EPA and NHTSA Propose to Extend
the National Program to Reduce
Greenhouse Gases and Improve Fuel
Economy for Cars and Trucks
The U.S. Environmental Protection Agency (EPA) and the
Department of Transportation's National Highway Traffic Safety
Administration (NHTSA) are issuing a joint proposal extending the
National Program to further reduce greenhouse gas emissions and
improve fuel economy for model year 2017 through 2025 light-duty
vehicles. EPA is proposing national greenhouse gas (GHG) emissions
standards under the Clean Air Act, and NHTSA is proposing
Corporate Average Fuel Economy (CAFE) standards under the Energy
Policy and Conservation Act as amended by the Energy Independence
and Security Act (EISA).
The standards proposed would apply to passenger cars, light-duty trucks, and medium-
duty passenger vehicles, covering model years 2017 through 2025. The proposed
standards are projected to require on an average industry fleet wide basis - that is
all passenger cars, light-duty trucks, and medium duty passenger vehicles (including
all SUVs) -- 163 grams/mile of carbon dioxide (CO2) in model year 2025, which is
equivalent to 54.5 miles per gallon (mpg) if the vehicles were to meet this CO2 level
all through fuel economy improvements.
This proposal builds on the success of the first phase of the National Program to
improve fuel economy and reduce GHG emissions from U.S. light-duty vehicles
which established strong and coordinated GHG and fuel economy standards for
model years 2012-2016. This proposal is consistent with the President's May 21, 2010
request that EPA and NHTSA work together to develop a national program that
would "...produce a new generation of clean vehicles" and responds to the country's critical
need to address global climate change and to reduce oil consumption.
SEPA
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
EPA-420-F-11-038
November 2011
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The agencies have been developing the basis for these proposed standards almost since the
conclusion of the rulemaking in May 2010 first establishing the National Program. After much
research and deliberation by the agencies, and drawing on the expertise of GARB and other
industry, environmental, union, and public interest stakeholders, President Obama announced
plans for these proposed rules on July 29, 2011 and NHTSA and EPA issued a Supplemental
Notice of Intent (NOI) outlining the agencies' plans for proposing the MY 2017-2025 standards
and program. The State of California and thirteen auto manufacturers representing over 90
percent of U.S. vehicle sales provided letters of support for the program concurrent with the
Supplemental NOI. The United Auto Workers (UAW) also supported the announcement.
Continuing the National Program would ensure that all manufacturers can build a single fleet
of U.S. vehicles that would satisfy requirements of both federal programs as well as California's
program, thus helping to reduce costs and regulatory complexity while providing significant
energy security and environmental benefits.
Benefits and Costs of the Proposed National Program
This second phase of the National Program is projected to save approximately 4 billion barrels
of oil and 2 billion metric tons of GHG emissions over the lifetimes of those light duty vehicles
sold in MY 2017'2025. The agencies estimate that fuel savings will far outweigh higher vehicle
costs, and that the net benefits to society of the MYs 2017-2025 National Program will be in
the range of $311 billion to $421 billion (7 and 3 percent discount rates, respectively) over the
lifetimes of those vehicles sold in MY 2017-2025
Benefits to Consumers
These proposed standards would have significant savings for consumers at the pump. Higher
costs for new vehicle technology will add, on average, about $2,000 for consumers who buy
a new vehicle in MY 2025. Those consumers who drive their MY 2025 vehicle for its entire
lifetime will save, on average, $5,200 to $6,600 (7 and 3 percent discount rates, respectively) in
fuel savings, for a net lifetime savings of $3,000 to $4,400 — assuming gasoline prices remain at
essentially current levels. For those consumers who purchase their new MY 2025 vehicle with
cash, the discounted fuel savings will offset the higher vehicle cost in less than 4 years, and fuel
savings will continue for as long as the consumer owns the vehicle. Those consumers that buy a
new vehicle with a typical 5-year loan will benefit from an average monthly cash flow savings of
about $12 during the loan period, or about $140 per year, on average, as the monthly fuel savings
more than offsets the higher monthly payment due to the higher incremental vehicle cost.
The agencies have designed the proposed standards to preserve consumer choice — that is, the
proposed standards should not affect consumers' opportunity to purchase the size of vehicle with
the performance, utility and safety features that meet their needs. This is because the standards
are structured so as not to create incentives to manufacture vehicles of any particular size (so,
for example, there is no incentive to downsize), and because the agencies have included costs of
preserving performance, utility and safety features in developing the standards
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EPA's Proposed Standards
EPA is proposing a set of fleet-wide average carbon dioxide (CO2) emission standards for cars
and light trucks. These standards are based on CO2 emissions-footprint curves, where each vehicle
has a different CO2 emissions compliance target depending on its footprint value (related to the
size of the vehicle). Generally, the larger the vehicle footprint, the higher the corresponding
vehicle CO2 emissions target. As a result, the burden of compliance is distributed across all
vehicles and all manufacturers. Manufacturers are not compelled to build vehicles of any particu-
lar size or type (nor does the proposed rule create an incentive to do so), each manufacturer will
have its own fleet-wide standard that reflects the vehicles it chooses it produce, and the GHG
program provides a wide range of credit programs and flexibilities for manufacturers to meet the
standards.
Table 1 shows the projected fleet-wide CO2 emission targets under the footprint-based approach.
The car requirements are projected to increase in stringency from 213 to 144 grams per mile
between model year 2017 and model year 2025. Similarly, fleet-wide CO2 emission level
requirements for trucks are projected to increase in stringency from 295 to 203 grams per mile,
EPA projects that the average light vehicle (combined car and truck) tailpipe CO2 compliance
level in model year 2017 will be 243 grams per mile while the average vehicle tailpipe CO2
emissions compliance level for the model year 2025 standard is projected to be 163 grams per
mile, corresponding to 54.5 mpg in model year 2025, if all reductions were made through fuel
economy improvements.
Table 1 - Projected Fleet-Wide Emissions Compliance Targets under the Proposed Foot-
print-Based CO2 Standards (g/mi) and Corresponding Fuel Economy (mpg)
Passenger Cars (g/mi)
Light Trucks (g/mi)
Combined Cars & Trucks (g/mi)
Combined Cars & Trucks (mpg)
2017
213
295
243
36.6
2018
202
285
232
38.3
2019
192
277
223
39.9
2020
182
270
213
41.7
2021
173
250
200
44.4
2022
165
237
190
46.8
2023
158
225
181
49.1
2024
151
214
172
51.7
2025
144
203
163
54.5
Figures 1 and 2 show the actual footprint curves for cars and trucks. For passenger cars, the CO2
compliance values associated with the footprint curves would be reduced on average by 5 per-
cent per year from the model year 2016 projected passenger car industry-wide compliance level
through model year 2025. In recognition of manufacturers' special challenges in improving the
fuel economy and GHG emissions of full-size pickup trucks as we transition from the MY 2016
standards to MY 2017 and later, while preserving the utility (e.g., towing and payload capa-
bilities) of those vehicles, EPA is proposing a lower annual rate of improvement for light-duty
trucks in the early years of the program. For light-duty trucks, the proposed average annual rate
of CO2 emissions reduction in model years 2017 through 2021 is 3.5 percent per year and for
model years 2022 through 2025 it is 5 percent per year.
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Figure 1 CO (g/mile) Car Standards Curves
u
cu
2016
2017
2018
2019
- - 2020
— 2021
2022
2023
--•2024
2025
35 40 45 50 55 60 65 70 75
Footprint [sf)
Figure 2 CO (g/mile)Truck Standards Curves
60 65
Footprint (sf)
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Example footprint targets for popular vehicle models are shown in Table 2, illustrating the fact
that different vehicle sizes will have varying CO2 emissions and fuel economy targets under the
footprint'based standards. Vehicle Commissions will be measured over the EPA city and high-
way tests.
Table 2 Model Year 2025 CO and Fuel Economy Targets for Various MY 2008 Vehicle Type
Vehicle Type
Example Models
Example Model
Footprint (sq. ft.)
EPA CO2 Emissions
Target (g/mi)*
NHTSA Fuel
Economy Target
(mpg)*
Example Passenger Cars
Compact car
Midsize car
Fullsize car
Honda Fit
Ford Fusion
Chrysler 300
40
46
53
131
147
170
61.1
54.9
48.0
Example Light-duty Trucks
Small SUV
Midsize
crossover
Minivan
Large pickup
truck
4WD Ford Escape
Nissan Murano
Toyota Sienna
Chevy Silverado
44
49
55
67
170
188
209
252
47.5
43.4
39.2
33.0
" Real-world C02 is typically 25 percent higher and real-world fuel economy is typically 20 percent lower than the C02 and
CAFE values discussed here.
VehicleTechnologies to Reduce GHGs and Improve Fuel Economy
EPA's and NHTSA's technology assessment indicates there is a wide range of technologies avail-
able for manufacturers to consider in reducing GHG emissions and improving fuel economy.
The proposals allow for long'term planning by manufacturers and suppliers for the continued
development and deployment across their fleets of fuel saving and emissions-reducing technolo'
gies. The agencies believe that advances in gasoline engines and transmissions will continue
for the foreseeable future, and that there will be continual improvement in other technologies,
including vehicle weight reduction, lower tire rolling resistance, improvements in vehicle aero-
dynamics, diesel engines, and more efficient vehicle accessories. The agencies also expect to see
some increased electrification of the fleet through the expanded production of stop/start, hybrid,
plug'in hybrid electric and electric vehicles. The agencies also expect that vehicle air condition-
ers will continue to improve by becoming more efficient and by increasing the use of alterna-
tive lower greenhouse warming potential (GWP) refrigerants. Many of these technologies are
already available today, and manufacturers will be able to meet the standards through significant
efficiency improvements in these technologies, as well as through a significant penetration of
these and other technologies across the fleet.
Mid-Term Evaluation
Given the long time frame at issue in setting standards for MYs 2022-2025, and given NHTSA's
obligation to conduct a separate rulemaking in order to establish final standards for vehicles for
those model years, EPA and NHTSA are proposing to undertake a comprehensive mid-term
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evaluation and agency decision-making process. As part of this undertaking, both NHTSA and
EPA will develop and compile up-to-date information for the evaluation, through a collabora-
tive, robust and transparent process, including public notice and comment. The comprehensive
evaluation process will lead to final agency action by both agencies.
EPA's Program Flexibilities
EPA's proposed program provides compliance flexibility to manufacturers. This flexibility is
expected to provide sufficient lead time for manufacturers to make necessary technological
improvements and reduce the overall cost of the program, without compromising overall envi-
ronmental objectives. The flexibilities also provide incentives to facilitate market penetration of
the most advanced vehicle technologies,
Credit Banking and Trading * EPA is proposing to continue the same comprehensive program
for averaging, banking, and trading of credits established in the MY 2012-2016 program. To-
gether, these provisions help manufacturers in planning and implementing the orderly phase-
in of emissions control technology in their production, consistent with their typical redesign
schedules. Credits may be carried forward, or banked, for five years, or carried back three years
to cover a deficit in a previous year. A manufacturer may transfer credits across all vehicles it
produces, both cars and light trucks. Trading of credits between companies would also be permit-
ted. To facilitate the transition to the increasingly more stringent 2017-2025 standards, EPA is
proposing an additional CO2 credit carry-forward provision, allowing credits generated from MY
2010 through 2016 to be used through MY 2021.
Air Conditioning Improvement Credits * As with the MYs 2012-2016 program, manufacturers
will be able to generate CO2-equivalent credits to use in complying with the CO2 standards for
improvements in air conditioning (A/C) systems, both for approaches that reduce tailpipe CO2
through efficiency improvements and for reduced refrigerant leakage through better components
and through the use of alternative refrigerants with lower global warming potential than pres-
ently used (reduces hydrofluorocarbons (HFC) emissions),
Off'Cycle Credits * Off-cycle technologies achieve CO2 reductions that are not reflected on
current test procedures. Such technologies might include solar panels on hybrids, adaptive cruise
control or active aerodynamics. EPA is proposing to expand and streamline the MYs 2012-
2016 off-cycle credit provisions. For MY 2017 and later, EPA is proposing a pre-approved list of
technologies and credit values. Further, manufacturers could also apply for off-cycle technologies
beyond those listed (or for different credit values for the listed off-cycle technologies) if they
have sufficient data,
Incentives for Electric Vehicles, Plug-in Hybrid Electric Vehicles, and Fuel Cell Vehicles *
To facilitate market penetration of the most advanced vehicle technologies as rapidly as pos-
sible, EPA is proposing an incentive multiplier for compliance purposes for all electric vehicles
(EVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles (FCV) sold in MYs 2017
through 2021. This multiplier approach means that each EV/PHEV/FCV would count as more
than one vehicle in the manufacturer's compliance calculation. EPA is proposing that EVs and
FCVs start with a multiplier value of 2.0 in MY 2017, phasing down to a value of 1.5 in MY
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2021. PHEVs would start at a multiplier value of 1.6 in MY 2017 and phase down to a value of
1.3 in MY 2021. There is no multiplier for MYs 2022-2025.
For EVs, PHEVs and FCVs, EPA is proposing to set a value of 0 g/mile for the tailpipe compli-
ance value for EVs, PHEVs (electricity usage) and FCVs for MY 2017-2021, with no limit on
the quantity of vehicles eligible for 0 g/mi tailpipe emissions accounting. For MY 2022-2025,
EPA is proposing that 0 g/mi only be allowed up to a per-company cumulative sales cap:
1) 600,000 vehicles for companies that sell 300,000 EV/PHEV/FCVs in MYs
2019-2021;
2) 200,000 vehicles for all other manufacturers. EPA believes the industry-wide
impact of such a tiered cap will be approximately 2 million vehicles.
For sales above these thresholds, manufacturers would be required to account for the net up-
stream GHG emissions for the electric portion of operation, using accounting methodologies
set out in the rule,
Incentives for Advanced Technologies Including Hybridization for Full-Size Pick-Up
Trucks ' EPA is proposing an additional CO2 per vehicle credit, for mild and strong hybrid
electric (HEV) full size pickup trucks if this advanced technology is utilized across a designated
percentage of a manufacturers' full size pickup trucks. This incentive further encourages manu-
facturers to begin to transform the most challenged category of vehicles in terms of the penetra-
tion of advanced technologies. This should allow additional flexibility to achieve the higher
levels of truck stringencies in MYs 2022-2025. Eligibility for this credit would be conditioned on
a minimum penetration of the technology in a manufacturer's full size pickup truck fleet. Mild
HEVs pickup trucks would be eligible for a per vehicle credit of 10 g/mi during MY 2017-2015
if the technology is used with at least 30% of a company 2017 full-size pickup production and
ramping up to at least 80% in MY 2021. Strong HEV pickup trucks would be eligible for 20 g/mi
per vehicle credit during MY 2017-2025 if the technology is used on at least 10% of the com-
pany's full size pickups.
These volume thresholds are being proposed in order to encourage rapid penetration of these
technologies in this vehicle segment. In addition to the specific hybridization credits, because
there are other technologies besides mild and strong hybrids which can significantly reduce
GHG emissions and fuel consumption in pickup trucks, EPA is also proposing a performance-
based incentive CO2 emissions credit for full-size pickup trucks that achieve a significant CO2
reduction below the applicable target. To avoid double-counting, the same vehicle would not
receive credit under both the HEV and performance based approaches,
Treatment of Compressed Natural Gas (CNG), Plug-in Hybrid Electric Vehicles (PHEVs),
and Flexible Fuel Vehicles (FFVs) - EPA is proposing a methodology for determining CO2
levels for plug-in hybrid electric vehicles (PHEVs) and dual fuel compressed natural gas (CNG)
vehicles based on the recognition that, once a consumer has paid several thousand dollars to be
able to use a fuel that is considerably cheaper than gasoline, it is very likely that the consumer
will seek to use the cheaper fuel as much as possible. EPA is proposing to use the Society of
Automotive Engineers "utility factor" methodology (based on vehicle range on the alternative
fuel and typical daily travel mileage) to determine the assumed percentage of operation on gaso-
line and percentage of operation on the alternative fuel.
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EPA is not proposing to establish a utility factor for flexible fueled vehicles (FFVs) using E'85
and gasoline, since there is not a significant cost differential between an FFV and a convention'
al gasoline vehicles and historically consumers have only fueled these vehicles with E85 a very
small percentage of the time. FFVs continue to be treated as they are treated in MY 2016 where
emissions are weighted based on actual alternative fuel usage.
Background of the Joint Proposal
Following the successful adoption of a National Program for GHG and fuel economy standards
for model years (MY) 2012-2016 vehicles, President Obama requested the agencies to continue
their efforts to address standards for MY 2017-2025. In a May 21, 2010, Presidential Memoran-
dum, the President requested that EPA and NHTSA work together to develop a national pro-
gram that would "...produce a new generation of clean vehicles." The President specifically requested
that the agencies develop "...a coordinated national program under the CAA [Clean Air Act] and the
EISA [Energy Independence and Security Act of 2007] to improve fuel efficiency and to reduce greenhouse
gas emissions of passenger cars and light-duty trucks of model years 2017-2025." The President recognized
our country could take a leadership role in addressing the global challenges of improving energy
security and reducing greenhouse gas pollution, stating that "America has the opportunity to lead
the world in the development of a new generation of clean cars and trucks through innovative technologies
and manufacturing that will spur economic growth and create high-quality domestic jobs, enhance our energy
security, and improve our environment."
Since that time, the agencies have worked with the State of California to address all elements
requested in the May 21, 2010 Presidential Memorandum. We completed an initial assessment
of the technologies, strategies and underlying analyses that would be considered in setting stan-
dards for 2017-2025, in consultation with a wide range of stakeholders. The Joint Interim Tech-
nical Assessment Report (TAR) and a Notice of Intent (NOI) to conduct a joint rulemaking
were concluded on September 30, 2010.1 Following the opportunity for public comment on the
interim TAR and NOI, the agencies developed and published a Supplemental NOI (SNOI)2 in
December 2010 highlighting many of the key comments received in response to the September
NOI and the TAR. That notice also discussed the agencies' plans for many of the key technical
analyses that would be undertaken in developing the upcoming proposed rulemaking.
On July 29, 2011, NHTSA and EPA issued a Supplemental Notice of Intent (NOI) outlining
the agencies' plans for proposing the MY 2017-2025 standards and program. The State of Cali-
fornia and thirteen auto manufacturers provided letters of support for the program concurrent
with the Supplemental NOI. The United Auto Workers, environmental groups and consumer
groups also expressed support for the program.
1 75 FR 62739, October 13, 2010
2 75 FR 76337, December 8, 2010
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Public Participation Opportunities
We welcome your comments on this proposed rule. Comments will be accepted for 60 days
beginning when this proposal is published in the Federal Register. All comments should be
identified by Docket ID No. EPA-HQ-OAR-2010-0799 and submitted by one of the following
methods:
Internet: www.regulations.gov
E-mail: A-and'R'Docket@epa.gov
Mail:
Environmental Protection Agency
Air and Radiation Docket and Information Center (6102T)
1200 Pennsylvania Avenue NW
Washington, DC 20460
Hand Delivery:
EPA West building
EPA Docket Center (Room 3340)
1301 Constitution Avenue NW
Washington, DC
You should consult the Federal Register notice for this proposal for more information about how
to submit comments, when the comment period will close, and about where and when public
hearings will be held. A copy of the Federal Register notice can be found on our website listed
below.
For More Information
You can access the rule and related documents on EPA's Office of Transportation and Air Quality
(OTAQ) Web site at:
www.epa.gov/otaq/climate/regulations.htm
For more information on this rule, please contact the U.S. Environmental Protection Agency,
Office of Transportation and Air Quality at:
E-mail: OTAQPUBLICWEB@epa.gov
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