EPA-AA-SDSB-80-23
Criteria for Development of
Emissions Averaging for Heavy-Duty Engines
and Light-Duty Trucks
December 1980
Glenn Passavant
Chester France
John Anderson
NOTICE
Technical Reports do not necessarily represent final EPA decisions
or positions. They are intended to present technical analysis of
issues using data which are currently available. The purpose in
the release of such reports is to facilitate the exchange of
technical information and to inform the public of technical devel-
opments which may form the basis for a final EPA decision, position
or regulatory action.
Standards Development and Support Branch
Emission Control Technology Division
Office of Mobile Source Air Pollution Control
Office of Air, Noise and Radiation
U.S. Environmental Protection Agency
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Table of Contents
I. Foreword 2
II. Background 2
III. Benefits of Averaging . . 3
A. Technical Flexibility 3
B. Economic Advantages 4
C. Regulatory Improvement ... 5
IV. Considerations in Designing an Averaging Program. .... 6
A. General Considerations 6
B. Specific Program Considerations 7
C. Equity Considerations 13
D. Environmental Impact . 22
E. Technological Innovation 25
F. Long Term Market Effects 25
V. Design Criteria for a Successful Averaging Program. ... 26
References 29
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I. Foreword
With the final implementation of the "bubble policy" for
stationary sources, EPA is now investigating the possible imple-
mentation of an averaging concept for mobile source emissions.
Emissions averaging is meant to provide motor vehicle manufacturers
with greater flexibility in determining the mix of vehicles/engines
to produce and the control technology to apply, while at the same
time permitting no degradation in the air quality benefits derived
from controlling motor vehicle emissions. This paper will examine
the major benefits of the averaging concept and will identify the
important design considerations which should affect the final form
of any averaging concept. The analysis of these important design
considerations will be used to identify design criteria which will
be necessary for a successful averaging program.
II. Background
The idea that motor vehicle emissions should be averaged has
been debated by the government and the motor vehicle industry since
prior to the Clean Air Act Amendments in 1970. However, in
more recent times, the concept of averaging was raised once again
by General Motors and later by Volkswagen in response to the
light-duty diesel particulate emission standard Notice of Proposed
Rulemaking. The EPA staff thoroughly analyzed the two averaging
concepts proposed by the manufacturers, but rejected both due to
statutory, equity, enforcement, and localized impact problems.
However, at the same time, the Agency took the position of remain-
ing open to further consideration of averaging at a later date.jY
In response to the manufacturers' proposals and interest
in averaging, a task force was established to investigate the
possibility of an averaging approach to emissions compliance in
association with the statutory light-duty truck (LDT) and heavy-
duty engine (HDE) NOx emission standards for the 1985 model year.
The remainder of this paper will be devoted to an investiga-
tion of the averaging concept as it relates to motor vehicles.
Instead of an analysis of specific averaging concepts, the more
fundamental concerns and criteria will be addressed. With this as
the goal, the remainder of this paper is divided into three sec-
tions. The first section will discuss some possible benefits of an
averaging program. The second section will identify the important
considerations in designing an averaging program. The third
section will use the design considerations identified in the
previous section to establish design criteria necessary to a
successful averaging program.
Throughout the remainder of this paper the term "vehicle"
will be used to represent both light-duty trucks and heavy-duty
engines. Strictly speaking, however, manufacturers certify the
entire vehicle for light-duty trucks but only the engine and
emission control system for heavy-duty engines.
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III. Benefits of Averaging
The major benefit of averaging is the increase in flexibility
which emissions averaging affords a manufacturer. The manufac-
turer will have a much greater degree of flexibility in designing
its own internal program to meet the emission standard under an
averaging approach. The potential benefits of such a compliance
approach can be divided into three broad areas: technical flexi-
bility, economic advantages, and regulatory improvement.
A. Technical Flexibility
Probably the largest benefit of an averaging program for
emissions is the increase in the technical flexibility available to
the manufacturers. Instead of every family being certified to the
same emission standard, the manufacturers would now be able to use
a variety of control strategies to achieve compliance with an
emission standard. For example, manufacturers can comply with a
standard by achieving the required emission reductions in the
families where they are most readily available and not seeking as
great a reduction in families where control is more difficult.
Clearly, the degree of difficulty and cost of achieving emissions
reductions will vary from family to family.
In addition, an averaging approach would allow the manufac-
turers to make greater use of any emission trade-offs between NOx
and the other pollutants. For example, if HC control was difficult
in a family, the manufacturer could use the NOx-HC trade-off to
reduce HC and increase NOx. The greater NOx levels could then be
offset by averaging. To a large degree, the current approach
limits the use of trade-offs in the manufacturer's control stra-
tegy.
The fact that an averaging concept allows emission offsets
between lower and higher emitting families would increase the time
available to decrease the emissions from the higher emitting
families. The greater time available would allow the use of an
optimized emission control system rather than the use of a quick
fix approach which might be necessary if time was a prime factor in
the choice of the emission control technology applied.
It is possible that an averaging approach would lead to a
decrease in any fuel economy penalty which might be related to
emission control. This is especially true in the case of NOx due
to the relationship between NOx control and fuel economy. This
potential savings is further enhanced by the fact that the quick
fix technology which is sometimes used may also cause a fuel
economy penalty (e.g., retarded timing). The higher emitting
vehicles which would require the greatest total reductions under
the current approach to emissions compliance could require less
total reduction and would thus be able to minimize the fuel economy
penalty which might otherwise be necessary with these higher
emitting vehicles.
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Finally, in the area of emission-related hardware, an aver-
aging approach would allow the manufacturer to choose its own
control stategy on a family by family basis, thus likely reducing
the total emission control hardware costs and allowing the selec-
tive application of the most costly technology or hardware.
B. Economic Advantages
An averaging program would have economic advantages in the
areas of marketing, corporate allocations of research and develop-
ment (R&D) funds, and short-term corporate capital investment
funds. Also more desirable cash flows could be maintained by the
affected firms.
The use of an averaging approach would minimize the chance
that any family would have to be dropped from production due to
technology or control cost concerns. The higher emissions from
these families could be offset by lower emissions from other
families. This would have the added advantage of allowing longer
use of non-recurring investments such as R&D and tooling for some
families.
A second marketing benefit of an averaging program would be
the potential change in marketing strategies. For example, it is
easy to conceive a scenario in which a manufacturer certifies two
versions of the same basic engine at two different emission levels.
Version one could have lower emission levels and higher operating
costs due to emission control. Version two could have higher
emission levels and lower operating costs. Version one could be
sold at an artificially lower price to encourage sales and at least
partially offset the higher operating costs, while version two
could be sold at an artificially higher price to discourage sales.
The premium received on version two could actually be larger than
the discount offered on version one, thus leaving the manufacturer
with a larger net profit. This premium could actually increase as
the manufacturer attempted to discourage sales of its higher
emitting engines, thus pushing the potential net profit even
higher.
In relation to marketing, an averaging program would allow
the "market testing" of a limited number of new families without
the relatively large fixed cost of R&D associated with emissions.
The potentially higher emission limits of these low sales volume
families could be offset by slightly lower emission limits from the
higher sales volume families. However, as the sales of this
family grew, emissions research and ultimately emission reductions
could become necessary to continue production.
An averaging approach allows manufacturers to choose where
their emission related R&D funds will be spent, and may allow the
emission related expenditures to be spread more evenly over several
years rather than lumped into the few years preceding the imple-
mentation of a revised standard.
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One other potential savings is related to the flexibility a
manufacturer has in establishing the emission limits for each
family. For example, a manufacturer may choose to establish the
emission limit for a family such that when produced it also con-
forms to the emission standards of one or more of its export
markets. This would decrease both development and production
costs.
Finally, and perhaps most importantly, the increased flexi-
bility inherent in an averaging program could permit the manufac-
turer to achieve its overall emissions reductions for the least
total cost. Although it is not possible to quantify the potential
savings, it is clear that the total cost would probably be less
than if averaging were not permitted, and in any case would proba-
bly not be more. This would lead to decreased short-term capital
investments in emission control hardware and would be a great
incentive for emission control system optimization. Although the
incentive for emission control system optimization is also present
in a nonaveraging approach to vehicle emission control, little
importance is placed on optimizing a system to achieve the required
emission reductions at the lowest cost, and it is not possible to
optimize product-wide control strategies for total cost.
In summary, potential economic disruptions of emission
control regulations may be minimized with the implementation of an
averaging approach for compliance with emission standards. These
economic benefits will be most pronounced for a manufacturer who
markets a diverse product line. A manufacturer with numerous
families will have much more flexibility than one with fewer
families when optimizing compliance costs under an averaging
approach.
C. Regulatory Improvement
Under the current control strategy there has been little
incentive to achieve emission reductions below those required to
meet the emission standards. Under an averaging approach, there
will be a much greater incentive to achieve the greatest reduction
possible, because the extra reductions can then be used to assure
compliance of all the manufacturer's families/ combinations within
the class or category of vehicles being averaged.
In addition, it would be beneficial if the averaging concept
could incorporate additional incentives for the manufacturers to
achieve maximum reductions. This might be achieved*if a program
for banking and trading of excess emission reductions could be
implemented. Such a program could create a market in emissions,
and could thus function to reduce compliance costs for the industry
as a whole. Under programs such as these, manufacturers would be
able to save some portion of their excess emission reductions for
future use or perhaps trade or sell some portion of their excess
reductions to other manufacturers. However, these programs may not
be possible under the current Clean Air Act.
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Finally, the implementation of an averaging program,. espe-
cially in the long term, could result in a decrease in waiver
requests which result under the current approach. Fewer waivers
would mean less total emissions into the environment.
IV. Considerations in Designing an Averaging Program
In light of the considerable potential benefits which might be
realized from an averaging approach to emissions compliance, it is
worth considering some of the factors involved in designing
such a program. To successfully .attain even a significant share of
those benefits will require a carefully conceived program.
Such a program would interact with essentially all areas of
existing heavy-duty engine and light-duty truck regulations.
Many of the resulting concerns could probably be solved in a
straight-forward manner. The important ones are discussed to give
the reader a comprehensive picture of the complicated impacts an
otherwise simple concept could have on EPA's existing programs.
Any successfully designed averaging program should minimize any of
these undesirable impacts.
A. General Considerations
Before dealing with specific needs, there are some general
considerations. First, an averaging approach would represent a
marked change in the way the Agency has to date applied the vehicle
emission requirements of the Clean Air Act. The existing program
requires that each vehicle in the class comply with the ...same
emission standard. Although a more flexible approach may be
possible under the Clean Air Act, either an averaging approach
would have to be designed whch is harmonious with the present
structure of the Act, or recommendations would have to be made to
Congress for changes in the Act.
A second general consideration is the overall impact which a
change to averaging could have on the entire motor vehicle control
program. We shall see in subsequent discussion that a successful
averaging program will impact nearly all current mobile source
regulatory programs. The overall motor vehicle control program as
currently structured is one which has been developed over many
years with much trial and error. It is a mature program which has
achieved a high rate of success in controlling motor vehicle
emissions. Manufacturers' warnings notwithstanding, this has been
done with no major disruption of the auto industry. The Agency has
invested substantial resources in developing and refining this
program to maximize its effectiveness.
Introduction of a major change in this program (i.e., avei
aging) can not be evaluated in a vacuum, neglecting the fact that
the current approach is in fact in place and has been for many
years. A choice which might be made if starting from ground
zero with no existing program might not be the choice starting from
our current position. The .current program should not be. reworked
unless the changes show significant and compelling advantages.
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A third area for consideration concerns the philosophy for
standards setting embodied in the nonconformance penalty provi-
sions of the Act. As shown by the legislative history, these
provisons were intended to allow EPA to set standards based upon
capabilities of what were identified as "technological leaders."
"Technological laggards," which would not be able to comply with
such standards, would be allowed to continue in production contin-
gent upon payment of a nonconformance penalty. These concepts of
technological leaders and laggards seem to assume a nonaveraging
approach to compliance. In an averaging approach, a manufac-
turer's "laggards", often its bigger vehicle/engine sizes, could be
balanced out by its "leaders." Where only average levels are
important, those which are laggards or leaders would not be of
concern or require special treatment. Introduction of averaging
would therefore have to be reconciled with the Act's provisions for
nonconformance penalties.
Lastly, it seems most likely that adoption of averaging could
lead to more complicated regulatory procedures than currently
exist. For example, accurate and timely sales forecasts and sales
data would be required on a family/control system configuration
basis. Heavy-duty engine manufacturers are not currently required
to supply actual sales data. Light-duty truck manufacturers
provide data for fuel economy purposes (CAFE), but it is not
likely that the families for fuel economy would be the same as
those for emissions. Since sales data would play a key role in
evaluating compliance with an emission standard under averaging,
sales would have to be monitored closely. Frequent updating would
be needed to avoid the disruptive impact of a significant change in
projected sales that went undetected for a long period. The costs
of enforcing and monitoring vehicle compliance may increase under
averaging. The amount of assembly line testing required to reach
enforcement decisions may also increase.
The purpose of discussing the procedural complications and
potential for more reporting burdens for manufacturers is to note
this aspect of an averaging program which could run counter to the
current thrust within the Federal government to simplify and reduce
regulatory requirements. The above possible procedural complica-
tions will have to be carefully studied and minimized in the design
of an averaging program. EPA has adequate experience with current
certification programs and has made substantial progress in reduc-
ing burdens on manufacturers without compromising program objec-
tives (i.e., abbreviated certification). Abbreviated certification
may have to be abandoned for at least the first few years of an
averaging program to provide both EPA and the manufacturers
assurance that the averaging provisions 'are being properly imple-
mented and that undetected loopholes and inconsistencies are
corrected in a timely manner.
B. Specific Program Considerations
The various EPA motor vehicle emissions control programs will
now be examined to identify those aspects of each program affected
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by an averaging concept. The purpose is to identify needs or
aspects of those programs with which a successful averaging program
will have to deal. Once these have been identified, specific
criteria for designing an averaging program can be developed. The
programs will be reviewed basically in the order in which they come
in the life cycle of a typical certification family.
1. Certification
The certification program is designed around the requirements
of Section 206(a) of the Act. This section requires that EPA issue
a certificate of conformity upon a showing by the manufacturer that
any new motor vehicle or engine conforms to the applicable emission
regulations. This certificate is required before the manufacturer
can sell or introduce into commerce its vehicles or engines.
Adoption of an averaging approach would have a major impact on the
current certification program.
The first basic consideration is that the program chosen must
be able to be implemented in a straightforward and uncomplicated
fashion. With some kinds of averaging it could be difficult or
impossible to make a compliance/noncompliance decision for indi-
vidual engine families. If only average values encompassing
numerous families were important, then individual family emission
rates would have little meaning, and in fact might fluctuate with
time as a manufacturer used the flexibility of averaging to mini-
mize emission constraints from his viewpoint. Changes would also
occur as sales projection updates were made. Such an environment
of "moving targets" would make it very difficult to operate a
meaningful certification program and at the same time avoid bur-
densome and complicated paperwork. Some compromises on maximum
flexibility might be needed in favor of a workable program.
Some of these considerations raise a more basic question of
what the role of certification would be in an averaging program.
Assembly line testing to evaluate actual production emission levels
could be used to provide accurate emissions data for averaging.
Data from preproduction certification vehicles could quickly
outgrow its usefulness as it was replaced by results of assembly
line emission testing under Section 206(b)(l) of the Act (here-
after, assembly line testing). After that, the approval of running
changes, for example, might have to depend on new assembly line
testing to evaluate the effect of the changes.
Under some averaging concepts, the entire body of certifica-
tion regulations would have to be redesigned away from the current
individualized approach to vehicle and engine certification. This
would entail a comprehensive review of both the existing regula-
tions and the associated complex of advisory circulars. All of
these are now oriented toward isolated decisions on a family
basis. Under averaging, the effect of a given family's emission
level could not be determined without considering all other
families from the same manufacturer and associated sales weights
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for each. An emission level that was acceptable at one time might
not be at another. Such a possibility could play havoc with
attempts at an orderly certification process as now understood. In
addition, certification could conceivably be a single go/no-go
decision for the manufacturer's entire product line, with the
threat being that no vehicles could be produced if the projected
average exceeded the emission standard. The manufacturer would
then have to reshuffle its product line on a crisis basis to reduce
his average. This is a high level of jeopardy which because of its
consequences might be very difficult to invoke. It would certainly
be undesirable from the manufacturer's viewpoint.
This paper has previously mentioned the fact that the in-
creased complexity of certification would probably result in the
abandonment of abbreviated certification for at least the first
several years of the new program. There would be an increased
certification workload to: 1) develop new procedures, 2) implement
and manage the new procedures, and 3) handle the increased data
requirements (e.g., projected and actual sales figures). In
addition, it is reasonable to expect that the learning process
under an averaging system would consume resources in refinement of
the program. This would cover such areas as closing loopholes and
dealing with unforeseen complications.
A final area of consideration concerns establishment of
vehicle families and their emission levels. In a situation
where only average emissions count, the appropriateness and need
for the current system of family/control system determinations
would need to be reviewed. An added complication from the manu-
facturer's point of view is the fact that in establishing emission
levels, it may no longer have fixed standards against which to
design. While allowing more flexibility, averaging would also
increase the complexity of the task of establishing target levels.
Many of the possible disruptions and changes to the certifi-
cation process could be minimized or eliminated if each family was
certified to a manufacturer specified level known as the family
emission limit. The family emission limits would apply to each
vehicle within the respective families and when sales-weighted
could not exceed the applicable emission standard for the vehicles
under consideration.
2v Assembly Line Testing
Under the current approach, some families have emission levels
well below the standard while other families exhibit more marginal
emission levels. In this scenario, it is possible to focus assem-
bly line testing activities on the marginal families to ensure that
they conform to emission standards. An SEA (Selective Enforcement
Auditing) approach could be implemented under some averaging
concepts where there are a small number of marginal families.
Under certain averaging concepts, however, it is expected that
manufacturers would have increased- incentive to establish each
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engine family emission limit (limits to which each vehicle in a
given family must adhere) closer to the engine family's actual
emission level, thus increasing the number of marginal families
that EPA may wish to test on the assembly line. In addition, some
averaging concepts could encourage manufacturers to establish a
larger number of families than those that currently exist,
so that the manufacturer could closely tailor its compliance with
the emission standard by using the emission level of a number of
specific groups of vehicles. This could conceivably maximize a
manufacturer's ability to offset the high emission limit of one
family against the low emission limit of another family. Conse-
quently, the Agency may need to increase the number of vehi-
cles it tests on the assembly line to maintain the same confidence
that vehicles are meeting the applicable emission limits which the
Agency has under the current approach. The lowest administrative
cost to EPA and the industry for this increased testing requirement
may occur if EPA required manufacturers to continually test a
portion of their production (perhaps 1 to 2 percent) using a
sampling plan EPA designs to assure that a manufacturer tests a
cross section of its production.
Under the current approach, EPA envisions the continued
use of an assembly line testing program that allows the Agency to
make pass/fail decisions regarding whether vehicles comply with
emission limits using a 10 percent AQL. In certain averaging
approaches, however, the assembly line testing program may be
required to establish the 90th percentile emission level for
each family which could require more extensive test data than that
required under a pass/fail program.
The sanctions applicable to a manufacturer when assembly
line test data indicate that a family fails to meet a family
emission limit, or when the manufacturer in effect exceeds the
applicable emission standard (i.e., when the average, sales-
weighted emissions from the manufacturer's fleet exceeds the
applicable emission standard), must be articulated in any averaging
program. In certain circumstances a family failure could cause a
manufacturer to exceed the standard. In other cases, it may not be
practicable for EPA to make any decisions regarding a manufac-
turer's "average" compliance status until the end of the model
year. Averaging schemes must somehow address this problem.
3. Nonconformance Penalties (NCPs)
The payment of nonconformance penalties is intended to allow
heavy-duty engines and light-duty trucks with GVWR above 6,000 Ibs.
to be produced under certain circumstances even though they cannot
meet established emission standards but can meet established upper
limits. (The Act does not provide for NCPs for light-duty trucks
under 6,000 Ibs. GVWR.) In averaging a manufacturer balances its
higher emitting .vehicles against its lower emitting vehicles to
meet an emission standard. Therefore, nonconformance penalties as
currently perceived by EPA may not be applicable to an averaging
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situation. However, an averaging approach with a stringent emis-
sion standard and stringent assembly line compliance requirements
may still leave some manufacturers with a need for NCPs. Indeed,
some manufacturers could receive little or no benefit from some
averaging concepts and thus, could in effect still be operating
under the current approach.
NCPs may have to be modified for use with averaging. For
example, when an averaging approach uses family emission limits
(limits each vehicle in the family must meet), the NCPs might be
used for those families which exceeded their limits. Or NCPs might
be applied in a broader way to a manufacturer's whole product line.
This would happen at the end of the model year in the case where,
based upon revised sales volume data or emissions data, a manu-
facturer's salesweighted average of family emission limits exceed
the applicable emission standard. In any case, payment of an NCP
should remove a manufacturer's competitive advantage over another
manufacturer that has achieved compliance.
NCPs could be a very important part in any averaging approach
to emissions control. NCPs could provide much relief from the
jeopardy manufacturers might encounter as sales change throughout
the model year.
4. Recall
The present recall program functions by identifying a poten-
tially nonconforming group of vehicles; testing vehicles from that
group and, if a determination is made that a substantial number are
not meeting an applicable standard, requiring that all vehicles in
that group be modified to meet the standard. It may be possible to
continue to operate the recall program in this manner under an
averaging approach if family emission limits are established. If,
however, under averaging, family emission limits are set nearer
actual emission levels or the number of families increases, an
equally effective recall program may be more complicated and
necessitate more in-use testing. The need for more tests may make
it infeasible to conduct a heavy-duty engine recall program. EPA
anticipates that it will be extremely difficult to procure in-use
heavy-duty engines for recall testing. Therefore, if the testing
burden increases, the heavy-duty engine recall program may become
impractical.
An averaging program could also complicate a manufacturer's
remedy for the nonconforming in-use vehicles the recall program
identifies. For example, a manufacturer may not wish to recall the
nonconforming family but, instead, recall a family more amenable to
emission reduction at lower cost. In that case, EPA would have to
approve the manufacturer's remedial plan and may require the
manufacturer to conduct additional emissions tests on the vehicles
the manufacturer elects to recall to determine the emission level
of the fix. If a recall of new vehicles or engines is involved
when assembly line testing reveals that a family is not meeting its
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family emission limit an averaging program may complicate the
recall of these vehicles. This is because for recalls of current
model year vehicles it may be impossible to know what a manufac-
turer's final average emission level will be during the model year.
It may be necessary to base recalls of current model year vehicles
or engines solely on family emission limits based on projections.
If, however, these projections were not accurate, it may result in
EPA ordering recalls, that were not necessary, or having to order a
second recall on a family because the original fix did not reduce
the emissions to a level which would allow the manufacturer to meet
the applicable emission standard under an averaging approach.
Another issue under an averaging concept is how to credit the
manufacturer for the vehicles or engines in the recalled class when
determining overall compliance with the emission standard. In most
recalls not every nonconforming vehicle or engine is repaired.
Sales volume is a factor in determining compliance with the
emission standard. Therefore, a manufacturer should be account-
able for the emissions and number of vehicles that are not actually
repaired in a recall.
5. Inspection and Maintenance Programs (I/M)
In the present case, where EPA is looking only at NOx averag-
ing, there would be very little impact on I/M programs. This is
because I/M programs presently measure only HC and CO emissions. A
physical inspection might be used to look for damaged EGR valves,
but this would not be affected by use of averaging concepts. I/M
is also not currently applied to heavy-duty vehicles. However, it
would include light-duty trucks.
On a broader perspective, where potential future applicability
to pollutants other than NOx is considered, the impact of an
averaging concept on I/M programs could be radical. This is
because I/M enforcement is inherently on a vehicle by vehicle
basis. Each vehicle must go through a pass/fail decision process
to determine if corrections are needed. Therefore, the operators
of an I/M program require clear limits which they may apply to each
vehicle passing through an inspection station. Averaging may
result in the multiplication of limits to a myriad of values
applicable to different families. This could then create the need
for determining separate idle test cut points for each of these
limits. To evaluate the status of a vehicle could involve identi-
fication of the family and perhaps the control system configuration
as well as the make and model year. Such identification would
probably have to be added to the engine label by the manufacturer.
The engine family identity would then lead to an applicable family
emission limit.
Prospects such as these just outlined could threaten the
viability of workable I/M programs. I/M programs now form key
elements of the State Implementation Plans of many states, and
their number is increasing rapidly. Their role in the control
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of in-use emissions must not be jeopardized. Any emissions
averaging program must be chosen to be compatible with workable I/M
programs.
6. Allowable Maintenance/Parameter Adjustment Provisions
Both of these areas apply by nature to individual families.
Changing standards compliance to an averaging approach should have
no effect on either one.
7. Proposed Durability Procedure
This program is also carried out on a family specific basis
to determine deterioration factors (dfs).^/ Therefore, aver-
aging would not directly impact its operation. However, there
are ways in which averaging would affect the application of
the durability program results. For example, because of the
ability to trade off high emissions for one family against low
emissions for another, averaging would reduce the jeopardy to
individual families which could result from adverse performance
of an in-use fleet. On the other hand, as preliminary dfs are
replaced by in-use dfs, averaging would complicate the conse-
quences of an erroneous preliminary df. If the in-use dfs in-
dicated that the true average of a prior year's production exceeded
the standard, then it is not clear what the options would be.
Under non-averaging regulations, EPA might verify the revised
emissions for the erroneous family df by selective in-use testing
from that family. However, with averaging that might be insuf-
ficient. This is because the actual existence of a non-compliance
situation could in some averaging concepts also depend on the true
in-use emissions of all the other families produced by the same
manufacturer. Determining those values could be prohibitively
costly in terms of testing resources.
Durability may also impact the flexibility of averaging via
its impact on dfs. Each year the dfs would be changed to reflect
the results of more recent in-use data. These changing dfs will
affect the manufacturer's flexibility in establishing emission
targets for the new year's production, and thus, may serve to
reduce the benefits of averaging.
C. Equity Considerations
It is clear that ideally any averaging approach which is
implemented for NOx or any other pollutant should not put any
manufacturer at a disadvantage nor give any other manufacturer an
advantage. All manufacturers of light-duty trucks or heavy-duty
engines should receive fair treatment if an averaging program is
implemented. This section will investigate possible inequitable
situations which must be avoided if at all possible when designing
an emissions averaging program. As an introduction, a brief
industry overview will provide the background information necessary
to support this discussion.
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1. Industry Overview
Thirteen foreign and ten domestic manufacturers produced and
sold approximately 3,530,000 light-duty trucks and heavy-duty
vehicles in 1979. Table 1 contains a general overview of the
corporations competing in this market ^3_/ Table 2 contains approx-
imate sales in each of the vehicle and engine classes under con-
sideration, for the year 1979._4/
As can be seen in the tables, the light-duty truck (LDT)
market is spread among twelve manufacturers, with the vast majority
of the sales still held by the large domestic manufacturers (85
percent of the 1979 market). The captive imports of the domestic
manufacturers and the other remaining imports were 15 percent of
the 1979 market. This fraction has been gradually increasing and
may continue to increase in the years ahead.
Only domestic manufacturers sell heavy-duty gasoline-powered
(HDG) engines in the U.S. This market is clearly led by General
Motors and Ford, but no manufacturer has less than ten percent of
the market. Three of the four manufacturers in this group also
sell gasoline-powered buses.
The heavy-duty diesel (HDD) engine market is dominated by
domestic manufacturers. Domestic manufacturers produce about 95
percent of the heavy-duty diesels sold in the U.S. each year. This
market is led by Cummins Engine Co. and General Motors (DDA), but
Caterpillar, International Harvester (IHC) and Mack Trucks also
hold substantial market shares. General Motors, Cummins, and IHC
are the primary producers of heavy-duty diesel engines for buses.
The remainder of this section will discuss several equity
conflicts which may arise and should be avoided or minimized in the
formulation and implementation of any averaging program.
2. Averaging by Engine and Vehicle Type
An ideal averaging program for NOx or any other pollutant
should deal fairly with all manufacturers affected. In terms of
equity, a fundamental question arises. Should averaging be per-
mitted across vehicle type, engine type, both, or none?
Averaging across vehicle type implies that a manufacturer
would be permitted to offset higher emissions in one vehicle
class by lower emissions within another vehicle class. This
would ultimately mean that the sales-weighted emission levels
of one class with higher emission levels would be offset by
the lower sales-weighted emission levels from another class. Thus,
for example, higher heavy-duty engine emissions could be offset by
lower light-duty truck emissions, such that the sales-weighted
average emission level would meet the emission standard. This
concept could be exclusive by engine type (i.e., gasoline-fueled
only) or include both engine types. Averaging by engine type means
-------
table 1
1979 Truck and Bus Producers I/
Manufacturer
AMC
Caterpillar
Chrysler
Cummins
Deutz
Ford
GM
Hino
IHC
Isuzu
Iveco-Fiat
MAN
Mack
Mercedes
Mitsubishi
Nissan
Scania Vabis
Suzuki
Toyo Kogyo
Toyota
VW
Volvo
White
Produces
LDV
X
X
X
X
X
X
X
X
X
X
X
X
X
Produces
Produces Produces HDG
LDT LDDT Engines
x
X X
X X
.X X X
XX X
X
X
X
X
X
X
X
X X
Produces
HDD
Engines
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Produces Produces
HDD Bus HDG Bus
Engines Engines
X
X
X
X X
X X
X
Ul
I
I/ Data gathered from EPA Certification Division.
-------
Table 2
1979 Estimated U.S. Sales I/
Manufacturer
AMC
Caterpillar
Chrysler
Cummins
Deutz
Ford
GM
Hino
IHC
Isuzu
Iveco-Fiat
MAN
Mack
Mercedes
Mitsubish i
Nissan
Scania Vabis
Suzuki
Toyo Kogyo
Toyota
VW
Volvo
White
LDT 2/
159,000
'
250,000
-
987,000
1,285,000
.
23,000
97,000
-
-
-
-
45,000
99,000
.
<2,000
83,500
129,000
2,000
-
HDG Engines 3/
^
-
19,000
-
46,500
58,000
-
22,000
- '
-
-
-
,
-
-
-
- >
.
-
-
-
HDD Engines 3/
_
30,500
70,300
<2,000
-
51,800
-
15,000
<2,000
700
26,800
3,300
<500
-
600
-
. -
-
.
700
<2,000
HDG HDD
Bus Engines Bus Engines
_ .
150
-
4,500
6,700 2,900
- -
13,000 1,100
-
- -
- 160
-
.
- -
-
- -
- -
- ' -
- ' -
\_l Calendar Year 1979.
2J 0-10,000 Ibs. GVWR: Data was obtained from MVMA, Automotive
News, March 24, 1980, and discussions with several manufacturers.
3/ MO.OOO .Ibs. GVWR - estimated from MVMA data.
-------
-17-
that a manufacturer can offset higher emissions in one engine
subclass (e.g., heavy-duty diesel) with lower emissions in the
other subclass (e.g., heavy-duty gasoline-fueled engine). The same
comparison could hold for light-duty trucks.
Thus, there are four combinations to consider: 1) averaging
limited by vehicle class and engine type (within heavy-duty diesel
families only), 2) averaging limited by vehicle class (within
heavy-duty engines only), 3) averaging limited by engine type only
(diesel only - but both light-duty trucks and heavy-duty engines)
and finally, 4) unrestricted averaging (all four vehicle and engine
types could be averaged).
As is probably obvious, there are certain equity problems tied
to any one of the four approaches. Averaging limited by vehicle
class and engine type would provide the most increased flexibility
to the manufacturer with a diverse product line, and for some
manufacturers would provide virtually no increase in flexibility.
Table 3 shows the number of families each manufacturer certified in
each class and thus, demonstrates the problems with this approach.
Averaging restricted by vehicle class would create some of the
same problems but to a greater degree in the case of heavy-duty
engines. Table 3 shows that of the 17 companies which certified
heavy-duty engines in 1979, 2 certified gasoline-fueled engine
only, 13 certified diesel engines only, and 2 certified both engine
types. In the case of heavy-duty engines allowing averaging within
a vehicle class would provide increased flexibility for only 2 of
the 17 companies involved.
The case is much the same for light-duty trucks. Of the
twelve companies which certified light-duty trucks in 1979 only 3
certified light-duty diesel trucks. Thus, only 3 of the 12 manu-
facturers would have any increased flexibility. However, for those
3 the benefits could be quite great. The high ratio of gasoline to
diesel light-duty truck sales for these manufacturers would greatly
aid in the minimization of any problems related to diesel gaseous
emissions.
Averaging limited by engine type would have some positive
implications. For the gasoline-powered vehicles, all of the
manufacturers of heavy-duty gasoline-fueled engines also produce
gasoline-powered light-duty trucks. Thus, 4 of the 12 producers of
light-duty trucks would also have heavy-duty gasoline-fueled
engines to include in averaging. No increase in flexibility
would accrue to the other eight manufacturers of light-duty trucks.
For diesel engines even less of an increase in flexibility
results. Of the 3 light-duty diesel truck manufacturers only two
also produce heavy-duty diesel engines. Thus, only 2 of the 12
light-duty truck and 2 of the 15 heavy-duty diesel engine manufac-
turers would have increased flexibility.
-------
-18-
Unrestricted averaging would provide a great increase in
flexibility, but most certainly some companies would benefit
substantially more than others. Large, diverse companies would be
able to average all of their product lines and the more specialized
would have far more limited benefits.
It may not be possible to develop an entirely equitable
averaging program. Indeed, at least 5 of the manufacturers in
Table 3 would not benefit from any averaging approach, because they
certify only one family. Under any of the 4 combinations described
above, the manufacturers with diverse product lines and many
families will benefit more than the specialized or more limited
manufacturers. In the long run it may be that no approach would
benefit all manufacturers or benefit them all to the same degree.
3. Production Volumes and Characteristics
As shown in Table 2 the sales of light-duty trucks and heavy-
duty engines are not spread evenly over all manufacturers involved.
For example, the four major domestic manufacturers sold over 85
percent of the light-duty trucks and one manufacturer alone
accounted for over 40 percent of the market.
For heavy-duty engines, the scenario is similar. General
Motors and Ford each sell about fifty percent more heavy-duty
gasoline-fueled engines than International Harvester or Chrysler.
In the heavy-duty diesel market, Cummins and General Motors -
Detroit Diesel Allison (DDA) each sell at least 70 percent more
than their nearest competitors, Caterpillar, Mack, and IHC.
Sales volume is important primarily because of the flexi-
bility it gives manufacturers. A manufacturer such as General
Motors which has a large share of each of the three markets under
consideration potentially has a great advantage in that its re-
quired reductions could be spread over many sales and diverse
product lines. Large emission reductions required by some families
could be offset by obtaining a small increment of additional
reduction from another family which is easier to control, and has a
large sales volume. In contrast, this same flexibility is avail-
able to International Harvester, but its sales are so much lower
that its flexibility is greatly reduced as compared to General
Motors. This potential inequity exists for light-duty trucks and
both types of heavy-duty engines.
In addition to the broader equity areas discussed previously,
the characteristics of the different manufacturers' product lines
must also be considered. Probably the single most important
consideration is the number of LOT, HDG, and HDD certification
families of each manufacturer. Table 3 contains the number of
families certified by each manufacturer for 1979. The number of
families is especially important because it is a strong indicator
of the flexibility available to the manufacturers for averaging
emissions. Engines within a family are expected to have similar
-------
-19-
Manufacturer
AMC
Caterpillar
Chrysler
Cummins
Deutz
Ford
GM
Hino
IHC
Isuzu
Iveco-Fiat
MAN
Mack
Mercedes
Mitsubishi
Nissan
Scania Vabis
Suzuki
Toyo Kogyo
Toyota
VW
Volvo
White
Table 3
1979 Engine Families _!/
LPT LDDT
6
6
5
5
3
2
3
2
1
2
4
3
HDG
6
4
HDD
11
10
2
9
1
3
2
2
1
4
3
1
3
1
I/ Based on data gathered from EPA Certification Division,
-------
-20-
eraission characteristics, while engine families are expected to
have different emission characteristics. A manufacturer with a
variety of families will probably have some families from which
reductions are easily obtained, and some other families whose
emissions are much more difficult to reduce. This manufacturer
will have more flexibility than a manufacturer whose product line
is much smaller. Examples of this situation are demonstrated by
Caterpillar and Mack in the HDD market and Ford and Chrysler in the
HDG market.
A second area of product line characteristics which should be
considered is the type of drivetrain (i.e. 2 wheel drive, 4 wheel
drive) used in light-duty trucks. Since the LDT emission testing
procedure is a vehicle test, the type of drivetrain is an important
factor in the ability of the vehicle to meet the emission stan-
dards. Of the five major domestic manufacturers, all sell four
wheel drive light-duty trucks but three also sell two-wheel drive
LDTs.3/ Thus the manufacturers which sell only four wheel drive
LDTs TAMC, IHC) may have less flexibility in complying with an
averaging program than manufacturers which sell both two and four
wheel drive LDTs. Table 4 contains a breakdown of the manufac-
turers by drivetrain type.
A third area of product line characteristics which should be
considered is the engine size mix (See Table 4). This is especial-
ly true for LDTs which certify to a grams per mile standard. A
manufacturer which has a limited product line, with primarily large
engines, will be at a disadvantage when compared to a manufacturer
which has a much more diverse engine size mix. For example,
Chrysler has six engine families ranging from 225 CID to 360 CID
while Ford has five engine families ranging from 300 CID to
460 CID.
The same argument might be made for heavy-duty engines, but
the fact that the heavy-duty standards are on a g/bhp-hr basis
somewhat decreases the inequity. A gram/brake-horsepower emission
standard allows an engine which does more work (produces more
power) to have a higher engine-out emission rate. As a general
rule, as CID increases horsepower increases, but not at the same
rate, so there is still the possibility that inequities could exist
due to the need to average heavy-duty emissions on a mass basis.
'A final product line characteristic which should be considered
is the variety of vehicle inertia weights available for the pro-
ducers of LDTs and the impact of these inertia weights on the
emission levels (See Table 4). LDTs with higher inertia weights
usually also have larger CID engines. These two factors together
make it more difficult for the larger vehicles to meet a grams per
mile emission standard. A manufacturer with a wide range of
available inertia weights within each engine family and within a
manufacturer's product line would have increased flexibility when
compared with a manufacturer with a more limited product line.
-------
-21-
Manufacturer
AMC
Chrysler
Ford
GM
IHC
Isuzu
Mitsubishi
Nissan
Suzuki
Toyo Kogyo
Toyota
VW
Table 4
1979 LOT Fleet Characteristics I/
2WD
X
X
X
X
X
X
X
X
X.
X
4WD
X
X
X
X
X
X
X
CID Range
121-360
225-360
300-460
250-454
196-345
111
122-156
119
49
120-140
134-258
120
Inertia Weight
Classes Range
2950
4000
4000
4000
4000
2750
2750
2750
2000
3000
2750
3500
-5000
-5000
-6000
-6000
-4500
-3000
-3500
-2250
-4500
I/Based on data gather from EPA Certification Division.
2J IHC certified two 2WD configurations in 1979, but sales were
negligible.
-------
-22-
4. Foreign and Domestic Manufacturers
The final potential inequity which needs consideration is the
possibility that an averaging program might discriminate against
either foreign or domestic manufacturers, by changing their rela-
tive market positions. Based on the number of families involved,
it may appear that the relative position of the domestic manufac-
turers would improve. However, what must also be considered is the
relative ease with which most of the imported LDTs meet the emis-
sion standards due to their smaller engine sizes and lighter
vehicle inertia weights. In terms of diesels, the foreign manu-
facturers would not receive as much flexibility as the domestic
manufacturers because of the smaller variety of engine families.
D. Environmental Impact
The implementation of an averaging program for light-duty
trucks and heavy-duty engines may have both nationwide and local-
ized air quality impacts which must be studied.
1. Nationwide Air Quality Impacts
Assessment of the impact of an averaging program on the
national ambient air quality is directly tied to the change in the
per vehicle emission rate which occurs as a result of going from
the current approach to an averaging approach to compliance with
the emission standard. The per vehicle emission rate, in turn, is
tied to the low mileage production targets.
Several different factors may affect the low mileage targets.
Obviously the most important factor which affects the value of the
low mileage target is the actual value of the emission standard.
Under the current approach, every vehicle must meet the emission
standard. Consequently, the vehicle should be at or below the
emission standard for its full useful life. Under some forms of
averaging, only the average emissions of a manufacturer's pro-
duction must be below the standard, so the overall fleetwide
emission levels may be higher than under the current approach.
This increase in overall emission rates would have unacceptable
environmental consequences, so any averaging program which allows
an increase in the average per vehicle lifetime emissions would not
be acceptable.
The second factor which has a strong impact on the low mileage
emission target is the deterioration factor. In the past engine
out NOx emissions have shown little deterioration, but the use of
add on devices (such as catalysts) to control NOx emissions may
lead to an increase in this deterioration. This has generally
been the case with EGR and 3-way catalyst systems. Under the
current approach the compliance strategies for different families
have been similar, so the deterioration factors have also been
approximately the same value. However, under an averaging ap-
proach, the increased flexibility may allow a marked increase
-------
-23-
in the NOx control strategies used. This occurrence could lead to
a change in the characteristically uniform values of most deteri-
oration factors. This in turn would increase the potential that
families with substantial deterioration will go undetected.
A third factor influencing the level of the low mileage target
is the value of the acceptable quality level (AQL) which must be
achieved during production. Under the current approach, a 10
percent AQL is required for heavy-duty engines and light-duty
trucks. This 10 percent AQL requires that virtually all engines
meet the emission standards. Variability during engine production
will cause some uncertainty as to the ability of a manufacturer's
families to pass assembly line testing. To account for this
production variability manufacturers generally decrease low
mileage targets by a small increment. In addition, it is often the
case that manufacturers adjust their low mileage targets to provide
themselves statistical confidence in their ability to pass assembly
line testing. Under an averaging approach, if the 10 percent AQL
is dropped or altered, the potential exists for a loss in air
quality benefits due to the slight increase in the per vehicle
emission rate. However, if the 10 percent AQL concept were re-
tained under an averaging approach then the air quality benefits
could be retained. This could be done if, for example, a 10
percent AQL were applied to each family emission limits.
In summary, three potential losses of emission reductions must
be avoided. First, average per vehicle emissions over the useful
life must remain below the applicable standard. Secondly, to
retain the level of air quality benefits achieved under the current
approach emissions deterioration must be closely monitored and
controlled for all of the families included. And, finally, the
"cushion" the manufacturers use because of the 10 percent AQL and
assembly line testing must be retained. All of these components
could be retained virtually intact if every family.cert ified
to some predetermined emission limit.
2. Localized Impacts
Local or perhaps regional impacts would occur if a dispro-
portionate number of vehicles emitting above the emission standard
were operated within a limited geographical area. There are
several heavy-duty vehicle types which may have a tendency to be
operated primarily within an urban area. The most logical example
is transit buses used in urban/ metropolitan areas. In 1977
transit buses accounted for over 70 percent of all non-school
buses,5j These buses accumulate over 60 percent of their miles in
urban areas.6/ Clearly, if diesel bus engines emit above any
standard under averaging, the potential for air quality degradation
exists. This problem is compounded by the fact that the number of
transit buses in use should increase in the coming decade.
A second area of potential problems is medium-duty diesel
trucks. These trucks are primarily Class VI (19,500-26^000
-------
-24-
lb GVWR) and are primarily competing in the gasoline-powered
heavy-duty truck and bus market. This class of vehicles is
especially important for several reasons. Diesel engines used
in this type of vehicle are high speed-low horsepower, with a
tendency toward higher emissions, and a higher cost to reduce these
emissions. It is quite likely that the engines in this type of
vehicle would be certified above the standard. Another important
aspect of the medium-duty diesel group is the percentage of the
time which this type of vehicle spends in urban areas. Whereas the
bulk of the heavy-duty diesel trucks accumulate less than 25
percent of their mileage in urban areas, medium-duty diesels
accumulate about 35 percent of their mileage in urban areas,T_I
Finally, both EPA and the manufacturers expect a marked increase in
the use of diesel engines in Class VI trucks and buses. The
percentage is expected to grow from 8 percent in 1978 to about 41
percent in 1988,8/ These three factors, inherently high emissions,
greater than average urban vehicle miles, and increasing sales, may
lead to localized negative air quality impacts.
A third group of vehicles which may impact local air quality
is the heavier light-duty trucks (6,001-8,500 Ib GVWR). Higher
inertia weight trucks such as standard pick-ups and vans are used
more in urban areas than their lighter inertia weight counterparts.
This is primarily because these vehicles are used for business
purposes such as hauling and delivery and not as much for personal
transportation. The emissions from these heavier vehicles (espe-
cially those with larger CID engines) are more difficult to reduce
than those from compact trucks and mini-vans. With the concentra-
tion of the heavier light-duty trucks in urban areas and their
inherently higher emission rates, the potential exists for air
quality degradation.
Finally, negative regional impacts associated with a concen-
tration of light-duty trucks within a given area may occur. For
example, cities such as Buffalo, Pittsburgh, and Cleveland which
receive heavy snow falls and sometimes have quite hilly terrain,
will have a larger concentration of four wheel drive (4WD) light
trucks. The concentration of these vehicles in urban areas, and
the slightly higher emissions of 4WD vehicles over their 2 wheel
drive counterparts may lead to increased emissions in these areas
over what .would occur if every vehicle had to meet the emission
standard. If averaging was being considered for light-duty vehi-
cles, the effect of increased use of diesel engines in taxicab
fleets would also have to be investigated.
3. Heavy-Duty Emissions
The fact that heavy-duty emission standards are on a g/bhp-hr
basis introduces one additional complication under emissions
averaging. Because the standard is based on a work amount, the
engine which produces more horsepower and thus does more work, is
allowed to have a larger amount of emissions in terms of mass.
Thus, this engine could produce more emissions and do more useful
-------
-25-
work, but still have the same g/bhp-hr emission level as a dif-
ferent engine which produces less emissions and does less work.
The g/bhp-hr type of emission standard with its inherent
trade-off between useful work and emission's mass already incor-
porates a form of averaging into the heavy-duty class. The larger
more powerful heavy-duty engines which normally produce a greater
mass of emissions than their smaller, less powerful counterparts
are not penalized in demonstrating compliance with the emission
standards, beacuse their greater emission's mass is offset by more
horsepower. Conversely,however, this is not the case for vehicles
such as light-duty trucks which must demonstrate compliance with a
grams per mile emission standard. The larger vehicles/engines must
comply with the same emission standards as their smaller counter-
parts. Each vehicle in the class is limited to the same amount of
emissions per distance traveled. The larger vehicles/engines would
have a more difficult time complying with the emission standards
than their smaller counterparts. For vehicles classes complying
with the grams per mile type of emission standards, averaging is
especially advantageous because the smaller and larger vehicles/
engines within the class can be offset against one another.
To protect air quality we would want to be sure that the
total mass of emissions emitted did not increase under an aver-
aging approach. Direct trade-offs by g/bhp-hr between two or
more, families would not provide this protection because the
absolute mass of emissions per engine would vary from family to
family.
To allow emissions averaging with heavy-duty engines un-
der a g/bhp-hr emission standard, the averaging would have to
be done using a mass-based system, for example, total grams
of NOx per test or grams per mile of NOx based on some average
emission factor or some average distance covered per test cycle.
However, this could have the effect of decreasing the benefits some
manufacturers could gain from an averaging program.
E. Technological Innovation
Although an averaging program will increase the manufac-
turer's compliance options, this flexibility will probably lead to
a reduction in innovation in the emission control technology
field. Any reduction in technology forcing is probably counter
to Congress's intent in the provisions of the Clean Air Act.
Averaging may discourage innovation, because of the emissions
offset strategy available to the manufacturers. Instead of a
manufacturer investing emission related R&D funds to attempt to
bring every family into compliance, it will be able to offset
higher emissions from some families, with lower emissions from other
families. This emissions offset option removes much of the incen-
tive to reduce emissions from the higher emitting families.
Implementing an averaging approach to compliance will also allow
the manufacturers the option of manipulating the sales volume in
-------
-26-
each family to assure compliance with the standard and at the
same time continue to permit the production of higher emitting
families. The implementation of an averaging program may lead to
stagnation in the drive to develop cleaner engines. Conversely,
emissions averaging would allow the manufacturers to innovate on
just a few engines in perhaps one family with little consequences
from any failure.
As mentioned previously, technological innovation could
probably be encouraged, if a system of banking and perhaps trading
of emissions reductions could be included. This system could
provide additional incentive to spur technological innovation.
F. Long Term Market Effects
As was shown in the equity discussion presented previously,
the potential exists for market disruption due to the inherent
characteristics of an averaging program. Under some averaging
approaches, large and diverse manufacturers would have a clear
advantage over small or more specialized manufacturers. If this
discrepancy were to continue, the position of the large manufac-
turers in the marketplace would be enhanced as they used their
greater resources and sales to manipulate the market. In the long
term the sales of the more specialized companies could be decreased
as a result of competition with a competing product from a larger
manufacturer.
In the area of foreign versus domestic producers, it appears
that an averaging program would favor domestic manufacturers. In
the area of heavy-duty diesel engines, there is no doubt that the
greater sales and diversification of the domestic producers would
allow them to improve their market positions.
The domestic producers of light-duty trucks may be slightly
favored under an averaging program due to their greater product
diversification. This product diversification would allow them to
use the lower emissions from their smaller trucks to offset the
higher emissions from their larger trucks. Foreign manufacturers
sell more limited product lines, and the characteristics of their
vehicles and engines would probably allow all foreign manufacturers
to meet the standards under the current approach or an averaging
approach. Any averaging program should strive to minimize these
equity concerns and the problems they create. However, a com-
pletely equitable emissions averaging program may not be possible.
V. Design Criteria for a Successful Averaging Program
Having identified the benefits and design considerations
in an averaging program it is now possible to isolate specific
design criteria which should ideally be met for a successful
averaging program. These criteria have been determined primarily
from the design considerations which were discussed in the pre-
ceding section, and are aimed at minimizing if not eliminating the
-------
-27-
potential problems of an emission control strategy based on averag-
ing.
The design criteria identified are outlined below, together
with an explanatory paragraph.
1. Any averaging approach implemented for mobile source
emissions must have a valid legal base. The averaging approach
must be consistent with the statutory requirements for setting
standards, including the requirement in section 202(a)(l) to set
standards applicable to emissions from "any class or classes of new
motor vehicles or new motor vehicle engines." The averaging
approach must adhere to statutory limits for the affected vehicle
and engine classes.
2. Any averaging program ultimately implemented must be
administratively practical and compatible with existing EPA pro-
grams. The program should be designed such that: compliance can
be clearly determined, there is a point (or points) at which a
manufacturer is held accountable for the emissions performance of
its production, the sanctions (including NCPs) for noncompliance
are clearly defined and the in-use emission program is not ren-
dered ineffective. The concepts of family-based certification,
assembly line testing (SEA), NCPs, Recall and I/M must remain
relatively unchanged due to their critical role in the total mobile
source control strategy.
3. Each family should have a fixed certification emission
level which it must maintain throughout the model year at a high
pass rate. This design criterion is necessary to ensure the
continued effectiveness of certification, SEA, NCP, Recall, and
I/M, as well as to assure consistency with the structure of the
act. Without a fixed emission level, certification would be
almost worthless, and enforcement and I/M would become virtually
impossible.
4. Any averaging program must give equivalent air quality
benefit to a nonaveraging approach and must not allow any sub-
stantial localized impacts. Air quality degradation can be
minimized, if not eliminated, by establishing as strict an emission
standard as feasible, and setting a maximum level on the emissions
allowed from any family. This maximum level will especially
address possible local impacts.
5. Any averaging program should be true "regulatory reform,"
it should make compliance less difficult for the industry and
reduce compliance costs for consumers and industry alike. Changes,
just for the sake of changing, do little more than cause confusion.
Any averaging program should provide a substantial increase in
flexibility as compared to the current approach. The program
should be designed and implemented in as simple a manner as pos-
sible so as to, at the very least, not increase the administrative
burden on the regulated industry or EPA. Above all, the average
-------
-28-
per vehicle cost of compliance, including fixed costs, should not
be higher than that for the current approach. An averaging
approach should be at least as cost effective as compliance under
the current approach.
6. An averaging program should not increase any manufac-
turer's economic jeopardy which might be caused by emission control
regulations. EPA expects that manufacturers will easily be able to
predict the emission levels of the families they certify, but sales
projections eighteen or more months into the future are difficult.
Some mechanism must be available to allow the manufacturers to
accommodate errors in their sales projections. Also, the failure
of an individual family in an assembly line testing (SEA) program
should not jeopardize the production of other families. NCPs or
perhaps other mechanisms could aid in minimizing jeopardy.
7. Any averaging program should benefit members of the
regulated industry without causing a disproportionate level of
advantage or disadvantage. Ideally, no competitor in the market-
place should have its relative position in the market significantly
affected by emissions averaging. However, due to the character-
istics of the manufacturers in the marketplace, it may not be
possible to develop a completely equitable approach to emissions
averaging. It is desirable, however, to provide increased flexi-
bility to as many manufacturers as possible provided that signi-
ficant marketplace disruptions do not occur in the short or long
term.
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-29-
References
y See 45 FR 14496, (March 5, 1980).
27 See 44 FR 40784, (July 12, 1979) and 44 FR 9464, (February 13,
1979) for more information on in-use durability testing.
3/ Data gathered from EPA's Certification Division, and Summar-
~ ized in 44 FR 42444, (July 19, 1979).
4/ Sales data was taken from MVMA data, R.L. Polk data published
in Automotive News, and supplemented by conversations with
manufacturers when necessary.
57 Motor Vehicle Facts and Figures, 1978, MVMA data.
6j EPA memo, Urban/Rural Vehicle Miles Travelled by Mobile Source
Category, Marcia Williams, December 4, 1975.
Tj The Development of an Emission and Fuel Economy Computer Model
for Heavy-Duty Trucks and Buses, John H. Johnson and Anil B.
Jambekar, SAE paper 780630.
&J Regulatory Analysis and Environmental Impact of Final Emission
Regulations for 1984 and Later Model Year Heavy-Duty Engines,
U.S. EPA, OMSAPC, December 1979.
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