Next Generation Fuels Act of 2021
Bill: H.R.5089 | Sponsor: Rep. Bustos, Cheri (D-IL)
Policy area: Energy

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

To promote low-carbon, high-octane fuels, to protect public health, and 
 to improve vehicle efficiency and performance, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Next Generation Fuels Act of 2021''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) continued increases in new automobile efficiency are 
        needed to improve consumer welfare and reduce carbon emissions;
            (2) the widespread availability of low-carbon, high-octane 
        fuel will allow continued cost-effective improvements in 
        automobile efficiency by enabling increased engine compression 
        ratios;
            (3) high-octane automobiles and low-carbon fuels are 
        readily available to consumers at little incremental cost;
            (4) ethanol is a cost-effective and low-carbon octane 
        enhancer;
            (5) the widespread adoption of climate-smart practices and 
        precision technologies by United States corn producers over the 
        past decade have further reduced the carbon intensity of 
        conventional ethanol;
            (6) on average, ethanol has been estimated to have 
        lifecycle greenhouse gas emissions that are 46 percent lower 
        than average gasoline, with some corn ethanol achieving a 61-
        percent reduction compared to gasoline; and
            (7) ethanol has one of the highest blending octane values 
        available in the marketplace.

SEC. 3. HIGH-OCTANE VEHICLES.

    Title II of the Clean Air Act (42 U.S.C. 7521 et seq.) is amended 
by adding at the end the following:

                     ``PART D--HIGH-OCTANE VEHICLES

``SEC. 261. DEFINITIONS; APPLICABILITY.

    ``(a) Definitions.--In this part:
            ``(1) Automobile.--The term `automobile' has the meaning 
        given to such term in section 32901(a)(3) of title 49, United 
        States Code.
            ``(2) Research octane number.--The term `research octane 
        number' has the meaning given to such term in section 201 of 
        the Petroleum Marketing Practices Act.
            ``(3) Manufacturer.--The term `manufacturer' has the 
        meaning given that term in section 216.
    ``(b) Applicability.--This part applies with respect to any motor 
vehicle that is introduced into commerce that--
            ``(1) is an automobile;
            ``(2) uses gasoline for propulsion or any other operation 
        of the motor vehicle, including the engine thereof; and
            ``(3) is a model year 2026 or later motor vehicle.

``SEC. 262. HIGH-OCTANE TEST FUELS.

    ``(a) E20 Certification Fuel.--Except as provided in subsections 
(b) and (c), manufacturers producing motor vehicles described in 
section 261(b) shall use a test fuel consisting of gasoline and 19.4 to 
20 volume percent ethanol with a minimum 95 research octane number in--
            ``(1) emissions testing and certification under section 
        206(a) of this Act; and
            ``(2) fuel economy testing and calculation procedures under 
        section 32904(c) of title 49, United States Code.
    ``(b) E25 to E30 Certification Fuel.--As an alternative to the test 
fuel described in subsection (a), manufacturers producing motor 
vehicles described in section 261(b) may use a test fuel consisting of 
gasoline and 24.3 to 30 volume percent ethanol with a minimum 98 
research octane number in--
            ``(1) emissions testing and certification under section 
        206(a) of this Act; and
            ``(2) fuel economy testing and calculation procedures under 
        section 32904(c) of title 49, United States Code.
    ``(c) Model Year 2031 and Later Model Years.--Notwithstanding 
subsections (a) and (b), beginning in model year 2031, manufacturers of 
motor vehicles described in section 261(b) shall use the gasoline test 
fuel described in subsection (b) in--
            ``(1) emissions testing and certification under section 
        206(a) of this Act; and
            ``(2) fuel economy testing and calculation procedures under 
        section 32904(c) of title 49, United States Code.
    ``(d) Formulation.--The test fuels described in subsections (a) and 
(b) shall be produced by adding neat or denatured fuel ethanol to the 
gasoline criteria emissions test fuel required for use in model year 
2020 and later motor vehicles.
    ``(e) Test Fuel Equations.--For purposes of--
            ``(1) testing and calculation procedures under section 
        206(a) of this Act, the emissions of motor vehicles using the 
        test fuels described in subsection (a) or (b) shall be based 
        exclusively on actual measured emissions; and
            ``(2) fuel economy testing and calculation procedures under 
        section 32904(c) of title 49, United States Code, the fuel 
        economy of motor vehicles using the test fuels described in 
        subsection (a) or (b) shall be determined on an energy-
        equivalent basis, calculated by multiplying measured fuel 
        economy by the ratio of--
                    ``(A) 114,086 British thermal units per gallon; 
                divided by
                    ``(B) the volumetric energy density of the test 
                fuel.

``SEC. 263. HIGH-OCTANE VEHICLES.

    ``(a) Warranty Requirements.--Manufacturers of motor vehicles 
described in section 261(b) shall warrant to the ultimate purchaser and 
each subsequent purchaser that each such motor vehicle is designed--
            ``(1) for model years 2026 through 2030--
                    ``(A) to operate with gasoline containing 10 and up 
                to and including 25 percent ethanol by volume; and
                    ``(B) to meet the design requirements under 
                subsection (b)(1); and
            ``(2) for model year 2031 and later model years--
                    ``(A) to operate with gasoline containing 10 and up 
                to and including 30 percent ethanol by volume; and
                    ``(B) to meet the design requirements under 
                subsections (b) and (c).
    ``(b) Design Requirements Before Model Year 2031.--
            ``(1) Manufacturers.--The manufacturer of a motor vehicle 
        described in section 261(b) shall design each such motor 
        vehicle--
                    ``(A) to use gasoline with a 95 research octane 
                number or higher; and
                    ``(B) to incorporate such devices or elements of 
                design (including physical or other barriers, devices, 
                or technological systems) as are determined by the 
                Administrator to be--
                            ``(i) necessary to prevent the introduction 
                        of gasoline with a research octane number that 
                        is lower than 95 into such motor vehicle; and
                            ``(ii) technically and economically 
                        feasible.
            ``(2) Fuel retailers.--Any fuel retailer selling gasoline 
        for use in a motor vehicle described in section 261(b) shall 
        incorporate into the retailer's dispensing equipment such 
        devices or elements of design, including physical or other 
        barriers, devices, or technological systems, as are determined 
        by the Administrator to be--
                    ``(A) necessary to ensure compatibility with the 
                motor vehicle design requirements under paragraph (1); 
                and
                    ``(B) technically and economically feasible.
    ``(c) Design Requirements for Model Year 2031.--
            ``(1) Manufacturers.--Beginning in model year 2031, the 
        manufacturer of a motor vehicle described in section 261(b) 
        shall design each such motor vehicle--
                    ``(A) to use gasoline with a 98 research octane 
                number or higher; and
                    ``(B) to incorporate such devices or elements of 
                design (including physical or other barriers, devices, 
                or technological systems) as are determined by the 
                Administrator to be--
                            ``(i) necessary to prevent the introduction 
                        of gasoline with a research octane number that 
                        is lower than 98 into such motor vehicle; and
                            ``(ii) technically and economically 
                        feasible.
            ``(2) Fuel retailer.--Any fuel retailer selling gasoline 
        for use in a model year 2031 and later motor vehicle described 
        in section 261(b) shall incorporate into the retailer's 
        dispensing equipment such devices or elements of design 
        (including physical or other barriers, devices, or 
        technological systems) as are determined by the Administrator 
        to be--
                    ``(A) necessary to ensure compatibility with the 
                motor vehicle design requirements under paragraph (1); 
                and
                    ``(B) technically and economically feasible.
            ``(3) EPA determination of nationwide availability.--The 
        requirements of this subsection shall not take effect unless 
        the Administrator determines that 98 research octane number 
        gasoline can be made readily available nationwide and publishes 
        notice of the determination in the Federal Register. Not later 
        than December 31, 2029, the Administrator shall make a 
        determination of whether 98 research octane number gasoline can 
        be made readily available nationwide. If the Administrator 
        fails to make such determination by the date specified in the 
        preceding sentence, the Administrator is deemed to have 
        determined that 98 research octane number gasoline can be made 
        readily available nationwide. If the Administrator determines 
        that 98 research octane number gasoline cannot be made readily 
        available nationwide, the Administrator shall revisit such 
        determination in the subsequent calendar year and shall 
        continue to revisit such determination annually unless and 
        until the Administrator determines that 98 research octane 
        number gasoline can be made readily available nationwide. If 
        the Administrator does not revisit such determination for any 
        calendar year as required by the preceding sentence, the 
        Administrator is deemed to have determined that 98 research 
        octane number gasoline can be made readily available 
        nationwide.
    ``(d) Violations.--
            ``(1) Manufacturers.--Any manufacturer who violates 
        subsection (b)(1) or (c)(1) shall be subject to a civil penalty 
        of not more than $5,000 for each offense. Any such violation 
        shall constitute a separate offense with respect to each motor 
        vehicle or fuel dispenser.
            ``(2) Fuel retailer.--Any fuel retailer who violates 
        subsection (b)(2) or (c)(2) shall be subject to a civil penalty 
        of not more than $2,500 for each offense. Any such violation 
        with respect to each dispensing equipment unit shall constitute 
        a separate offense.

``SEC. 264. MISFUELING.

    ``(a) Prohibitions Against Tampering and Defeat Devices for Motor 
Vehicles.--In lieu of applying section 203(a)(3) with respect to the 
requirements of this part, the following shall apply:
            ``(1) No person shall--
                    ``(A) remove or render inoperative any device or 
                element of design installed on or in a motor vehicle 
                pursuant to subsection (b)(1) or (c)(1) of section 263 
                prior to its sale and delivery to the ultimate 
                purchaser; or
                    ``(B) knowingly remove or render inoperative any 
                such device or element of design after such sale and 
                delivery to the ultimate purchaser.
            ``(2) No person shall manufacture or sell, or offer to 
        sell, or install, any part or component intended for use with, 
        or as part of, any motor vehicle, where--
                    ``(A) a principal effect of the part or component 
                is to bypass, defeat, or render inoperative any device 
                or element of design installed on or in a motor vehicle 
                pursuant to subsection (b)(1) or (c)(1) of section 263; 
                and
                    ``(B) the person knows or should know that such 
                part or component is being offered for sale or 
                installed for such use or put to such use.
    ``(b) Prohibitions Against Tampering and Defeat Devices for 
Dispensing Equipment.--No person shall--
            ``(1) remove or render inoperative any device or element of 
        design installed pursuant to subsection (b)(2) or (c)(2) of 
        section 263; or
            ``(2) sell, or offer to sell, or incorporate into, any part 
        or component intended for use with, or as part of, any 
        dispensing equipment, where--
                    ``(A) a principal effect of the part or component 
                is to bypass, defeat, or render inoperative any device 
                or element of design incorporated into dispensing 
                equipment pursuant to subsection (b)(2) or (c)(2) of 
                section 263; and
                    ``(B) the person knows or should know that such 
                part or component is being offered for sale or 
                incorporated for such use or put to such use.
    ``(c) Violations.--Any person who violates this section shall be 
subject to a civil penalty of not more than $2,500. Any such violation 
shall constitute a separate offense with respect to--
            ``(1) each motor vehicle or dispensing equipment, for 
        purposes of subsections (a)(1) and (b)(1); and
            ``(2) each part or component, for purposes of subsections 
        (a)(2) and (b)(2).

``SEC. 265. OCTANE STANDARD.

    ``(a) Octane Standard.--
            ``(1) Prohibition.--
                    ``(A) 95 research octane number marketing.--No 
                person shall sell motor vehicle gasoline marketed as 95 
                research octane number unless such gasoline has a 
                research octane number of 95 or greater.
                    ``(B) 98 research octane number marketing.--No 
                person shall sell motor vehicle gasoline marketed as 98 
                research octane number unless such gasoline has a 
                research octane number of 98 or greater.
                    ``(C) Deemed compliance.--A person, including any 
                distributor, blender, marketer, reseller, carrier, 
                retailer, or wholesaler shall be deemed to be in full 
                compliance with this paragraph if it can demonstrate, 
                through evidence deemed acceptable by the 
                Administrator, that such person had reason to believe 
                in good faith that the motor vehicle gasoline complied 
                with subparagraph (A) or (B).
            ``(2) Controls.--
                    ``(A) 95 research octane number availability.--
                Effective January 1, 2025, any person that owns, 
                leases, operates, controls, or supervises--
                            ``(i) a retail outlet at which 200,000 or 
                        more gallons of gasoline were sold during 
                        calendar year 2022 or any subsequent calendar 
                        year, shall offer for sale motor vehicle 
                        gasoline of not less than 95 research octane 
                        number at such outlet; or
                            ``(ii) six or more retail outlets offering 
                        motor vehicle gasoline for sale, shall offer 
                        for sale motor vehicle gasoline of not less 
                        than 95 research octane number at not fewer 
                        than 60 percent of such retail outlets.
                    ``(B) 98 research octane number availability.--
                Effective January 1, 2030, any person that owns, 
                leases, operates, controls, or supervises--
                            ``(i) a retail outlet at which 200,000 or 
                        more gallons of gasoline were sold during 
                        calendar year 2028 or any subsequent calendar 
                        year, shall offer for sale motor vehicle 
                        gasoline of not less than 98 research octane 
                        number at such outlet; or
                            ``(ii) six or more retail outlets offering 
                        motor vehicle fuel for sale, shall offer for 
                        sale motor vehicle gasoline of not less than 98 
                        research octane number at no fewer than 60 
                        percent of such retail outlets.
    ``(b) Violations.--Any person that violates--
            ``(1) subsection (a)(1), (a)(2)(A)(i), or (a)(2)(B)(i) 
        shall be subject to a civil penalty of not more than $25,000 
        for each day on which such violation continues; and
            ``(2) subsection (a)(2)(A)(ii) or (a)(2)(B)(ii) shall be 
        subject to a civil penalty of not more than $2,500 per day for 
        each retail outlet owned, leased, operated, controlled, or 
        supervised by such person.

``SEC. 266. REGULATIONS.

    ``(a) Regulations.--The Administrator shall--
            ``(1) not later than 12 months after the date of enactment 
        of the Next Generation Fuels Act of 2021, propose regulations 
        to carry out this part; and
            ``(2) not later than 24 months after such date of 
        enactment, finalize regulations to carry out this part.

``SEC. 267. LIABILITY LIMITATION AND PREEMPTION.

    ``(a) Limitation of Liability.--A manufacturer of a motor vehicle, 
or a gasoline retailer, that is in compliance with the requirements of 
this part and the requirements of sections 203(e) and 206 of the 
Petroleum Marketing Practices Act, shall not be liable under any 
provision of this Act or any other Federal, State, or local law, 
including common law, for damages--
            ``(1) to or caused by a motor vehicle described in section 
        261(b); and
            ``(2) that would not have occurred but for the introduction 
        of gasoline with a research octane number required by this 
        part.
    ``(b) Preemption.--No State or any political subdivision of a State 
may adopt, continue in effect, or enforce, any provision of law or 
regulation--
            ``(1) requiring motor vehicles to operate using gasoline 
        with a certain octane content, or the corresponding design of 
        equipment for dispensing such gasoline into such motor 
        vehicles, unless such provision of such law or regulation is 
        the same as the corresponding provision under this part; or
            ``(2) limiting the concentration of ethanol in motor 
        vehicle gasoline.

``SEC. 268. CIVIL ACTIONS; ADMINISTRATIVE ASSESSMENT OF CERTAIN 
              PENALTIES.

    ``The provisions of subsections (b) and (c) of section 205 shall 
apply with respect to a violation of section 263 or 264 to the same 
extent and in the same manner as such provisions apply with respect to 
a violation of section 203(a)(3).''.

SEC. 4. OCTANE DISCLOSURE.

    (a) High-Efficiency Fuels.--Title II of the Petroleum Marketing 
Practices Act (15 U.S.C. 2821 et seq.) is amended by adding at the end 
the following:

``SEC. 206. HIGH-EFFICIENCY FUEL AND VEHICLE MARKETING REQUIREMENTS.

    ``(a) Rule.--The Federal Trade Commission shall, by rule, and in 
consultation with persons to be regulated under this section, consumer 
advocates, and other stakeholders, as appropriate--
            ``(1) prescribe or revise requirements under this title 
        relating to the certification, display, and representation of 
        the automotive fuel rating of an automotive fuel as necessary 
        to carry out--
                    ``(A) the requirement under subsection (b); and
                    ``(B) any determination made under subsection (c);
            ``(2) make the determination required under subsection (c); 
        and
            ``(3) prescribe requirements under subsection (d).
    ``(b) Requirement.--The Federal Trade Commission shall require 
that, for purposes of this title, beginning on the date that is 180 
days after the date on which the Federal Trade Commission issues a 
final rule under subsection (a), the automotive fuel rating of an 
automotive fuel with a research octane number of 95 or higher be 
determined only by the research octane number of such automotive fuel.
    ``(c) Labeling.--
            ``(1) In general.--The Federal Trade Commission shall 
        prescribe requirements--
                    ``(A) as the Federal Trade Commission determines 
                necessary with respect to a display at the point of 
                sale to ultimate purchasers of automotive fuel and a 
                display on a motor vehicle to--
                            ``(i) inform such ultimate purchaser of 
                        such automotive fuel and any purchaser or user 
                        of such motor vehicle that--
                                    ``(I) a model year 2026 or later 
                                motor vehicle is only warrantied to use 
                                automotive fuel with a research octane 
                                number of 95 or higher; and
                                    ``(II) a model year 2031 or later 
                                motor vehicle is only warrantied to use 
                                automotive fuel with a research octane 
                                number of 98 or higher;
                            ``(ii) provide a warning to such ultimate 
                        purchaser of such automotive fuel and any such 
                        purchaser or user of such motor vehicle, that 
                        the use of automotive fuel with a research 
                        octane number that--
                                    ``(I) is lower than 95 in a model 
                                year 2026 or later motor vehicle will 
                                result in reduced fuel economy, 
                                increased exhaust emissions, and 
                                possibly engine damage; and
                                    ``(II) is lower than 98 in a model 
                                year 2031 or later motor vehicle will 
                                result in reduced fuel economy, 
                                increased exhaust emissions, and 
                                possibly engine damage; and
                            ``(iii) inform such ultimate purchaser of 
                        such automotive fuel and any purchaser or user 
                        of such motor vehicle that--
                                    ``(I) a model year 2026 or later 
                                motor vehicle is warrantied to use 
                                gasoline containing up to and including 
                                25 percent ethanol by volume; and
                                    ``(II) a model year 2031 or later 
                                motor vehicle is warrantied to use 
                                gasoline containing up to and including 
                                30 percent ethanol by volume; and
                    ``(B) that are applicable to--
                            ``(i) a manufacturer of a new motor vehicle 
                        (or an entity making a representation in 
                        connection with the sale of such motor vehicle) 
                        with respect to a display on such motor 
                        vehicle; and
                            ``(ii) an automotive fuel retailer, with 
                        respect to a display at the point of sale to an 
                        ultimate purchaser of automotive fuel.
            ``(2) Considerations.--In prescribing requirements under 
        paragraph (1), the Federal Trade Commission shall ensure that 
        such requirements are designed to be--
                    ``(A) understandable to--
                            ``(i) the ultimate purchaser of automotive 
                        fuel; and
                            ``(ii) any purchaser or user of a model 
                        year 2026 or later motor vehicle; and
                    ``(B) cost effective for automotive fuel retailers.
    ``(d) Deadlines.--The Federal Trade Commission shall--
            ``(1) not later than January 1, 2024, issue a proposed rule 
        under subsection (a); and
            ``(2) not later than July 1, 2025, issue a final rule under 
        subsection (a).''.
    (b) Enforcement.--Section 203(e) of the Petroleum Marketing 
Practices Act (15 U.S.C. 2823(e)) is amended--
            (1) by striking ``or a rule prescribed'' and inserting ``a 
        rule prescribed''; and
            (2) by striking ``of such section.'' and inserting ``of 
        section 202, or a rule prescribed under section 206.''.
    (c) Table of Contents Amendment.--The table of contents for the 
Petroleum Marketing Practices Act (15 U.S.C. 2801 et seq.) is amended 
by inserting after the item relating to section 205 the following:

``Sec. 206. High-efficiency fuel and vehicle marketing requirements.''.

SEC. 5. ADVERTISEMENT OF PRICE OF HIGH-OCTANE AUTOMOTIVE FUEL.

    (a) In General.--It shall be unlawful for any person to sell or 
offer for sale, at retail, automotive fuel with a research octane 
number (as such terms are defined in section 201 of the Petroleum 
Marketing Practices Act (15 U.S.C. 2821)) of 95 or greater unless such 
person displays, in a manner specified in the rules promulgated under 
subsection (b), the total price per gallon of such fuel on any sign on 
which such person displays the price of the most-sold grade of 
automotive fuel of such person.
    (b) Rulemaking.--
            (1) In general.--Not later than 24 months after the date of 
        enactment of this Act, the Federal Trade Commission shall 
        promulgate, in accordance with section 553 of title 5, United 
        States Code, any rules necessary for the implementation and 
        enforcement of this section.
            (2) Contents.--Such rules--
                    (A) shall define ``retail'' and ``most-sold'' for 
                the purposes of this section;
                    (B) shall specify the manner in which the price of 
                automotive fuel with a research octane number of 95 or 
                greater must be displayed in order to comply with 
                subsection (a); and
                    (C) shall be consistent with the requirements for 
                declaring unfair acts or practices in section 5(n) of 
                the Federal Trade Commission Act (15 U.S.C. 45(n)).
    (c) Enforcement.--A violation of subsection (a) shall be treated as 
a violation of a rule defining an unfair or deceptive act or practice 
prescribed under section 18(a)(1)(B) of the Federal Trade Commission 
Act (15 U.S.C. 57a(a)(1)(B)). The Federal Trade Commission shall 
enforce this section in the same manner, by the same means, and with 
the same jurisdiction, powers, and duties as though all applicable 
terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 
et seq.) were incorporated into and made part of this section.

SEC. 6. E40 RETAIL INFRASTRUCTURE STANDARD.

    Section 9003 of the Solid Waste Disposal Act (42 U.S.C. 6991b) is 
amended by adding at the end the following:
    ``(k) E40-Compatible Retail Infrastructure Systems.--
            ``(1) In general.--The Administrator shall, not later than 
        January 1, 2024, issue or revise, as necessary, performance 
        standards for underground storage tank systems and dispenser 
        systems that are brought into use on or after January 1, 2024, 
        to require that such systems be compatible with automotive fuel 
        consisting of gasoline and at least 40 percent ethanol by 
        volume.
            ``(2) Compatibility.--Owner and operators may demonstrate 
        the compatibility of an underground storage tank system with 
        automotive fuel containing any concentration of ethanol through 
        the use of a secondary containment system that is able to--
                    ``(A) contain regulated substances leaked from the 
                primary containment system until they are detected and 
                removed; and
                    ``(B) prevent the release of regulated substances 
                to the environment at any time during the operational 
                life of the underground storage tank system.
            ``(3) Definitions.--In this subsection:
                    ``(A) Automotive fuel.--The term `automotive fuel' 
                has the meaning given such term in section 201(6) of 
                the Petroleum Marketing Practices Act (15 U.S.C. 
                2821(6)).
                    ``(B) Compatible.--The term `compatible' means, to 
                the extent feasible, certified by a nationally 
                recognized testing laboratory recognized by the 
                Occupational Safety and Health Administration in 
                accordance with section 1910.7 of title 29, Code of 
                Federal Regulations (or any successor regulations) to 
                maintain system performance throughout the operational 
                life of the dispenser system.
                    ``(C) Dispenser system.--The term `dispenser 
                system' has the meaning given such term in section 
                280.12 of title 40, Code of Federal Regulations (as in 
                effect on the date of enactment of this subsection).''.

SEC. 7. REGISTRATION TESTING, REID VAPOR PRESSURE, AND SUBSTANTIALLY 
              SIMILAR WAIVERS.

    (a) Registration Testing Waiver.--Section 211(e) of the Clean Air 
Act (42 U.S.C. 7545(e)) is amended by adding at the end the following:
    ``(4) Fuels consisting of gasoline and no more than 30 percent 
ethanol by volume that meet the requirements of subsection (f)(3) shall 
be deemed to have satisfied any testing regulations promulgated under 
this subsection and to be immediately eligible for registration under 
subsection (b) without further testing.''.
    (b) Reid Vapor Pressure Waiver.--Section 211(h) of the Clean Air 
Act (42 U.S.C. 7545(h)) is amended--
            (1) in paragraph (4)--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``or more'' after ``10 percent''; and
                    (B) in subparagraph (C), by striking ``additional 
                alcohol or''; and
            (2) in paragraph (5)(A), by inserting ``or more'' after 
        ``10 percent''.
    (c) Substantially Similar Waiver.--Section 211(f) of the Clean Air 
Act (42 U.S.C. 7545(f)) is amended--
            (1) in paragraph (1)--
                    (A) by striking subparagraph (A); and
                    (B) in subparagraph (B), by striking ``(B)'';
            (2) by amending paragraph (3) to read as follows:
    ``(3) Fuels consisting of gasoline and ethanol may be introduced 
into commerce under this subsection for use in motor vehicles described 
in section 261(b), provided that the finished fuel--
            ``(A) does not exceed the warranted ethanol levels 
        described in section 263(a);
            ``(B) meets the physical and chemical criteria specified by 
        ASTM International Standard D4814-20 for gasoline with 15 
        percent ethanol; and
            ``(C) consists solely of carbon, hydrogen, oxygen, and 
        sulfur, excepting any impurities present at trace levels that 
        are gaseous upon combustion.''; and
            (3) in paragraph (4), by striking ``or (3)''.

SEC. 8. CLEAN OCTANE STANDARD.

    Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by--
            (1) in subsection (d)--
                    (A) in paragraph (1), by striking ``or (o)'' each 
                place it appears and inserting ``(o), or (w)''; and
                    (B) in paragraph (2), by striking ``and (o)'' each 
                place it appears and inserting ``(o), and (w)''; and
            (2) by adding at the end the following:
    ``(w) Clean Octane Standard.--
            ``(1) Aromatics.--
                    ``(A) Annual average limitation.--Effective 
                beginning on January 1, 2025, it shall be unlawful for 
                refiners or importers to sell motor vehicle gasoline 
                that contains, on an average annual basis, an aromatic 
                hydrocarbon concentration in excess of 17.5 percent by 
                volume.
                    ``(B) 2025 cap.--Effective beginning on January 1, 
                2025, it shall be unlawful for refiners or importers to 
                sell motor vehicle gasoline that contains an aromatic 
                hydrocarbon concentration in excess of 30 percent by 
                volume.
                    ``(C) 2030 cap.--Effective beginning on January 1, 
                2030, it shall be unlawful for refiners or importers to 
                sell motor vehicle gasoline that contains an aromatic 
                hydrocarbon content in excess of 25 percent by volume.
                    ``(D) Oxygenate adjustment for gasoline 
                blendstock.--For purposes of compliance with this 
                paragraph, the aromatics volume of motor vehicle 
                gasoline produced as blendstock for oxygenate blending 
                may be adjusted based on the specified type and amount 
                of oxygenate required to be added downstream. Any such 
                adjustment shall be made through--
                            ``(i) the preparation of a hand blend 
                        containing oxygenate; or
                            ``(ii) any other method deemed acceptable 
                        to the Administrator.
                    ``(E) Regulations.--
                            ``(i) In general.--The Administrator shall 
                        promulgate regulations to implement this 
                        paragraph.
                            ``(ii) Contents.--Such regulations shall 
                        allow for the generation of tradeable credits 
                        to meet the requirement of subparagraph (A), 
                        but any credits shall expire after not more 
                        than five years.
                            ``(iii) Initial regulations.--Not later 
                        than January 1, 2025, the Administrator shall 
                        promulgate final regulations under clause (i).
            ``(2) Low-carbon octane.--
                    ``(A) Prohibition.--Effective beginning on January 
                1, 2025, no refiner or importer shall introduce into 
                commerce motor vehicle gasoline with a research octane 
                number of 95 or higher except through the use of a fuel 
                additive that has average lifecycle greenhouse gas 
                emissions that (as determined by the Secretary of 
                Energy using the version of the Argonne National 
                Laboratory Greenhouse gases, Regulated Emissions, and 
                Energy use in Transportation (GREET) model in effect as 
                of the date of enactment of the Next Generation Fuels 
                Act of 2021) are at least 40 percent less than baseline 
                lifecycle greenhouse gas emissions.
                    ``(B) Regulations.--
                            ``(i) In general.--The Administrator shall 
                        promulgate regulations to implement this 
                        paragraph.
                            ``(ii) Contents.--Such regulations shall--
                                    ``(I) determine the baseline 
                                lifecycle greenhouse gas emissions for 
                                purposes of this paragraph;
                                    ``(II) determine the average 
                                lifecycle greenhouse gas emissions of 
                                sources of octane value for purposes of 
                                this paragraph; and
                                    ``(III) ensure that the 
                                requirements of this paragraph are met.
                            ``(iii) Initial regulations.--Not later 
                        than January 1, 2024, the Administrator shall 
                        promulgate final regulations under clause (i).
            ``(3) Definitions.--
                    ``(A) Baseline lifecycle greenhouse gas 
                emissions.--The term `baseline lifecycle greenhouse gas 
                emissions' means the average lifecycle greenhouse gas 
                emissions, as determined by the Administrator, in 
                consultation with the Director of the Argonne National 
                Laboratory, for unblended gasoline sold or distributed 
                as transportation fuel in 2021.
                    ``(B) Lifecycle greenhouse gas emissions.--The term 
                `lifecycle greenhouse gas emissions' means the 
                aggregate quantity of greenhouse gas emissions as 
                determined by the Secretary of Energy using the version 
                of the Argonne National Laboratory Greenhouse gases, 
                Regulated Emissions, and Energy use in Transportation 
                (GREET) model in effect as of on the date of enactment 
                of the Next Generation Fuels Act of 2021.
                    ``(C) Research octane number.--The term `research 
                octane number' has the meaning given to such term in 
                section 201 of the Petroleum Marketing Practices 
                Act.''.

SEC. 9. NEW FUEL EFFECTS STUDY.

    (a) Fuel Effects Study.--Subject to subsection (b), the 
Administrator of the Environmental Protection Agency shall carry out a 
study of the emissions effects of ethanol-blended fuels in light-duty 
vehicles and light-duty trucks, for the purpose of updating the Motor 
Vehicle Emission Simulator modeling system. In designing and conducting 
such study, the Administrator shall--
            (1) select test fuels that--
                    (A) reflect a range of ethanol concentrations 
                between 0 and at least 25 percent by volume; and
                    (B) are representative of fuels that are widely 
                available today or reasonably could be available 
                regionally or nationally, taking into account fuel 
                refinery operations and economics, including the cost 
                of reformate;
            (2) select test vehicles that are representative of recent-
        model-year vehicles that include relevant technologies that 
        are, or reasonably may come to be, in widespread use;
            (3) measure emission products of combustion including, at a 
        minimum--
                    (A) particulate matter of 2.5 micrometers in 
                diameter or less;
                    (B) ultrafine particulate matter of 0.1 micrometers 
                in diameter or less;
                    (C) nitrogen oxides;
                    (D) total hydrocarbons;
                    (E) nonmethane organic gas;
                    (F) carbon monoxide;
                    (G) benzene;
                    (H) toluene;
                    (I) ethylbenzene;
                    (J) xylene;
                    (K) 1,3-butadiene;
                    (L) ethanol; and
                    (M) polycyclic aromatic hydrocarbons, including at 
                a minimum benzo(a)pyrene;
            (4) measure the tendency of measured emissions to form 
        secondary organic aerosols and any other relevant secondary air 
        pollution; and
            (5) consult with the Secretary of Energy, the Secretary of 
        Agriculture, and the Secretary of Transportation (or their 
        delegates).
    (b) Certification by Secretary of Energy.--The Administrator of the 
Environmental Protection Agency shall--
            (1) provide the proposed design of the study under 
        subsection (a) to the Secretary of Energy for review; and
            (2) not commence the study until the Secretary of Energy 
        certifies in writing that such design complies with the 
        requirements of subsection (a).

SEC. 10. DUAL-FUELED AUTOMOBILE DEFAULT UTILIZATION FACTOR.

    (a) In General.--Section 32905(b) of title 49, United States Code, 
is amended to read as follows:
    ``(b) Duel Fueled Automobiles.--Except as provided in subsection 
(d) of this section or section 32904(a)(2) of this title--
            ``(1) for any model of dual-fueled automobile manufactured 
        by a manufacturer in model years 1993 through 2019, the 
        Administrator of the Environmental Protection Agency shall 
        measure the fuel economy for that model by dividing 1.0 by the 
        sum of--
                    ``(A) 0.5 divided by the fuel economy measured 
                under section 32904(c) of this title when operating the 
                model on gasoline or diesel fuel; and
                    ``(B) 0.5 divided by the fuel economy--
                            ``(i) measured under subsection (a) when 
                        operating the model on alternative fuel; or
                            ``(ii) measured based on the fuel content 
                        of B20 when operating the model on B20, which 
                        is deemed to contain 0.15 gallon of fuel; and
            ``(2) for any model of dual-fueled automobile manufactured 
        by a manufacturer in model year 2023 or later, the 
        Administrator shall measure the fuel economy for that model by 
        dividing 1.0 by the sum of--
                    ``(A) 0.79 divided by the fuel economy measured 
                under section 32904(c) of this title when operating the 
                model on gasoline or diesel fuel; and
                    ``(B) 0.21 divided by the fuel economy measured 
                under subsection (a) when operating the model on 
                alternative fuel.
        A manufacturer may demonstrate that a higher utilization factor 
        applies to any model of dual-fueled automobile manufactured by 
        such manufacturer in model year 2023 or later.''.
    (b) Exclusion From Limit on Maximum Increase in Average Fuel 
Economy Attributable to Dual-Fueled Automobiles.--Section 32906 of 
title 49, United States Code, is amended by adding at the end the 
following:
    ``(c) Exclusion.--Subsection (a) shall not apply to the fuel 
economy of dual-fueled automobiles measured under section 
32905(b)(2).''.
    (c) Testing Procedures.--Section 206(h) of the Clean Air Act (42 
U.S.C. 7525(h)) is amended by adding at the end the following: ``Not 
later than July 1, 2022, the Administrator shall amend the test 
procedures under this section in accordance with section 32905(b)(2) of 
title 49, United States Code.''.

SEC. 11. TRANSFERS OF CREDITS FOR EXCEEDING AVERAGE FUEL ECONOMY 
              STANDARDS.

     Section 32903(g)(3) of title 49, United States Code, is amended to 
read as follows:
            ``(3) Maximum increase.--The maximum increase in any 
        compliance category attributable to transferred credits is--
                    ``(A) for model year 2021, 4.0 miles per gallon; 
                and
                    ``(B) for model year 2022 and subsequent model 
                years, 6.0 miles per gallon.''.

SEC. 12. EXTENSION AND EXPANSION OF ALTERNATIVE FUEL VEHICLE REFUELING 
              PROPERTY CREDIT.

    (a) In General.--Section 30C of the Internal Revenue Code of 1986 
is amended--
            (1) by amending subsection (c) to read as follows:
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified alternative fuel vehicle refueling 
        property.--The term `qualified alternative fuel vehicle 
        refueling property' means any property (not including a 
        building and its structural components) if--
                    ``(A) such property is of a character subject to 
                the allowance for depreciation,
                    ``(B) the original use of such property begins with 
                the taxpayer, and is not used as the principal 
                residence (within the meaning of section 121) of the 
                taxpayer, and
                    ``(C) such property is used--
                            ``(i) for the storage or dispensing of a 
                        qualifying fuel into the fuel tank of a motor 
                        vehicle propelled by such fuel, but only if the 
                        storage or dispensing of the fuel is at the 
                        point where such fuel is delivered into the 
                        fuel tank of the motor vehicle, or
                            ``(ii) for the recharging of motor vehicles 
                        propelled by electricity, but only if such 
                        property is located at the point where the 
                        motor vehicles are recharged.
            ``(2) Qualifying fuel.--The term `qualifying fuel' means--
                    ``(A) any fuel at least 50 percent of the volume of 
                which consists of natural gas, compressed natural gas, 
                liquified natural gas, liquefied petroleum gas, or 
                hydrogen, or
                    ``(B) any fuel mixture at least 20 percent of the 
                volume of which consists of ethanol or biodiesel, 
                without regard to any denaturant or kerosene used in 
                such mixture.''; and
            (2) in subsection (g), by striking ``December 31, 2021'' 
        and inserting ``December 31, 2027''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.
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