
refrigerated box vans with at least one of the side features identified 
for longer trailers.
    (B) Non-box trailers and non-aero trailers must meet the following 
standards:
    (1) Trailers must use qualified automatic tire inflation systems 
with all load-bearing wheels.
    (2) Trailers must use tires with a TRRL at or below 4.7 kg/ton. 
Through model year 2023, trailers may instead use tires with a TRRL at 
or below 5.1 kg/ton.
    (ii) Partial-aero trailer standards. Partial-aero trailers must 
comply with the regulatory subcategory fuel consumption standards as 
follows:
    (A) ``Partial-aero trailers'' are box vans that have at least one 
of the side features identified in paragraph (e)(1)(i)(A) of this 
section. Long box vans also qualify as partial-aero trailers if they 
have a rear lift gate or rear hinged ramp.
    (B) Partial-aero trailers may continue to meet the 2024 standards 
in 2027 and later model years. This provision does not apply for short 
refrigerated vans because their standard does not change in 2027.
    (iii) Full-aero trailers. Full-aero trailers comply with the 
regulatory subcategory fuel consumption standards as follows:
    (A) ``Full-aero trailers'' are box vans that do not meet the 
specifications for non-areo or partial-aero trailers in paragraph 
(e)(1)(i)(A) or (e)(1)(ii)(A) of this section.
    (B) Fuel consumption standards apply for full-aero trailers as 
specified in the following table:

                         Table 18--Phase 2 Fuel Aero Trailer Fuel Consumption Standards
                                          [Gallons per 1,000 ton-miles]
----------------------------------------------------------------------------------------------------------------
                                                              Dry van                    Refrigerated van
                   Model years                   ---------------------------------------------------------------
                                                       Long            Short           Long            Short
----------------------------------------------------------------------------------------------------------------
                                               Voluntary Standards
----------------------------------------------------------------------------------------------------------------
2018 to 2020....................................          8.1532         14.1454          8.2515         14.4401
----------------------------------------------------------------------------------------------------------------

[[Page 40750]]

 
                                               Mandatory Standards
----------------------------------------------------------------------------------------------------------------
2021 to 2023....................................          7.9568         13.9489          8.0550         14.3418
2024 to 2026....................................          7.7603         13.8507          7.9568         14.1454
2027 and later..................................          7.5639         13.7525          7.8585         14.1454
----------------------------------------------------------------------------------------------------------------

    (C) For purposes of certifying vehicles to fuel consumption 
standards, manufacturers must divide their product lines into vehicles 
families that have similar emissions and fuel consumption features, as 
specified by EPA in 40 CFR part 1037.230, and these families will be 
subject to the applicable standards. Each vehicle family is limited to 
a single model year.
    (2) Subfamily standards. Manufacturers may specify a Family 
Emission Limit (FEL) in terms of fuel consumption for each vehicle 
subfamily. The FEL may not be less than the result of fuel consumption 
modeling from 40 CFR 1037.520. The FEL is the fuel consumption standard 
for the vehicle subfamily instead of the standard specified in 
paragraph (e)(1)(ii) and (iii) of this section and can be used for 
calculating fuel consumption credits in accordance with Sec.  535.7. 
Manufacturers may not use averaging for non-box trailers, partial-aero 
trailers, or non-aero trailers that meet standards under paragraph 
(e)(1) of this section, and may not use fuel consumption credits for 
banking or trading for any trailers.
    (3) Useful life. The fuel consumption standards of this section 
apply for a useful life equal to 10 years.

Sec.  535.6  Measurement and calculation procedures.

    Determine all vehicle parameters used for testing in accordance 
with EPA's provisions in 40 CFR 1037.140. Manufacturers conducting 
testing for certification or annual demonstration testing and providing 
CO2 emissions data to EPA must also provide equivalent fuel 
consumption results for all values. NHTSA and EPA reserve the right to 
verify separately or in coordination the results of any testing and 
measurement established by manufacturers in complying with the 
provisions of this program and as specified in 40 CFR 1037.301 and 
Sec.  535.9. Any carry over data from the Phase 1 program may be 
carried into the Phase 2 only with approval from EPA and by using good 
engineering judgment considering differences in test protocols for 
testing procedure.
    (a) Heavy-duty pickup trucks and vans. This section describes the 
testing a manufacturer must perform for each model year and the method 
for determining the fleet fuel consumption performance to show 
compliance with the fleet average fuel consumption standard for heavy-
duty pickup trucks and vans in Sec.  535.5(a).
    (1) For each model year, the heavy-duty pickup trucks and vans 
selected by a manufacturer to comply with fuel consumption standards in 
Sec.  535.5(a) must be used to determine the manufacturer's fleet 
average fuel consumption performance. If the manufacturer's fleet 
includes conventional and advanced technology heavy-duty pickup trucks 
and vans, the fleet should be sub-divided into two separate vehicle 
fleets, with all of the conventional vehicles in one fleet and all of 
the advanced technology vehicles in the other fleet.
    (2) Vehicles in each fleet should be divided into test groups or 
subconfigurations according to EPA in 40 CFR part 86, subpart S.
    (3) Test and measure the CO2 emissions test results for 
the selected vehicles and determine the CO2 emissions test 
group result, in grams per mile in accordance with 40 CFR part 86, 
subpart S.
    (i) Perform exhaust testing on vehicles fueled by conventional and 
alternative fuels, including dedicated and dual-fueled (multi-fuel and 
flexible-fuel) vehicles and measure the CO2 emissions test 
result.
    (ii) Adjust the CO2 emissions test result of dual-fueled 
vehicles using a weighted average of your emission results as specified 
in 40 CFR 600.510-12(k) for light-duty trucks.
    (iii) All electric vehicles are deemed to have zero emissions of 
CO2, CH4, and N2O. No emission testing 
is required for such electric vehicles. Assign the fuel consumption 
test group result to a value of zero gallons per 100 miles in paragraph 
(a)(4) of this section.
    (iv) Test cab-complete and incomplete vehicles using the applicable 
complete sister vehicles as determined in 40 CFR part 86.
    (v) Test loose engines using applicable complete vehicles as 
determined in 40 CFR part 86.
    (vi) Manufacturers can choose to analytically derive CO2 
emission rates (ADCs) for test groups or subconfigurations. Calculate 
the ADCs for test groups or subconfigurations in accordance with 40 CFR 
86.1819-14 (g).
    (4) Calculate equivalent fuel consumption test group results, in 
gallons per 100 miles, from CO2 emissions test group 
results, in grams per miles, and round to the nearest 0.001 gallon per 
100 miles.
    (i) Calculate the equivalent fuel consumption test group results as 
follows for compression-ignition vehicles and alternative fuel 
compression-ignition vehicles. CO2 emissions test group 
result (grams per mile)/10,180 grams per gallon of diesel fuel) x 
(10\2\) = Fuel consumption test group result (gallons per 100 mile).
    (ii) Calculate the equivalent fuel consumption test group results 
as follows for spark-ignition vehicles and alternative fuel spark-
ignition vehicles. CO2 emissions test group result (grams 
per mile)/8,877 grams per gallon of gasoline fuel) x (10\2\) = Fuel 
consumption test group result (gallons per 100 mile).
    (5) Calculate the fleet average fuel consumption result, in gallons 
per 100 miles, from the equivalent fuel consumption test group results 
and round the fuel consumption result to the nearest 0.001 gallon per 
100 miles. Calculate the fleet average fuel consumption result using 
the following equation.

[[Page 40751]]

[GRAPHIC] [TIFF OMITTED] TP13JY15.109

Where:

Fuel Consumption Test Group Resulti = fuel consumption performance 
for each test group as defined in 49 CFR 523.4.
Volumei = production volume of each test group.

    (6) Compare the fleet average fuel consumption standard to the 
fleet average fuel consumption performance. The fleet average fuel 
consumption performance must be less than or equal to the fleet fuel 
consumption standard to comply with standards in Sec.  535.5(a).
    (b) Heavy-duty vocational vehicles and tractors. This section 
describes the testing a manufacturer must perform and the method for 
determining fuel consumption performance to show compliance with the 
fuel consumption standards for vocational vehicles and tractors in 
Sec.  535.5(b) and (c).
    (1) Select vehicles and vehicle family configurations to test as 
specified in 40 CFR 1037.230 for vehicles that make up each of the 
manufacturer's regulatory subcategories of vocational vehicles and 
tractors.
    (2) Determine the CO2 emissions and fuel consumption 
results for all vehicles(conventional, alternative fueled and advanced 
technology vehicles) using the Greenhouse Emissions Model (GEM) in 
accordance with 40 CFR part 1037, subpart F. Vocational vehicles and 
tractors are modeled using the following inputs in the GEM model.
    (3) For Phase 1, all of the following GEM inputs apply for sleeper 
cab tractors, and day cab tractors. Some do not apply for vocational 
vehicles and other tractor regulatory subcategories, as follows:
    (i) Manufacturers must identify vehicles according to their 
regulatory subcategory, as defined in Sec.  535.4, for use in GEM (such 
as ``Class 8 Combination--Sleeper Cab--High Roof'').
    (ii) Coefficient of aerodynamic drag in accordance with 40 CFR 
1037.520 and 1037.525. Do not use for vocational vehicles.
    (iii) Steer tire rolling resistance for low rolling resistance 
tires in accordance with 40 CFR 1037.520 and 1037.650.
    (iv) Drive tire rolling resistance for low rolling resistance tires 
in accordance with 40 CFR 1037.520 and 1037.650.
    (v) Vehicle speed limit as governed by vehicles speed limiters in 
accordance with 40 CFR 1037.520 and 1037.640. Do not use for vocational 
vehicles.
    (vi) Vehicle weight reduction as provided in accordance with 40 CFR 
1037.520. Do not use for vocational vehicles.
    (vii) Extended idle reduction credit using automatic engine 
shutdown systems in accordance with 40 CFR 1037.520 and 1037.660. Do 
not use for vehicles other than Class 8 sleeper cabs.
    (4) For Phase 1, engine performance and the advanced technologies 
equipped on vocational vehicles and tractors are tested separately as 
follows:
    (i) Test results for engines installed in vocational vehicles and 
tractors, for both conventional and alternative fueled vehicles, are 
determined in accordance with paragraph (c) of this section.
    (ii) Improvements for advanced technologies are determined as 
follows:
    (A) Test hybrid vehicles with power take-off in accordance with 40 
CFR 1037.540.
    (B) Vehicles with post-transmission hybrid systems are determined 
in accordance with 40 CFR 1037.550.
    (5) For Phase 2, manufacturers are allowed to add additional 
specifications to improve fuel consumption performance in GEM as 
specified in 40 CFR 1037.520. Additional GEM inputs apply for Phase 2 
tractors and vocational vehicles as follows:
    (i) Transmission make, model, type, and the gear ratio for every 
available forward gears.
    (ii) Engine make, model, fuel type, engine family name, calibration 
identification. Also identify whether the engine is subject to spark-
ignition or compression-ignition standards under 40 CFR part 1036.
    (iii) Drive axle ratio. If a vehicle is designed with two or more 
user-selectable axle ratios, use the axle ratio that is expected to be 
engaged for the greatest driving distance.
    (iv) Various engine and vehicle operational characteristics, as 
described in 40 CFR 1037.520(f).
    (v) Engine fuel maps, which include an idle fuel map for vocational 
vehicles.
    (vi) Engine full-load torque curve and motoring torque curve.
    (vii) Loaded tire radius, based upon nominal design specifications, 
expressed to the nearest 0.01m as described in 40 CFR 1037.140.
    (viii) Hybrid power take-off (for vocational vehicles only).
    (6) Manufacturers may certify their vehicles based on powertrain 
testing as described in 40 CFR 1037.550, rather than fuel maps, to 
characterize fuel consumption rates at different speed and torque 
values.
    (7) Emergency vehicles complying with alternative standards 
specified in Sec.  535.5(b) and 40 CFR 1037.105(b)(4), run GEM by 
identifying the vehicle as an emergency vehicle and enter values for 
tire rolling resistance only.
    (8) You may use a default fuel map for specialty vehicles using 
engines certified to alternate standards under 40 CFR 1037.605.
    (9) Manufacturers of vehicles that run on fuel other than gasoline 
or diesel, should use good engineering judgment to adjust modeling 
output values to account for the physical properties of the fuel.
    (10) From the GEM results, select the CO2 family 
emissions level (FEL) and equivalent fuel consumption values for 
vocational vehicle and tractor families in each regulatory subcategory 
for each model year. Equivalent fuel consumption FELs are derived in 
GEM and expressed to the nearest 0.0001 gallons per 1000 ton-mile. For 
families containing multiple subfamilies, identify the FELs for each 
subfamily.
    (11) All electric vehicles are deemed to have zero CO2 
emissions and fuel consumption. No emission testing is required for 
such electric vehicles. Assign the vehicle family with a fuel 
consumption FEL result to a value of zero gallons per 1000-ton miles.
    (c) [Reserved]
    (d) Heavy-duty engines. This section describes the testing a 
manufacturer must perform and the method for determining fuel 
consumption performance to show compliance with the fuel consumption 
standards for engines in Sec.  535.5(d). Each engine must be tested to 
the primary intended service class that it is designed for in 
accordance with 40 CFR 1036.108. For engines using aftertreatment 
technology with infrequent regeneration events test in accordance with 
40 CFR 86.004-28,
    (1) Manufacturers must select emission-data engines and engine 
family configurations to test as specified in 40 CFR part 86 for 
engines in heavy-duty pickup trucks and vans and 40 CFR 1036.235 for 
engines installed in truck tractors and vocational vehicles that make 
up each of the manufacture's regulatory subcategories.
    (2) Test the CO2 emissions for each emissions-data 
engine subject to the

[[Page 40752]]

standards in Sec.  535.5(d) using the procedures and equipment 
specified in 40 CFR part 1036, subpart F. Measure the CO2 
emissions in grams per hp-hr as specified in 40 CFR 1036.501. For 
medium and heavy heavy-duty engines certified as tractor engines, 
measure CO2 emissions using the steady-state duty cycle 
specified in 40 CFR 86.1362. For medium and heavy heavy-duty engines 
certified as both tractor and vocational engines, measure 
CO2 emissions using the steady-state duty cycle and the 
transient duty cycle (sometimes referred to as the FTP engine cycle), 
both of which are specified in 40 CFR part 86, subpart N.
    (i) Perform exhaust testing on each fuel type for conventional, 
dedicated, dual-fueled (multi-fuel, and flexible-fuel) vehicles and 
measure the CO2 emissions level as specified in 40 CFR part 
1036.
    (ii) Adjust the CO2 emissions result of dual-fueled 
vehicles using a weighted average of the demonstrated emission results 
as specified in 40 CFR 1036.225. If EPA disapproves a manufacturer's 
dual-fueled vehicle demonstrated use submission, NHTSA will require the 
manufacturer to only use the test results with 100 percent conventional 
fuel to determine the fuel consumption of the engine.
    (iii) All electric vehicles are deemed to have zero emissions of 
CO2 and zero fuel consumption. No emission or fuel 
consumption testing is required for such electric vehicles.
    (3) Determine the CO2 emissions for the family 
certification level (FCL) from the emissions test results in paragraph 
(c)(2) of this section for engine families within the heavy-duty engine 
regulatory subcategories for each model year.
    (i) If a manufacturer certifies an engine family for use both as a 
vocational engine and as a tractor engine, the manufacturer must split 
the family into two separate subfamilies in accordance with 40 CFR 
1036.230. The manufacturer may assign the numbers and configurations of 
engines within the respective subfamilies at any time prior to the 
submission of the end-of-year report required by 40 CFR 1036.730 and 
Sec.  535.8. The manufacturer must track into which type of vehicle 
each engine is installed, although EPA may allow the manufacturer to 
use statistical methods to determine this for a fraction of its 
engines.
    (ii) The following engines are excluded from the engine families 
used to determined FCL values and the benefit for these engines is 
determined as an advanced technology credit under the ABT provisions 
provided in Sec.  535.7(e); these provisions apply only for the Phase 1 
program:
    (A) Engines certified as hybrid engines or power packs.
    (B) Engines certified as hybrid engines designed with PTO 
capability and that are sold with the engine coupled to a transmission.
    (C) Engines with Rankine cycle waste heat recovery.
    (4) Calculate equivalent fuel consumption values for emissions FCLs 
and the CO2 levels for certified engines, in gallons per 100 
hp-hr and round each fuel consumption value to the nearest 0.0001 
gallon per 100 hp-hr.
    (i) Calculate equivalent fuel consumption FCL values for 
compression-ignition engines and alternative fuel compression-ignition 
engines. CO2 FCL value (grams per hp-hr)/10,180 grams per 
gallon of diesel fuel) x (10\2\) = Fuel consumption FCL value (gallons 
per 100 hp-hr).
    (ii) Calculate equivalent fuel consumption FCL values for spark-
ignition engines and alternative fuel spark-ignition engines. 
CO2 FCL value (grams per hp-hr)/8,877 grams per gallon of 
gasoline fuel) x (10\2\) = Fuel consumption FCL value (gallons per 100 
hp-hr).
    (iii) Manufacturers may carryover fuel consumption data from a 
previous model year if allowed to carry over emissions data for EPA in 
accordance with 40 CFR 1036.235.
    (iv) If a manufacturer uses an alternate test procedure under 40 
CFR 1065.10 and subsequently the data is rejected by EPA, NHTSA will 
also reject the data.
    (e) Heavy-duty trailers. This section describes the testing a 
manufacturer must perform and the method for determining fuel 
consumption performance to show compliance with the fuel consumption 
standards for trailers in Sec.  535.5(e).
    (1) Select trailer family configurations to test as specified in 40 
CFR 1037.235 for trailers that make up each of the manufacture's 
regulatory subcategories of heavy-duty trailers.
    (2) Obtain preliminary approvals for trailers aerodynamic devices 
from EPA in accordance with 40 CFR 1037.150.
    (3) For manufacturers voluntarily complying in model years 2018 
through 2020, and for trailers complying with mandatory standards in 
model years 2021 and later, determine the CO2 emissions and 
fuel consumption results for partial- and full-aero trailers using the 
equations and technologies specified in CFR part 1037, subpart F. Use 
testing to determine input values in accordance with 40 CFR 1037.515.
    (4) Non-box trailers and non-aero trailers certified using design-
based certification must meet tire rolling resistance levels, and use 
tire inflation systems on all load-bearing wheels as prescribed in 40 
CFR 1037.150.
    (5) Box trailer manufacturers shall use a GEM-based equation to 
calculate CO2 emissions, as specified in 40 CFR 1037.515. 
From the equation results, calculate the CO2 family 
emissions level (FEL) and equivalent fuel consumption values for 
trailer families in the long dry van, short dry van, long refrigerated 
van, and short refrigerated van regulatory subcategories for each model 
year. Equivalent fuel consumption FELs are expressed to the nearest 
0.0001 gallons per 1000 ton-mile. For families containing multiple 
subfamilies, identify the FELs for each subfamily.

Sec.  535.7  Averaging, banking, and trading (ABT) credit program.

    (a) General provisions. After the end of each model year, 
manufacturers must comply with the fuel consumption standards in Sec.  
535.5 by averaging, banking and trading credits. Trailer manufacturers 
are excluded from this section except for those producing full-aero box 
trailers, which may comply with special provisions in paragraph (e) of 
this section. Manufacturers comply with standards if the sum of 
averaged, banked and traded credits generate a ``zero'' credit balance 
or a credit surplus within an averaging set of vehicles or engines. 
Manufacturers fail to comply with standards if the sum of the credit 
flexibilities generate a credit deficit (or shortfall) in an averaging 
set. Credit shortfalls must be offset by banked or traded credits 
within three model years after the shortfall is incurred. These 
processes are hereafter referenced as the NHTSA ABT credit program. The 
following provisions apply to all fuel consumption credits.
    (1) Credits (or fuel consumption credits (FCCs)). Credits in this 
part mean a calculated weighted value representing the difference 
between the fuel consumption performance and the standard of a vehicle 
or engine family or fleet within a particular averaging set. Positive 
credits represent cases where a vehicle or engine family or fleet 
perform better than the applicable standard (the fuel consumption 
performance is less than the standard) whereas negative credits 
represent underperforming cases. The value of a credit is calculated 
according to sections (b) through (e) of this section. FCCs are only 
considered earned or useable for averaging, banking or trading after 
EPA and NHTSA have verified the information in a manufacturer's final 
reports required in Sec.  535.8. Types of FCCs include the following:

[[Page 40753]]

    (i) Conventional credits. Credits generated by vehicle or engine 
families or fleets containing conventional vehicles (i.e., gasoline, 
diesel and alternative fueled vehicles).
    (ii) Early credits. Credits generated by vehicle or engine families 
or fleets produced for model year 2013. Early credits are multiplied by 
an incentive factor of 1.5 times.
    (iii) Advanced technology credits. Credits generated by vehicle or 
engine families or subconfigurations containing vehicles with advanced 
technologies (i.e., hybrids with regenerative braking, vehicles 
equipped with Rankine-cycle engines, electric and fuel cell vehicles) 
and incentivized under this ABT credit program in paragraph (f)(1) of 
this section and by EPA under 40 CFR 86.1819-14(d)(7), 1036.615, and 
1037.615.
    (iv) Innovative and off-cycle technology credits. Credits generated 
by vehicle or engine families or subconfigurations having fuel 
consumption reductions resulting from technologies not reflected in the 
GEM simulation tool or in the FTP chassis dynomometer. These innovative 
and off-cycle technology are incentivized under this fuel consumption 
program in paragraph (f)(2) of this section and by EPA under 40 CFR 
86.1819-14(d)(13), 1036.610, and 1037.610.
    (2) Averaging. Averaging is the summing of a manufacturer's 
positive and negative FCCs for engines or vehicle families or fleets 
within an averaging set. The principle averaging sets are defined in 
Sec.  535.4.
    (i) A credit surplus occurs when the net sum of the manufacturer's 
generated credits for engines or vehicle families or fleets within an 
averaging set is positive (a zero credit balance is when the sum equals 
zero).
    (ii) A credit deficit occurs when the net sum of the manufacturer's 
generated credits for engines or vehicle families or fleets within an 
averaging set is negative.
    (iii) Positive credits, other than advanced technology credits, 
generated and calculated within an averaging set may only be used to 
offset negative credits within the same averaging set.
    (iv) Manufacturers may certify one or more vehicle families (or 
subfamilies) to an FEL above the applicable fuel consumption standard, 
subject to any applicable FEL caps and other provisions allowed by EPA 
in 40 CFR parts 1036 and 1037, if the manufacturer shows in its 
application for certification to EPA that its projected balance of all 
FCC transactions in that model year is greater than or equal to zero or 
that a negative balance is allowed by EPA under 40 CFR 1036.745 and 
1037.745.
    (v) If a manufacturer certifies a vehicle family to an FEL that 
exceeds the otherwise applicable standard, it must obtain enough FCC to 
offset the vehicle family's deficit by the due date of its final report 
required in Sec.  535.8. The emission credits used to address the 
deficit may come from other vehicle families that generate FCCs in the 
same model year (or from the next three subsequent model years), from 
banked FCCs from previous model years, or from FCCs generated in the 
same or previous model years that it obtained through trading. Note 
that the option for using banked or traded credits does not apply for 
trailers.
    (vi) Manufacturers may certify a vehicle or engine family using an 
FEL (as described in Sec.  535.6) below the fuel consumption standard 
(as described in Sec.  535.5) and choose not to generate conventional 
fuel consumption credits for that family. Manufacturers do not need to 
calculate fuel consumption credits for those families and do not need 
to submit or keep the associated records described in Sec.  535.8 for 
these families. Manufacturers participating in NHTSA's FCC program must 
provide reports as specified in Sec.  535.8.
    (3) Banking. Banking is the retention of surplus FCC in an 
averaging set by the manufacturer for use in future model years for the 
purpose of averaging or trading.
    (i) Surplus credits may be banked by the manufacturer for use in 
future model years, or traded, given the restriction that the credits 
have an expiration date of five model years after the year in which the 
credits are generated. For example, banked credits earned in model year 
2014 may be utilized through model year 2019. Surplus credits will 
become banked credits unless a manufacturer contacts NHTSA to expire 
its credits.
    (ii) Surplus credits become earned or usable banked FCCs when the 
manufacturer's final report is approved by both agencies. However, the 
agencies may revoke these FCCs at any time if they are unable to verify 
them after reviewing the manufacturer's reports or auditing its 
records.
    (iii) Banked FCC retain the designation from the averaging set and 
model year in which they were generated.
    (iv) Banked credits retain the designation of the averaging set in 
which they were generated.
    (v) Trailer manufacturers generating credits in paragraph (e) of 
this section may not bank credits except to resolve credit deficits in 
the same model year or from up to three prior model years.
    (4) Trading. Trading is a transaction that transfers banked FCCs 
between manufacturers or other entities in the same averaging set. A 
manufacturer may use traded FCCs for averaging, banking, or further 
trading transactions.
    (i) Manufacturers may only trade banked credits to other 
manufacturers with vehicle or engines in the same averaging set. Traded 
FCCs, other than advanced technology credits, may be used only within 
the averaging set in which they were generated. Manufacturers may only 
trade credits to other entities for the purpose of expiring credits.
    (ii) Advanced technology credits can be traded across different 
averaging sets.
    (iii) The agencies may revoke traded FCCs at any time if they are 
unable to verify them after reviewing the manufacturer's reports or 
auditing its records.
    (iv) If a negative FCC balance results from a transaction, both the 
buyer and seller are liable, except in cases the agencies deem to 
involve fraud. See Sec.  535.9 for cases involving fraud. EPA also may 
void the certificates of all vehicle families participating in a trade 
that results in a manufacturer having a negative balance of emission 
credits. See 40 CFR 1037.745.
    (v) Trailer manufacturers generating credits in paragraph (e) of 
this section may not trade credits.
    (5) Credit deficit (or credit shortfall). A credit shortfall or 
deficit occurs when the sum of the manufacturer's generated credits for 
engines or vehicle families or fleets within an averaging set is 
negative. Credit shortfalls must be offset by an available credit 
surplus within three model years after the shortfall was incurred. If 
the shortfall cannot be offset, the manufacturer is liable for civil 
penalties as discussed in Sec.  535.9.
    (6) FCC transaction plan. In order to provide the maximum 
flexibility to a manufacturer, during the model year and before the due 
date for its final report, an FCC transaction plan must be submitted to 
the agencies as specified in Sec.  535.8 anytime a manufacturer wants 
to executes a credit transaction involving banked or tradeding credits. 
For example, if a manufacturer executes a plan to apply banked credits 
over multiple subsequent model years.
    (7) Revoked credits. NHTSA may revoke fuel consumption credits if 
unable to verify any information after auditing reports or records or 
conducting conformitory testing. In the cases where EPA revokes 
emissions CO2 credits, NHTSA will revoke the same amount of 
fuel consumption credits.

[[Page 40754]]

    (b) ABT provisions for heavy-duty pickup trucks and vans. (1) 
Calculate fuel consumption credits in a model year for one fleet of 
conventional heavy-duty pickup trucks and vans and if designated by the 
manufacturer another consisting of advance technology vehicles for the 
averaging set as defined in Sec.  535.4. Calculate credits for each 
fleet separately using the following equation:
Total MY Fleet FCC (gallons) = (Std -Act) x (Volume) x (UL) x (10\2\)

Where:
Std = Fleet average fuel consumption standard (gal/100 mile).
Act = Fleet average actual fuel consumption value (gal/100 mile).
Volume = the total U.S.-directed production of vehicles in the 
regulatory subcategory.
UL = the useful life for the regulatory subcategory. The useful life 
value for heavy-pickup trucks and vans manufactured for model years 
2013 through 2020 is equal to the 120,000 miles. The useful life for 
model years 2021 and later is equal to 150,000 miles.

    (2) Adjust the fuel consumption performance of subconfigurations 
with advanced technology for determining the fleet average actual fuel 
consumption value as specified in paragraph (f)(1) of this section and 
40 CFR 86.1819-14(d)(7). Advanced technology vehicles can be separated 
in a different fleet for the purpose of applying credit incentives as 
described in paragraph (f)(1) of this section.
    (3) Adjust the fuel consumption performance for subconfigurations 
with innovative technology. A manufacturer is eligible to increase the 
fuel consumption performance of heavy-duty pickup trucks and vans in 
accordance with procedures established by EPA set forth in 40 CFR part 
600. The eligibility of a manufacturer to increase its fuel consumption 
performance through use of an off-cycle technology requires an 
application request made to EPA and NHTSA in accordance with 40 CFR 
86.1869-12 and an approval granted by the agencies. For off-cycle 
technologies that are covered under 40 CFR 86.1869-12, NHTSA will 
collaborate with EPA regarding NHTSA's evaluation of the specific off-
cycle technology to ensure its impact on fuel consumption and the 
suitability of using the off-cycle technology to adjust fuel 
consumption performance. NHTSA will provide its views on the 
suitability of the technology for that purpose to EPA. NHTSA will apply 
the criteria in section (f) of this section in granting or denying off-
cycle requests.
    (4) Fuel consumption credits may be generated for vehicles 
certified in model year 2013 to the model year 2014 standards in Sec.  
535.5(a). If a manufacturer chooses to generate CO2 emission 
credits under EPA's provisions in 40 CFR part 86, it may also 
voluntarily generate early credits under the NHTSA fuel consumption 
program. To do so, a manufacturer must certify its entire U.S.-directed 
production volume of vehicles in its fleet. The same production volume 
restrictions specified in 40 CFR 1037.150(a)(2) relating to when test 
groups are certified apply to the NHTSA early credit provisions. 
Credits are calculated as specified in paragraph (b)(3) of this section 
relative to the fleet standard that would apply for model year 2014 
using the model year 2013 production volumes. Surplus credits generated 
under this paragraph (b)(4) are available for banking or trading. 
Credit deficits for an averaging set prior to model year 2014 do not 
carry over to model year 2014. These credits may be used to show 
compliance with the standards of this part for 2014 and later model 
years. Once a manufacturer opts into the NHTSA program they must stay 
in the program for all of the optional model years and remain 
standardized with the same implementation approach being followed to 
meet the EPA CO2 emission program.
    (5) Calculate the averaging set credit value by summing together 
the fleet credits for conventional and advanced technology vehicles 
including any adjustments for innovative technologies. Manufacturers 
may sum conventional and innovative technology credits before adding 
any advanced technology credits in each averaging set.
    (6) Credit adjustment for useful life. For credits that 
manufacturers calculate based on a useful life of 120,000 miles, 
multiply any banked credits carried forward for use in model year 2021 
and later by 1.25. For credit deficits that you calculate based on a 
useful life of 120,000 miles and that you offset with credits 
originally earned in model year 2021 and later, multiply the credit 
deficit by 1.25.
    (c) ABT provisions for vocational vehicles and tractors. (1) 
Calculate the fuel consumption credits in a model year for each 
participating family or subfamily consisting of conventional vehicles 
in each averaging set (as defined in Sec.  535.4) using the equation in 
this section. Each designated vehicle family or subfamily has a 
``family emissions limit'' (FEL) that is compared to the associated 
regulatory subcategory standard. An FEL that falls below the regulatory 
subcategory standard creates ``positive credits,'' while fuel 
consumption level of a family group above the standard creates a 
``negative credits.'' The value of credits generated for each family or 
subfamily in a model year is calculated as follows:

Vehicle Family FCC (gallons) = (Std -FEL) x (Payload) x (Volume) x (UL) 
x (10\3\)

Where:
Std = the standard for the respective vehicle family regulatory 
subcategory (gal/1000 ton-mile).
FEL = family emissions limit for the vehicle family (gal/1000 ton-
mile).
Payload = the prescribed payload in tons for each regulatory 
subcategory as shown in the following table:

------------------------------------------------------------------------
                                                               Payload
                   Regulatory subcategory                       (tons)
------------------------------------------------------------------------
LHD Vocational Vehicles....................................         2.85
MHD Vocational Vehicles....................................         5.60
HHD Vocational Vehicles....................................          7.5
Class 7 Tractor............................................        12.50
Class 8 Tractor............................................        19.00
------------------------------------------------------------------------

Volume = the number of U.S.-directed production volume of vehicles in 
the corresponding vehicle family.
UL = the useful life for the regulatory subcategory (miles) as shown in 
the following table:

------------------------------------------------------------------------
                   Regulatory subcategory                     UL (miles)
------------------------------------------------------------------------
LHD Vocational Vehicles....................................      110,000
                                                              (Phase 1),
                                                                 150,000
                                                              (Phase 2).
MHD Vocational Vehicles....................................     185,000.
HHD Vocational Vehicles....................................     435,000.
Class 7 Tractor............................................     185,000.
Class 8 Tractor............................................     435,000.
------------------------------------------------------------------------

    (i) Calculate the value of credits generated in a model year for 
each family or subfamily consisting of vehicles with advanced 
technology vehicles in each averaging set using the equation above and 
the guidelines provided in paragraph (f)(1) of this section. 
Manufacturers may generate credits for advanced technology vehicles 
using incentives specified in paragraph (f)(1) of this section.
    (ii) Calculate the value of credits generated in a model year for 
each family or subfamily consisting of vehicles with off-cycle 
technology vehicles in each averaging set using the equation above and 
the guidelines provided in paragraph (f)(2) of this section.
    (2) Manufacturers must sum all negative and positive credits for 
each vehicle family within each applicable averaging set to obtain the 
total credit balance for the model year before rounding. The sum of 
fuel consumptions credits must be rounded to the nearest gallon. 
Calculate the total

[[Page 40755]]

credits generated in a model year for each averaging set using the 
following equation:

Total averaging set MY credits = [Sigma] Vehicle family credits within 
each averaging set

    (3) Manufacturers can sum conventional and innovative technology 
credits before adding any advanced technology credits in each averaging 
set.
    (4) If a manufacturer chooses to generate CO2 emission 
credits under EPA provisions of 40 CFR 1037.150(a), it may also 
voluntarily generate early credits under the NHTSA fuel consumption 
program as follows:
    (i) Fuel consumption credits may be generated for vehicles 
certified in model year 2013 to the model year 2014 standards in Sec.  
535.5(b) and (c). To do so, a manufacturer must certify its entire 
U.S.-directed production volume of vehicles. The same production volume 
restrictions specified in 40 CFR 1037.150(a)(1) relating to when test 
groups are certified apply to the NHTSA early credit provisions. 
Credits are calculated as specified in paragraph (c)(11) of this 
section relative to the standards that would apply for model year 2014. 
Surplus credits generated under this paragraph (c)(4) may be increased 
by a factor of 1.5 for determining total available credits for banking 
or trading. For example, if you have 10 gallons of surplus credits for 
model year 2013, you may bank 15 gallons of credits. Credit deficits 
for an averaging set prior to model year 2014 do not carry over to 
model year 2014. These credits may be used to show compliance with the 
standards of this part for 2014 and later model years. Once a 
manufacturer opts into the NHTSA program they must stay in the program 
for all of the optional model years and remain standardized with the 
same implementation approach being followed to meet the EPA 
CO2 emission program.
    (ii) A tractor manufacturer may generate fuel consumption credits 
for the number of additional SmartWay designated tractors (relative to 
its MY 2012 production), provided that credits are not generated for 
those vehicles under paragraph (c)(4)(i) of this section. Calculate 
credits for each regulatory sub-category relative to the standard that 
would apply in model year 2014 using the equations in paragraph (c)(2) 
of this section. Use a production volume equal to the number of 
verified model year 2013 SmartWay tractors minus the number of verified 
model year 2012 SmartWay tractors. A manufacturer may bank credits 
equal to the surplus credits generated under this paragraph multiplied 
by 1.50. A manufacturer's 2012 and 2013 model years must be equivalent 
in length. Once a manufacturer opts into the NHTSA program they must 
stay in the program for all of the optional model years and remain 
standardized with the same implementation approach being followed to 
meet the EPA CO2 emission program.
    (5) If a manufacturer generates credits from vehicles certified for 
advanced technology in accordance with paragraph (e)(1) of this 
section, a multiplier of 1.5 can be used, but this multiplier cannot be 
used on the same credits for which the early credit multiplier is used.
    (d) ABT provisions for heavy-duty engines. (1) Calculate the fuel 
consumption credits in a model year for each participating family or 
subfamily consisting of engines in each averaging set (as defined in 
Sec.  535.4) using the equation in this section. Each designated engine 
family has a ``family certification level'' (FCL) which is compared to 
the associated regulatory subcategory standard. A FCL that falls below 
the regulatory subcategory standard creates ``positive credits,'' while 
fuel consumption level of a family group above the standard creates a 
``credit shortfall.'' The value of credits generated in a model year 
for each engine family or subfamily is calculated as follows:
Engine Family FCC (gallons) = (Std-FCL) x (CF) x (Volume) x (UL) x 
(10\2\)

Where:

Std = the standard for the respective engine regulatory subcategory 
(gal/100 hp-hr).
FCL = family certification level for the engine family (gal/100 hp-
hr).
CF= a transient cycle conversion factor in hp-hr/mile which is the 
integrated total cycle horsepower-hour divided by the equivalent 
mileage of the applicable test cycle. For spark-ignition heavy-duty 
engines, the equivalent mileage is 6.3 miles. For compression-
ignition heavy-duty engines, the equivalent mileage is 6.5 miles.
Volume = the number of engines in the corresponding engine family.
UL = the useful life of the given engine family (miles) as shown in 
the following table:

------------------------------------------------------------------------
          Regulatory subcategory                     UL (miles)
------------------------------------------------------------------------
Class 2b-5 Vocational Vehicles, Spark       110,000 (Phase 1),
 Ignited (SI), and Light Heavy-Duty Diesel  150,000 (Phase 2).
 Engines.
Class 6-7 Vocational Vehicles and Medium    185,000.
 Heavy-Duty Diesel Engines.
Class 8 Vocational Vehicles and Heavy       435,000.
 Heavy-Duty Diesel Engines.
Class 7 Tractors and Medium Heavy-Duty      185,000.
 Diesel Engines.
Class 8 Tractors and Heavy Heavy-Duty       435,000.
 Diesel Engines.
------------------------------------------------------------------------

    (i) Calculate the value of credits generated in a model year for 
each family or subfamily consisting of engines with advanced technology 
vehicles in each averaging set using the equation above and the 
guidelines provided in paragraph (f)(1) of this section. Manufacturers 
may generate credits for advanced technology vehicles using incentives 
specified in paragraph (f)(1) of this section.
    (ii) Calculate the value of credits generated in a model year for 
each family or subfamily consisting of engines with off-cycle 
technology vehicles in each averaging set using the equation above and 
the guidelines provided in paragraph (f)(2) of this section.
    (2) Manufacturers shall sum all negative and positive credits for 
each engine family within the applicable averaging set to obtain the 
total credit balance for the model year before rounding. The sum of 
fuel consumptions credits should be rounded to the nearest gallon. 
Calculate the total credits generated in a model year for each 
averaging set using the following equation:

Total averaging set MY credits = [Sigma] Engine family credits within 
each averaging set

    (3) The provisions of this section apply to manufacturers utilizing 
the compression-ignition engine voluntary alternate standard provisions 
specified in Sec.  535.5(d)(4) as follows:
    (i) Manufacturers may not certify engines to the alternate 
standards if they are part of an averaging set in which they carry a 
balance of banked credits. For purposes of this section, manufacturers 
are deemed to carry credits in an averaging set if they carry credits 
from advance technology that are allowed to be used in that averaging 
set.
    (ii) Manufacturers may not bank fuel consumption credits for any 
engine family in the same averaging set and model year in which it 
certifies engines to the alternate standards. This means a manufacturer 
may not bank advanced technology credits in a model year it certifies 
any engines to the alternate standards.
    (iii) Note that the provisions of paragraph (a) of this section 
apply with

[[Page 40756]]

respect to credit deficits generated while utilizing alternate 
standards.
    (4) Where a manufacturer has chosen to comply with the EPA 
alternative compression ignition engine phase-in standard provisions in 
40 CFR 1036.150(e), and has optionally decided to follow the same path 
under the NHTSA fuel consumption program, it must certify all of its 
model year 2013 compression-ignition engines within a given averaging 
set to the applicable alternative standards in Sec.  535.5(d)(5). 
Engines certified to these standards are not eligible for early credits 
under paragraph (d)(5) of this section. Credits are calculated using 
the same equation provided in paragraph (d)(1) of this section.
    (5) If a manufacturer chooses to generate early CO2 
emission credits under EPA provisions of 40 CFR 1036.150, it may also 
voluntarily generate early credits under the NHTSA fuel consumption 
program. Fuel consumption credits may be generated for engines 
certified in model year 2013 (2015 for spark-ignition engines) to the 
standards in Sec.  535.5(d). To do so, a manufacturer must certify its 
entire U.S.-directed production volume of engines except as specified 
in 40 CFR 1036.150(a)(2). Credits are calculated as specified in 
paragraph (d)(1) of this section relative to the standards that would 
apply for model year 2014 (2016 for spark-ignition engines). Surplus 
credits generated under this paragraph (d)(3) may be increased by a 
factor of 1.5 for determining total available credits for banking or 
trading. For example, if you have 10 gallons of surplus credits for 
model year 2013, you may bank 15 gallons of credits. Credit deficits 
for an averaging set prior to model year 2014 (2016 for spark-ignition 
engines) do not carry over to model year 2014 (2016 for spark-ignition 
engines). These credits may be used to show compliance with the 
standards of this part for 2014 and later model years. Once a 
manufacturer opts into the NHTSA program they must stay in the program 
for all of the optional model years and remain standardized with the 
same implementation approach being followed to meet the EPA 
CO2 emission program.
    (e) ABT provisions for trailers. (1) Manufacturers can not use 
averaging for non-box trailers, partial-aero trailers, or non-aero 
trailers and can not use fuel consumption credits for banking or 
trading for any trailers. Full aero box trailer manufactures may 
average credits but cannot bank credits except to resolve deficits in 
future model years.
    (2) Calculate the fuel consumption credits in a model year for each 
participating family or subfamily consisting of full aero box trailers 
(vehicles) in each averaging set (as defined in Sec.  535.4) using the 
equation in this section. Each designated vehicle family or subfamily 
has a ``family emissions limit'' (FEL) which is compared to the 
associated regulatory subcategory standard. An FEL that falls below the 
regulatory subcategory standard creates ``positive credits,'' while 
fuel consumption level of a family group above the standard creates a 
``negative credits.'' The value of credits generated for each family or 
subfamily in a model year is calculated as follows:
Vehicle Family FCC (gallons) = (Std - FEL) x (Payload) x (Volume) x 
(UL) x (10\3\)

Where:
Std = the standard for the respective vehicle family regulatory 
subcategory (gal/1000 ton-mile).
FEL = family emissions limit for the vehicle family (gal/1000 ton-
mile).
Payload = 19 tons.
Volume = the number of U.S.-directed production volume of vehicles 
in the corresponding vehicle family.
UL = the useful life for the regulatory subcategory. The useful life 
value for heavy-duty trailers is equal to the 250,000 miles.

    (3) Trailer manufacturers may not generate advanced or innovative 
technology credits.
    (4) Manufacturers shall sum all negative and positive credits for 
each vehicle family within the applicable averaging set to obtain the 
total credit balance for the model year before rounding. The sum of 
fuel consumptions credits should be rounded to the nearest gallon.
    Calculate the total credits generated in a model year for each 
averaging set using the following equation:

Total averaging set MY credits = [Sigma] Vehicle family credits within 
each averaging set

    (5) Trailer manufacturers may not generate a credit surplus within 
an averaging set for the purpose of banking except to offset a credit 
deficit from a prior model year.
    (f) Additional credit provisions. (1) Advanced technology credits. 
Manufacturers of heavy-duty pickup trucks and vans, vocational 
vehicles, tractors and the associated engines showing improvements in 
CO2 emissions and fuel consumption using hybrid vehicles 
with regenerative braking, vehicles equipped with Rankine-cycle 
engines, electric vehicles and fuel cell vehicles are eligible for 
advanced technology credits. Manufacturers shall use sound engineering 
judgment to determine the performance of the vehicle or engine with 
advanced techonology. Advanced technology credits for vehicles or 
engines complying with Phase 1 standards may be increased by a 1.5 
multiplier for Phase 2. Manufacturers may not apply this multiplier in 
addition to any early-credit multipliers. The maximum amount of credits 
a manufacturer may bring into the service class group that contains the 
heavy-duty pickup and van averaging set is 5.89[middot]10\6\ gallons 
(for advanced technology credits based upon compression ignition 
engines) or 6.76[middot]10\6\ gallons (for advanced technology credits 
based upon spark-ignition engines) per model year as specified in 40 
CFR part 86 for heavy-duty pickup trucks and vans, 40 CFR 1036.740 for 
engines and 40 CFR 1037.740 for tractors and vocational vehicles. The 
specified limit does not cap the amount of advanced technology credits 
that can be used across averaging sets within the same service class 
group. Advanced technology credits can be used to offset negative 
credits in the same averaging set or other averaging sets. A 
manufacturer must first apply advanced technology credits to any 
deficits in the same averaging set before applying them to other 
averaging.
    (i) Heavy-duty pickup trucks and vans. For advanced technology 
systems (hybrid vehicles with regenerative braking, vehicles equipped 
with Rankine-cycle engines and fuel cell vehicles), calculate fleet-
average performance rates consistent with good engineering judgment and 
the provisions of 40 CFR 86.1819-14 and 40 CFR 86.1865.
    (ii) Tractors and vocational vehicles. For advanced technology 
system (hybrid vehicles with regenerative braking, vehicles equipped 
with Rankine-cycle engines and fuel cell vehicles), calculate the 
advanced technology credits as follows:
    (A) Measure the effectiveness of the advanced system by conducting 
A to B testing a vehicle equipped with the advanced system and an 
equivalent conventional system in accordance with 40 CFR 1037.615.
    (B) For purposes of this paragraph (e), a conventional vehicle is 
considered to be equivalent if it has the same footprint, intended 
vehicle service class, aerodynamic drag, and other relevant factors not 
directly related to the advanced system powertrain. If there is no 
equivalent vehicle, the manufacturer may create and test a prototype 
equivalent vehicle. The conventional vehicle is considered Vehicle A, 
and the advanced technology vehicle is considered Vehicle B.

[[Page 40757]]

    (C) The benefit associated with the advanced system for fuel 
consumption is determined from the weighted fuel consumption results 
from the chassis tests of each vehicle using the following equation:

Benefit (gallon/1000 ton mile) = Improvement Factor x GEM Fuel 
Consumption Result_B

Where:
Improvement Factor = (Fuel Consumption_A - Fuel Consumption_B)/(Fuel 
Consumption_A)
Fuel Consumption Rates A and B are the gallons per 1000 ton-mile of 
the conventional and advanced vehicles, respectively as measured 
under the test procedures specified by EPA.
GEM Fuel Consumption Result B is the estimated gallons per 1000 ton-
mile rate resulting from emission modeling of the advanced vehicle 
as specified in 40 CFR 1037.520 and Sec.  535.6(b).

    (D) Calculate the benefit in credits using the equation in 
paragraph (c) of this section and replacing the term (Std-FEL) with the 
benefit.
    (E) For electric vehicles calculate the fuel consumption credits 
using an FEL of 0 g/1000ton-mile.
    (iii) Heavy-duty engines. (A) This section specifies how to 
generate advanced technology-specific fuel consumption credits for 
hybrid powertrains that include energy storage systems and regenerative 
braking (including regenerative engine braking) and for engines that 
include Rankine-cycle (or other bottoming cycle) exhaust energy 
recovery systems.
    (1) Pre-transmission hybrid powertrains are those engine systems 
that include features that recover and store energy during engine 
motoring operation but not from the vehicle wheels. These powertrains 
are tested using the hybrid engine test procedures of 40 CFR part 1065 
or using the post-transmission test procedures.
    (2) Post-transmission hybrid powertrains are those powertrains that 
include features that recover and store energy from braking at the 
vehicle wheels. These powertrains are tested by simulating the chassis 
test procedure applicable for hybrid vehicles under 40 CFR 1037.550.
    (3) Test engines that include Rankine-cycle exhaust energy recovery 
systems according to the test procedures specified in 40 CFR part 1036, 
subpart F, unless EPA approves the manufacturer's alternate procedures.
    (B) Calculate credits as specified in paragraph (c) of this 
section. Credits generated from engines and powertrains certified under 
this section may be used in other averaging sets as described in 40 CFR 
1036.740(d).
    (2) Innovative and off-cycle technology credits. This provision 
allows fuel saving innovative and off-cycle engine and vehicle 
technologies to generate fuel consumption credits comparable to 
CO2 emission credits consistent with the provisions of 40 
CFR 1036.610 (for engines), 40 CFR part 86 (for heavy-duty pickup 
trucks and vans) and 40 CFR 1037.610 (for vocational vehicles and 
tractors).
    (i) For model years 2013 through 2020, manufacturers may generate 
innovative technology credits for introducing technologies that were 
not in-common use for heavy-duty vehicles or engines before model year 
2010 and that are not reflected in the EPA specified test procedures. 
Upon identification and joint approval with EPA, NHTSA will allow 
equivalent fuel consumption credits into its program to those allowed 
by EPA for manufacturers seeking to obtain innovative technology 
credits in a given model year. Such credits must remain within the same 
regulatory subcategory in which the credits were generated. NHTSA will 
adopt fuel consumption credits depending upon whether--
    (A) The technology has a direct impact upon reducing fuel 
consumption performance; and
    (B) The manufacturer has provided sufficient information to make 
sound engineering judgments on the impact of the technology in reducing 
fuel consumption performance.
    (ii) For model years 2021 and later, manufacturers may generate 
off-cycle technology credits for introducing technologies that are not 
reflected in the EPA specified test procedures. Upon identification and 
joint approval with EPA, NHTSA will allow equivalent fuel consumption 
credits into its program to those allowed by EPA for manufacturers 
seeking to obtain innovative technology credits in a given model year. 
Such credits must remain within the same regulatory subcategory in 
which the credits were generated. NHTSA will adopt fuel consumption 
credits depending upon whether--
    (A) The technology meets paragraph (f)(2)(i)(A) and (B) of this 
section.
    (B) For heavy-duty pickup trucks and vans, manufacturers using the 
5-cycle test to quantify the benefit of a technology are not required 
to obtain approval from the agencies to generate results.
    (iii) The following provisions apply to all innovative and off-
cycle technologies:
    (A) Technologies found to be defective, or identified as a part of 
NHTSA's safety defects program, and technologies that are not 
performing as intended will have the values of approved off-cycle 
credits removed from the manufacturer's credit balance.
    (B) Approval granted for innovative and off-cycle technology 
credits under NHTSA's fuel efficiency program does not affect or 
relieve the obligation to comply with the Vehicle Safety Act (49 U.S.C. 
Chapter 301), including the ``make inoperative'' prohibition (49 U.S.C. 
30122), and all applicable Federal motor vehicle safety standards 
issued thereunder (FMVSSs) (49 CFR part 571). In order to generate off-
cycle or innovative technology credits manufacturers must state--
    (1) That each vehicle equipped with the technology for which they 
are seeking credits will comply with all applicable FMVSS(s); and
    (2) Whether or not the technology has a fail-safe provision. If no 
fail-safe provision exists, the manufacturer must explain why not and 
whether a failure of the innovative technology would affect the safety 
of the vehicle.
    (C) Manufacturers requesting approval for innovative technology 
credits are required to provide documentation in accordance with 40 CFR 
86.1869-12, 1036.610, and 1037.610.
    (D) Credits will be accepted on a one-for-one basis expressed in 
terms of gallons in comparison to those approved by EPA.
    (E) For the heavy-duty pickup trucks and vans, the average fuel 
consumption will be calculated as a separate credit amount (rounded to 
the nearest whole number) using the following equation:

Off-cycle FC credits = (CO2 Credit/CF) x 100 x Production x 
VLM

Where:
CO2 Credits = the credit value in grams per mile 
determined in 40 CFR 86.1869-12(c)(3), (d)(1), (d)(2) or (d)(3).
CF = conversion factor, which for spark ignition engines is 8,887 
and for compression ignition engines is 10,180.
Production = the total production volume for the applicable category 
of vehicles
VLM = vehicle lifetime miles, which for 2b-3 vehicles shall be 
150,000 for the Phase 2 program.

    (F) NHTSA will not approve innovative technology credits for 
technology that is related to crash-avoidance technologies, safety 
critical systems or systems affecting safety-critical functions, or 
technologies designed for the purpose of reducing the frequency of 
vehicle crashes.
    (iv) Manufacturers may carryover an approved innovative technology 
into the Phase 2 off-cycle credit program. Manufacturers may continue 
to carryover the improvement factor (not the credit value) if--

[[Page 40758]]

    (A) The FEL is generated by GEM or 5-cycle testing;
    (B) The technology is not changed or paired with any other off-
cycle technology;
    (C) The improvement factor only applies to approved vehicle or 
engine families;
    (D) The agencies do not expect the technology to be incorporated 
into GEM at any point during the Phase 2 program; and
    (E) The documentation to carryover credits that would primarily 
justify the difference in fuel efficiency between real world and 
compliance protocols is the same for both Phase 1 and Phase 2 
compliance protocols. The agencies must approve the justification. If 
the agencies do not approve the justification, the manufacturer must 
recertify.

Sec.  535.8  Reporting and recordkeeping requirements.

    (a) General requirements. Manufacturers producing heavy-duty 
vehicles and engines applicable to fuel consumption standards in Sec.  
535.5, for each given model year, must submit the required information 
as specified in paragraphs (b) through (h) of this section.
    (1) The information required by this part must be submitted by the 
deadlines specified in this section and must be based upon all the 
information and data available to the manufacturer 30 days before 
submitting information.
    (2) Manufacturers must submit information electronically through 
the EPA database system as the single point of entry for all 
information required for this national program and both agencies will 
have access to the information. The format for the required information 
is specified by EPA in coordination with NHTSA.
    (3) Manufacturers providing incomplete reports missing any of the 
required information or providing untimely reports are considered as 
not complying with standards (i.e., if good-faith estimates of U.S.-
directed production volumes for EPA certificates of conformity are not 
provided) and are liable to pay civil penalties in accordance with 49 
U.S.C. 32912.
    (4) Manufacturers certifying a vehicle or engine family using an 
FEL or FCL below the applicable fuel consumption standard as described 
in Sec.  535.5 may choose not to generate fuel consumption credits for 
that family. In which case, the manufacturer is not required to submit 
reporting or keep the associated records described in this part for 
that family.
    (5) Manufacturers must use good engineering judgment and provide 
comparable fuel consumption information to that of the information or 
data provided to EPA under 40 CFR 86.1865, 1036.250, 1036.730, 1036.825 
1037.250, 1037.730, and 1037.825.
    (6) Any information that must be sent directly to NHTSA. In 
instances in which EPA has not created an electronic pathway to receive 
the information, the information should be sent through an electronic 
portal identified by NHTSA or through the NHTSA CAFE database (i.e., 
information on fuel consumption credit transactions). If hardcopy 
documents must be sent, the information should be sent to the Associate 
Administrator of Enforcement at 1200 New Jersey Avenue, NVS-200, Office 
W45-306, SW., Washington, DC 20590.
    (b) Pre-model year reports. Manufacturers producing heavy-duty 
pickup trucks and vans must submit reports in advance of the model year 
providing early estimates demonstrating how their fleet(s) would comply 
with GHG emissions and fuel consumption standards. Note, the agencies 
understand that early model year reports contain estimates that may 
change over the course of a model year and that compliance information 
manufacturers submit prior to the beginning of a new model year may not 
represent the final compliance outcome. The agencies view the necessity 
for requiring early model reports as a manufacturer's good faith 
projection for demonstrating compliance with emission and fuel 
consumption standards.
    (1) Report deadlines. For model years 2013 and later, manufacturer 
of heavy-duty pickup trucks and vans complying with voluntary and 
mandatory standards must submit a pre-model year report for the given 
model year as early as the date of the manufacturer's annual 
certification preview meeting with EPA and NHTSA, or prior to 
submitting its first application for a certificate of conformity to EPA 
in accordance with 40 CFR 86.1819-14 (d). For example, a manufacturer 
choosing to comply in model year 2014 could submit its pre-model year 
report during its precertification meeting which could occur before 
January 2, 2013, or could provide its pre-model year report any time 
prior to submitting its first application for certification for the 
given model year.
    (2) Contents. Each pre-model year report must be submitted 
including the following information for each model year.
    (i) A list of each unique subconfiguration in the manufacturer's 
fleet describing the make and model designations, attribute based-
values (i.e., GVWR, GCWR, Curb Weight and drive configurations) and 
standards;
    (ii) The emission and fuel consumption fleet average standard 
derived from the unique vehicle configurations;
    (iii) The estimated vehicle configuration, test group and fleet 
production volumes;
    (iv) The expected emissions and fuel consumption test group results 
and fleet average performance;
    (v) If complying with MY 2013 fuel consumption standards, a 
statement must be provided declaring that the manufacturer is 
voluntarily choosing to comply early with the EPA and NHTSA programs. 
The manufacturers must also acknowledge that once selected, the 
decision cannot be reversed and the manufacturer will continue to 
comply with the fuel consumption standards for subsequent model years 
for all the vehicles it manufacturers in each regulatory category for a 
given model year;
    (vi) If complying with MYs 2014, 2015 or 2016 fuel consumption 
standards, a statement must be provided declaring whether the 
manufacturer will use fixed or increasing standards in accordance with 
Sec.  535.5(a). The manufacturer must also acknowledge that once 
selected, the decision cannot be reversed and the manufacturer must 
continue to comply with the same alternative for subsequent model years 
for all the vehicles it manufacturers in each regulatory category for a 
given model year;
    (vii) If complying with MYs 2014 or 2015 fuel consumption 
standards, a statement must be provided declaring that the manufacturer 
is voluntarily choosing to comply with NHTSA's voluntary fuel 
consumption standards in accordance with Sec.  535.5(a)(4). The 
manufacturers must also acknowledge that once selected, the decision 
cannot be reversed and the manufacturer will continue to comply with 
the fuel consumption standards for subsequent model years for all the 
vehicles it manufacturers in each regulatory category for a given model 
year;
    (viii) The list of Class 2b and 3 incomplete vehicles (cab-complete 
or chassis complete vehicles) and the method used to certify these 
vehicles as complete pickups and vans identifying the most similar 
complete sister- or other complete vehicles used to derive the target 
standards and performance test results;

[[Page 40759]]

    (ix) The list of Class 4 and 5 incomplete and complete vehicles and 
the method use to certify these vehicles as complete pickups and vans 
identifying the most similar complete or sister vehicles used to derive 
the target standards and performance test results;
    (x) List of loose engines included in the heavy-duty pickup and van 
category and the list of vehicles used to derive target standards and 
performance test results;
    (xi) Copy of any notices a vehicle manufacturer sends to the engine 
manufacturer to notify the engine manufacturers that their engines are 
subject to emissions and fuel consumption standards and that it intends 
to use their engines in excluded vehicles;
    (xii) A credit plan identifying the manufacturers estimated credit 
balances, planned credit flexibilities (i.e., credit balances, planned 
credit trading, innovative, advanced and early credits and etc.) and if 
needed a credit deficit plan demonstrating how it plans to resolve any 
credit deficits that might occur for a model year within a period of up 
to three model years after that deficit has occurred; and
    (xiii) The supplemental information specified in paragraph (h) of 
this section. [Note: NHTSA may also ask a manufacturer to provide 
additional information if necessary to verify compliance with the fuel 
consumption requirements of this regulation.]
    (c) Applications for certificate of conformity. Manufacturers 
producing vocational vehicles, tractors and heavy-duty engines are 
required to submit applications for certificates of conformity to EPA 
in accordance with 40 CFR 1036.205 and 1037.205 in advance of 
introducing vehicles for commercial sale. Applications contain early 
model year information demonstrating how manufacturers plan to comply 
with GHG emissions. For model years 2013 and later, manufacturers of 
vocational vehicles, tractors and engine complying with NHTSA's 
voluntary and mandatory standards must submit applications for 
certificates of conformity in accordance through the EPA database 
including both GHG emissions and fuel consumption information for each 
given model year.
    (1) Submission deadlines. Applications are primarily submitted in 
advance of the given model year to EPA but cannot be submitted any 
later than December 31 of the given model year.
    (2) Contents. Each application for certificates of conformity 
submitted to EPA must include the following equivalent fuel 
consumption.
    (i) Equivalent fuel consumption values for emissions CO2 
FCLs values used to certify each engine family in accordance with 40 
CFR 1036.205(e). This provision applies only to manufacturers producing 
heavy-duty engines.
    (ii) Equivalent fuel consumption values for emission CO2 
data engines used to comply with emission standards in 40 CFR 1036.108. 
This provision applies only to manufacturers producing heavy-duty 
engines.
    (iii) Equivalent fuel consumption values for emissions 
CO2 FELs values used to certify each vehicle families or 
subfamilies in accordance with 40 CFR 1037.205(k). This provision 
applies only to manufacturers producing vocational vehicles and 
tractors.
    (iv) Report modeling results for ten configurations in terms of 
CO2 emissions and equivalent fuel consumption results in 
accordance with 40 CFR 1037.205(o). Include modeling inputs and 
detailed descriptions of how they were derived. This provision applies 
only to manufacturers producing vocational vehicles and tractors.
    (3) Additional supplemental information. Manufacturers are required 
to submit additional information as specified in paragraph (h) of this 
section for the NHTSA program before or at the same time it submits its 
first application for a certificate of conformity to EPA. Under limited 
conditions, NHTSA may also ask a manufacturer to provide additional 
information directly to the Administrator if necessary to verify the 
fuel consumption requirements of this regulation.
    (d) Final reports. Heavy-duty vehicle and engine manufacturers 
participating and not-participating in the ABT program are required to 
submit an end-of-the-year (EOY) report containing information for NHTSA 
as specified in paragraph (d)(2) of this section and in accordance with 
40 CFR 86.1865, 1036.730, and 1037.730. The final reports are used to 
review a manufacturer's preliminary or final compliance information and 
to identify manufacturers that might have a credit deficit for the 
given model year. For model years 2013 and later, heavy-duty vehicle 
and engine manufacturers complying with NHTSA's voluntary and mandatory 
standards must submit final reports through the EPA database including 
both GHG emissions and fuel consumption information for each given 
model year.
    (1) Report deadlines. For model year 2013 and later, heavy-duty 
vehicle and engine manufacturers complying with NHTSA voluntary and 
mandatory standards must submit EOY reports through the EPA database 
including both GHG emissions and fuel consumption information within 90 
days after the end of the given model year and no later than April 1 of 
the next calendar year. For example, the final report for model year 
2014 must be submitted no later than April 1, 2015. A manufacturer may 
ask NHTSA and EPA to extend the deadline of a final report by up to 30 
days. A manufacturer unable to provide, and requesting to omit an 
emissions rate or fuel consumption value from a final report must 
obtain approval from the agencies prior to the submission deadline of 
its final report.
    (i) If a manufacturer expects differences in the information 
reported between the EOY and the final year report specified in 40 CFR 
1036.730 and 1037.730, it must provide the most up-to-date fuel 
consumption projections in its final report and identify the 
information as preliminary.
    (ii) If the manufacturer cannot provide any of the required fuel 
consumption information, it must state the specific reason for the 
insufficiency and identify the additional testing needed or explain 
what analytical methods are believed by the manufacturer will be 
necessary to eliminate the insufficiency and certify that the results 
will be available for the final report.
    (2) Contents. Each final report must be submitted including the 
following fuel consumption information for each model year. final 
reports for manufacturers participating in the ABT program must include 
final estimates.
    (i) Engine and vehicle family designations and averaging sets.
    (ii) Engine and vehicle regulatory subcategory and fuel consumption 
standards including any alternative standards used.
    (iii) Engine and vehicle family FCLs and FELs in terms of fuel 
consumption.
    (iv) Final production volumes for engines and vehicles.
    (v) A final credit plan (for manufacturers participating in the ABT 
program) identifying the manufacturers actual fuel consumption credit 
balances, credit flexibilities, credit trades and a credit deficit plan 
if needed demonstrating how it plans to resolve any credit deficits 
that might occur for a model year within a period of up to three model 
years after that deficit has occurred.
    (vi) A summary as specified in paragraph (g)(7) of this section 
describing the vocational vehicles and vocational tractors that were 
exempted as heavy-duty off-road vehicles. This applies to manufacturers 
participating

[[Page 40760]]

and not participating in the ABT program.
    (vii) A summary describing any advanced or innovative technology 
engines or vehicles including alternative fueled vehicles that were 
produced for the model year identifying the approaches used to 
determinate compliance and the production volumes.
    (viii) A list of each unique subconfiguration included in a 
manufacturer's fleet of heavy-duty pickup trucks and vans identifying 
the attribute based-values (GVWR, GCWR, Curb Weight, and drive 
configurations) and standards. This provision applies only to 
manufacturers producing heavy-duty pickup trucks and vans.
    (ix) The fuel consumption fleet average standard derived from the 
unique vehicle configurations. This provision applies only to 
manufacturers producing heavy-duty pickup trucks and vans.
    (x) The subconfiguration and test group production volumes. This 
provision applies only to manufacturers producing heavy-duty pickup 
trucks and vans.
    (xi) The fuel consumption test group results and fleet average 
performance. This provision applies only to manufacturers producing 
heavy-duty pickup trucks and vans.
    (xii) Under limited conditions, NHTSA may also ask a manufacturer 
to provide additional information directly to the Administrator if 
necessary to verify the fuel consumption requirements of this 
regulation.
    (e) Amendments to applications for certification. At any time, a 
manufacturer modifies an application for certification in accordance 
with 40 CFR 1036.225 and 1037.225, it must submit GHG emissions changes 
with equivalent fuel consumption values for the information required in 
paragraphs (b) through (e) and (h) of this section.
    (f) Confidential information. Manufacturers must submit a request 
for confidentiality with each electronic submission specifying any part 
of the for information or data in a report that it believes should be 
withheld from public disclosure as trade secret or other confidential 
business information. Information submitted to EPA should follow EPA 
guidelines for treatment of confidentiality. Requests for confidential 
treatment for information submitted to NHTSA must be filed in 
accordance with the requirements of 49 CFR part 512, including 
submission of a request for confidential treatment and the information 
for which confidential treatment is requested as specified by part 512. 
For any information or data requested by the manufacturer to be 
withheld under 5 U.S.C. 552(b)(4) and 49 U.S.C. 32910(c), the 
manufacturer shall present arguments and provide evidence in its 
request for confidentiality demonstrating that-
    (1) The item is within the scope of 5 U.S.C. 552(b)(4) and 49 
U.S.C. 32910(c);
    (2) The disclosure of the information at issue would cause 
significant competitive damage;
    (3) The period during which the item must be withheld to avoid that 
damage; and
    (4) How earlier disclosure would result in that damage.
    (g) Additional required information. The following additional 
information is required to be submitted through the EPA database. NHTSA 
reserves the right to ask a manufacturer to provide additional 
information if necessary to verify the fuel consumption requirements of 
this regulation.
    (1) Small businesses. For model years 2013 through 2020, vehicles 
and engines produced by small business manufacturers meeting the 
criteria in 13 CFR 121.201 are exempted from the requirements of this 
part. Qualifying small business manufacturers must notify EPA and NHTSA 
Administrators before importing or introducing into U.S. commerce 
exempted vehicles or engines. This notification must include a 
description of the manufacturer's qualification as a small business 
under 13 CFR 121.201. Manufacturers must submit this notification to 
EPA, and EPA will provide the notification to NHTSA. The agencies may 
review a manufacturer's qualification as a small business manufacturer 
under 13 CFR 121.201.
    (2) Emergency vehicles. For model years 2021 and later, emergency 
vehicles produced by heavy-duty pickup truck and van manufacturers are 
exempted except those produced by manufacturers voluntarily complying 
with standards in Sec.  535.5(a). Manufacturers must notify the 
agencies in writing if using the provisions in Sec.  535.5(a) to 
produce exempted emergency vehicles in a given model year, either in 
the report specified in 40 CFR 86.1865 or in a separate submission.
    (3) Early introduction. The provision applies to manufacturers 
seeking to comply early with the NHTSA's fuel consumption program prior 
to model year 2014. The manufacturer must send the request to EPA 
before submitting its first application for a certificate of 
conformity.
    (4) NHTSA voluntary compliance model years. Manufacturers must 
submit a statement declaring whether the manufacturer chooses to comply 
voluntarily with NHTSA's fuel consumption standards for model years 
2014 through 2015. The manufacturers must acknowledge that once 
selected, the decision cannot be reversed and the manufacturer will 
continue to comply with the fuel consumption standards for subsequent 
model years. The manufacturer must send the statement to EPA before 
submitting its first application for a certificate of conformity.
    (5) Alternative engine standards. Manufacturers choosing to comply 
with the alternative engine standards must notify EPA and NHTSA of 
their choice and include in that notification a demonstration that it 
has exhausted all available credits and credit opportunities. The 
manufacturer must send the statement to EPA before submitting its EOY 
report.
    (6) Alternate phase-in. Manufacturers choosing to comply with the 
alternative engine phase-in must notify EPA and NHTSA of their choice. 
The manufacturer must send the statement to EPA before submitting its 
first application for a certificate of conformity.
    (7) Off-road exclusion (tractors, vocational vehicles and trailers 
only). (i) Tractors and vocational vehicles intended to be used 
extensively in off-road environments such as forests, oil fields, and 
construction sites may be exempted without request from the 
requirements of this regulation as specified in 49 CFR 523.2 and Sec.  
535.5(b). Within 90 days after the end of each model year, 
manufacturers must send EPA and NHTSA through the EPA database a report 
with the following information:
    (A) A description of each excluded vehicle configuration, including 
an explanation of why it qualifies for this exclusion.
    (B) The number of vehicles excluded for each vehicle configuration.
    (ii) A manufacturer having an off-road vehicle failing to meet the 
criteria under the agencies' off-road exclusions will be allowed to 
request an exclusion of such a vehicle from EPA and NHTSA. The approval 
will be granted through the certification process for the vehicle 
family and will be done in collaboration between EPA and NHTSA in 
accordance with the provisions in 40 CFR 1037.150, 1037.210, and 
1037.630.
    (8) Vocational tractors. Tractors intended to be used as vocational 
tractors may comply with vocational vehicle standards in Sec.  535.5(b) 
of this regulation. Manufacturers classifying tractors as vocational 
tractors must provide a description of how they meet

[[Page 40761]]

the qualifications in their applications for certificates of conformity 
as specified in 40 CFR 1037.205.
    (9) Approval of alternate methods to determine drag coefficients 
(tractors only). Manufacturers seeking to use alternative methods to 
determine aerodynamic drag coefficients must provide a request and gain 
approval by EPA in accordance with 40 CFR 1037.525. The manufacturer 
must send the request to EPA before submitting its first application 
for a certificate of conformity.
    (10) Innovative and off-cycle technology credits. Manufacturers 
pursuing innovative and off-cycle technology credits must submit 
information to the agencies and may be subject to a public evaluation 
process in which the public would have opportunity for comment if the 
manufacturer is not using a test procedure in accordance with 40 CFR 
1037.610(c). Whether the approach involves on-road testing, modeling, 
or some other analytical approach, the manufacturer would be required 
to present a final methodology to EPA and NHTSA. EPA and NHTSA would 
approve the methodology and credits only if certain criteria were met. 
Baseline emissions and fuel consumption and control emissions and fuel 
consumption would need to be clearly demonstrated over a wide range of 
real world driving conditions and over a sufficient number of vehicles 
to address issues of uncertainty with the data. Data would need to be 
on a vehicle model-specific basis unless a manufacturer demonstrated 
model-specific data was not necessary. The agencies may publish a 
notice of availability in the Federal Register notifying the public of 
a manufacturer's proposed alternative off-cycle credit calculation 
methodology and provide opportunity for comment. Any notice will 
include details regarding the methodology, but not include any 
Confidential Business Information.
    (11) Credit trades. If a manufacturer trades fuel consumption 
credits, it must send EPA and NHTSA a fuel consumption credit plan as 
specified in Sec.  535.7(a) and provide the following information 
within 90 days after the transaction:
    (i) As the seller, the manufacturer must include the following 
information in its report:
    (A) The corporate names of the buyer and any brokers.
    (B) A copy of any contracts related to the trade.
    (C) The fleet, vehicle or engine families that generated fuel 
consumption credits for the trade, including the number of fuel 
consumption credits from each family.
    (ii) As the buyer, the manufacturer or entity must include the 
following information in its report:
    (A) The corporate names of the seller and any brokers.
    (B) A copy of any contracts related to the trade.
    (C) How the manufacturer or entity intends to use the fuel 
consumption credits, including the number of fuel consumption credits 
it intends to apply to each vehicle family (if known).
    (D) A copy of the contract with signatures from both the buyer and 
the seller.
    (12) Production reports. Within 90 days after the end of the model 
year, manufacturers must send to EPA a report including the total U.S.-
directed production volume of vehicles it produced in each vehicle and 
engine family during the model year (based on information available at 
the time of the report) as required by 40 CFR 1036.250 and 40 CFR 
1037.250. Each manufacturer shall report by vehicle or engine 
identification number and by configuration and identify the subfamily 
identifier. Report uncertified vehicles sold to secondary vehicle 
manufacturers. Small business manufacturers may omit reporting. 
Identify any differences between volumes included for EPA but excluded 
for NHTSA.
    (h) Public information. Based upon information submitted by 
manufacturers and EPA, NHTSA will publish fuel consumption standards 
and performance results.
    (i) Information received from EPA. NHTSA will receive information 
from EPA as specified in 40 CFR 1036.755 and 1037.755.
    (j) Recordkeeping. NHTSA has the same recordkeeping requirements as 
EPA, specified in 40 CFR 86.1865-12(k), 1036.250, 1036.735, 1036.825, 
1037.250, 1037.735, and 1037.825. The agencies each reserve the right 
to request information contained in records separately. If collected 
separately and NHTSA finds that information is provided fraudulent or 
grossly negligent or otherwise provided in bad faith, the manufacturer 
may be liable to civil penalties in accordance with each agencies 
authority.

Sec.  535.9  Enforcement approach.

    (a) Compliance. (1) Each year NHTSA will assess compliance with 
fuel consumption standards as specified in Sec.  535.10.
    (i) NHTSA may conduct audits or verification testing prior to first 
sale throughout a given model year or after the model year in order to 
validate data received from manufacturers and will discuss any 
potential issues with EPA and the manufacturer. Audits may periodically 
be performed to confirm manufacturers credit balances or other credit 
transactions.
    (ii) NHTSA may also conduct field inspections either at 
manufacturing plants or at new vehicle dealerships to validate data 
received from manufacturers. Field inspections will be carried out in 
order to validate the condition of vehicles, engines or technology 
prior to first commercial sale to verify each component's certified 
configuration as initially built. NHTSA reserves the right to conduct 
inspections at other locations but will target only those components 
for which a violation would apply to OEMs and not the fleets or vehicle 
owners. Compliance inspections could be carried out through a number of 
approaches including during safety inspections or during compliance 
safety testing.
    (iii) NHTSA will conduct audits and inspections in the same manner 
and, when possible, in conjunction with EPA. NHTSA will also attempt to 
coordinate inspections with EPA and share results.
    (iv) Documents collected under NHTSA safety authority may be used 
to support fuel efficiency audits and inspections.
    (2) At the end of each model year NHTSA will confirm a 
manufacturer's fleet or family performance values against the 
applicable standards and, if a manufacturer uses a credit flexibility, 
the amount of credits in each averaging set. The averaging set balance 
is based upon the engines or vehicles performance above or below the 
applicable regulatory subcategory standards in each respective 
averaging set and any credits that are traded into or out of an 
averaging set during the model year.
    (i) If the balance is positive, the manufacturer is designated as 
having a credit surplus.
    (ii) If the balance is negative, the manufacturer is designated as 
having a credit deficit.
    (iii) NHTSA will provide notification to each manufacturer 
confirming its credit balance(s) after the end of each model year 
directly or through EPA.
    (3) Manufacturer are required to confirm the negative balance and 
submit a fuel consumption credit plan as specified in Sec.  535.7(a) 
along with supporting documentation indicating how it will allocate 
existing credits or earn (providing information on future vehicles, 
engines or technologies), and/or acquire credits, or else be liable for

[[Page 40762]]

a civil penalty as determined in paragraph (b) of this section. The 
manufacturer must submit the information within 60 days of receiving 
agency notification.
    (4) Credit shortfall within an averaging set may be carried forward 
only three years, and if not offset by earned or traded credits, the 
manufacturer may be liable for a civil penalty as described in 
paragraph (b) of this section.
    (5) Credit allocation plans received from a manufacturer will be 
reviewed and approved by NHTSA. NHTSA will approve a credit allocation 
plan unless it determines that the proposed credits are unavailable or 
that it is unlikely that the plan will result in the manufacturer 
earning or acquiring sufficient credits to offset the subject credit 
shortfall. In the case where a manufacturer submits a plan to acquire 
future model year credits earned by another manufacturer, NHTSA will 
require a signed agreement by both manufacturers to initiate a review 
of the plan. If a plan is approved, NHTSA will revise the respective 
manufacturer's credit account accordingly by identifying which existing 
or traded credits are being used to address the credit shortfall, or by 
identifying the manufacturer's plan to earn future credits for 
addressing the respective credit shortfall. If a plan is rejected, 
NHTSA will notify the respective manufacturer and request a revised 
plan. The manufacturer must submit a revised plan within 14 days of 
receiving agency notification. The agency will provide a manufacturer 
one opportunity to submit a revised credit allocation plan before it 
initiates civil penalty proceedings.
    (6) For purposes of this regulation, NHTSA will treat the use of 
future credits for compliance, as through a credit allocation plan, as 
a deferral of civil penalties for non-compliance with an applicable 
fuel consumption standard.
    (7) If NHTSA receives and approves a manufacturer's credit 
allocation plan to earn future credits within the following three model 
years in order to comply with regulatory obligations, NHTSA will defer 
levying civil penalties for non-compliance until the date(s) when the 
manufacturer's approved plan indicates that credits will be earned or 
acquired to achieve compliance, and upon receiving confirmed 
CO2 emissions and fuel consumption data from EPA. If the 
manufacturer fails to acquire or earn sufficient credits by the plan 
dates, NHTSA will initiate civil penalty proceedings.
    (8) In the event that NHTSA fails to receive or is unable to 
approve a plan for a non-compliant manufacturer due to insufficiency or 
untimeliness, NHTSA may initiate civil penalty proceedings.
    (9) In the event that a manufacturer fails to report accurate fuel 
consumption data for vehicles or engines covered under this rule, 
noncompliance will be assumed until corrected by submission of the 
required data, and NHTSA may initiate civil penalty proceedings.
    (10) If EPA suspends or revoke a certificate of conformity as 
specified in 40 CFR 1036.255 or 1037.255, and a manufacturer is unable 
to take a corrective action allowed by EPA, noncompliance will be 
assumed, and NHTSA may initiate civil penalty proceedings or revoke 
fuel consumption credits.
    (b) Civil penalties--(1) Generally. NHTSA may assess a civil 
penalty for any violation of this part under 49 U.S.C. 32902(k). This 
section states the procedures for assessing civil penalties for 
violations of Sec.  535.3(h). The provisions of 5 U.S.C. 554, 556, and 
557 do not apply to any proceedings conducted pursuant to this section.
    (2) Initial determination of noncompliance. An action for civil 
penalties is commenced by the execution of a Notice of Violation. A 
determination by NHTSA's Office of Enforcement of noncompliance with 
applicable fuel consumption standards utilizing the certified and 
reported CO2 emissions and fuel consumption data provided by 
the Environmental Protection Agency as described in this part, and 
after considering all the flexibilities available under Sec.  535.7, 
underlies a Notice of Violation. If NHTSA Enforcement determines that a 
manufacturer's averaging set of vehicles or engines fails to comply 
with the applicable fuel consumption standard(s) by generating a credit 
shortfall, the incomplete vehicle, complete vehicle or engine 
manufacturer, as relevant, shall be subject to a civil penalty.
    (3) Numbers of violations and maximum civil penalties. Any 
violation shall constitute a separate violation with respect to each 
vehicle or engine within the applicable regulatory averaging set. The 
maximum civil penalty is not more than $37,500.00 per vehicle or 
engine. The maximum civil penalty under this section for a related 
series of violations shall be determined by multiplying $37,500.00 
times the vehicle or engine production volume for the model year in 
question within the regulatory averaging set. NHTSA may adjust this 
civil penalty amount to account for inflation.
    (4) Factors for determining penalty amount. In determining the 
amount of any civil penalty proposed to be assessed or assessed under 
this section, NHTSA shall take into account the gravity of the 
violation, the size of the violator's business, the violator's history 
of compliance with applicable fuel consumption standards, the actual 
fuel consumption performance related to the applicable standards, the 
estimated cost to comply with the regulation and applicable standards, 
the quantity of vehicles or engines not complying, and the effect of 
the penalty on the violator's ability to continue in business. The 
``estimated cost to comply with the regulation and applicable 
standards,'' will be used to ensure that penalties for non-compliance 
will not be less than the cost of compliance.
    (5) NHTSA enforcement report of determination of non-compliance. 
(i) If NHTSA Enforcement determines that a violation has occurred, 
NHTSA Enforcement may prepare a report and send the report to the NHTSA 
Chief Counsel.
    (ii) The NHTSA Chief Counsel will review the report prepared by 
NHTSA Enforcement to determine if there is sufficient information to 
establish a likely violation.
    (iii) If the Chief Counsel determines that a violation has likely 
occurred, the Chief Counsel may issue a Notice of Violation to the 
party.
    (iv) If the Chief Counsel issues a Notice of Violation, he or she 
will prepare a case file with recommended actions. A record of any 
prior violations by the same party shall be forwarded with the case 
file.
    (6) Notice of violation. (i) The Notice of Violation will contain 
the following information:
    (A) The name and address of the party;
    (B) The alleged violation(s) and the applicable fuel consumption 
standard(s) violated;
    (C) The amount of the proposed penalty and basis for that amount;
    (D) The place to which, and the manner in which, payment is to be 
made;
    (E) A statement that the party may decline the Notice of Violation 
and that if the Notice of Violation is declined within 30 days of the 
date shown on the Notice of Violation, the party has the right to a 
hearing, if requested within 30 days of the date shown on the Notice of 
Violation, prior to a final assessment of a penalty by a Hearing 
Officer; and
    (F) A statement that failure to either pay the proposed penalty or 
to decline the Notice of Violation and request a hearing within 30 days 
of the date shown on the Notice of Violation will result in a finding 
of violation by default

[[Page 40763]]

and that NHTSA will proceed with the civil penalty in the amount 
proposed on the Notice of Violation without processing the violation 
under the hearing procedures set forth in this subpart.
    (ii) The Notice of Violation may be delivered to the party by--
    (A) Mailing to the party (certified mail is not required);
    (B) Use of an overnight or express courier service; or
    (C) Facsimile transmission or electronic mail (with or without 
attachments) to the party or an employee of the party.
    (iii) At any time after the Notice of Violation is issued, NHTSA 
and the party may agree to reach a compromise on the payment amount.
    (iv) Once a penalty amount is paid in full, a finding of ``resolved 
with payment'' will be entered into the case file.
    (v) If the party agrees to pay the proposed penalty, but has not 
made payment within 30 days of the date shown on the Notice of 
Violation, NHTSA will enter a finding of violation by default in the 
matter and NHTSA will proceed with the civil penalty in the amount 
proposed on the Notice of Violation without processing the violation 
under the hearing procedures set forth in this subpart.
    (vi) If within 30 days of the date shown on the Notice of Violation 
a party fails to pay the proposed penalty on the Notice of Violation, 
and fails to request a hearing, then NHTSA will enter a finding of 
violation by default in the case file, and will assess the civil 
penalty in the amount set forth on the Notice of Violation without 
processing the violation under the hearing procedures set forth in this 
subpart.
    (vii) NHTSA's order assessing the civil penalty following a party's 
default is a final agency action.
    (7) Hearing Officer. (i) If a party timely requests a hearing after 
receiving a Notice of Violation, a Hearing Officer shall hear the case.
    (ii) The Hearing Officer will be appointed by the NHTSA 
Administrator, and is solely responsible for the case referred to him 
or her. The Hearing Officer shall have no other responsibility, direct 
or supervisory, for the investigation of cases referred for the 
assessment of civil penalties. The Hearing Officer shall have no duties 
related to the light-duty fuel economy or medium- and heavy-duty fuel 
efficiency programs.
    (iii) The Hearing Officer decides each case on the basis of the 
information before him or her.
    (8) Initiation of action before the Hearing Officer. (i) After the 
Hearing Officer receives the case file from the Chief Counsel, the 
Hearing Officer notifies the party in writing of-
    (A) The date, time, and location of the hearing and whether the 
hearing will be conducted telephonically or at the DOT Headquarters 
building in Washington, DC;
    (B) The right to be represented at all stages of the proceeding by 
counsel as set forth in paragraph (b)(9) of this section; and
    (C) The right to a free copy of all written evidence in the case 
file.
    (ii) On the request of a party, or at the Hearing Officer's 
direction, multiple proceedings may be consolidated if at any time it 
appears that such consolidation is necessary or desirable.
    (9) Counsel. A party has the right to be represented at all stages 
of the proceeding by counsel. A party electing to be represented by 
counsel must notify the Hearing Officer of this election in writing, 
after which point the Hearing Officer will direct all further 
communications to that counsel. A party represented by counsel bears 
all of its own attorneys' fees and costs.
    (10) Hearing location and costs. (i) Unless the party requests a 
hearing at which the party appears before the Hearing Officer in 
Washington, DC, the hearing may be held telephonically. In Washington, 
DC, the hearing is held at the headquarters of the U.S. Department of 
Transportation.
    (ii) The Hearing Officer may transfer a case to another Hearing 
Officer at a party's request or at the Hearing Officer's direction.
    (iii) A party is responsible for all fees and costs (including 
attorneys' fees and costs, and costs that may be associated with travel 
or accommodations) associated with attending a hearing.
    (11) Hearing procedures. (i) There is no right to discovery in any 
proceedings conducted pursuant to this subpart.
    (ii) The material in the case file pertinent to the issues to be 
determined by the Hearing Officer is presented by the Chief Counsel or 
his or her designee.
    (iii) The Chief Counsel may supplement the case file with 
information prior to the hearing. A copy of such information will be 
provided to the party no later than three business days before the 
hearing.
    (iv) At the close of the Chief Counsel's presentation of evidence, 
the party has the right to examine respond to and rebut material in the 
case file and other information presented by the Chief Counsel. In the 
case of witness testimony, both parties have the right of cross-
examination.
    (v) In receiving evidence, the Hearing Officer is not bound by 
strict rules of evidence. In evaluating the evidence presented, the 
Hearing Officer must give due consideration to the reliability and 
relevance of each item of evidence.
    (vi) At the close of the party's presentation of evidence, the 
Hearing Officer may allow the introduction of rebuttal evidence that 
may be presented by the Chief Counsel.
    (vii) The Hearing Officer may allow the party to respond to any 
rebuttal evidence submitted.
    (viii) After the evidence in the case has been presented, the Chief 
Counsel and the party may present arguments on the issues in the case. 
The party may also request an opportunity to submit a written statement 
for consideration by the Hearing Officer and for further review. If 
granted, the Hearing Officer shall allow a reasonable time for 
submission of the statement and shall specify the date by which it must 
be received. If the statement is not received within the time 
prescribed, or within the limits of any extension of time granted by 
the Hearing Officer, it need not be considered by the Hearing Officer.
    (ix) A verbatim transcript of the hearing will not normally be 
prepared. A party may, solely at its own expense, cause a verbatim 
transcript to be made. If a verbatim transcript is made, the party 
shall submit two copies to the Hearing Officer not later than 15 days 
after the hearing. The Hearing Officer shall include such transcript in 
the record.
    (12) Determination of violations and assessment of civil penalties. 
(i) Not later than 30 days following the close of the hearing, the 
Hearing Officer shall issue a written decision on the Notice of 
Violation, based on the hearing record. This may be extended by the 
Hearing officer if the submissions by the Chief Counsel or the party 
are voluminous. The decision shall address each alleged violation, and 
may do so collectively. For each alleged violation, the decision shall 
find a violation or no violation and provide a basis for the finding. 
The decision shall set forth the basis for the Hearing Officer's 
assessment of a civil penalty, or decision not to assess a civil 
penalty. In determining the amount of the civil penalty, the gravity of 
the violation, the size of the violator's business, the violator's 
history of compliance with applicable fuel consumption standards, the 
actual fuel consumption performance related to the applicable standard, 
the estimated cost to comply with the regulation and applicable 
standard, the quantity of vehicles or engines not complying, and

[[Page 40764]]

the effect of the penalty on the violator's ability to continue in 
business. The assessment of a civil penalty by the Hearing Officer 
shall be set forth in an accompanying final order. The Hearing 
Officer's written final order is a final agency action.
    (ii) If the Hearing Officer assesses civil penalties in excess of 
$1,000,000, the Hearing Officer's decision shall contain a statement 
advising the party of the right to an administrative appeal to the 
Administrator within a specified period of time. The party is advised 
that failure to submit an appeal within the prescribed time will bar 
its consideration and that failure to appeal on the basis of a 
particular issue will constitute a waiver of that issue in its appeal 
before the Administrator.
    (iii) The filing of a timely and complete appeal to the 
Administrator of a Hearing Officer's order assessing a civil penalty 
shall suspend the operation of the Hearing Officer's penalty, which 
shall no longer be a final agency action.
    (iv) There shall be no administrative appeals of civil penalties 
assessed by a Hearing Officer of less than $1,000,000.
    (13) Appeals of civil penalties in excess of $1,000,000. (i) A 
party may appeal the Hearing Officer's order assessing civil penalties 
over $1,000,000 to the Administrator within 21 days of the date of the 
issuance of the Hearing Officer's order.
    (ii) The Administrator will review the decision of the Hearing 
Officer de novo, and may affirm the decision of the hearing officer and 
assess a civil penalty, or
    (iii) The Administrator may--
    (A) Modify a civil penalty;
    (B) Rescind the Notice of Violation; or
    (C) Remand the case back to the Hearing Officer for new or 
additional proceedings.
    (iv) In the absence of a remand, the decision of the Administrator 
in an appeal is a final agency action.
    (14) Collection of assessed or compromised civil penalties. (i) 
Payment of a civil penalty, whether assessed or compromised, shall be 
made by check, postal money order, or electronic transfer of funds, as 
provided in instructions by the agency. A payment of civil penalties 
shall not be considered a request for a hearing.
    (ii) The party must remit payment of any assessed civil penalty to 
NHTSA within 30 days after receipt of the Hearing Officer's order 
assessing civil penalties, or, in the case of an appeal to the 
Administrator, within 30 days after receipt of the Administrator's 
decision on the appeal.
    (iii) The party must remit payment of any compromised civil penalty 
to NHTSA on the date and under such terms and conditions as agreed to 
by the party and NHTSA. Failure to pay may result in NHTSA entering a 
finding of violation by default and assessing a civil penalty in the 
amount proposed in the Notice of Violation without processing the 
violation under the hearing procedures set forth in this part.
    (c) Changes in corporate ownership and control. Manufacturers must 
inform NHTSA of corporate relationship changes to ensure that credit 
accounts are identified correctly and credits are assigned and 
allocated properly.
    (1) In general, if two manufacturers merge in any way, they must 
inform NHTSA how they plan to merge their credit accounts. NHTSA will 
subsequently assess corporate fuel consumption and compliance status of 
the merged fleet instead of the original separate fleets.
    (2) If a manufacturer divides or divests itself of a portion of its 
automobile manufacturing business, it must inform NHTSA how it plans to 
divide the manufacturer's credit holdings into two or more accounts. 
NHTSA will subsequently distribute holdings as directed by the 
manufacturer, subject to provision for reasonably anticipated 
compliance obligations.
    (3) If a manufacturer is a successor to another manufacturer's 
business, it must inform NHTSA how it plans to allocate credits and 
resolve liabilities per 49 CFR part 534.

Sec.  535.10  How do manufacturers comply with fuel consumption 
standards?

    (a) Pre-certification process. (1) Regulated manufacturers 
determine eligibility to use exemptions or exclusions in accordance 
with Sec.  535.3.
    (2) Manufacturers may seek preliminary approvals as specified in 40 
CFR 1036.210 and 40 CFR 1037.210. Manufacturers may request to schedule 
pre-certification meetings with EPA and NHTSA prior to submitting 
approval requests for certificates of conformity to address any joint 
compliance issues and gain informal feedback from the agencies.
    (3) The requirements and prohibitions required by EPA in special 
circumstances in accordance with 40 CFR 1037.601 and 40 CFR part 1068 
apply to manufacturers for the purpose of complying with fuel 
consumption standards. Manufacturers should use good judgment when 
determining how EPA requirements apply in complying with the NHTSA 
program. Manufacturers may contact NHTSA and EPA for clarification 
about how these requirements apply to them.
    (4) In circumstances in which EPA provides multiple compliance 
approaches manufacturers must choose the same compliance path to comply 
with NHTSA's fuel consumption standards that they choose to comply with 
EPA's greenhouse gas emission standards.
    (5) Manufacturers may not introduce new vehicles into commerce 
without a certificate of conformity from EPA. Manufacturers must attest 
to several compliance standards in order to obtain a certificate of 
conformity. This includes stating comparable fuel consumption results 
for all required CO2 emissions rates. Manufacturers not 
completing these steps do not comply with the NHTSA fuel consumption 
standards.
    (6) Manufacturers apply the fuel consumption standards specified in 
Sec.  535.5 to vehicles, engines and components that represent 
production units and components for vehicle and engine families, sub-
families and configurations consistent with the EPA specifications in 
40 CFR 86.1819, 1036.230, and 1037.230.
    (7) Only certain vehicles and engines are allowed to comply 
differently between the NHTSA and EPA programs as detailed in this 
section. These vehicles and engines must be identified by manufacturers 
in the ABT and production reports required in Sec.  535.8.
    (b) Model year compliance. Manufacturers are required to conduct 
testing to demonstrate compliance with CO2 exhaust emissions 
standards in accordance with EPA's provisions in 40 CFR part 600, 
subpart B, 40 CFR 1036, subpart F, 40 CFR part 1037, subpart R, and 40 
CFR part 1066. Manufacturers determine equivalent fuel consumption 
performance values for CO2 results as specified in Sec.  
535.6 and demonstrate compliance by comparing equivalent results to the 
applicable fuel consumption standards in Sec.  535.5.
    (c) End-of-the-year process. Manufacturers comply with fuel 
consumption standards after the end of each model year, if--
    (1) For heavy-duty pickup trucks and vans, the manufacturer's fleet 
average performance, as determined in Sec.  535.6, is less than the 
fleet average standard; or
    (2) For truck tractors, vocational vehicles, engines and box 
trailers the manufacturer's fuel consumption performance for each 
vehicle or engine family (or sub-family), as determined in Sec.  535.6, 
is lower than the applicable regulatory subcategory standards in Sec.  
535.5.

[[Page 40765]]

    (3) For non-box and non-aero trailers, a manufacturer is considered 
in compliance with fuel consumption standards if all trailers meet the 
specified standards in Sec.  535.5(e)(1)(i).
    (4) NHTSA will use the EPA final verified values as specified in 40 
CFR 86.1819, 40 CFR 1036.755 and 1037.755 for making final 
determinations on whether vehicles and engines comply with fuel 
consumption standards.
    (5) A manufacturer fails to comply with fuel consumption standards 
if its final reports are not provided in accordance with Sec.  535.7 
and 40 CFR 86.1865, 1036.730, and 1037.730. Manufacturers not providing 
complete or accurate final reports by the required deadlines do not 
comply with fuel consumption standards. A manufacturer that is unable 
to provide any emissions results along with comparable fuel consumption 
values must obtain permission for EPA to exclude the results prior to 
the deadline for submitting final reports.
    (6) A manufacturer that would otherwise fail to directly comply 
with fuel consumption standards as described in paragraphs (c)(1) 
through (3) of this section may use one or more of the credit 
flexibilities provided under the NHTSA averaging, banking and trading 
program, as specified in Sec.  535.7, but must offset all credit 
deficits in its averaging sets to achieve compliance.
    (7) A manufacturer failing to comply with the provisions specified 
in this part may be liable to pay civil penalties in accordance with 
Sec.  535.9.
    (8) A manufacturer may also be liable to pay civil penalties if 
found by EPA or NHTSA to have provided false information as identified 
through NHTSA or EPA enforcement audits or new vehicle verification 
testing as specified in Sec.  535.9 and 40 CFR parts 86, 1036, and 
1037.

PART 537--AUTOMOTIVE FUEL ECONOMY REPORTS

0
290. Revise the authority citation for part 537 to read as follows:

    Authority:  49 U.S.C. 32907; delegation of authority at 49 CFR 
1.95.
0
291. Revise Sec.  537.5 to read as follows:

Sec.  537.5  General requirements for reports.

    (a) For each current model year, each manufacturer shall submit a 
pre-model year report, a mid-model year report, and, as required by 
Sec.  537.8, supplementary reports.
    (b)(1) The pre-model year report required by this part for each 
current model year must be submitted during the month of December 
(e.g., the pre-model year report for the 1983 model year must be 
submitted during December, 1982).
    (2) The mid-model year report required by this part for each 
current model year must be submitted during the month of July (e.g., 
the mid-model year report for the 1983 model year must be submitted 
during July 1983).
    (3) Each supplementary report must be submitted in accordance with 
Sec.  537.8(c).
    (c) Each report required by this part must-
    (1) Identify the report as a pre-model year report, mid-model year 
report, or supplementary report as appropriate;
    (2) Identify the manufacturer submitting the report;
    (3) State the full name, title, and address of the official 
responsible for preparing the report;
    (4) Be submitted through an electronic portal identified by NHTSA 
(i.e. the Environmental Protection Agency VERYIFY database) or through 
the NHTSA CAFE database.
    (5) Identify the current model year;
    (6) Be written in the English language; and
    (7)(i) Specify any part of the information or data in the report 
that the manufacturer believes should be withheld from public 
disclosure as trade secret or other confidential business information.
    (ii) With respect to each item of information or data requested by 
the manufacturer to be withheld under 5 U.S.C. 552(b)(4) and 15 U.S.C. 
2005(d)(1), the manufacturer shall-
    (A) Show that the item is within the scope of sections 552(b)(4) 
and 2005(d)(1);
    (B) Show that disclosure of the item would result in significant 
competitive damage;
    (C) Specify the period during which the item must be withheld to 
avoid that damage; and
    (D) Show that earlier disclosure would result in that damage.
    (d) Each report required by this part must be based upon all 
information and data available to the manufacturer 30 days before the 
report is submitted to the Administrator.

PART 538--MANUFACTURING INCENTIVES FOR ALTERNATIVE FUEL VEHICLES

0
292. Revise the authority citation for part 538 to read as follows:

    Authority:  49 U.S.C. 32901, 32905, and 32906; delegation of 
authority at 49 CFR 1.95.
0
293. Revise Sec.  538.5 to read as follows:

Sec.  538.5  Minimum driving range.

    (a) The minimum driving range that a passenger automobile must have 
in order to be treated as a dual fueled automobile pursuant to 49 
U.S.C. 32901(c) is 200 miles when operating on its nominal useable fuel 
tank capacity of the alternative fuel, except when the alternative fuel 
is electricity or compressed natural gas. Beginning model year 2016, a 
natural gas passenger automobile must have a minimum driving range of 
150 miles when operating on its nominal useable fuel tank capacity of 
the alternative fuel to be treated as a dual fueled automobile, 
pursuant to 49 U.S.C. 32901(c)(2).
    (b) The minimum driving range that a passenger automobile using 
electricity as an alternative fuel must have in order to be treated as 
a dual fueled automobile pursuant to 49 U.S.C. 32901(c) is 7.5 miles on 
its nominal storage capacity of electricity when operated on the EPA 
urban test cycle and 10.2 miles on its nominal storage capacity of 
electricity when operated on the EPA highway test cycle.

    Dated: June 19, 2015.
Anthony R. Foxx,
Secretary, Department of Transportation
    Dated: June 19, 2015.
Gina McCarthy,
Administrator, Environmental Protection Agency.
[FR Doc. 2015-15500 Filed 7-10-15; 8:45 am]
 BILLING CODE 6560-50-P